Microsoft Corp named company veteran Satya Nadella as its next chief executive officer on Tuesday, ending a longer-than-expected search for a new leader after Steve Ballmer announced his intention to retire in August.
Nadella is only the third CEO in Microsoft’s 39-year history, following co-founder Bill Gates and Ballmer.
Microsoft also said John Thompson, lead independent director, would succeed Gates as chairman. Gates will assume a new role as technology adviser and retain a seat on the board, the company said in a statement.
The choice of Nadella was widely expected, and investors and analysts are already weighing how effective the 22-year veteran will be in re-igniting the company’s mobile ambitions and satisfying Wall Street’s hunger for cash.
"It’s a relief this process is over,” said Daniel Ives, an analyst at FBR Capital Markets. “Many investors view it as the ‘safe pick’ as Mr. Nadella is a born-and-bred Redmond insider. But the uphill battle continues for Microsoft on its path to growth.”
Microsoft faces a slow erosion of its PC-centric Windows and Office franchises and needs to somehow challenge Apple Inc. and Google Inc. in the new realm of mobile computing. At the same time, some investors are campaigning for retrenchment and a bigger cut of the company’s massive cash pile.
Nadella beat out various other candidates for the job. Several were close to the company, like Stephen Elop, who is set to rejoin Microsoft when its acquisition of Nokia’s handset business closes, and Tony Bates, the former Skype boss now in charge of Microsoft’s business development.
Most agree that Nadella’s background in creating Microsoft’s Internet-based, or “cloud,” computing services makes him a safe pair of hands to take the company forward, but there remains a question over his ability to make Microsoft a hit with consumers or with impatient shareholders.
So, who is Satya Nadella?
Microsoft attempted to answer that question in a purpose-built web page designed for press, investors and the public to discover more about the new man.
The tone is similar to that of an online dating profile, introducing Nadella’s birthplace (Hyderabad, India), degrees, age and hobbies (cricket, poetry). In an e-mail to employees Nadella builds out his personal profile further, saying: “I’ve been married for 22 years and we have 3 kids. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.”
The page also includes a half-dozen photos of Nadella, including one of him leaning casually against a wall in a hooded sweatshirt, of the type made popular by Facebook CEO Mark Zuckerberg.
As well, Microsoft included video testimonials from Ballmer, Gates and Thompson where they speak directly to the camera about their excitement about hiring Nadella, and also about Microsoft as a company.
Crucially, Nadella’s note suggests he will continue with Ballmer’s recent Microsoft One reorganization, but adds some strong hints that he will seek to change Microsoft’s corporate culture: “Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.”
In what could be perceived as a veiled shot against Ballmer’s regime – or about the company’s stumbling consumer product strategy – Nadella writes: “While we have seen great success, we are hungry to do more. Our industry does not respect tradition – it only respects innovation.”
The only pieces of forward-looking strategy that Nadella shares is a statement that “our job is to ensure that Microsoft thrives in a mobile and cloud-first world.” The first refers to the company’s recent purchase of Nokia’s mobile handset business and the PC market’s transition away from the desktop/laptop paradigm, the latter plays directly to his own strengths.
With files from Shane Dingman, Globe Staff