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Satya Nadella at six months: Grading Microsoft's new CEO

Woody Leonhard | Aug. 5, 2014
The future emerging for Microsoft under Nadella is a mixed bag of hope and turmoil.

Although some people buy into the "dual user" marketing direction, I've seen a whole lot of evidence that consumers want simpler solutions that don't get bogged down in corporate baggage. The first time your Windows wristwatch blue-screens, you can tell me different.

Consumer market vision grade: D.

Then there's Windows. Salvation may be at hand, but Windows is dying, and Microsoft hammered eight nails into the coffin. Nadella gave the go-ahead to put all of the Windows effort into one team (an unconscionable lapse of the Ballmer/Sinofsky era), but now we're looking at a forthcoming version of Windows that's supposed to run on everything, everywhere. Of course that won't happen except in marketing drivel — Microsoft, after all, can call anything "Windows" — but there's been precious little insight or direction coming from Redmond about where it's headed with Windows, the most ubiquitous Microsoft product.

Windows transparency grade: F.

The financials
Microsoft's stock, which was doing well after Ballmer announced his impending departure a little over a year ago, has been positively golden. Microsoft's shares closed just under $37 on Feb. 4, 2014, and their value lately hovers around $44, for an increase of about 20 percent over six months.

Company value grade: A.

Nadella only had a small impact as CEO on Microsoft's financial results for the fiscal year ending June 30, but those results speak for themselves: $87 billion in revenue, $28 billion in operating income, commercial cloud revenue (including Azure and Office 365) at a $4.4 billion annual rate, $86 billion in cash — all records. Nadella's impact as CEO will show up in the numbers next year, but his old job had a big effect on the numbers that were recently released.

Company financials grade: A.

Overall grade
How you rate Satya Nadella overall depends very much on what you value. If you're looking at stock price and financials — certainly a worthwhile barometer — he's done exceptionally well in a short period of time, and he'll likely continue to do well. In that regard, he definitely gets an A.

If you're a Nokia employee, your perspective might be a bit different.

Looking at Nadella's performance from the point of view of a stuck-in-the-mud, old-fashioned Windows and Office guy, he's clearly not all that interested in my dying technology. I give him a C—, extending the benefit of the doubt largely because he is keeping Windows and Office alive, although he won't tell us much about what it's going to look like. Also, there may actually be progress with Surface ... some day.

Putting on my other hat, as an enthusiastic tablet toter, phone puncher, and media consumer, I still don't see any signs that Microsoft will come up with something that'll turn my head. I'm not a dual user, and I don't want to be a dual user, although I'll begrudgingly admit that Office for iPad is a treat. Let's call the consumer recap a C.


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