Microsoft named 46-year-old Satya Nadella as its new CEO and assigned co-founder Bill Gates a larger role in the company as a technology adviser.

Nadella has been working at Microsoft for 22 years in positions such as vice president of R&D for the online services division and vice president of Microsoft’s business division. He took over the server and tools business and is credited for increasing revenues from this division to $20.3 billion in 2013 from $16.6 billion when he took over.

As part of the promotion, Nadella gets a pay rise to a base salary of $1.2 million, a maximum annual cash bonus of three times that and a stock award of $13.2 million for next fiscal year. Ex-CEO Ballmer on the other hand, had a salary of $1.3 million last year and opted not to take any stock.

satya_nadella

He says that he will focus on innovation, “Our industry does not respect tradition — it only respects innovation. We need to prioritize innovation that is centered on our core value of empowering users and organizations to ‘do more.” He also envisions a future for Microsoft that is cloud centric albeit in a jargon heavy fashion: “I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient. The coevolution of software and new hardware form factors will intermediate and digitize — many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning.”

Gates role

It will be very interesting to see what Bill Gates will do in his new position. He says that he will be interacting with the product teams and that he will spend one-third of his time at the company. Will Nadella focus on services, while Gates looks at the product side or will it be vice-versa? Either way, his comeback to an active role is a shot in the arm for Microsoft, which seems to be struggling in the industry right now.

Microsoft has been trying to become more than a software player and it has been pushing its hardware products, but none apart from Xbox has gained a footing in the market. Even in the console gaming market, Xbox One has faced serious competition from PlayStation 4 which is expected to out do Microsoft’s offering this generation. So how Gates and Nadella goes about fixing the company is something worth watching out for.

What they are saying

Indian media has a tendency of behaving like it is a national achievement whenever an Indian is appointed to a senior role in a western company. We have seen that in the past when Indra Nooyi was appointed CEO of Pepsi and when Shantanu Narayen became CEO of Adobe. The story wasn’t different this time around either.

PTI pushed out a story how test match cricket helped Nadella learn about working in teams and leadership, while also noting that he played cricket as part of the Hyderabad Public School team. Hindu Businessline meanwhile, quoted Manipal University Chancellor Ramdas M Pai who took pride in the fact that Nadella passed out of Manipal Institute of Technology. He proclaimed it as the “biggest event for Manipal University*”, but what he did not mention was the fact that MIT was under Mangalore University when Nadella passed out and Manipal group got deemed university status only much later.

The most dramatic headline was of Business Today, which wrote about the possibility of Nadella becoming CEO with the headline “Hyderabad’s eagle rises to Microsoft top”. Why is he an eagle, why not tiger or a lion? I wonder how they narrowed down on eagle.

*

PS: In an alternate universe the race for Microsoft CEO position would have reminded you of a Bollywood movie title.

 

*Disclosure: I’m a Manipal University alumni, but it was called Manipal Academy of Higher Education when I passed out.