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Big task at hand for Nadella: renewing faith in Microsoft

business Updated: Feb 05, 2014 12:53 IST
Yashwant Raj
Yashwant Raj
Hindustan Times
Highlight Story

Microsoft-Corp-named-Satya-Nadella-as-its-next-chief-executive-officer-ending-a-longer-than-expected-search-for-a-new-leader-after-Steve-Ballmer-announced-his-intention-to-retire-in-August-Reuters-Microsoft-Handout

Satya Nadella buys more books than he can finish, enrolls for more online courses than he can complete. He likes to challenge himself. And he now faces the biggest challenge of his life.

Twenty-two years after Nadella, a 46-year-old from Hyderabad, joined Microsoft, he found himself named to head it , at 6:00 am on Tuesday morning. What a start to a day.

Along came a doubling of salary. His basic annual salary will go up to $1.2 million, with a cash award between nothing and $3.6 million, according to SEC filings.

He will also get stocks worth $13.2 million. In sum, Nadella stands to make close to $18 million in his first year as Microsoft CEO, double what he made in 2013.

His predecessor, Steve Ballmer, got about the same basic salary of $1.26 million, but held 333.2 million shares, which at Tuesday’s price were worth $12.1 billion. But that’s another story.

Congratulations poured in after the announcement, and advice.

“We know Satya well. His strong combination of engineering innovation and business acumen make him an outstanding choice to lead Microsoft,” Dell boss Michael Dell said.

Dell is one of Microsoft’s biggest customers. The other is HP, whose CEO Meg Whitman was said to be happy about Nadella’s promotion, according to reports.

Cisco’s John Chambers said in a blog post he knew Nadella well and believed “he will do a great job for Microsoft as he is a seasoned, world-class technology leader”.

Read: We have unparalleled capability to make an impact: Nadella to Microsoft employees

Read: Hyderabad celebrates Nadella's elevation

Nadella will have to repair Microsoft’s image. The company built its empire on software such as Windows or Office licensed to computer makers or sold in packages for installation on machines in homes or workplaces. The era of the personal computer is being sunk by broadside hits from smartphones and tablets and could be outright scuttled by “wearables” such as Google Internet-linked eyewear and the coming of a rumored Apple “iWatch”.

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The Microsoft board appeared to have got it right, at least for now. But can he fix the company, which in recent years has lost to more nimble rivals such as Google and Apple?

Addressing customers and partners in a live interaction, Nadella said he would like the company to focus on mobile and cloud businesses going forward.

“Microsoft has a big challenge ahead of it: to reinvent itself in an era in which its core business—PC software—is shrinking,” said Silicon Valley guru Vivek Wadhwa.

He added: “These are losing market share to mobile devices and tablets. Microsoft needs a new vision and technical direction.”

IT experts and analysts said Nadella needs to forge ahead with cloud, which he is doing; fix mobile, which he said he plans to; wean its software from Windows and spur development of Apps.

“He needs to start from scratch and think about what the company should be,” Marc Andreessen, who helped first widely used web browser Mosaic, told USA Today.

“Satya needs to re-think Microsoft's commitments,” he added.

Nadella will have help, of course. The best possible from, co-founder Bill Gates, who takes on a more hands-on position advising the new CEO on technology and products.

Read: Nadella’s rise a tribute to US tech meritocracy

Indian American techies proud and inspired
Akshay Kothari was 25 when he and Ankit Gupta, classmates at Stanford University, began making headlines for their news aggregation App Pulse in 2011. Nadella, at their age, had just joined Microsoft which he would go on to head as its third CEO, following Steve Ballmer and co-founder Bill Gates, 22 years later.

“I feel inspired and proud,” said Kothari in an email on Tuesday, hours after Nadella’s coronation at Microsoft’s Redmond, Washington headquarters.

“Leaders like Satya Nadella (Microsoft), Indra Nooyi (Pepsi) and Deep Nishar (Linkedin Product head) are terrific role models for India's next generation,” he added.

Silicon Valley guru Vivek Wadhwa told HT in an email, “To me it is most amazing that an Indian is filling Bill Gates’s shoes as CEO of Microsoft.”

He expanded that theme in an essay for LinkedIn and Quartz, to argue more and more companies are hiring Indian in top positions: As of 2005, 52.4% of Silicon Valley’s companies had a chief executive or lead technologist who was foreign-born and Indians founded 25.8% of these companies.

“Indians, who constitute only 6% of Silicon Valley’s working population, start roughly 15% of its companies. That is quite a feat to achieve in the most competitive, entrepreneurial, and innovative place on this planet.”