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“A computer scientist who had risen through the technical and general-management ranks at the software giant. He’d never worked in finance, another training ground for CEOs,” Fortune commented
Initially, many thought Nadella couldn’t be the kind of CEO Bill Gates or Steve Ballmer were.
But Satya Nadella’s entry turned out to be an unexpected game changer.
Microsoft became the world’s most valued company under his leadership.
And it comes as no surprise that he was named the Fortune’s Businessperson of the Year in 2019 -- the very organisation that questioned his abilities earlier.
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When Satya Nadella became Microsoft CEO on March 27, 2014, the company was losing its steam. Microsoft 8 was a sore disappointment, attrition was high, operations were haywire and more importantly-- it was losing consumer trust. It was the first time in the history of the company that no founding member was running it.
But Satya Nadella’s entry turned out to be an unexpected game changer. According to Fortune, he overcame the challenge of assembling the right team — sorting out the dog-eat-dog culture in a company of 130,000.
Soon after he did that, everything else fell into place. “I don’t know of any other software company in the history of technology that fell onto hard times and has recovered so well,” says Reed Hastings, CEO of Netflix Inc.
Initially, many thought Nadella was couldn’t be the kind of CEO Bill Gates or Steve Ballmer were
“A computer scientist who had risen through the technical and general-management ranks at the software giant. He’d never worked in finance, another training ground for CEOs,” Fortune commented
Nadella’s tryst with Microsoft days started back in 1992, when Gates was the CEO.
He kept rising through the ranks, and fast in the 2000s. By 2007, he was the senior Vice President of Microsoft Online Services which included Bing, online Microsoft Suite and the Xbox Live gaming service.
In 2011, he led Server and Tools business — which at the time had $16.6 billion in revenue. In two years, the segment’s revenues grew to $20.3 billion.
However, Microsoft started losing its steam soon. Windows 8 never took off and Bing wasn’t good enough to compete with Google. Added to that, iPhone and Android were way ahead of Windows phones.
In 2013, when Steve Ballmer announced his departure, the company announced a surprise CEO — Satya Nadella. The Microsoft board gave him an $84 million as compensation for the first year.
He also led the acquisition of LinkedIn for $26.2 billion in 2016.
He led some of the big acquisition Microsoft has ever done. In 2018, it acquired GitHub for $7.5 billion. Soon, Microsoft became a mobile and cloud company from a devices and services company. Nadella’s leadership was all about serving customers, as per demand.
Earlier this year on April 25, Microsoft again became the world’s most valuable company. Its value hit the $1 trillion mark,
Its value hit the $1 trillion mark, up by 230% since 2014 since Nadella’s entry to the top post. The company earned $39 billion revenue in FY19, growing at a three year compound annual rate of 11%.
Its profits also increased by 24%.
However, there was a time when everyone in the Silicon Valley thought Microsoft may never be able to become what it was under the leadership of Gates.
Microsoft again made headlines in November 2019 announcing that Teams, its workplace messaging and collaboration app has 20 million daily active users - much higher than rival, Slack. Microsoft saw more than 50% increase in usage of Teams since July.
Nadella’s peers believe Microsoft’s rise is both impressive and terrifying. But it was effective. And it comes as no surprise that he was named the Fortune’s Businessperson of the Year in 2019 -- the very organisation that questioned his abilities earlier.