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Will Nadella shake up Microsoft more than expected?

Thor Olavsrud | Feb. 6, 2014
The reception has been lukewarm to Microsoft's decision to name 22-year Microsoft veteran Satya Nadella as CEO. Critics wonder if Nadella can make the changes the company needs. But he has a history of change from within.

Nadella has charted such a course for Microsoft before. For instance, he helped Microsoft see the value and potential in open source software.

"Satya has reinvigorated Microsoft's server and tools business," venture capitalist and former Microsoft executive Brad Silverberg wrote in a guest commentary for CNET.

"He's done a remarkable job getting Microsoft to move fast on the cloud and begin staking out a strong position against difficult competitors, such as Amazon. Most of all, he recognized that the world has changed and that to be relevant and become a leader again, Microsoft needs to embrace those changes and offer solutions for customers that fit in that new world. Whereas once open source was regarded as a cancer at Microsoft, Satya has found a way for Microsoft to add value while supporting new standards, like Linux, Hadoop, Ruby on Rails. It's exciting to see Microsoft play well in this new world and offer differentiated solutions."

"Relevancy, not longevity, is what Satya said was important," Silverberg adds. "I couldn't agree more, and when I read those words from him, I knew he was the right person to lead the company in this critical next stage."

New CEO Must Deal with Windows and Windows Phone Struggles
Nadella faces a considerable challenge as he steps into the CEO role. While Microsoft's commercial business has continued to thrive, its Windows and Windows Phone businesses have struggled.

"Keeping the parts of the company he knows well on track is the easy part for Nadella," Wildstrom says. "Fortunately, the cash that continues to pour out of the Microsoft enterprise engine buys plenty of time to fix the not-so-good parts. The first challenge is dealing with Windows. Not being a stupid company, Microsoft realizes that it made a fundamental mistake in the design of Windows 8."

Salvaging Windows after that debacle may be Nadella's first concern. Figuring out what to do with Windows Phone and Nokia will likely be a close second.

"Now that the other shoe has fallen, we will begin to see what sort of changes Nadella will be making in Microsoft's foggy future," writes Stowe Boyd, researcher-at-large with GigaOm Research.

"What does he think about Nokia: Is it the key to the future or a boat anchor threatening to swamp Microsoft's mobile aspirations? Will Xbox be spun off? Will Bing be shut down? Will he come out and say that enterprise software and cloud are the future of the company? Or will he simply follow the 'fight every sector' model that Ballmer set up for the company? I can't wait to see what happens in the first 90 days."


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