Now that Microsoft has a fresh CEO, let’s think a little bit about the new possibilities this opens up.

Even though the “new” guy, Satya Nadella, is a 20-year veteran; he represents a meaningful committment to a fresh approach, since he is the only non-founder to be named CEO since the beginning. Before now, you could argue that Gates and Ballmer have guided the company with the same authority and principles all along, which may have made its entry into new markets difficult for the company culture. I think it’s evident by now that they aren’t coming in 1st place anymore in the consumer space, with the failures of Windows Phone, Bing, and the Surface tablets. A new set of priorities, launched by a new CEO, could change the way Microsoft is perceived, both within and outside of the company.

It seems that one thing Microsoft won’t be doing anymore is listening to Steve Ballmer. From his sudden “resignation” during a restructuring, and his refusal to say exactly what his new role will be in the company (short-term or long-term), it seems obvious to me that he was pushed aside. The board, perhaps convinced by Gates, probably told him to set a date and promised dignity if he went gently into the night.

Also interesting is that Gates is giving up his role as chairman to take a position as advisor to Nadella, and he says he is doing this at Nadella’s request. But we don’t know what kind of a personality Nadella is, yet. I view the possibilities as a combination of these three extremes:

  1. Gates will not actually be advising the new CO, but Nadella won’t be making major changes anyway. The new Microsoft will be iterative and thoughtful, focusing on the enterprise first and slowly draw back its battle for consumer mindshare.
  2. Gates has been itching to be back in a leadership role, and finally managed to get Ballmer out after witnessing his decade of mistakes from the sidelines. Gates picked Nadella because he will listen to his direction and be a fresh face for the company to rally around while he implements all of Gates’ ideas.
  3. Nadella plans to make large, sweeping changes, and will rely on regular appearances from Gates to make employees and investors fall in line. Otherwise, the founder will stay out of the day-to-day and trust the new CEO.

The second option is the most fun to think about, but in reality, seems the most ridiculous to me. The Bill & Melinda Gates Foundation is more than a full-time job, and one he clearly enjoys and sees as more important than anything Microsoft is doing. Besides, at the rate Gates is selling his own shares, he will soon no longer be the largest shareholder, reducing his influence even more.

We don’t know much about the new CEO’s style yet, but my guess is that the board wouldn’t have allowed this arrangement if he plans on doing anything close to #3. Microsoft isn’t a fast-moving company and a new CEO isn’t going to change that culture.

That leaves the first scenario. Microsoft will continue soaring with their strengths, which right now is the Azure and enterprise services division. My guess is that the next major release of Windows under Satya Nadella will essentially be a hardware-accellerated portal into Azure, where everyone’s information flows to and from their Microsoft account, and enterprises are married even deeper into Microsoft’s services.

Posted Fri 07 February 2014