Cognoscenti anoint Nadella as next Microsoft CEO - Computerworld ~ Electronic Gadgets

News Analysis

January 31, 2014 02:58 PM ET

Computerworld - After sustained reports surfaced yesterday that Microsoft is close to naming its third-ever chief executive, Satya Nadella, a 21-year veteran of the company, has been named the heir apparent by virtually every pundit.

Nadella, 46, currently serves as the executive vice president of Microsoft's Cloud and Enterprise group, the division responsible for some of the firm's fastest-growing services and most-profitable products, including the Azure cloud computing platform and SQL Server.

Before taking control of Cloud and Enterprises -- one of the new groups created when CEO-for-now Steve Ballmer shuffled the company last year in a massive reorganization -- Nadella led the Server and Tools Business division, which in 2012 was Microsoft's second-largest unit by revenue. Prior to that, Nadella served stints in the company's online and Office groups, notably as the one who led the rebranding of its search engine as Bing.

Microsoft has spent the last five months searching for a new CEO, a process kicked off last August when Ballmer abruptly announced he would retire within the next year.

Although outside candidates were early favorites -- including Ford Motor CEO Alan Mulally, who took himself out the race in December -- the board's focus increasingly shifted toward someone already at the Redmond, Wash. company. In November, for example, co-founder and chairman Bill Gates said the next CEO needed "a lot of comfort in leading a highly technical organization and have an ability to work with our top technical talent," words that were interpreted to point to not just a technologist, but one very familiar with the firm.

By some accounts, the return to insiders was not a choice, but forced on the board by its inability to land a technology executive -- largely because many passed on the job knowing that they would probably have Gates, as well as Ballmer, who was also just reelected as a director, looking over their shoulders.

Nadella has been rumored to be one of those top internal candidates since the search's start, usually cited alongside Tony Bates, once the CEO of Skype and now the head of business development, and at times accompanied by Kevin Turner, the COO and company's highest-paid executive. Also often reported in the running was Stephen Elop, the former CEO of Nokia who will return to Microsoft -- where he ran once ran the Office franchise -- after it wraps up the acquisition of the Finnish firm's handset business this quarter.

"This would be an enormous job for Nadella. He has experience, but I wonder if he has the amount of experience to take on a behemoth like Microsoft," said Patrick Moorhead, principal analyst with Moor Insights & Strategy, when asked his take, assuming Nadella is the guy. "He has had a lot of success in areas where Microsoft has done a real good job, like Server and Tools, but no experience in areas of major pain, like consumer."

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