Feb 4 2014, 4:01pm CST | by Forbes
Today, Microsoft named Sataya Nadella as the new CEO of Microsoft. He’s only the third CEO in the company’s 39 year history. Nadella was previously Microsoft’s Executive Vice President of Cloud and Enterprise . He’s a 22-year veteran of Microsoft that most recently managed Microsoft’s high growth cloud computing business division. The appointment comes at a critical time for Microsoft and for the computing industry. Companies are undergoing a fundamental transformation as mobile , cloud computing, big data hardware and analytics change the underlying technology infrastructure of business. Several things are apparent as a result of this appointment. First and foremost, there will be no major shakeup at Microsoft. Second, Nadella has a fundamentally different personality than the previous CEO, Steve Ballmer . This change could foster a culture of experimentation. Third, he understands the new world of cloud computing.
It shouldn’t be a surprise that the board selected a seasoned Microsoft executive. Surviving and thriving in an organization of that size is a skill within itself. It means Nadella understands how things work at Microsoft and how to get things moving. This is an incredibly valuable in terms of turning around a company’s vision. He can skip the six to twelve month process of “understanding” how the company operates. He’s been in the running for this position for some time. He’s most likely formulated his 100 day strategy. He can focus his efforts on change management. While the industry hoped for a shakeup, it’s safe to have someone that understands the company.
The downside concerns are obvious. Can an executive that has spent his entire career at Microsoft deliver fresh new perspectives? Where will he source these new perspectives? With the appointment comes another obvious question. What does it mean for the mobile team? Will the appointment of the cloud guru spell bad news for mobile or a lack of direction?
In short, the answer is no. Mobile is a software business. Apple, Blackberry, Nokia and Samsung all make beautiful hardware. The success or demise of their solutions has come down to the success of their software and distribution strategies. Increasingly the differentiation within mobile has come down to two things. How easy is it for third parties to deliver value on top of a company’s mobile platform and what is the breadth and depth of the ecosystem of partners. Mobile and cloud are inextricably linked. Without cloud, many of the applications and services we use on mobile devices wouldn’t exist. To the extent that Nadella can make Microsoft’s cloud and mobile strategy come together, Microsoft may have a shot at a strong mobile comeback.
Many people believe the mobile battle is over. In fact, it’s just beginning. Globally, many people are buying their first smartphone or upgrading to their second phone. We’re also just embarking on the world of connected devices, such as wearables and the Internet of Things. These devices will demand new platforms, software and services. What is the operating system for IoT/connected devices? Who will provide the platform for management and security? Where will the services that make IoT valuable live? It sounds like a cloud play to me. Who better to fuel the future of IOT and computing than Microsoft?
One big question remains. Can Microsoft make and execute on the big bets that it would take to be successful? Nadella will need to foster innovation internally but he will also need to attract new talent. He needs an personal external board of advisors from other industries that can provide outside perspective. He has enough mobile talent in the building. He needs to empower these employees to do something. He needs to have the speed of a start-up and the fearlessness of one. He’ll have to ignore Wall Street and focus on what’s right for the company.
In truth there is nothing new and earth shattering in what Microsoft needs to do to be successful. It’s been the same story for at least 10 years. Most of the issue with Microsoft is that it had many good visions that it never fully executed on. It needs to bring its technologies out of the labs and into reality. It needs to keep its most innovative people by allowing them to experiment. Microsoft has to stop paying lip service to innovation. Don’t say you want innovation but only fund the cash cows. Don’t say you want innovation and refuse to cannibalize any part of your business. They had Windows CE but lost the lead. The company played it safe and it lost the first 3 innings of mobile.
The good news, we are at the beginning of the next computing revolution. Wearables, digital health and automotive solutions are just coming to market. Contextual computing, where we can deliver predictive and prescriptive services, is just hitting the marketplace. In the words of Nadella himself, “As we look forward, we must zero in on what Microsoft can uniquely contribute to the world.”
What should Microsoft do to change its fortune in mobile? Comment here or find me on Twitter at @MaribelLopez
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