Microsoft Zeros in on Indian-born Satya Nadella as its New CEO

Edited by Vani Rao

Nadella to take over as CEO with immediate effect, replacing Steve Ballmer

ceoMicrosoft’s (NASDAQ: MSFT) much publicized search for a new CEO to replace Steve Ballmer has finally ended. And we say Satya Eva Jayathe (‘Satya’ or truth only wins)! The company announced on 4 February 2014 that Indian-born, 46-year-old Satya Nadella will take over as its third CEO with immediate effect, allowing Ballmer to retire early. Before becoming the CEO, Satya was Executive Vice President of the Cloud and Enterprise group, which develops computing platforms and developer tools for Microsoft. He joined Microsoft in 1992 and has risen through the ranks to assume leadership roles in both the consumer and enterprise businesses of the company.

According to the company’s press release, Nadella previously led the R&D activities for the Online Services Division and was Vice President of the Microsoft Business Division. Before joining Microsoft, Nadella was one of the technology staff at Sun Microsystems. Nadella’s appointment as CEO comes at a crucial phase ahead of the closure of Microsoft’s Nokia deal and its ongoing reorganization within the company, as part of a “mobile first, cloud first” business plan.

In an internal memo to Microsoft employees on 4 February, Nadella said, “Today is a very humbling day for me. It is an incredible honor for me to lead and serve this great company of ours.” He also said, “This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places—as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.”

Born in 1967, Nadella studied Electrical Engineering at Mangalore University in Karnataka, before moving to the US to study Computer Science at the University of Wisconsin-Milwaukee. He also has a Master’s in Business Administration from the University of Chicago. Nadella lives in Bellevue, Washington. He is married and has three children.

Server and Enterprise Pundit

At Microsoft, Nadella has worked in the company’s business division on Office and was involved in building the Bing search engine. Most importantly, he has been instrumental in transforming Microsoft’s cloud business and has previously led its server and tools business. Nadella took over what was then the Server and Tools division in February 2011 and has managed to increase its revenue while overseeing the transition to cloud computing. Nadella’s work on Microsoft’s server and tools business helped increase the division’s profitability, and paved the way for its transition from traditional client-server computing to cloud infrastructure like Windows Azure.

As Executive Vice President of the Cloud and Enterprise group, Nadella focused on pushing the company’s underlying infrastructure and services into products like Bing, SkyDrive, Xbox Live, and Skype. Nevertheless, Nadella lacks core experience in the consumer-facing businesses like Xbox or Skype. Yet, he has the requisite knowledge of the computing and engineering skills to develop and build new services and applications.

Innovation and Growth is the New Mantra

After the announcement of the new CEO, Bill Gates, Microsoft’s Founder and Member of the Board of Directors, stated, “During this time of transformation, there is no better person to lead Microsoft than Satya Nadella. Satya is a proven leader with hard-core 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.”

Microsoft set Nadella’s base salary at $1.2 million, over 70% higher than that received by Steve Ballmer. Nadella’s stock award for fiscal 2015, on an annualized basis, will be $13.2 million. In all, Nadella could receive up to $18 million in his first year as CEO.

In a parallel development, Bill Gates will step down as Chairman, but will take up a on the Board as Founder and Technology Advisor to support Nadella in shaping technology and product direction. Microsoft’s lead independent director John Thompson will take over as Chairman.

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