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1/31/2014
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Microsoft CEO Search: 3 Things Satya Nadella Brings

Microsoft is set to name Nadella as its next CEO. Take a closer look at who he is and what he brings to the table.

7 Mistakes Microsoft Made In 2013
7 Mistakes Microsoft Made In 2013
(Click image for larger view and slideshow.)

Microsoft is preparing to introduce Satya Nadella, the company's executive VP for cloud and enterprise, as its new CEO, according to numerous reports. An official announcement reportedly could arrive within the next several days.

Since Microsoft CEO Steve Ballmer announced last year that he would be retiring, many would-be candidates have taken turns at the center of speculation. But even as possible Ballmer successors, such as Ford CEO Alan Mulally and Ericcson CEO Hans Vestberg, entered and exited the conversation, reports have consistently listed Satya Nadella among those under the most serious consideration.

Citing multiple unidentified sources, news website Recode reported Wednesday that Microsoft was close to choosing Nadella. Bloomberg followed up the next day, stating that a source with knowledge of the process had corroborated Nadella's status as CEO-in-waiting, and adding that the Microsoft board might replace Bill Gates as chair. Bloomberg noted that plans are not final, though reports have suggested for months that some prominent investors are wary of Gates's and Ballmer's continued presence on Microsoft's board. Reuters subsequently cited its own unnamed source who stated Nadella is likely to be named CEO in coming days.

[If learning from your mistakes is key to success, Microsoft should have a great 2014. See Microsoft In 2013: 7 Lessons Learned.]

Who is Satya Nadella and why might he become Microsoft's next leader? Here are three major strengths Nadella brings to the table.

1. Nadella blends leadership skills with technical expertise. Commentators have debated for months whether Microsoft's next CEO should be a tech visionary, à la Gates, or an expert manager and businessperson, like Ballmer. In Nadella, an accomplished engineer who also holds an MBA from the University of Chicago, Microsoft might have found both.

"He is an incredibly smart guy who really understands the cloud business and knows how to run it effectively," said IDC analyst Al Gillen in a phone interview. "He is very, very impressive as an individual and a tech manager."

2. Nadella has led Microsoft's most promising efforts. Nadella has spent most of his career at Microsoft, joining the company in 1992 after a stint at Sun Microsystems. Nadella has led Microsoft's cloud and enterprise efforts, building the foundation for successful products such as Windows Azure and Office 365. These efforts encompass many of the Microsoft projects that have grown most rapidly in recent years, and which analysts consider most important to the company's future. Some commentators had questioned whether alleged CEO front-runners such as Mulally would have the tech chops to lead Microsoft, but Recode's report said company insiders consider Nadella an uncontroversial choice due to his diverse skills and strong track record.

Microsoft executive VP Satya Nadella.(Source: Microsoft)
Microsoft executive VP Satya Nadella.
(Source: Microsoft)

3. Nadella is an energetic leader. Microsoft's next CEO will have to negotiate a course filled with a range of critics and collaborators. He or she will have to keep investors, many of whom were never supportive of Ballmer, both satisfied with quarterly progress and invested in long-term goals -- a potentially conflicting mandate, given Microsoft's much-debated and slow progress making its own devices.

The next CEO will also have to inspire developers to support Microsoft's flagship platforms, such as Windows 8.1's Modern UI. He or she will also have to reconnect with a user base that has rejected Windows 8 and 8.1. If that's not enough, Microsoft's next leader will have to oversee extended implementation of the companywide reorganization Ballmer unveiled before announcing he would retire.

Last year, Forrester analyst David Johnson told InformationWeek that Nadella could be right person to tackle these challenges. He said Microsoft needs a leader who can energize employees and partners, and that Nadella has the charisma and intelligence to do the job.

Gillen expressed similar sentiments. He said Nadella is well-liked and respected, though he countered that the CEO role is bigger than anything Nadella has conquered to date, which might give some board members pause.

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Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

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melgross
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melgross,
User Rank: Ninja
1/31/2014 | 8:13:06 PM
Re: Nadella represents Microsoft's strengths
But that exactly one of the things I'm worried about. He specializes. The CEO shouldn't have ties to one area. (S)he should be able to look at the company in its entirety and decide what needs to be cut, and what needs to be enhanced. He also needs to be able to tell Microsoft's story to customers. I'm not sure he can do that.
melgross
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melgross,
User Rank: Ninja
1/31/2014 | 8:08:00 PM
Re: Secondary choice, or tertiary choice?
He may be the best choice of who can realistically be expected to take the position. But that doesn't mean he's a great, or even good, choice. I think the idea that Microsoft needs someone who excels technically, is incorrect, just as it was with IBM, a substantially more technically complex company than Microsoft ever was. Microsoft needs someone who can project a feeling about Microsoft that says that they are there for people, not just for themselves. I don't think that anyone within Microsoft can do that, they are all part of the problem. They also need someone who isn't too close to any particular product lines. That can't be said about anyone in Microsoft either. Will he favor his old areas? And it's a big difference between running a division, and running the entire shebang. A CEO has to make decisions that a division chief never need consider.
RobPreston
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RobPreston,
User Rank: Author
1/31/2014 | 5:09:45 PM
Re: MS Insider Vs. Outsider
I agree with Chris Murphy here. Why is an outsider necessarily better than an insider? My father used to make fun of people who blindly hold to the notion that "far is better"--the notion that that "special" bakery 15 miles away is superior to the local one...mostly because it's far away. In the Microsoft case, insider knowledge is extremely valuable. I like the sound of Nadella. Don't underestimate him because he's an insider. 
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
1/31/2014 | 4:21:37 PM
Re: MS Insider Vs. Outsider
That's a criticism I used to hear about Ballmer: That he would actually repress efforts to groom his successor.  Probably paranoid.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
1/31/2014 | 4:07:23 PM
Re: MS Insider Vs. Outsider
Why is choosing an insider a sign of weakness? If a CEO is a decade in the job and hasn't groomed any successor candidates, that's a failure. 
Laurianne
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Laurianne,
User Rank: Author
1/31/2014 | 3:24:36 PM
Re: Secondary choice, or tertiary choice?
No disrespect to Gerstner, but he also benefitted from great timing, getting in on the services wave. Will Nadella have that same kind of chance? He faces a harder road than Gerstner did, IMHO.
Lorna Garey
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Lorna Garey,
User Rank: Author
1/31/2014 | 2:32:31 PM
Re: Nadella represents Microsoft's strengths
Exactly - Bezos should worry. Expect Azure to go after AWS with guns blazing this year. MS has the cash and enterprise cred to do it.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
1/31/2014 | 1:36:30 PM
Re: MS Insider Vs. Outsider
I think the consensus is that Nadella is a solid but conservative choice. I don't think Microsoft has the gumption to tap an outsider. Nadella has been with Microsoft since the early '90s so he's the last thing from an outsider. If Nadella gets the call that signals to me it will be business as usual: hard-charging on enterprise tools and cloud, but still directionless on consumer because he has no consumer leadership experience. Then again, I've heard about Nadella's charm and likeability so maybe he'll have better relationships with the consumer side of the business and be the uniter that Ballmer never was.

 
Canamjay
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Canamjay,
User Rank: Apprentice
1/31/2014 | 1:01:09 PM
new CEO for MSFT?
Well, he's certainly a snappy dresser!! I do remember him vaguely from Sun I think.. he worked on the emerging big server products when the net was starting to build out. Not very chatty.
cbabcock
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cbabcock,
User Rank: Author
1/31/2014 | 12:54:06 PM
Nadella represents Microsoft's strengths
Nadella is an insider, yes, but he also represents the strenghts of Microsoft beneath its flailing pursuit- of-consumers surface. Microsoft is a very strong systems company in both the enterprise data center  and the cloud. Nadella doesn't flinch from that. And he's fearless.
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