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| Nadella |
Microsoft has named Satya Nadella as its new CEO and
announced that founder Bill Gates will step down as chairman of the company's
board.
Nadella is a 22-year veteran of Microsoft (MSFT, Fortune
500) who has been overseeing various aspects of the company's corporate
software business since 1992. Over the past several years, Nadella's cloud and
enterprise division has been one of Microsoft's best-performing units.
As Microsoft's cloud and enterprise group chief, Nadella
oversees the company's server software and back-end technology for corporate
customers. He also is in charge of several consumer cloud products, including
Office 365, as well as the Bing search engine, Xbox Live and Skype. Prior to
joining Microsoft, Nadella worked at Sun Microsystems, which is now owned by
Oracle (ORCL, Fortune 500).
Nadella has been named CEO amid a major transition at
Microsoft. He is replacing Steve Ballmer, who announced in August that he was
stepping down as CEO. The company's famed consumer business is struggling,
including sales of Windows. Meanwhile, corporate revenue now makes up
two-thirds of Microsoft's overall sales and is instrumental in driving Microsoft's
growth.
"During this time of transformation, there is no better
person to lead Microsoft than Satya Nadella," said Gates in a prepared
statement. "His vision for how technology will be used and experienced
around the world is exactly what Microsoft needs as the company enters its next
chapter of expanded product innovation and growth."
Microsoft also said that Gates will be working closely with
Nadella in a new technology adviser role. Gates will be replaced by current
Microsoft board member and former Symantec (SYMC, Fortune 500) CEO John
Thompson as new chairman of Microsoft. Gates and Ballmer will remain on the
company's board.
Nadella was Microsoft's second-highest paid executive last
year, earning $7.7 million in salary, bonuses and stock grants. Only chief
operating officer Kevin Turner made more. Microsoft has not yet announced Nadella's
new compensation package.
Many think that Nadella is somewhat of a safe choice for
Microsoft. He is personable, and well-liked at Microsoft and within the
technology world at large. But he isn't bringing fresh perspective or any
outside influence.
In many ways, Microsoft's CEO search was bungled from the
start. Ballmer failed to groom an obvious replacement during his 13-year tenure
as CEO, and he announced his retirement with no successor in place. The CEO
search was filled with leaks to the press, particularly about the desire to
hire Ford (F, Fortune 500) CEO Alan Mulally. But the board was seemingly unable
to find an outside candidate they could agree upon.
The choice of Nadella seems to be a signal that Microsoft
wants to maintain the status quo even though it is a company that many believe
needs shaking up.
Nadella acknowledged that a main part of his job as CEO will
be to speed up the process of bringing innovative products to customers.
Microsoft has struggled to adapt to the mobile revolution, as Apple (AAPL,
Fortune 500) and Google (GOOG, Fortune 500) have dominated that market. One of
his key tasks will be to find a way to integrate the mobile device business of
Nokia (NOK), which Microsoft agreed to buy last year.
"I couldn't be more honored to have been chosen to lead
the company," Nadella said in a statement. "The opportunity ahead for
Microsoft is vast, but to seize it, we must focus clearly, move faster and
continue to transform."
It's unclear how much leeway he will have though. Even
though Gates will no longer be the company's chairman, the Microsoft founder is
taking a more active role at Microsoft, which could mean his grip on the company
is only getting tighter.
"There is no question that this is still Bill's
company," said a Microsoft employee who asked not to be named.
But analysts are hoping for more drastic moves. One worried
that Nadella will face resistance from Gates and Ballmer.
"We do not want to see a continuation of the existing
direction for the business, so it will be important that Mr. Nadella be free to
make changes," said Rick Sherlund, analyst at Nomura Securities. "We
question whether it will become necessary for Mr. Ballmer to step aside as a
director to facilitate this. We do not think having two previous CEOs on the
board to report to as he redirects the business is a good idea." (CNN)
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