Microsoft’s new CEO appointment shows that the world’s largest desktop software developer has seen that the cloud is the future of enterprise IT.
Microsoft’s long and public CEO selection process has come to a close, with veteran Redmond employee Satya Nadella taking up the reins to lead the company through what will be a period of unprecedented change.
In the four decades since Microsoft was founded both the enterprise and consumer IT space has undergone radical evolution. It was Microsoft more than any other company that lead the way in past decades, shaping the industry with its massively popular enterprise, productivity, and operating system software. But, although Microsoft is still the dominant player in those arenas, that dominance is being challenged by a changing environment. Those changes are largely the result of new IT paradigms brought about by the cloud, including SaaS applications and IaaS platforms.
Microsoft is a huge company with fingers in many pies, from gaming with the Xbox, to mobile devices with Windows Phone and its recent purchase of Nokia, and from productivity and collaboration software with Microsoft Office and SharePoint, to its own cloud services like Windows Azure and SkyDrive.
The choice of CEO for a company that has only had two leaders in the past, Bill Gates and his close friend Steve Ballmer, is a crucial indication of where it sees its future. The selection committee might have chosen to double down on the traditional PC market, put its entertainment division first and foremost, given the reins to someone with mobile experience — Steven Elop was considered a front runner by some — or brought someone from the outside to take the company in a new direction. Instead they chose Satya Nadella, an insider to be sure, but an insider who has had more influence than anyone else in shaping the company’s cloud and services strategy.
The 46-year-old Nadella has been with the company for over two decades, previously having worked at Sun Microsystems. He is currently head of cloud services and enterprise business, and his appointment clearly demonstrates where Microsoft believes its future revenue lies. The PC market is stagnating, including the market for enterprise desktops, and although it’s unlikely to dwindle significantly any time soon, that traditional cash-cow can’t be relied on to generate new business.
In spite of Xbox and its constant experimentation with consumer devices, the enterprise has always been Microsoft’s major money-spinner. In the modern IT space, enterprise IT spending is being increasingly transferred to the cloud as businesses seek to exploit the cost-benefits, reduced management burden, and scaling advantages of cloud platforms. If Microsoft is to flourish, it must provide cloud solutions that will enable it to generate revenue that will supplement its less successful operations. That makes Nadella the perfect choice — he knows how to build services and platforms that give businesses what they need.
We’re in a transitional phase between legacy IT strategies and new cloud paradigms. Microsoft was the winner in the legacy IT world. Nadella’s appointment shows that Microsoft is determined to win in the cloud too.
By John Mack,
John is a technical writer for Datarealm, one of the oldest web hosting companies. You can follow Datarealm on Twitter, @datarealm, Like them on Facebook, and check out more of their web hosting articles on their blog, http://www.datarealm.com/blog.