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What new CEO Nadella's promotion means for Microsoft's cloud

Brandon Butler | Feb. 5, 2014
Satya Nadella has grown Microsoft into a relevant cloud company, now the company has to take the next step forward.

This combination of PaaS, IaaS and SaaS, along with both public, private and hybrid clouds, makes Microsoft one of the few companies with a broad portfolio, plus the scale and enterprise credibility to be a major cloud computing provider. "In (Nadella's) tenure we have seen a significant shift among the group to Azure and SaaS first, much more agile release processes and significant improvements in cohesion," says Forrester cloud analyst James Staten. Nadela's promotion is a validation of that work and a continued commitment to the cloud computing model.

Despite all these advancements, the company is still seen as second fiddle to AWS though, says Michael Cote, who tracks the IaaS market for the 451 Research Group. The biggest challenge for Microsoft and Nadella in the cloud computing market moving forward is to attract and retain developers on the Microsoft platform, says Michael Cote, "It's one thing to have software to run cloud and mobile, it's another thing to attract the developers," he says.

Linthicum, the consultant for Cloud Technology Partners, says he'd like to see Microsoft make some bold moves in the industry, which thus far has been left for AWS to do. "What needs to be on the Microsoft to-do list right now is to figure out how to be innovative around the emerging use of cloud computing, beyond just being a fast follower," he says. "The days of Microsoft pushing into a space after it's emerged, and beating the hell out of the competitors there are long gone. You get market share through innovation and execution; Microsoft has not shown me much there since cloud began to emerge."

Just how much of a focus will cloud be for Nadella as he is promoted? In his first video interview as part of the announcement, he made it clear cloud and mobile are two major focuses for the company moving forward. "Going forward, it's a mobile first, cloud-first world," Nadella said in the interview. "In other words, everything is becoming digital and software driven. And so I think of the opportunities being unbounded and we need to be able to pick the unique contribution that we want to bring."

Nadella recognizes the importance of the cloud for Microsoft because he helped build it and his promotion is a validation of that work. But with so many other priorities now as CEO, from mobile to search, gaming and hardware, the question is how that strategy will continue to evolve under Nadella's leadership at the helm of the broader company.


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