Microsoft announced on Tuesday it had appointed Satya Nadella its new chief executive, formerly head of the company’s cloud services division and a 22-year veteran of the company.
While at Microsoft, Nadella helped develop the cloud infrastructures for Bing, Xbox, Microsoft Office and other software services, according to the company. Under Nadella, Microsoft’s commercial cloud services revenue more than doubled year-over-year in 2013.
“What Satya has done is not only initiated but started successfully the process of moving developers into a cloud environment,” said Crawford Del Prete, chief research officer at the International Data Corporation, noting that Nadella has been promoting cloud-based applications to defend Microsoft against other tech companies. “Amazon did a good job of moving [to the cloud] early, and Microsoft was a fast follower.”
This strategy is in line with that of his predecessor, Steve Ballmer, who often touted the idea of “One Microsoft”, a company whose software and services can be accessed consistently across tablets, desktops and smartphones, according to Del Prete.
Customers will be watching how Nadella integrates cloud services and mobile devices, IDC vice president for servers and software Al Gillen said. If Nadella is willing to participate in more open-source software projects — which Ballmer historically resisted, Gillen said — the company can attract more business clients through a wider range of devices.
Gillen noted that Microsoft has recently made a few open-source announcements — last week it announced it was releasing the designs for its data centers to Facebook’s Open Compute Project, which aims to reduce the cost of computing infrastructure.
Charles Weaver, chief executive of the International Association of Cloud & Managed Service Providers, represents about 20,000 IT vendors who often resell Microsoft products. Weaver said his members are optimistic about Nadella’s appointment because of his cloud expertise. In the past few years, many member businesses were selling some type of e-mail client, but as more e-mail systems are moved to the cloud, “constituents are saying, what else can we sell that’s high margin that’s valuable?”
As Microsoft expands its offerings in other types of hosted applications — customer relationship management, data storage, or others, vendors are seeking opportunities for themselves, Weaver said.
“We hope Nadella will come back in and say, ‘How can we reengage and bring back into the fold some of those end users and channel companies we used to make a lot of money with?’ ”
For his part, Nadella left little doubt about his focus, if not a detailed roadmap about his plans.
“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,” Nadella said in a message to Microsoft employees Tuesday.