Nadella named Microsoft CEO, as Elop gets snubbed

As had been expected, Microsoft (NASDAQ:MSFT) named Satya Nadella as its third CEO. Nadella will take the place of the outgoing Steve Ballmer, who announced last year he would retire. In naming a 22-year Microsoft veteran as CEO, the company's board chose an insider who was considered a safe choice at a time when the company is being buffeted by challenges on the mobile front and is integrating Nokia's (NYSE:NOK) handset business.

Satya Nadella microsoft ceo


Nadella had been the company's cloud and enterprise chief and was named to that role as part of a reorganization deigned by Ballmer. In addition to naming Nadella as CEO, Microsoft also said co-founder and former CEO Bill Gates will be stepping down as chairman of the company, and will be replaced in that role by John Thompson, Microsoft's lead independent director and the former CEO of Symantec, who led the five-month Microsoft CEO search process.  

However, Gates is not stepping away from Microsoft and will remain a board member and will serve as a technology advisor to Nadella. "I'm thrilled that Satya has asked me to step up, substantially increasing my time at the company," Gates said in a video discussing Nadella's new role. "I'll have over a third of my time available to meet with product groups, and it'll be fun to define this next round of products working together."

Former Nokia CEO Stephen Elop, a former Microsoft executive who will return to Microsoft through the company's purchase of Nokia's handset business, was also considered a possibility for the Microsoft CEO spot. Ericsson's (NASDAQ:ERIC) Hans Vestberg, Qualcomm's (NASDAQ:QCOM) Steve Mollenkopf and Ford Motor Co.'s Alan Mulally had also been rumored as prospects for the job.

"Satya is a proven leader. He's got strong technical skills and great business insights," Ballmer wrote in an email to employees, according to Re/code. "He has a remarkable ability to see what's going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way. I have worked closely with Satya for many years and I have seen these skills many times."

In an email to employees, Nadella said the choice was "very humbling." Nadella also spoke to the challenges the company faces as more computing shifts to mobile platforms. "In our early history, our mission was about the PC on every desk and home, a goal we have mostly achieved in the developed world," he wrote, according to Re/code. "Today we're focused on a broader range of devices. While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us."

In an interview Microsoft posted online, Nadella said one of his big goals is to "ruthlessly remove any obstacles that allow us to innovate." Many analysts think Nadella will have the skills to manage Microsoft's internal politics, but the question is whether he can make Microsoft move faster and be focused on mobile and cloud technology.

Source: Microsoft

"He is the right person to drive safe, right down the middle of the fairway, and continue Microsoft's strengths," Rajeev Chand, managing director and head of research at tech investment bank Rutberg & Co, told Reuters. "What we don't know is will Nadella help with the consumer revival, or with the mobile revival. Mobile is an open hole in his background."

One of Nadella's largest challenges will be successfully integrating Nokia and 32,000 new employees into the fold. Nokia is Microsoft's largest Windows Phone partner; however, Nokia's Lumia Windows Phone sales dipped in the fourth quarter to 8.2 million units, down from 8.8 million in the third quarter. Windows Phone has been gaining momentum in the market but still badly trails Android and iOS in terms of global market share.

"I would advise him (Nadella) to take a fresh look at mobile, or bring in some talent who really understands the space," Gartner analyst David Smith told Reuters.

For more:
- see this Microsoft page
- see this Re/code article
- see this The Verge article
- see this separate The Verge article
- see this Reuters article

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