Once a ferocious beast in the kingdom of tech with massive product launches and Antitrust sagas, it could be argued that Microsoft has spent the first two decades of the 21st century in search of solid ground. The Steve Balmer era, which focused on “devices and services,” brought us the Xbox, the Surface, and the acquisitions of Skype and Linkedin. Wired posits that the fall of Microsoft “stems from its attempts to lock users into its products by refusing to work with competitors,” coupled with a series of “me-too hardware products,” like the Zune and the Kin. There’s also Bing and MSN, which are practically non-entities compared to their competition.
In the last three years, CEO Satya Nadella has been a relevatory savior for the company, spearheading a massive pivot away away from hardware and toward cloud computing and AI. So far, so good. Company shares reached record highs since 1999 and its cloud is valued at a $14 billion annual run rate, which places Microsoft neck and neck with Amazon Web Services, if you include Microsoft Office 365. That said, Nadella remains unphased by the numbers, as he tells the Economist, “When you have a core that’s growing at more than 20 percent, that is when the rot really sets in.”
Let’s take a deeper dive to find out more about Nadella’s past, present, and future.
Learning at Chicago Booth
Nadella’s tenure at Microsoft is inextricably linked with his University of Chicago Booth School of Business education. In fact he started both at the exact same time, in 1992. Instead of opting out of one for the other, he enrolled in Booth’s Weekend MBA program and flew from Seattle to Chicago every weekend for two-and-a-half years.
Nadella believes his Booth MBA was instrumental in giving him the “knowledge and confidence to tackle complex questions at the intersection of business and technology,” according to a UChicago profile. Nadella cites Steven Kaplan’s entrepreneurial finance class as particularly influential on his ability to “evaluate new business opportunities at Microsoft.” On Nadella, Kaplan spoke highly: “He can take a situation and analyze and articulate the issues involved. He can both write well and understand the case quantitatively.”
Wired traces Nadella’s “clarity of vision and empathetic listening style” to his firstborn son Zain’s cerebral palsy, which helped Nadella “see beyond himself and compelled him to force-rank his daily priorities so that he could meet his son’s needs and still perform his job—the same skill so necessary to effective management.” He tells Wired:
“I think back to how I thought about work before and after, and this notion of the words you say and what they can do to the other person. How can you really change the energy around you? It’s a thing that started building in me, and I started exercising it in my day job. It made a lot of difference to how I felt when I went back home. So much of it is mental attitude.”
Early Days at Microsoft
In 2015, Nadella told UChicago Booth Magazine, “Having grown up in the company, what is it 23 years or so, I always come back to the very first thing Microsoft did, the BASIC interpreter. It was this notion of empowering others to do great things.”
Nadella progressed quickly through company ranks. His first major notch on his belt was Windows NT but played significant technical roles in Bing, MSN, and Microsoft’s advertising systems. UChicago Booth Magazine pinpoints Nadella’s real contribution to the company during his tenure of Executive VP of cloud and enterprise businesses.
“At Microsoft, Nadella is navigating a rapidly shifting technology landscape, in which customers have been moving away from traditional desktop computers, toward nimbler mobile platforms such as tablets and smartphones.” Nadella says, “The only way you’re going to have that mobility of the human experience—not the device—is by having cloud orchestrate the movement.”
CEO
When the Nadella era began, he publicly invoked Nietzsche when he said Microsoft must have “courage in the face of reality,” according to Wired. His approach to steering Microsoft is nothing if not rooted in reality. Wired compared his Microsoft strategy to those of “the Silicon Valley startups that have eclipsed it” in which the change is cultural, not just organizational. The Economist writes that Microsoft is much more of a “full stack” firm, in which it “not only writes all kinds of software, but builds its own data centers and designs its own hardware.”
Nadella tells UChicago Booth Magazine, “My vision is to take that productivity and empowerment of individuals and organizations and express it in this new world, which is mobile-first, cloud-first.”
Nadella jettisoned the company’s R&D process in favor of a more transparent, open-ended model, which is perhaps in response to such New Coke-style abominations as the Microsoft Courier. He encourages execs to work with people outside their divisions, whose lines of demarcation have become increasingly ambiguous.
He’s pushing engineers and researchers from disparate parts of Microsoft to work more closely together—even wrangling Bill Gates back into the saddle as a part-time technical adviser to motivate his team. “When I say, ‘Hey, I want you to go run this by Bill,’ I know they’re going to do their best job prepping for it,” he tells Wired. Nadella described Microsoft’s Skype Translator, which offers real-time translation of multilingual chats, as the apotheosis of his cooperative company-wide strategy.
The Future
Nadella tells UChicago Booth that his overarching vision for Microsoft is to adapt to the dialogue between culture and technology but to push for a more productive, harmonious conversation. In March, Nadella shared his vision for a new “platform-neutral” Microsoft with the announcement that the company would soon launch Word, Excel, and PowerPoint editions for the iPad.
“Technology has always led us to have better lives [but] you can measure whether you’re doing anything useful. Do you feel a little stretched? If not, there’s something wrong.”