
Microsoft Said to Be Preparing to Make Satya Nadella CEO - slckfielder08
http://www.bloomberg.com/news/2014-01-30/microsoft-said-to-be-preparing-to-make-satya-nadella-ceo.html
======
jedmeyers
My personal opinion is that for Microsoft this is a much better solution than
to hire an external CEO with an MBA and no background in software/technology.
If the news are true then I wish all the luck to Mr. Nadella.

~~~
dm8
I don't think BillG would have allowed hiring someone with an MBA and no
background in software/technology. He is still the majority shareholder (from
what I've read) and sits on the board.

~~~
alienfluid
Would it have been better to hire someone from the outside with no experience
in software/technology AND no MBA?

Just trying to see if you (parent and g-parent) consider an MBA an overall
negative signal, regardless of someone's background.

~~~
dm8
Satya has an MBA too. I was just commenting on my previous comment. I guess
author meant that someone just with MBA as a qualification and no relevant
tech background would have been bad deal since MBAs get hired in leadership
role even if they may or may not possess relevant domain knowledge.

~~~
exelius
Nobody is going to get hired as CEO of an $80 billion a year company with just
an MBA. It would be an MBA plus 20-30 years of business experience, and these
days it's almost impossible to avoid technology completely. I'm not even sure
domain knowledge is important for a CEO of a company that size: once you
become a $50 billion plus company, you don't have time to get involved with
the details of the business.

~~~
VladRussian2
>I'm not even sure domain knowledge is important for a CEO of a company that
size: once you become a $50 billion plus company, you don't have time to get
involved with the details of the business.

Steve Jobs and CEOs in-between kind of make a counter-example.

~~~
deletes
Read the biographies of Steve and Steve; Jobs was not an expert, but was
familiar with technology of that era. His father taught him electronics, and
Jobs was working at Atari as an technician.

------
dredmorbius
Observations:

⚫ This spot's proving very difficult to fill. Both in terms of finding the
right person, and in getting them to accept. It's been 160 days from the
initial announcement of Ballmer's retirement.

⚫ Given Ballmer's long-standing deficiencies and publicly-voiced
dissatisfaction with his performance, this also speaks to very poor succession
planning on the part of the Board. This would be they:
[http://www.microsoft.com/en-
us/news/exec/bod.aspx](http://www.microsoft.com/en-us/news/exec/bod.aspx)

⚫ Enterprise + cloud is probably a safe pick for now. It suggests a de-
emphasis of consumer and mobile, and a retrenchment to core strengths, if not
enduring ones.

⚫ I'm not sold that bringing in external talent solves problems that insiders
can't tackle. The insiders will be well aware of strengths and weaknesses, the
challenge is in acting on them given existing internal relationships and
politics.

~~~
rbanffy
Enterprise is the high-inertia segment in Microsoft's product portfolio and
the one most at risk of disruption by SaaS players. Emphasizing it makes a lot
of sense.

The problem of insiders is that they may embrace the culture that brought the
company to where it is now. It's not always a good thing.

~~~
mastermojo
I'm pretty sure Microsoft is a pretty big player in Enterprise SaaS already.

~~~
rbanffy
They are, but that's also the market where their lock-in has least effect.

~~~
r00fus
That sounds like an opportunity to me. Get real cloud-based software solutions
that compete with Google SaaS officeware, but tie it into desktop office in a
way that synergizes without forcing people to subscribe or upgrade.

Apple is good at the monetization angle of this. There's no reason Microsoft
couldn't do the same (except with software, not hardware).

Example: 90% of the time I'm on a webex/gotomeeting, I'm looking at one of
three things: 1) Powerpoint, 2) Excel/Word or 3) a Browser.

Why can't Microsoft make that kind of sharing easier? My guess is that they
were too arrogant to make things work for the folks not on the latest
versions, or on different OS's.

It's 2014, that's not good enough. People expect your product to be sociable
and flexible. And that's why it's Cisco/Citrix software that's showing the MS
docs.

~~~
Maarten88
> Why can't Microsoft make that kind of sharing easier?

What makes you think they haven't done so already? Ever heard of Office 365,
OneNote, Lync?

> My guess is that they were too arrogant to make things work for the folks
> not on the latest versions, or on different OS's.

My guess is that you haven't really looked into Microsoft's products for the
past 5 years. I can tell you that they are doing quite well in the product
development of their cloud and SaaS offerings lately.

~~~
jzwinck
Lync doesn't even have an option to pop up notifications when new chats come
in. How well do you think that works on a workstation with four screens and no
sound?

~~~
kyberias
Care to elaborate? When I get new messages in a IM window on Lync, and the
window is not active, the icon on the taskbar is being blinked.

~~~
jzwinck
Right. So imagine if you have two or more monitors, and the one with the
taskbar is two or three feet away from where your focus is. The little
blinking square is hardly noticeable then, especially if you rarely use the
taskbar (and how would you if you have four screens, it will give you RSI just
mousing over there every time).

There is one semi-cheesy third-party app which adds more obvious notification,
but as it stands, email arriving in Outlook is way easier to see than IMs in
Lync, even though Outlook knows all about your Lync conversations, including
when you are missing one (i.e. it quietly puts the chats you are missing into
your Missed Conversations, even while it is notifying you with a big popup
about incoming emails). In 1999 AOL IM would just pop up the chat window on
your screen where you could see it.

~~~
kyberias
Well, I'm running Windows 8 which repeats the taskbar on all monitors.

------
keithwarren
I think an interesting side effect of this; his vacating of the
Cloud/Enterprise role provides a natural succession up the chain for Scott
Guthrie. It also gives Scott (who has more of an effect on the Microsoft dev
community than any other person) a direct pipeline and solid personal
relationship with the CEO.

~~~
abuqutaita
If Satya is indeed promoted to CEO, Soma -- not Scott -- will be promoted to
EVP.

~~~
keithwarren
I imagine that Satya would know the people well and where he wants them so we
may see some shuffling in the next 6-9 months. Scott is a great public persona
and clicks with developers far more than Soma. Soma is stronger operationally
and there are going to be other ops critical roles to fill because Satya's
elevation to CEO will certainly cause some high level people to leave.

Going to be an interesting next couple years.

------
nl
As I said 50 days ago[1] Nadella was always the most likely internal
candidate. It's a choice that makes some sense to me - he's a technologist,
which I think is important (note that at some point the Ford CEO was tipped).
However, his background is all in Enterprise software.

Microsoft's most successful products recently have all been in the Enterprise
field, so that reflects well on him. But there have to be questions about his
experience with consumer software.

[1]
[https://news.ycombinator.com/item?id=6871957](https://news.ycombinator.com/item?id=6871957)

~~~
exelius
Microsoft really isn't a consumer company: they make all their profit from
enterprise software. Ballmer's biggest mistake was trying to convince an
elephant to become a mouse. What he left was a mess that needs a lot of
cleaning up. It doesn't help that he reorganized the company 6 months ago,
effectively preventing his successor from making any substantial changes from
the Ballmer way.

Given the number of people that were mentioned as front runners in this CEO
search over the last few months, this seems to be a job that nobody outside
Microsoft wants. Nadella was always the most likely internal candidate, and it
really feels like they're settling on him because everyone external candidate
they wanted turned them down.

~~~
blah32497
"Microsoft really isn't a consumer company"

yeah, except the video game market and the whole hardware market...

It's definitely the most obvious area for growth that they have available. The
enterprise market is more or less saturated by them already. They're sorta
trying to push their cloud solution, but they're late to that game. They
aren't going to sell a whole bunch more of MS Office... It's a segment that
will continue to develop organically, but the place where they really wanna be
dumping cash on is definitely the consumer market.

I know everyone hates on Balmer, but he seemed to follow a very sensibly
strategy and there seems to have been a genuinely big effort to integrate
their different platforms and services into something that pleasant to use and
develope for. At least stylistically, Windows RT, 8, Phone and Xbox are
identical. The underlying "meat" is in wonderful languages (C#/F#), with a
great IDE (VS13), with - from what I understand - and well made new libraries.
They've also aggressively tried to cut out the old moldy stuff, and have paid
for it in the short term (ex: Windows RT not supporting Win32 & Windows Phone
7 not being very compatible with Windows Phone 8)

~~~
exelius
What market? I know I'll probably get crucified for saying this, but video
games are only a good business if you're making the games themselves. The
hardware is low margin, and you don't really make it up on the licensing
anymore either since gamers have so many platforms to choose from. Worse
still, you can't form a dominant platform through the methods Microsoft
traditionally uses: you have to convince consumers directly. And video games
are just a "good" business, never a great one: they are very risky and the
maximum payout is limited. EA and Activision both made about $5 billion in
revenue. Combined they made as much as half of the Server and Tools business
(and at much lower margins.)

Microsoft's core strength is licensing software to businesses. Hardware and
game consoles are a foray into a high-risk, low-margin business (well, low
margin relative to software.) By contrast, Microsoft's operating margin on
enterprise software is close to 50%. The margin on their entertainment and
devices division is currently less than 1%. Comparables would say that a good
margin in a hardware business like that is 10-20%.

Worse still, selling consumer electronics and media properties to consumers
requires a sales channel that Microsoft has still not mastered. Windows and
enterprise software are sold through a reseller model: Microsoft makes
products and advertises them to a network of people who have discovered they
can make a living selling and implementing Microsoft software (be they PC OEMs
or consultants.) They have _never_ been good at consumer marketing or retail
sales. They've never had that "cool" brand image you need to succeed there,
and the amount of money you have to spend on marketing is insane compared to
their more profitable cash cow.

There's still plenty of room for them to innovate in the enterprise space too.
Oracle and SAP suck donkey balls to use and Microsoft is actually really good
at delivering rock-solid enterprise software with a good blend of usability
and power. I just fear that if any new CEO focuses too much on the consumer
side of the business, there are a lot of much more profitable options on the
enterprise side.

The consumer side is a huge distraction to Microsoft, one that has produced a
lot of red ink but never really any profit. Look at their historical results
since, well, ever, and you'll see that the consumer products consistently lose
money while the enterprise software keeps growing margins and top line.

------
keithwarren
Background != Direction

All this banter about it being a bad choice or a good choice because Satya's
current role is enterprise focused is just goofy. Had Elop been chosen we
would not be acting as if Microsoft is only a phone company now and is
abandoning the enterprise.

~~~
chc
I think the unspoken logic here is that Microsoft is already doing great in
the enterprise and poorly on devices, so hiring somebody with the same
distribution of strengths and weaknesses will just exacerbate the weaknesses
without helping the strengths all that much (since they're already strong
there).

~~~
cwp
The observation that Satya's division is doing well is an argument _against_
him?

~~~
chc
As much as saying "I think this person should keep doing what he's doing
because he's really good at it" can be said to be speaking against someone.

This isn't my own opinion, mind you. I don't know enough about this whole
issue to have an opinion of my own. I'm just explaining where I think the
disconnect is. I think the people who don't like the choice of Satya dislike
it because they feel Satya is doing as well as he can do in his current
position, and Microsoft needs to bring in a different skill set in order to
make the company good in areas where it isn't already.

------
jmspring
All the talk of needing a turn around specialist, I personally don't see it.
Really, a visionary or someone who can actually come up with a constructive,
actionable plan that grows market share (in realm of focus) and revenues makes
sense to me. I would like someone less steeped in the monoculture that is
Redmond, but Satya will be a solid choice. Tony Bates would be my preference
for "internal candidate".

Of course these are just my personal opinions.

If Bill Gates is removed as Chairman that will be a major change.

------
sirkneeland
A lot of Nokia employees are probably happy it isn't going to be Stephen Elop.

I know this one is.

~~~
nokia_chi
As a former NOKIAn I am sad. I want to see MS go down in flames and without
Elop it's gonna be difficult. However Indians are also very talented at
destroying the spirit of their own companies and alienating their users (see
Harman or Adobe) so there is a hope...

~~~
meepmorp
> Indians are also very talented at destroying the spirit of their own
> companies and alienating their users

That's kinda racist

~~~
MartinCron
kinda?

------
DunbarTrout
Satya Nadella's Wiki
[https://en.wikipedia.org/wiki/Satya_Nadella](https://en.wikipedia.org/wiki/Satya_Nadella)

------
brudgers
The selection of an internal post IPO candidate makes the most cultural sense.
If Sinofsky had not incurred a billion dollar fine by failing to include
browser choice in the EU version of Windows 8, it might have been him.

------
katherat
Amid suspicions that Microsoft is having trouble finding the perfect person to
fill this role, Satya makes sense. I've always thought of him as an incredibly
talented administrator rather than a brilliant general. He's a known person
within Microsoft who can be a caretaker for the organization while the hunt
for a CEO who can lead the next charge can continue.

~~~
spiralpolitik
It's a bit of a poisoned chalice for someone outside of Microsoft as if Gates
and Balmer remain on the board as any new CEO will be continually undermined
by people "going to Bill/Steve". To appointment someone from inside Microsoft
is simply rearranging the deck chairs.

Best thing for Microsoft would be to hire an outsider who will come in with an
unbiased eye and clear out the deadwood to give new growth a chance or to milk
the cash cows to their inevitable conclusions. To be able to do this you need
Bill and Steve and their old guard out of the way.

------
gesman
Nadella is a perfect fit for MSFT CEO.

MSFT's power and potential is in everything enterprise and Nadella understands
this (or rather passionate about this) universe from top to bottom better than
any other candidate.

~~~
shanselman
Totally. He's wicked smart, very nice, and both a techie and a business guy.

Note: He's my boss, 4 bosses up.

~~~
Maarten88
Scott,

Good to see you comment positively on this.

Does he share your views on openness? Does he listen to the opinions of
forward-thinking Microsoft devs?

Do you think he'd read Hacker News?

~~~
shanselman
I know he reads voraciously, so it's possible he's reading HN. He totally
listens to forward-thinking devs. ScottGu works for him, so he's been leading
us as we've been doing all this open source work on Azure and ASP.NET.

------
amaks
Big mistake IMO. I can't imagine Satya "the enterprise guy" being CEO of the
devices company (he's probably qualified to be CEO for the "services" part of
Microsoft). I'm wondering if him and Elop would work as co-CEOs, but history
shows that's not a good idea either.

~~~
graving
He was a lead on Bing and was working on Windows earlier. That's hardly
enterprise.

~~~
hueving
Nobody uses bing and Windows is largely enterprise. The entire value of
Windows is enterprise management.

~~~
nivla
>Nobody uses bing

Not sure if you are trying to pull out the old faded joke or being truly
serious. Bing has about 18%-27% market share depending on Organic vs Powered
By. No I am not nitpicking a specific blog article, infact its the first
summarized link on a Google search for "Bing market share". Bing also powers
Siri, which is another major contributor.

>Windows is largely enterprise.

Its revenue may be largely enterprise but its still a monopoly in the consumer
side. Infact I can blindly bet that majority of users here on HN is using
Windows.

[1] [http://searchenginewatch.com/article/2307115/Google-Fails-
to...](http://searchenginewatch.com/article/2307115/Google-Fails-to-Gain-
Search-Market-Share-Bing-Steals-From-Yahoo)

~~~
marshray
> No I am not nitpicking a specific blog article

It would be 'nitpicking' to point out that you were not 'cherry picking' one
from many possible articles to support your point.

~~~
nivla
You are absolutely right, that's the word I was looking for. My apologies. :)

------
computerslol
I'm looking forward to learning more about him in the coming weeks.

I'm glad it's a tech guy.

------
sytelus
Satya is no Steve Jobs or Larry Page. He is typical corporate ladder climber
who took 22 years in the company to get to where he is. Before you credit with
all the profits in server & tools, make a note that he was in Bing and did not
had any major impact in direction or turnaround. Microsoft divisions are setup
in such a way that if you put a monkey on the top (or even Steve Ballmer, for
that matter) for a year or two, it will still make same amount of profits
because of licensing deals. Satya also hasn't brought anything dramatic or
revolutionary in his current job. Azure is still irrelevant and Dev Tools
still has little impact on Windows or vice versa.

So Satya would be your choice if you want "stability", no fear of any dramatic
changes and "easy as she goes" attitude. Honestly that is the least what
Microsoft needs right now. Microsoft is currently pretty much in same
situation as Apple was when Steve Jobs arrived. I know, I know, I see you
jumping off your chairs quoting last quarterly results and telling me it is
far from bankruptcy like was Apple. _But_ have noticed a chart of PC sales for
last 3 years? Have you noticed a giant slump in Office that is only matter of
time to eat away the growth in server and tools?

In any case, I really think Micosoft needs a bold bet, not someone
conservative. It needs someone who would come in and say, this size of 100K
employees is bullshit, who has courage to remove about 60% of crud that has
been accumulated in form of MBAs, PMs, "Business Managers", GMs and their 13+
levels of hierarchy. Someone who would have balls to say managers are
overhead, less important and there needs to be 30 reports per manager (instead
of current 3-7). Someone who can personally deeply dive in to products and
send out "30 things to fix and improve" every Friday night. Someone who will
go to end of the Earth to get the best talent in industry. Someone who insist
on best customer experience and signs off his/her name on each product release
saying that he personally has tested and used every customer facing aspect of
the product and is happy with it. Someone who would never let crapeware like
Windows 8 get through the door. Someone who insist on same OS for Phone and
Tablets. Someone who would not hesitate to move org charts if things don't
work out as intended.

As far as I'm aware Satya is neither of these. He is your regular MBA with
tech experience who can keep the ship steady in good weather.

------
owenwil
That's disappointing. I was really hoping that it would be someone external to
the company who would be visionary enough to take them to new heights.
Instead, they're picking the safe, enterprise bet, who won't change things too
much.

I would say Microsoft's consumer facing days are numbered.

~~~
angersock
They basically own the entire PC market, and most of the enterprise market.
What more do you want?

It's like bitching that Walmart hasn't cornered Starbucks. Jesus.

~~~
mikeash
The thing is, the "PC market" is rather artificially defined to be that market
in which Microsoft dominates.

If you take the generic concept of "personal computer", what people were using
those for five or ten years ago, people are now often using smartphones and
tablets. Due to how the market is segmented for analysis, this isn't counted
against Microsoft, but the money doesn't care how we segment it. The PC, in
the long term, is going to be a niche market. Not today, not tomorrow, but in
5, 10, 20 years, a Microsoft that owns the entire PC market and little else
will be a tiny, broken Microsoft.

If we count tablets in with PCs, then MS's "PC" monopoly is already gone.
Tablets are selling around 1/3rd of what PCs are selling, so that gives MS a
75% share.

If we count smartphones in with PCs, then PCs almost disappear. Smartphones
make up about 60% of the combined smartphone+tablet+PC market, with tablets
making up another 10%, giving PCs 30%.

I'm sure you'd point out how PCs are still very popular, how MS still makes
tons of money off them, how they're not going anywhere soon, etc. And I
completely agree. But in the long term, it's not going to last, not in the
form it exists now. I'm sure MS could do decently well for a very long time as
they are, but they will stagnate and they will eventually shrink if they do
so. They might remain powerful, but not to anywhere near the same degree.

For your Wal-Mart analogy, imagine if Wal-Mart totally owned retail sales, but
"retail" was defined to exclude all online sales, and Amazon was selling 3x as
much stuff as Wal-Mart once you counted online. Even as Wal-Mart owned the
"retail" market and remained profitable, it would be completely reasonable to
think that they might need to change.

~~~
pnathan
Yes and no.

There is a rather large market for the machines people do business with.

~~~
mikeash
Those won't remain PCs forever. "Post-PC" devices are already making
substantial inroads, just to a much smaller degree _so far_. How many business
laptops meant for field use have been replaced with smartphones and tablets
because all they're used for is reading e-mails and viewing maps and such?

There's no doubt that MS can coast for a _long_ time on PCs, but if they do,
they're never going to dominate they way they did in the 90s, and they will
eventually go away.

~~~
pnathan
You are absolutely right. But I'm pretty sure (crystal ball time) the post-PC
device looks a good deal closer to a Surface Pro than an iPad.

That concept of keyboard + mouse + touch screen is really good; you need a way
to have custom line of business apps developed for it. Apps need to be easily
installable on it. It needs to have integration capabilities with oddish
hardware. App state needs to be 'sane' and persist extant data without
wrecking it due to swapping out of memory.

IOW, the capability lineup looks a lot like a PC on someone's desk, even
though the form factor might reflow to be a tablet placed in a dock with
attached bluetooth keyboard/mouse.

~~~
mikeash
You could be totally right about that. It's a bit of a tough sell to me to say
that Surface will keep them relevant, but it's definitely far more possible
and reasonable than them staying relevant sticking to the PC.

------
barce
His twitter seems to suggest he really is into keeping up with the latest
trends. [https://twitter.com/satyanadella](https://twitter.com/satyanadella)
The article states there was a 5 month search. I'm glad they are hiring within
the ranks.

~~~
alienfluid
Is there a strong correlation between being active on Twitter and being a
successful CEO?

~~~
onezeno
I think the point was "keeping up with the latest trends".

~~~
ScottWhigham
I agree. But, that said, I don't know that "people who are active on Twitter"
and "people who are up on the latest trends" are always connected (which is
what was implied).

------
hardwaresofton
On topic: I do not think this guy (or any CEO) of Microsoft is going to be
able drive Microsoft in any true sense of the word. Gates is not going
anywhere.

Off topic: I might be the only one who came in here excitedly expecting to see
a Female CEO of Microsoft. Kind of disappointed when I saw the picture and
it's just another balding dude.

No I'm not female or a feminist, just kind of excited for drastic progressive
change that I personally favor (I think more girls should be in tech,
especially in leadership)

~~~
umeshunni
> excitedly expecting to see a Female An informal search seems to indicate
> that around 1/5 of Satyas are female, so I can see why you thought so.

------
HashThis
This won't end well. Microsoft is a bubble with an echo-chamber internally.
Their employees are in the 1990s era, which is making DVD application software
(Word, etc.). The problem is that they still think that way. Senior managers
are from the 1990s. Or they hired from colleges and sheep dipped people in the
same thinking. People from startups and industry don't last long there, and
definitely don't rise in management.

The reason startup or industry people don't rise in Microsoft is that they are
rejected as not matching the 1990s way of doing things.

Examples: Their UI innovation was in WPF because someone forgot to tell them
that UI dev now happens on web pages and iPhone. Hotmail is a joke. MSN is a
joke. Web hosted office 365 is a joke. Exchange web UI and client main usage
is for 1990s customers and not 2010 customers. C# is charging in the opposite
direction of the entire webapp industry's development platforms. (aka, they
were late to MVC, Hadoop, Linux server hosting, etc.) They push Windows OS
lock-in to win (but that fails).

The right leader comes from Silicon Valley in a startup gone big. That right
leader will then replace many of the other leaders in MSFT with Silicon Valley
highly strategic leaders. When the CEO is a Microsoft person, they will keep
the same Microsoft 1990s style internal leaders and nothing will change in the
category of what needs to change.

~~~
Locke1689
_C# is charging in the opposite direction of the entire webapp industry 's
development platforms._

I'm not sure if you're confused or I'm confused. C# is a programming language.
What exactly about C# is "in the opposite direction of the entire webapp
industry's development platforms"?

------
ct
The biggest priority for new CEO is to get the two major divisions OS and Devs
on the same page instead of bickering and reinventing the UI several times
over from other groups. Secondly, he needs to put focus on UI design and
usability instead of having engineering lead the way.

------
jonhohle
From one former Milwaukeean to another, I hope this kicks more recruiters to
the area. With three major universities in the city, there was a dismal number
of national recruiters dropping by when I lived there (about a decade ago now,
maybe things are different).

~~~
swalsh
I grew up in the Milwaukee area, but eventually moved to Boston. I think it
produces a decent amount of talent (my school had a great technical program)
but there's not a lot of interesting employers there.

------
data_app
what? After all this ruckus..

------
suprjami
What an article. "It could be this person. Or this one. Or this one or this
one or this one or this entire list of people."

~~~
0A0D66
What? It mentions one name for CEO and one for chairman. The last bit is just
names that were looked at during the process.

