Microsoft Names Satya Nadella its New CEO. Bill Gates Returns

Satya Nadella, 3rd Microsoft CEO

Microsoft in February 4th, 2014, has made it official that its new CEO is Satya Nadella, replacing Steve Ballmer, as the CEO of the giant tech company. Nadella that has spent 22 years at Microsoft, and was previously Microsoft's Executive Vice President of Cloud and Enterprise, also takes a position on Microsoft’s Board of Directors.

As expected, co-founder Bill Gates is also stepping down as Chairman of Microsoft, but still remains with his advisory role, and assume the new title of Technology Advisor, which will increase his time at the company.

The announcement ends a long search for a new chief after Steve Ballmer announced his intention to retire in August 2013. Nadella is the third Chief Executive in Microsoft's 39-year history, following co-founder Bill Gates and Steve Ballmer.

Born in India with bachelor degree in electrical engineering, master's degree in computer science and business administration, Nadella started at Sun Microsystems in the 1990s before moving to Microsoft in 1992 to help develop Windows NT. Since then, Nadella has worked in numerous Microsoft's department, mostly on the server and enterprise side. Before becoming CEO, he was the head of Microsoft's Cloud and Enterprise group.

Given his background, Nadella is well suited to the services portion of Microsoft's recent realignment towards "devices and services," and boost the company's within the tech industry.

The company that Bill Gates co-founded with Paul Allen in 1974 has received many critical criticisms from both investors and customers in recent years. And with the new CEO, Microsoft is trying to keep up its pace.

"During this time of transformation, there is no better person to lead Microsoft than Satya Nadella," said Bill Gates in a statement. "Satya is a proven leader with hardcore engineering skills, business vision and the ability to bring people together. His vision for how technology will be used and experienced around the world is exactly what Microsoft needs as the company enters its next chapter of expanded product innovation and growth."

Microsoft also said John Thompson, the senior independent director, will succeed Gates as Chairman, the company said in a statement. Shares of the world's largest software maker rose one percent in early trading.

Few people outside Microsoft had ever heard of Satya Nadella until last Thursday, when the Indian-born executive was named as the most likely candidate to become Chief Executive of the technology giant. The appointment comes at a crucial juncture for the company. Gates built the computer giant on the principle that if the software was good enough, the rest would surely follow. It was a strategy that worked for decades.

At the time, Microsoft Windows was so far ahead of the competition, computer manufacturers installed it in their products by default.

However, things eventually changed around it and gadgets rather than software became the keys to success. And Microsoft was rather late to enter the hardware gadget business. When Apple set out with the opposite vision, staking its future on the notion that if its hardware, it had once taken Microsoft's throne as the biggest technology business in the world.

Microsoft was forced to change. Over the past few years, it has produced its Surface tablet, acquired Nokia's mobile handset business and launched Windows 8, a radical reinvention of its iconic operating system that is designed to allow people to flip easily between tablets and PCs.

However, less if not none of these initiatives caught the public imagination the company was expecting, and the launch of Windows 8 was a disaster, both in its timing and execution. The company's morale suffered, with staff and investors complaining that the computer giant had lost its "touch" in culture of innovation.

The cycle of decline has also taken its toll on Microsoft's shares. They have fallen more than a third since Ballmer's appointment in the year 2000.

Microsoft's promises may not be as fast-growing as Google's web search or Apple's shiny hardware, but they are still a valuable. The company's revenues climbed to $24.51 billion in the last three months of 2013, while profits hit $6.6 billion, up from $6.4 billion in the same period the previous year.

Nadella is expected to do well in making Microsoft more competitive, by sharpening its innovation and boosting the morale that suffered.

Gates shifted his focus away from Microsoft years ago, preferring to devote his time and public profile to improving the world's health though the Bill and Melinda Gates Foundation, the charity he established with his wife. But his departure as Chairman still marks a historic moment for the technology business he founded when he was still a student.

In his first interview as CEO, Nadella said the way he thought had been shaped by his life's experience, and that he "loves to learn".

"I get excited about new things, I buy more books than I read or finish, I sign up for more online courses than I can actually finish, but the thing about being able to watch people do great things, learn new concepts is something that truly excites me."

He said that the Microsoft was central to applying human potential to a world becoming more rapidly software-driven when he was asked why he wanted to become CEO of Microsoft.

He said he felt "honored, humbled and excited" to be CEO. "We have tremendous opportunity, and that's inspiring. I want every one of us to find more meaning at work. We spend far too much time at work for it not to have deep meaning.

"The opportunity ahead for Microsoft is vast, but to seize it, we must focus clearly, move faster and continue to transform. A big part of my job is to accelerate our ability to bring innovative products to our customers more quickly."

With his appointment as CEO, Microsoft made him the most powerful Indian-born tech executive in the world.

"While we have seen great success, we are hungry to do more. Our industry does not respect tradition - it only respects innovation," Nadella said. "This is a critical time for the industry and for Microsoft."

"Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can't ask for a better foundation." Bill Gates that is joining the “Founder and Technology Advisor,” a role that makes him take a more active hand in product development. The move seems designed to offset any perception of Nadella's inexperience on the hardware side, and indeed, the team should be a formidable one if Gates is really going to be spending more time. Gates will apparently spend 30 percent of his time at Microsoft under the new arrangement.

Bill Gates will support Nadella "in shaping technology and product direction", Microsoft said.

An email message from Satya Nadella to Microsoft Employees:

Today is a very humbling day for me. It reminds me of my very first day at Microsoft, 22 years ago. Like you, I had a choice about where to come to work. I came here because I believed Microsoft was the best company in the world. I saw then how clearly we empower people to do magical things with our creations and ultimately make the world a better place. I knew there was no better company to join if I wanted to make a difference. This is the very same inspiration that continues to drive me today.

It is an incredible honor for me to lead and serve this great company of ours. Steve and Bill have taken it from an idea to one of the greatest and most universally admired companies in the world. I've been fortunate to work closely with both Bill and Steve in my different roles at Microsoft, and as I step in as CEO, I've asked Bill to devote additional time to the company, focused on technology and products. I'm also looking forward to working with John Thompson as our new Chairman of the Board.

While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation. This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places — as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.

As we start a new phase of our journey together, I wanted to share some background on myself and what inspires and motivates me.

Who am I?

I am 46. I've been married for 22 years and we have 3 kids. And like anyone else, a lot of what I do and how I think has been shaped by my family and my overall life experiences. Many who know me say I am also defined by my curiosity and thirst for learning. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.

Why am I here?

I am here for the same reason I think most people join Microsoft - to change the world through technology that empowers people to do amazing things. I know it can sound hyperbolic - and yet it's true. We have done it, we're doing it today, and we are the team that will do it again.

I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient. The coevolution of software and new hardware form factors will intermediate and digitize — many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning.

This is a software-powered world.

It will better connect us to our friends and families and help us see, express, and share our world in ways never before possible. It will enable businesses to engage customers in more meaningful ways.

I am here because we have unparalleled capability to make an impact.

Why are we here?

In our early history, our mission was about the PC on every desk and home, a goal we have mostly achieved in the developed world. Today we're focused on a broader range of devices. While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us.

As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.

We are the only ones who can harness the power of software and deliver it through devices and services that truly empower every individual and every organization. We are the only company with history and continued focus in building platforms and ecosystems that create broad opportunity.

Qi Lu captured it well in a recent meeting when he said that Microsoft uniquely empowers people to "do more." This doesn't mean that we need to do more things, but that the work we do empowers the world to do more of what they care about - get stuff done, have fun, communicate and accomplish great things. This is the core of who we are, and driving this core value in all that we do - be it the cloud or device experiences - is why we are here.

What do we do next?

To paraphrase a quote from Oscar Wilde - we need to believe in the impossible and remove the improbable.

This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to "do more." We have picked a set of high-value activities as part of our One Microsoft strategy. And with every service and device launch going forward we need to bring more innovation to bear around these scenarios.

Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.

Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it's not just work, but something that will improve other people's lives. This is the opportunity that drives each of us at this company.

Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can't ask for a better foundation.

Let's build on this foundation together. Satya