On the one hand, Microsoft just posted record revenue, a neat trick considering its hard-to-eclipse history and the PC industry's ongoing decline. It also beat Wall Street estimates for the second consecutive quarter. Given that earnings were driven by the enterprise products Nadella oversaw, his promotion to the top job in Redmond is in many ways a just reward for 22 years of outstanding work.
But it's hard to find a company as rich and successful as Microsoft that is so consistently dogged by doomsday prophesies. Commentators blasted outgoing CEO Steve Ballmer's consumer-oriented strategies in the months leading up to his August retirement announcement, citing the company's irrelevance in the mobile market, embarrassing sales of first-generation Surface products, and myriad objections to Windows 8.
Nadella inherits all of these concerns, as well as the disarray of an ongoing company-wide reorg that seeks to replace divided teams and internal politics with a collaborative culture and common vision. At the same time, he must also contend with speculation that Microsoft settled on him only after higher-profile candidates, such as Ford CEO Alan Mulally, dropped out.
As if that weren't daunting enough, he'll have to continue the progress he made as the company's enterprise and cloud chief. As Nadella asserted in his first remarks as CEO, the company's future is in the cloud. Microsoft's Windows and device strategies need attention, but not at the expense of Azure and the online services it supports. These face heated competition from Amazon and Google, among others.
Microsoft CEO Satya Nadella
Is Nadella up to the task? Here are six goals he must prioritize to get started.
1. Remember how you got here. As a 22-year Microsoft veteran, Nadella has a close relationship with both Bill Gates and Ballmer. It is perhaps too close, if you were among the people hoping Microsoft would select an outsider to defenestrate the Surface line and double down on enterprise products.
Indeed, in his first statements, Nadella made clear that he will pursue Ballmer's "One Microsoft" blueprint, device ambitions and all. But he also repeatedly described a business model grounded in a mobile-first, cloud-first stratagem -- and that should come as no surprise. He's been internally advocating the same ideas for years, often to disruptive effect.
In advancing products such as Windows Azure, Bing, and Xbox Live, Nadella "has made significant innovations around agility," Gartner analyst Merv Adrian told InformationWeek in a phone interview. He noted that Nadella championed iterative releases when Microsoft's status quo still revolved around monolithic updates that arrived every few years.
Nadella has also shown a willingness to break from Microsoft's historically proprietary-minded playbook. Under his leadership, the company's cloud products have become increasingly open, supporting not only Microsoft software and services, but also a wide range of other workloads.
"There have been fewer sacred cows when he is in charge," said Forrester analyst James Staten, who said Nadella overcame internal opposition to push products such as SQL Server into the cloud.
As CEO, Nadella must remember the strategies that have worked for him so far. Ballmer drew the broad outlines of "One Microsoft," but Nadella will be responsible for sketching in the finer details. If those details include his past projects' openness, agility, and irreverence for tradition, Microsoft's new CEO will have taken a step in the right direction.
Still, Nadella could face challenges implementing this attitude across the entire company.
"Microsoft has evolved to be less proprietary over the years," said Gartner analyst David Mitchell Smith in an interview. "But that's easier to do on the
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
Top IT Trends to Watch in Financial ServicesIT pros at banks, investment houses, insurance companies, and other financial services organizations are focused on a range of issues, from peer-to-peer lending to cybersecurity to performance, agility, and compliance. It all matters.
Join us for a roundup of the top stories on InformationWeek.com for the week of October 9, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."