Microsoft founders recede into middle distance
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
MicrosoftâsÂ founding fathers are finally receding into the middle distance. Satya Nadellaâs experience makes him a solid choice to succeed longtime Chief Executive Steven Ballmer. Better still, he will have greater room to maneuver as Bill Gates steps down as chairman. Nadella will need to grapple with his predecessorsâ bad decisions, like the NokiaÂ deal, and heâs unlikely to pursue a breakup. But he can focus on what the company does best.
While many candidates entered the frame, it was always going to be a difficult post to fill. Microsoft spans everything from its omnipresent operating system to enterprise software to consumer hardware. Itâs also threatened by upstarts and a shift in technology away from PCs. Finding a manager that understands technology, all these markets and has skills in revitalizing a mature behemoth was close to impossible.
Worse, the decision to buy Nokiaâs handsets arm for $7.2 billion in the midst of the search showed that Microsoftâs board was wedded to the sprawl built by Gates and Ballmer. Few credible outsiders wanted to step into a position where they had little say over the companyâs direction.
In this light, Nadellaâs choice is probably as good as the company could make. He has worked for Microsoft since 1992, so he knows the place. His most recent task was to run Microsoftâs cloud and enterprise group. This is one of the fastest growing divisions at Microsoft and represents the companyâs future â selling software on demand to companies. He doesnât have sales experience or much interaction with investors, which is important for a $303 billion market cap company. But Microsoftâs bench has enough depth to make up for these shortfalls.
The bigger question is where Nadella will take Microsoft. He didnât give many hints in his opening memo to employees. The right course would be to focus on enterprise software, which is what Microsoft does best. A breakup or spinoff of the consumer and hardware operations would be welcome. But with Ballmer still on the board and holding some 4 percent of the company, and Gates remaining as the boardâs technology adviser to âdevote more time to the company,â such radical redrawing will be hard to accomplish any time soon.
But the message is unmistakable. The old guard is slipping into the background. That gives Nadella room to slowly turn Microsoft toward a more focused, and potentially valuable, future.