Microsoft
settled on a veteran insider as its replacement for long-time CEO
Steve Ballmer on Tuesday, ending a five-month search with a choice some
analysts called a “safe pick” for the software behemoth.
India-born Satya Nadella, 46, head of the company's cloud computing
division and enterprise business, was appointed after a team of
headhunters concluded a five-month search that included some of the most
world’s most famous executives.
Nadella is only the third person
to lead Microsoft; since the company was founded 39 years ago, only
co-founder Bill Gates and Ballmer have headed it. But in recent years
the company has looked flat-footed as rivals Apple, Google and Facebook
have dominated and innovated in hardware, online services and social
media.
In a nod to Nadella's low profile outside the company, Microsoft introduced him with a sleek web page that was heavy on biographical details including the revelation that he relaxes by reading poetry.
Ballmer
said he would step down last August amid mounting criticism of the
company’s dependence on its Windows, Microsoft Office and workplace
software, products that have generated massive profits for the company
for decades but are being increasingly challenged by online
alternatives. In a statement, Ballmer said Nadella was “the right leader
at the right time” for Microsoft.
Some were less sure. In a
note to investors, analysts at FBR Capital Markets said the appointment
of Nadella was a "safe pick" compared to choosing an outsider. Microsoft
was among the first to innovate in areas like smartphones, tablets and
cloud services. But it has seen those ideas better executed by rivals
including Apple and Amazon, the note said.
As part of the
announcement, Gates said he would step down as chairman to assume a new
role on the board as founder and technology adviser. John Thompson, the
Microsoft board member who oversaw its search for a new chief executive,
becomes chairman. “During this time of transformation, there is no
better person to lead Microsoft than Satya Nadella,” Gates said..
“Satya
is a proven leader with hardcore engineering skills, business vision
and the ability to bring people together. His vision for how technology
will be used and experienced around the world is exactly what Microsoft
needs as the company enters its next chapter of expanded product
innovation and growth,” Gates said in his statement.
Nadella may
be little known outside of Microsoft’s sprawling Redmond campus, but
inside it he is a star. Before being named as CEO he ran one of
Microsoft's fastest growing divisions, cloud services. Revenue at the
division soared 107% compared to a year ago, the company said when it
reported its fiscal second-quarter results on 23 January. Most of his
experience is in serving corporate customers – the source of two-thirds
of Microsoft profits.
He has also been unafraid to speak his mind on sensitive issues. In December, speaking at the Le Web
conference in Paris, Nadella addressed the revelations of the NSA
whistleblower Edward Snowden, saying they demonstrated that “the
surveillance system has to be reformed”.
"Businesses and users are
going to use technology only if they can trust it," said Nadella.
"Clearly now it's the responsibility, I think, of governments – the US
government included – to restore that trust. The only mechanisms that I
think we have learned is that the respect for the liberties of people
and the rule of law is the one way to have societies thrive."
Microsoft's
decision to retain Gates worried some observers. Sydney Finkelstein, a
leadership professor at Dartmouth's Tuck School of Business, said there
were huge challenges ahead for Nadella. Finkelstein said making changes
within a company as large as Microsoft was difficult for any CEO, and
more so when the senior figures being replaced were, as in the case of
Gates, still playing a part.
“The next CEO needs to instil a
level of risk-taking and innovation,” said Finkelstein. He pointed to
examples of insiders shaking up big companies after the resignation of a
famous CEO – Bob Iger, for example, took over at Disney after Hollywood
legend Michael Eisner was forced out amid criticism that the the media
firm was losing its way to younger rivals. Iger went on to revitalise
Disney, buying Pixar and Marvel.
“But that’s much harder to do if the people who used to run it are still breathing over your shoulder,” said Finkelstein.
Finkelstein
also noted that before Nadella’s appointment, the top job at Microsoft
had been linked to a number of leading executives outside the company,
including Ford CEO Alan Mulally. “The fact that he is relatively unknown
outside Microsoft is interesting, especially in the light of the big
names that were associated with the job. It makes you wonder if he was
the first choice,” Finkelstein said.
James Staten, an analyst with
Forrester Research, was more positive. "Satya Nadella is a tough,
number-driven leader. [His appointment] will be a great thing for the
overall direction of the company," Staten said.
"Nadella is a
visionary, is making it happen, and knows what it takes to drive change
in the unique Microsoft culture. An outsider would have a hard time
accomplishing this coming in fresh. And time is of the essence."
In a statement about his hiring, Nadella called Microsoft “one of
those rare companies to have truly revolutionized the world through
technology,” and said, “I couldn’t be more honoured to have been chosen
to lead the company.
"The opportunity ahead for Microsoft is vast,
but to seize it, we must focus clearly, move faster and continue to
transform. A big part of my job is to accelerate our ability to bring
innovative products to our customers more quickly.”
Nadella joined
the company in 1992 and as well as heading cloud services, he also held
leadership roles in server software, internet search and business
applications. Born in Hyderabad, he holds a master's degree in computer
science from the University of Wisconsin, and a master's in business
administration from the University of Chicago.
Married for 22
years and with three children, he counts cricket and poetry among his
hobbies. In an email to Microsoft employees on Tuesday morning, he wrote
that he is “defined by my curiosity and thirst for learning.”
On the web page constructed for his announcement, Microsoft said:
Microsoft’s
new CEO finds relaxation by reading poetry, in all forms and by poets
who are both Indian and American. “It’s like code,” he says. “You’re
trying to take something that can be described in many, many sentences
and pages of prose, but you can convert it into a couple lines of poetry
and you still get the essence, so it’s that compression.” Indeed, he
says, the best code is poetry.
In
a video interview, Nadella said he was “honoured, humbled, excited,” by
his appointment. “We have tremendous opportunity and that’s exciting.
And I’m also grounded on our challenges. In fact that is the adventure
and the constraint that also creates, I think, the competitive zeal in
me to be able to do great work,” he said.
I've been involved in IT and web development for more than 20
years. I love analysing data, drinking good coffee, listening to heavy
metal and practicing karate.
I’ve
had a frustrating time trying to find the original ‘Content is King’
article written by Bill Gates back in 1996. There’s a few sites that
have a copy of the essay, but nothing on the Microsoft site (it has been
removed from the Bill Gates Published Writing page). Wayback Machine seems to be the only other option (thanks to Andrew Heenan for the link). If you can find a Microsoft link could you please let me know. For
now, I am adding the essay in it’s entirety here (as I will be referring
to it in a future post).
Content Is King – Bill Gates (1/3/1996)
Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting. The television revolution that began half a century ago spawned a
number of industries, including the manufacturing of TV sets, but the
long-term winners were those who used the medium to deliver information
and entertainment. When it comes to an interactive network such as the Internet, the
definition of “content” becomes very wide. For example, computer
software is a form of content-an extremely important one, and the one
that for Microsoft will remain by far the most important. But the broad opportunities for most companies involve supplying
information or entertainment. No company is too small to participate. One of the exciting things about the Internet is that anyone with a
PC and a modem can publish whatever content they can create. In a sense,
the Internet is the multimedia equivalent of the photocopier. It allows
material to be duplicated at low cost, no matter the size of the
audience. The Internet also allows information to be distributed worldwide at
basically zero marginal cost to the publisher. Opportunities are
remarkable, and many companies are laying plans to create content for
the Internet. For example, the television network NBC and Microsoft recently agreed
to enter the interactive news business together. Our companies will
jointly own a cable news network, MSNBC, and an interactive news service
on the Internet. NBC will maintain editorial control over the joint
venture. I expect societies will see intense competition-and ample failure as
well as success-in all categories of popular content-not just software
and news, but also games, entertainment, sports programming,
directories, classified advertising, and on-line communities devoted to
major interests. Printed magazines have readerships that share common interests. It’s
easy to imagine these communities being served by electronic online
editions. But to be successful online, a magazine can’t just take what it has
in print and move it to the electronic realm. There isn’t enough depth
or interactivity in print content to overcome the drawbacks of the
online medium. If people are to be expected to put up with turning on a computer to
read a screen, they must be rewarded with deep and extremely up-to-date
information that they can explore at will. They need to have audio, and
possibly video. They need an opportunity for personal involvement that
goes far beyond that offered through the letters-to-the-editor pages of
print magazines. A question on many minds is how often the same company that serves an
interest group in print will succeed in serving it online. Even the
very future of certain printed magazines is called into question by the
Internet. For example, the Internet is already revolutionizing the exchange of
specialized scientific information. Printed scientific journals tend to
have small circulations, making them high-priced. University libraries
are a big part of the market. It’s been an awkward, slow, expensive way
to distribute information to a specialized audience, but there hasn’t
been an alternative. Now some researchers are beginning to use the Internet to publish
scientific findings. The practice challenges the future of some
venerable printed journals. Over time, the breadth of information on the Internet will be
enormous, which will make it compelling. Although the gold rush
atmosphere today is primarily confined to the United States, I expect it
to sweep the world as communications costs come down and a critical
mass of localized content becomes available in different countries. For the Internet to thrive, content providers must be paid for their
work. The long-term prospects are good, but I expect a lot of
disappointment in the short-term as content companies struggle to make
money through advertising or subscriptions. It isn’t working yet, and it
may not for some time. So far, at least, most of the money and effort put into interactive
publishing is little more than a labor of love, or an effort to help
promote products sold in the non-electronic world. Often these efforts
are based on the belief that over time someone will figure out how to
get revenue. In the long run, advertising is promising. An advantage of
interactive advertising is that an initial message needs only to attract
attention rather than convey much information. A user can click on the
ad to get additional information-and an advertiser can measure whether
people are doing so. But today the amount of subscription revenue or advertising revenue
realized on the Internet is near zero-maybe $20 million or $30 million
in total. Advertisers are always a little reluctant about a new medium,
and the Internet is certainly new and different. Some reluctance on the part of advertisers may be justified, because
many Internet users are less-than-thrilled about seeing advertising. One
reason is that many advertisers use big images that take a long time to
download across a telephone dial-up connection. A magazine ad takes up
space too, but a reader can flip a printed page rapidly. As connections to the Internet get faster, the annoyance of waiting
for an advertisement to load will diminish and then disappear. But
that’s a few years off. Some content companies are experimenting with subscriptions, often
with the lure of some free content. It’s tricky, though, because as soon
as an electronic community charges a subscription, the number of people
who visit the site drops dramatically, reducing the value proposition
to advertisers. A major reason paying for content doesn’t work very well yet is that
it’s not practical to charge small amounts. The cost and hassle of
electronic transactions makes it impractical to charge less than a
fairly high subscription rate. But within a year the mechanisms will be in place that allow content
providers to charge just a cent or a few cents for information. If you
decide to visit a page that costs a nickel, you won’t be writing a check
or getting a bill in the mail for a nickel. You’ll just click on what
you want, knowing you’ll be charged a nickel on an aggregated basis. This technology will liberate publishers to charge small amounts of money, in the hope of attracting wide audiences. Those who succeed will propel the Internet forward as a marketplace
of ideas, experiences, and products-a marketplace of content.
