Microsoft has expanded the availability of free tools in Microsoft Teams for personal accounts so that people can use the app to connect with…
Ever since the Steve Ballmer announced his retirement in August, the tech press has been rife with speculation about who will replace him as CEO of Microsoft.
Former Nokia boss Stephen Elop’s name came up frequently (even more so after Microsoft bought the ailing phone maker for €5.4-billion), as did Skype CEO turned Microsoft business development chief Tony Bates’ and Microsoft COO Kevin Turner. Heck, some even spoke about Bill Gates making a return to the position he left to Ballmer in 2000.
Ultimately though, two names have emerged as favourites: Ford CEO Alan Mulally, who’s always been a frontrunner and executive vice president of Microsoft’s Cloud and Enterprise group Satya Nadella, who’s always been a bit of a dark horse.
It’s easy to see why Mulally’s name was the one popping up so frequently. He’s done great things at Ford, turning it around as a business and injecting some serious geek cred with the opening of Silicon Valley research centre.
Recently however Ford reiterated its stance that Mulally will stay at the company until the end of his contract in late 2014. “There is no change to the plan,” the man himself said when questioned on the topic.
And while Forbes’s Connie Guglielmo rightly points out that plans change, it might not actually be all that bad a thing if the Microsoft board is forced to scratch Mulally’s name off the list and give the number one spot to Nadella.
Among the things Nadella has in his favour are his geek credentials, emerging markets background and experience of Microsoft’s corporate structures. All of that would matter very little however if he hadn’t performed in his time at the Redmond-based giant. Take a look at any Microsoft quarterly report from the past couple of years though and you’ll see how important the enterprise division, under Nadella’s guidance, has become to the company.
Dirty, sexy enterprise money
If you’re the kind of person who obsesses over Surface sales, you might think I was joking. But in its most recent quarterly financial report Microsoft revealed that its commercial revenue — which comes mostly from enterprise products and cloud services — had grown 10% US$11.20 billion. That’s substantially higher than the US$7.46-billion in device and customer revenue it managed in the same period.
If Microsoft is going to succeed in the future, it’s fairly obvious that it needs someone at the helm who gets how important enterprise is to the company.
Nadella very clearly gets it. Heck, he’s credited with turning around Microsoft’s approach to the cloud, something he’s done so well that it’s now one of the leading players in the space.
This kind of stuff may not be as sexy as the big device reveals, but when people’s jobs are on the line having someone at helm who knows how to grow the business is a lot more important than being able to emit a reality distortion field.
The Indian connection
Speaking of growth, there can be little doubt that Microsoft understands how important emerging market countries could be to its continued survival. Perhaps the most obvious manifestation of that is its decision to buy Nokia. Yes, it gives it more control over Windows Phone’s fate in developed countries like the US (where it currently sits in a very firm third place) but, as TechCrunch’s Catherine Shu notes, it’s really a bet on emerging markets.
In many of those markets, Nokia is still the number feature phone brand. With a compelling range of entry-level Nokia smartphones Windows Phone can poach vital marketshare from people who would otherwise have gone on to buy Android devices. Nowhere is this more true than in India, Nadella’s country of birth.
While the Indian smartphone market is booming, it’s only makes up around 19% of the total mobile market.
In a country of over a billion people, that’s a lot of market left to capture. Sure, large portions of it might not spend all that much on their smartphones, but a lot of people spending a little adds up pretty quickly.
To be fair, part of Nadella’s tertiary education was in the States and he’s lived there for pretty much his entire professional life but Nasdaq.com reports that he still takes an active interest in the country and returns at least once a year to visit his parents.
For the past 21 years, Nadella would have taken those trips back to India as an employee of Microsoft. That means, unlike any outside candidates, he’ll be immediately familiar with the company’s structures if elected CEO.
While some might argue that isn’t necessarily a good thing after the Ballmer years, it does mean that he’ll be able to get down to the business of doing business much faster than most other candidates would be able to.
It also means Microsoft staff could feel a lot less threatened than if an outsider was brought in. It’s the difference between being able to say “I’m one of you guys” and “treat me like I’m one of you guys.”
Let’s make this last
Despite having spent 21 years at the company, Nadella’s still only 44. That means he could be around a lot longer than Mulally, who’s 68. In the best-case scenario, Mulally would most likely be a short-term appointment, a bandaid meant to see Microsoft through to the next medic station.
Nadella on the other hand could put in place that could guarantee Microsoft’s security for a long time to come.
It also means that he can inject some (relatively) youthful energy into the Microsoft top spot. That could be a very good thing, especially given that some of the decisions made around the company’s device launches have felt analogous to the ones your grandparents make when they try to buy you video games for Christmas.
OG: Original Geek
Of course, given the right kind of healthcare, Mulally could remain CEO of Microsoft well into his 80s and, with the right people at his side, he could overcome most of the obstacles I’ve already pointed out. One area where Nadella has the Ford CEO completely licked though is his geek credentials.
Nadella received his bachelor’s degree in engineering from the prestigious Manipal Institute of Technology before earning master’s degrees in computer science and business from US universities.
That means that if he does become CEO, he’ll have a profound understanding of how the products and services Microsoft sends out into the world actually work.
And that’s something Mulally simply can’t hope to match right now.