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Nadella, Gates: Right Team For Microsoft?

Does the pairing of Nadella and Gates foretell Microsoft's return to glory or a new era of dysfunction? Take a closer look.

$1.2 million but could rake in up to $18 million in 2015, has a track record to back up calls for innovation.

Staten, whose research focuses on Microsoft's cloud efforts and who has met with Nadella periodically over the years, said the new CEO has relied heavily on data to make his case, such as when he faced an uphill battle rallying Microsoft's Server and Tools division around the cloud.

Nadella referenced these challenges last fall in an interview with ZDNet. He exhibited a willingness to challenge Ballmer and Gates, dismissing their tendencies to yell and scream as "melodrama."

"You come back at it with data," he said at the time, shortly after Ballmer announced his retirement intentions.

If dissenters resisted this analytical approach, Nadella made clear that "he was not going to have them if they didn't get on board," Staten said. He added that he expects the new CEO to bring the same attitude to Microsoft's client group.

He said that Nadella, in a past conversation, characterized Windows 8 as an improperly hedged bet. With the watered-down desktop mode awkwardly tacked onto an unproven touch-first interface, the OS has failed to mobilize developers and partners rooted in the old paradigm.

Even today, nearly 15 months after Win 8's release and more than three months after the rollout of Windows 8.1, the Windows Store remains an afterthought for most developers, who continue to throw their weight behind iOS and Android. With cheap Android tablets gobbling up global market share and iPads still commanding 90% of enterprise tablet activations, why should app makers focus anywhere else?

Nadella now bears responsibility for that question. Reports indicate Microsoft is retreating from some of Windows 8's more hardline UI changes, but Staten predicted that Nadella will focus on showing the value of the tiled Modern, or Metro, interface.

"Up to this point, the unified message has been that cloud, SaaS, and Metro are the [future]," Staten said.

Microsoft co-founder Bill Gates
Microsoft co-founder Bill Gates

Whatever Nadella's approach toward Windows, he's proved himself willing to second-guess his company's past moves. In November, for example, he told Fortune that the company was forced to play from behind in virtualization after "getting [its] ass kicked by VMware," and that "being captive to old category definitions is really a death sentence in this business." Nadella also said at the time that Microsoft was among the few players realistically vying to become a cloud mega-provider.

Ultimately, Gates is going to have an influence, quite possibly a positive one. Ballmer, who will soon become the company's top shareholder if Gates continues to sell off his stake, is still on the board and will retain some sway. Nadella's outlook as leader should be clearer by April, when the company will host its Build conference for developers in San Francisco. A development announcement of Windows 9 is possibly on the docket. But until then, the Nadella-Gates partnership warrants optimism.

"You can count on two hands the number of people who have managed something of [Microsoft's] size," said Staten of Nadella's new role. "Give him a little credit for running a multi-billion dollar business for the last 15 years."

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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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JayMan1
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JayMan1,
User Rank: Apprentice
4/12/2014 | 11:23:29 AM
Re: Nadella's push is for change
I think you're right. MSFT stock has already risen 10-15% since the CEO shakeup, and they are only getting started. The best days for MSFT are yet to come.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
2/10/2014 | 7:58:03 PM
Nadella's push is for change
I think what Michael is getting at in this piece is that Gate and Nadella may be the right combination of founder legitimacy and a disrupter's ability to move the organization. It may not meet Wall Sttreet's definitiopn of what's needed, but if those people actually knew, they'd be as rich as Bill Gates. Nadella does represent change inside an organization that's reluctant to. He may be able to effect more of it in CEO's chair. 
mak63
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mak63,
User Rank: Ninja
2/7/2014 | 11:40:05 PM
actual proof
The article mentions a quote from Nadella that says: "You come back at it with data," I like that very much. Can a business go wrong having that strategy?

In the name of the consumers, I wish the best to Nadella & Gates
sarchiapon
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sarchiapon,
User Rank: Apprentice
2/7/2014 | 10:23:24 AM
Windows 8 is a total disaster and Microsoft will be destroyed by its arrogance
Windows 8 is a total disaster and Microsoft will count nothing in another 6/8 years and will close in 15 years

In the next 3/4 years it will be plain clear.

People are not intersted to strategies and tech discussion. They buy products or not. No one will buy the products of the new Microsoft wave, the one based on the concept of 'one interface for any device' because they are based on an idiotic assumption.

Microsoft is too arrogant to backpedal and this will destroy Microsoft, arrogance.

We have just to wait.
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/6/2014 | 4:08:06 PM
Re: Dell-javue?
@Somedude8, The "soft dollar" stuff is usually found in principle by the founding entrepreneur or owner only to be displaced once the founder or private owner sells or leaves.  BTW, I'm a good Monday morning QB.
Somedude8
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Somedude8,
User Rank: Ninja
2/6/2014 | 1:21:04 PM
Re: Dell-javue?
Its amazing how often the Big Boys totally blow it by underestimating the value of certain 'soft dollar' investments. If its not a hard ROI, it gets cut. Fast forward a couple years, the company is floundering, and they don't understand why. Of course this is a whole lot easier to spot from the sidelines!
DDURBIN1
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DDURBIN1,
User Rank: Ninja
2/6/2014 | 1:10:55 PM
Dell-javue?

This kind of reminds me of Michel Dell's history.  He started the company built it up then turned it over to a money management type that proceeded to run the company into the ground pinching every penny possible.  Dell returned, briefly restoring business only to end up making the same poor penny pinching mistakes.  This looks like the same is happening at Microsoft however Nadella is the wild card.  My guess is that penny pinching will still win out over customer satisfaction with competitive products and prices.

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