Smith said that Nadella would have to beef up his expertise on areas where he was less experienced, namely mobile and the consumer business. Although Microsoft has turned to Julie Larson Green (now executive vice president of Devices and Studios), as well as Tami Reller (executive vice president of marketing), the analysts I interviewed recommend that Microsoft look outside the company at some fresh, new blood.
Where are the moonshots?
Microsoft investors were relatively nonplussed by the deal, sending shares up just 19 cents, about half a percentage point. Microsoft's stock price nearly touched $38 on Monday, however.
That may be because Wall Street views Nadella as a rather uninspiring choice, without the vision or leadership to really add to Microsoft's product portfolio. In some ways, this is a rather short-sighted perspective.
Microsoft's moonshots are right under its nose: helping to grow Bing into a true rival for Google — a task Nadella never accomplished — while Google works to minimize the value of reactive search, making it proactive with technologies like Google Now. Microsoft needs to get its house in order in the mobile space, fitting the massive Nokia piece into its organization. Microsoft must then get its house in order in the mobile space, providing coherency across its mobile services, while continuing to develop a coherent apps ecosystem.
Forrester's Schadler said that one of Microsoft's strengths is understanding and addressing both sides of the customer: as a businessperson, and as a consumer as well. In his view, Microsoft should (and will) continue addressing the "person," with products ranging from Office 365 to the Xbox One. Perhaps that implies a future wearables push.
How much leeway will Gates give his protege? How far will Nadella be willing to deviate from the course? Gates, like Jobs and other CEOs, built Microsoft as much from his gut as from a spreadsheet. Ballmer was reportedly dismissive of new ideas unless he received data showing that they could work. Nadella appears part of the modern breed of managers — someone who argues for change only if the numbers back it up.
However, the narrative that Microsoft is crafting around Nadella appears to be one of curiosity. "I fundamentally believe that if you are not learning new things, you stop doing great and useful things," Nadella wrote in his letter to employees. He says he's here to "change the world". But if he does so, history says he'll do it one careful step at a time, rather than in a big leap of faith.
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