Why Satya Nadella Is Too Safe a Choice for Microsoft CEO

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By Pete Pachal2014-02-04 17:59:38 UTC

This post reflects the opinions of the author and not necessarily those of Mashable as a publication.

Microsoft just appointed the third CEO in its 39-year history. Satya Nadella, who has been with the company for 22 years and currently manages the company's extensive cloud services, is now the man in charge of everything. He's also the wrong man for the job.

First, disclosure: I don't know Nadella. My only contact with him has been at Microsoft's Build developer conference, and as a spectator. Nadella typically leads the Day 2 keynote — the one about servers, the cloud, SkyDrive, Office 365, Bing, Windows Azure and other insomnia-curing subjects. He always comes off as incredibly intelligent and to his credit makes the material about as interesting as it can possibly be.

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I think that he's able to do that from a real passion for what he's talking about. Nadella has degrees in electrical engineering and computer science and came to Microsoft by way of Sun Microsystems, where he was a member of the technology staff. Throughout his tenure at Microsoft, he's been knee-deep in the company's back-end services, from the cloud to servers to software clients. But passion for the back end doesn't mean Nadella has what it takes to lead Microsoft into its next era.

The Return to Microsoft's Core

For all the conversation around Windows 8 and Windows Phone, the stuff Nadella has been running is Microsoft's bread and butter. Those products and services are the reason the company remains incredibly profitable even as the PC market continues to significantly decline. His experience with Microsoft's infrastructure and services was obviously the main reason the board settled on him.

And they definitely settled. Given how long it took Microsoft's board to choose Nadella (Steve Ballmer announced he was stepping down last August), they were clearly looking at other, external candidates. The choice facing the board was an existential dilemma: With no clear internal front-runner, they could either appoint a loyal Microsoftie to the top job or pick someone from the outside to shake things up.

With Nadella, the board opted for the safe choice. It's not surprising — and he may yet be successful — but it's dismaying. For the past few years, Microsoft has been taking risks with Windows and Windows Phone to better play in the consumer markets dominated by Apple and Google. Some of those risks may have been misguided and overreaching, but it was good that Microsoft took them.

Now is not the time to stop taking risks. I'm sure Nadella doesn't plan on doing so, but the CEO sets the tone for the entire company. Despite its financial success, Microsoft's mind share among consumers has shrunk over the last decade. That's because the company wasn't able to predict and get ahead of big technology trends, such as the rise of smartphones. Ballmer even said one of his regrets as CEO was that he didn't focus on Microsoft's mobile products early enough.

Does anyone really think Nadella would have? If Microsoft wants to hang onto any clout in the consumer market it needs to be placing big bets on what the post-mobile world will look like. Wearables, health and fitness services, in-car experiences and on-demand content are all poised to explode. Apart from a little activity around Xbox, Microsoft hasn't led in any of these consumer-focused areas, and it's hard to see Nadella changing that.

And Microsoft honestly hasn't even led the way in cloud services, supposedly Nadella's strong suit. Amazon Web Services was around for years before Windows Azure was a real alternative. Microsoft likes to brag that SkyDrive (now OneDrive) was around well before Box, Dropbox and Google Drive, but it let the service languish, unserviced and unpromoted, for years — with completely inconsistent branding. And it took the company far too long to bring services like Office 365 to iOS and Android.

Nadella talks a lot about software and the cloud driving the next wave of technology, and he's right... to a point. Cloud services enable great things, but they don't capture consumer imagination. You'd be hard-pressed to find anyone who bought an iPhone because of iCloud. People care about design, user experience and whether or not the apps they want are available — all areas Microsoft has struggled lately.

Road to Irrelevance

Microsoft has recently taken steps to correct past mistakes, and its cloud offerings are now arguably stronger than competitors (SkyDrive integration with Windows 8.1 works almost exactly the same as local storage). With such resources at Nadella's disposal, the board probably saw great potential for them to flourish, and produce even greater profits.

That's the dream scenario, at least. In reality, such a safe choice will probably put Microsoft on the same misguided course pursued by the likes of Sun, HP and even BlackBerry. There's no question there's money to be made by providing back-end enterprise-friendly services, but without focus on consumer, it's one wrong turn away from irrelevance.

There's one asterisk beside Nadella's appointment, though, and that's the news that former CEO Bill Gates will return to an active, advisory role within Microsoft. Although Gates' first priority will always be his philanthropic endeavors, his genius and record are unquestionable. As long as Gates' new role isn't just PR spin, it's a great move for the company.

Nadella's going to need him. What Microsoft needs now is someone who has a clear picture of where technology is headed, how to position the company to get there before competitors, and the willingness to take big risks to make that happen. That requires imagination and a good sense of how today's consumers interact with technology — two things Nadella has yet to show he possesses.

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Topics: Apps and Software, Microsoft, Mobile, Satya Nadella, Tech