The Search is Over

Microsoft has a New CEO – Satya Nadella

I first saw this on Wired, but didn’t put any credence in it until I saw Mary Jo Foley’s article on ZDNet. Based on what we’ve been seeing, despite my earlier column on how association with Ballmer may be a tough hurdle to clear, Microsoft gave Nadella the nod anyway and on Tuesday 2014-02-04 made him the company’s third CEO.

Satya-NadellaThere are three other announcements that go along with this:
1.    Ballmer is out, effective immediately. However, he remains a member of the Board of Directors.
2.    Gates is stepping down as Chairman to take a role on the Board as Founder and Technology Advisor.  You can think of him as Nadella’s consigliere or major domo.  He will “devote more time to the company, supporting Nadella in shaping technology and product direction.”
3.    John Thompson, who was the one-man force behind the CEO search, is taking on the role of Chairman of the Board, effective immediately.

Nadella’s first issue is likely to be some level of “discussion” involving the support of the “One Microsoft” initiative that Ballmer laid out in the July 2013 reorg.  ValueAct’s Mason Morfit is taking a seat on the Board in about a month or so of this writing (March 2014).  The One Microsoft initiative has Microsoft supporting both consumer and enterprise sectors of technology; and Morfit doesn’t support that business strategy. He wants Microsoft to drop consumer hardware efforts like Surface, Windows Phone and Xbox One. He’s also not a Bing fan, either.

Microsoft recently agreed to make Morfit a member of the Board in order to avoid a proxy fight initiated by ValueAct if Microsoft didn’t agree to drop or scale back the consumer side of the business. Taking that on as one of his first issues as CEO would be a challenge for anyone. It certainly looks like Nadella will have his hands full, if that does, in fact, happen.

Nadella has a lot to offer Microsoft as CEO. Most notably, he has 22 years at Microsoft and knows the culture and people. Individuals coming from the outside, taking visible, upper management roles have historically not done well at Microsoft due to the high technical nature of the culture and business.  Nadella won’t have issues there.  His background as an engineer will help him a great deal, as will his tenure at the company.  He doesn’t have anything to prove, and the ‘Softies have already afforded him credibility.

This is Nadella’s first go as CEO, so we’ll have to play a wait and see game before we know how independent he truly is.  Gates’ new role as Founder and Technology Advisor may be created specifically to give Nadella someone he can go to for advice, guidance and assistance. It may also be nothing more than a PR gimmick to help “erase” the Ballmerfication that I mentioned the other day.  We’ll have to wait and see.  However, given Nadella’s experience as an engineer and as the enterprise and cloud services guy, he’s got a good background to take the company into the future…provided he’s really given the opportunity and support to do so. It depends on how much of a voice Ballmer and Morfit each have on the Board.

What do you think? Did Ballmer really suck THAT bad? Is Gates’ new role as Founder and Technology Advisor for real or for show? Will Mason Morfit give Nadella problems, or will he wait and see how things go before pressing his agenda at the Board level?  Does Nadella look as though he will be successful, or will his entrance start the spinning of a revolving door outside the CEO’s office?  You tell me.  Why don’t you join me in the discussion area, below and give me your thoughts…?

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