Microsoft Corp.’s directors could have anointed a visionary outsider to shake up a technology giant that has fallen behind. Instead, they have opted for a safe choice.
Directors are negotiating with 22-year company veteran Satya Nadella to succeed Chief Executive Steve Ballmer, according to a person familiar with the matter. If the board finalizes the pick in coming days, Mr. Nadella will become the third person to lead Microsoft since Bill Gates and Paul Allen founded the company in 1975.
Mr. Nadella has signaled a desire for continuity, telling directors that, as CEO, he hopes to lean on Mr. Gates, according to several people familiar with the matter. Little in Mr. Nadella’s public history at Microsoft suggests he will break from the company’s pattern as a fast follower, rather than a trend setter.
“It is clearly a safe pick,” says Dan Fletcher, a research analyst at Neuberger Berman LLC’s Large Cap Disciplined Growth, a Microsoft investor. Mr. Nadella’s selection will disappoint those seeking “an outsider who would drive significant and bold change,” he said.
That assessment could be short-lived, however. The job of CEO can embolden executives in unexpected ways. People who have worked with Mr. Nadella credit him with repairing technical glitches at Microsoft’s Web-search service, disarming Silicon Valley technologists suspicious of the company and fostering collaboration in a turf-conscious workplace.
If he is named CEO, Mr. Nadella would inherit many advantages. Microsoft generated $27 billion in operating profit in the year ended June 30, and the company holds $84 billion in cash. Microsoft’s Windows still runs roughly nine out of every 10 desktop and laptop computers in the world, and its Office and Exchange programs are corporate mainstays.
Most of Mr. Nadella’s experience is in serving corporate customers—the source of two-thirds of Microsoft profits—which suggests the company may want to double down in that area. He has been an leading internal champion of Microsoft’s efforts to rent computing power to other companies, even though that business competes with some of Microsoft’s most-profitable products.
Some investors, including an activist firm that soon will have a Microsoft board seat, want Microsoft to focus on corporate software and think the company should shed consumer-oriented operations such as the Xbox videogame business and Bing search engine.
Messrs. Gates and Ballmer and some directors have resisted that course, arguing that lines are blurring between corporate and consumer technology.
Mr. Nadella seems to agree. At a 2012 customer meeting in Kirkland, Wash., one attendee said Mr. Nadella argued passionately that consumer and corporate offerings can borrow and benefit from each other. Nand Mulchandani, CEO of software startup ScaleXtreme Inc., says Mr. Nadella told the group that his experience working on Bing taught him that Microsoft’s online business increasingly depends on its Web-computing services.
Not long ago, Microsoft could afford to fall behind, then spend whatever was necessary to catch up. That’s how it unseated Netscape Communications Corp. as the leading Internet browser in the 1990s.
Now, the game has changed. Microsoft is fighting on multiple fronts against well-heeled rivals. It must simultaneously compete with Apple Inc. in smartphones, Google Inc. in Web search, Amazon.com Inc.’s in Web-computing services, Oracle Corp. in databases, Salesforce.com Inc. in Internet-based corporate software and Sony Corp. in videogames, among others.
Directors are negotiating with 22-year company veteran Satya Nadella to succeed Chief Executive Steve Ballmer, according to a person familiar with the matter. If the board finalizes the pick in coming days, Mr. Nadella will become the third person to lead Microsoft since Bill Gates and Paul Allen founded the company in 1975.
Mr. Nadella has signaled a desire for continuity, telling directors that, as CEO, he hopes to lean on Mr. Gates, according to several people familiar with the matter. Little in Mr. Nadella’s public history at Microsoft suggests he will break from the company’s pattern as a fast follower, rather than a trend setter.
“It is clearly a safe pick,” says Dan Fletcher, a research analyst at Neuberger Berman LLC’s Large Cap Disciplined Growth, a Microsoft investor. Mr. Nadella’s selection will disappoint those seeking “an outsider who would drive significant and bold change,” he said.
That assessment could be short-lived, however. The job of CEO can embolden executives in unexpected ways. People who have worked with Mr. Nadella credit him with repairing technical glitches at Microsoft’s Web-search service, disarming Silicon Valley technologists suspicious of the company and fostering collaboration in a turf-conscious workplace.
If he is named CEO, Mr. Nadella would inherit many advantages. Microsoft generated $27 billion in operating profit in the year ended June 30, and the company holds $84 billion in cash. Microsoft’s Windows still runs roughly nine out of every 10 desktop and laptop computers in the world, and its Office and Exchange programs are corporate mainstays.
Most of Mr. Nadella’s experience is in serving corporate customers—the source of two-thirds of Microsoft profits—which suggests the company may want to double down in that area. He has been an leading internal champion of Microsoft’s efforts to rent computing power to other companies, even though that business competes with some of Microsoft’s most-profitable products.
Some investors, including an activist firm that soon will have a Microsoft board seat, want Microsoft to focus on corporate software and think the company should shed consumer-oriented operations such as the Xbox videogame business and Bing search engine.
Messrs. Gates and Ballmer and some directors have resisted that course, arguing that lines are blurring between corporate and consumer technology.
Mr. Nadella seems to agree. At a 2012 customer meeting in Kirkland, Wash., one attendee said Mr. Nadella argued passionately that consumer and corporate offerings can borrow and benefit from each other. Nand Mulchandani, CEO of software startup ScaleXtreme Inc., says Mr. Nadella told the group that his experience working on Bing taught him that Microsoft’s online business increasingly depends on its Web-computing services.
Not long ago, Microsoft could afford to fall behind, then spend whatever was necessary to catch up. That’s how it unseated Netscape Communications Corp. as the leading Internet browser in the 1990s.
Now, the game has changed. Microsoft is fighting on multiple fronts against well-heeled rivals. It must simultaneously compete with Apple Inc. in smartphones, Google Inc. in Web search, Amazon.com Inc.’s in Web-computing services, Oracle Corp. in databases, Salesforce.com Inc. in Internet-based corporate software and Sony Corp. in videogames, among others.
Source: Technology News in Hindi
No comments:
Post a Comment