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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

February 5, 2014 at 12:43 PM

Microsoft’s Satya Nadella, CEO for a golden age of software

There has been a lot of talk about world champions in Seattle lately.

Now we have another winner, in the biggest CEO search game around, though it’s a little early to throw Satya Nadella a parade.

Whether Nadella is embraced as warmly as the Seahawks remains to be seen because we haven’t yet seen how he will perform on the global stage, battling some awe-inspiring competitors.

Microsoft photo

Microsoft photo

Nadella must also overcome growing indifference to his team, even among some in his hometown who favor San Franciscans over the local powerhouse.

Replacing Steve Ballmer won’t persuade iPhone lovers to swap for a Nokia Windows Phone or Google fans to switch to Bing.

But Microsoft has a better chance of winning over a more important audience — developers building and using Microsoft software — by rebooting the company and replacing its business-oriented boss with an engineer who worked his way up from the trenches. Especially one who earned his chops on do-or-die projects where the company was the underdog, fighting to establish itself in critical markets such as servers, search and cloud computing.

If Nadella wins over that crowd, and can keep and attract top talent through Microsoft’s overhaul into a more mobile and online focused enterprise, the rest should fall into place.

The company didn’t hire Nadella to win over fair-weather fans, though activist investors are apparently pleased with the choice. Nadella was hired to lead the company through its next generation.

Ballmer is a business genius who grew Microsoft’s earnings, head count and product lineup — though not its stock price — through the dot-com hangover, antitrust morass, historic recession and upheaval in the computer industry.

As a farewell gift Ballmer reorganized the company around devices and online services and positioned it as the world’s second-largest producer of mobile phones, with the Nokia acquisition that’s closing shortly.

Now, with a new era of computing unfolding — as our lives become almost completely connected and bound by software and wireless gadgets — Microsoft is in the sweet spot. It’s time for someone who is more like Bill Gates, someone who gets excited not only about winning and innovating, but also about building amazing new things with software.

“Satya is the right guy for the right time,” said Sanjay Parthasarathy, a former Microsoft vice president who hired Nadella in 1992 to join an advanced-consumer-technology group working on interactive TV.

“Technology is just so much more interesting these days than growing revenue and sales necessarily,” he said. “That will come — but creating a sales and revenue machine, that was for a different time. This is for a technology time.”

Parthasarathy, who left Microsoft in 2009 and now runs a Seattle startup called Indix, said we’re entering another golden age of software in which Nadella is particularly well suited.

“The developers will see him as one of their own — there’s no question of that — but he also brings a broader perspective on things,” he said.

Choosing Nadella sends other messages.

If the company brought in a seasoned “fixer” executive from another industry, it would have affirmed skeptics who think Microsoft is a lost cause.

It would also raise questions about why a company with nearly 100,000 employees was unable to cultivate one to run the show. Instead, it offers the ultimate reward for loyalty and performance.

You could also look at the 46-year-old native of Hyderabad, India, as an embodiment of Microsoft’s platitudes about empowering and elevating people around the world. After graduating from the public Mangalore University in India, he received degrees in computer science and business administration from the universities of Wisconsin and Chicago.

Taken in Hyderabad's old city center

Taken in Hyderabad’s old city center

Yet at this point — with executives of Indian descent leading major companies such as PepsiCo and Adobe and well established in the tech industry — Nadella’s ethnicity is not as significant, at least according to Vijay Vashee, an early Microsoft manager who is now a philanthropist and startup investor.

“The world has become so global that some of these things are not as relevant as they used to be. Indian origin, that just happens to be a fact,” Vashee said.

This emerging status quo is also reflected in Microsoft’s upper echelon, he noted, with Nadella working alongside an African-American chairman and senior leaders who are women and of Chinese descent.

More important may be that Nadella has a gift for working with all sorts of people. Vashee recalls a particularly challenging employee who thrived under Nadella’s leadership.

“This guy just loves Satya,” he said. “Satya found a way to have the aggressiveness have an impact and not a negative impact — you understand what I’m saying?”

Microsoft can’t afford to continue losing technical talent, Vashee said, and must “give them an avenue to show their innovation and allow their innovation to be recognized.”

Talented players also want to play on teams with the potential to win it all.

Like the Seahawks, Microsoft won in recent years largely with defense, holding on to its dominant position in personal and business computing. Nearly 40 years on, its software still runs more than 90 percent of the world’s PCs.

Microsoft’s offense gets less respect but has steadily gained ground in some areas, such as cloud computing, search and gaming.

Let’s give Nadella a few years and see how things develop. We’ve had pretty good luck lately with unproven quarterbacks who went to college in Wisconsin.

Comments | Topics: Bill Gates, Billionaire techies, India


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