Nadella's Big Moment: 5 Things To Watch

Microsoft CEO Satya Nadella will face stratospheric expectations Thursday when he makes his first public appearance since succeeding Steve Ballmer. Here's what we want to know.

analysts and customers have argued that the company must stop making devices, and instead focus on lucrative enterprise products. The Surface line's notoriously poor debut only fueled this fire.

Since Nadella became CEO, Microsoft execs have continued to stress the importance of consumerization. Employees become regular people outside the office, they've argued, and don't want to use completely different tools in each role. This is true enough. But should Microsoft deal with BYOD by releasing its most popular software to competing platforms, as an Office for iPad release would imply? Should it, as a recent ZDNet report claims, provide better management tools for mixed-OS offices? Should it keep building Xboxes and Surface tablets?

It's possible, and perhaps even likely, that Nadella would answer all of these questions in the affirmative. But at some point, the strategies start to conflict. Office for iPads poses an obvious threat to Surface sales, for example. How Nadella apportions resources and emphasizes products will be central to his success.

4. What about developers?
Ballmer can be rightly defended as a passionate salesman and an unabashed Microsoft cheerleader, but few people consider him a tech luminary on the order of Bill Gates or Steve Jobs. Nadella isn't quite that revered yet, but compared to Ballmer, he commands substantial respect from technical audiences.

Microsoft has struggled with such audiences in recent years, as developers have dedicated more attention to iOS and Android than to Windows platforms. Nadella has cannily helped Microsoft to endure this challenge by positioning Azure as an open cloud platform. In Microsoft's ideal world, the strategy could allow Azure to monetize the success of competing platforms, allowing it to become the architecture of choice for the new computing landscape. But Microsoft needs developers writing for its own properties, too -- and Nadella could help.

Windows 8.1's Modern UI and Windows Phone both need attention from developers, and Microsoft is trying to turn properties such as Bing and Office into development platforms as well. Nadella's success will be judged partly by the degree to which he can inspire the technical community. One rumored strategy that has garnered support in recent weeks: Microsoft could purchase Xamarin, a popular cross-platform mobile development framework.

5. Can Nadella satisfy Wall Street?
Many investors were critical of Ballmer's leadership, especially as it became clear he'd misjudged the mobile revolution. Since Ballmer announced his retirement plans last year, the company's stock price has trended up. Following recent reports that Nadella will announce Office for iPads, the company's stock shot above $40, reaching heights not seen since the dotcom boom.

But stockholders are notoriously fickle. Apple's stock often builds in the days leading to a product announcement, only to fall immediately thereafter. The same could happen to Microsoft Thursday, especially if the company fails to announce an iPad product, or if the product is revealed but falls short of expectations.

Activist investors are another concern. ValueAct, a hedge fund with a large stake in Microsoft, recently succeeded in placing its president, Mason Morift, on the Microsoft board. Microsoft has publicly downplayed rumors of tension, but ValueAct reportedly opposes the device strategies Ballmer pursued. If true, Microsoft's evolving board could affect how Nadella leads.

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