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Microsoft shakes itself up for 2014 and beyond

Satya Nadella, CEO of Microsoft

Microsoft has a new leader and it’s not Stephen Elop. Its a man who hails from Hyderabad, India (yes, Microsoft is now headed up by someone who isn’t an American!) and has never been in the limelight until now. Enter Satya Nadella, Microsoft’s new CEO who has been shaping the company’s cloud offerings and software as a service programs for over a decade. Nadella climbs into the hot seat while Bill Gates enters in to advise him in the areas of consumer technology, while Stephen Elop now takes over the Hardware and Devices division, which covers the Xbox department as well. Why are these three men in these positions and is any of this a good idea?

Attention! Captain on the Bridge!

Satya Nadella, first and foremost, is a geek. A humongous, tremendously geeky geek. He’s a complete turnaround from ex-CEO Steve Ballmer who had his hands busy shaping Microsoft but was not a technology enthusiast – Ballmer had a career in sales and building up brands, with little experience in actually building the software his company was selling. That’s one of the reasons why the interwebs are so interested in Nadella and what he can bring to the table – the last geek at the helm was Bill Gates.

Nadella, 46 and married with three children, is an electrical engineer by trade and moved to the U.S. in the 80′s to study further and build up a career. With a Masters degree for Computer Science from the University of Wisconsin–Milwaukee he began working at Sun Microsystems before moving to Microsoft in the early 90′s to become a part of their online services division, a fledgling department at the time.

In the last decade, Nadella has headed up Microsoft’s Business Solutions division, has been the Corporate Vice President of the Search and Advertising Platform Group (yes, he had a hand in Bing) and until his appointment as CEO was President of the Server and Tools division of the company.

Why is he now the head honcho? Nadella understands, probably better than anyone else inside Microsoft right now, that the company has to move with the changing market into offering software as a service. Being one of the key individuals behind Bing Search, Onedrive and Office365, Nadella knows how to monetise services provided by Microsoft through the internet and knows exactly what the company’s biggest customers – other companies and businesses, that is – want on their desktop and in the cloud.

An engineering background also means that Satya is familiar with how things work and may not be as out of touch with reality as Ballmer was. However, it’s unlikely that this means the end of Modern UI and the Start Screen we’ve seen in Windows 8. At best, Satya will likely move to make Windows have less of a split personality, something that the company has been trying to achieve with Windows 8.1.

The Gates have opened and Gates has returned

Bill-Gates-Reddit

Bill Gates’ return to a much more hands-on approach at Microsoft was the second-biggest announcement to hit the news. For years, Gates has been a board member and Chairman, but devoted much of his time to philanthropic pursuits, using the Bill and Melinda Gates Foundation to help solve problems afflicting third-world countries. Gates alone has donated more money to charities and NGOs than most Billionaires combined and has continued to slowly sell off his shares to fund his work in the Foundation.

But he’s also best remembered for being a product visionary and is stepping into an advisory role at Microsoft as Company Founder and Technology Advisor. He will most likely be assisting Nadella with the transition into his role as CEO and advising him on trends in the consumer industry that Nadella might otherwise miss.

He isn’t very good at predicting hardware trends (the 64k comment will forever be famous) and Microsoft’s tablet initiative long before the inception of the iPad failed as well. But if you consider that few people in the company have his ability to execute on a vision (Steven Sinofsky notwithstanding) then he’s probably the person best suited to plant the right ideas into Nadella’s head. Microsoft is still partly his creation, after all.

Who am I? I’m the cleaner

Stephen Elop, ex-CEO of Nokia

Stephen Elop, the Trojan horse that spelled Nokia’s doom. No single person at Nokia has ever managed to wield the destructive power that Elop commanded as he whipped it down to size. During the three years following his announcement in September 2010 as CEO of the Finnish company, Nokia’s revenue dropped by 40%, profits by 95% and market share by an astounding 34%, together with a 60% dip in share value.

At the end of it all, Elop was paid €18.8 million as a bonus, which roughly translates into R280 million. Before leaving as CEO, Elop spearheaded a deal by Microsoft to buy the company, with the understanding that he would leave Nokia and return to the mothership.

A completely ruthless man, by all accounts and an incredibly efficient one at that. You might balk at the suggestion, then, that Elop is probably the best person to overhaul Microsoft’s Devices and Services department.

Consider that the Xbox division hasn’t made any significant profit in the last fifteen years that it’s been operational. While the Xbox 360 and the One have been successes despite shortcomings and though Xbox Live Gold brings in about a billion Dollars a year, it’s not enough to balance out the money that Microsoft has been pouring into it. Elop will probably play the clean-up role in here again, slimming the unit down, getting rid of dead weight and focusing the employees in the division to make the One fit into the One Microsoft vision that Satya Nadella hopes to bring to the company.

This means that Xbox, along with Microsoft’s Surface line, could see a radical shift in tactics. Elop made Nokia reliant on Windows Phone by dumping everything that didn’t fit – Meego, Symbian 5 and S^3, even going so far as to buy other businesses that had services which would fit into the Nokia-flavouried Windows Phone. It worked for Microsoft, boosting overall sales and even taking in a chunk of market share and it worked for Nokia, since their Lumias were always going to be the better ones anyway.

But beware, folks, beware. Elop did mention months ago that, were it up to him as CEO, the Xbox and Bing division would be cut out of Microsoft for good. Let’s hope he doesn’t end up destroying the brands which make up what will always be an important part of Microsoft’s offering to consumers.

Sources: DailyTech, Forbes

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  • XCal1bur

    That Elop guy scares me…. Xbox is an important brand. Without competition the game industry will stagnate into paralysis. I’m holding all my fingers cross this guy keep his destructive hands miles away from the Xbox brand. Constructive is fine, destructive, please no….

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