Microsoft CEO Satya Nadella has driven a decade of incredible growth through cloud computing and AI

Spread the love

Satya Nadella turned 10 as Microsoft CEO on Sunday, leading a decade of spectacular growth by transforming the slow-moving software giant into one with a laser focus on cloud computing and artificial intelligence. Microsoft's stock is up more than 1,000% since Nadella took the helm in 2014, compared to the broader S&P 500's steady 185% rise. Microsoft now has a market value of $3 trillion – more than any US publicly traded company. Its long-time rival is Apple.

Wedbush Securities analyst Daniel Ives said, “Nadella's biggest transformation at a tech company. The only one that rivals it is (Steve) Jobs coming back to Apple and turning it around with the iPhone.”

Microsoft has created $2.8 trillion in shareholder wealth over the past decade, meaning that an investor who bought a $10,000 stake in Microsoft at the time of Nadella's takeover and did nothing with those shares now owns a stake worth $113,000.

This is how it happened

“Our industry doesn't respect tradition — it only respects innovation,” Nadella told employees in an inaugural memo 10 years ago, the opening salvo that signaled big changes to come. Microsoft declined requests for an interview.

Now a hero to Wall Street, Redmond was initially skeptical that such a transformation could come from an insider who had already spent 22 years at the Washington company. He is only the third Microsoft CEO after Steve Ballmer, who served for 14 years, and Bill Gates, who co-founded the company in 1975 and took it public in 1986.

Big changes came quickly under Nadella. He marshalled resources to build the Azure cloud computing platform, a shift in priorities from the company's long reliance on its flagship Windows operating system and the royalties it gets for every PC sold with it. And he largely put the brakes on Microsoft's ill-fated attempts to play catch-up in the smartphone market, marked by his predecessor Ballmer's $7.3 billion purchase of Nokia's phone business.

But some of the biggest changes have occurred in the company's culture, moving from Microsoft's grandiose external reputation and internal strife to a more collaborative approach that Nadella has modeled on his own gregarious personality and engineer mindset.

We are now on WhatsApp. Click Here to join

Learn all the culture

“Microsoft is famous for rallying forces with competitive firepower,” Nadella said in his 2017 autobiography. “The magazines love it, but it's not me.”

Raimo Lensho, a stock analyst at Barclays who covers 36 tech companies, said Nadella's greatest strength is how he stands out from “a CEO with a very strong ego.” Instead of making bold statements, Lenshow says Nadella takes a more measured approach to explaining. “Where he thinks the future is going.”

And “whether it's a cafeteria worker, an engineer, a finance executive, a customer, he treats everyone the same, with respect,” Ives said. It's not just Wall Street analysts.

When Nadella, a small startup from Zeeland, Michigan, showed up running a booth at the CES gadget show in Las Vegas in January, he reached out to founder Tim Murphy and asked for a demo. The product, Audio Radar, visualizes sounds in video games for deaf and hard-of-hearing players.

“He's very down to earth,” Murphy told a small crew, including his teenage son. “I pitched him, played a few games, and he was like, 'What you're doing is awesome.' Honestly, I don't remember much about what he said because I was really shocked.

Nadella has long prioritized making technology accessible, citing some of his experience raising a son who is visually impaired, quadriplegic and has cerebral palsy. Zain Nadella died in 2022.

AI push

What has brought Microsoft to its latest heights is its emergence as an artificial intelligence leader, setting the agenda for how AI tools can be used in work and society. Although Nadella has emphasized AI for much of his tenure, its role is far from guaranteed and comes after years of careful planning that led to a close partnership with ChatGPT-maker OpenAI. (OpenAI pays The Associated Press an undisclosed fee to license its archive of news stories).

“Historically, if you were a cool startup doing something amazing, Microsoft wasn't really your first choice,” Lenschow said. “So for him to get OpenAI to commit to Azure is an amazing masterstroke … it gives him a huge, competitive advantage over Google and Amazon.”

That position was put in jeopardy late last year when OpenAI's board of directors abruptly fired CEO Sam Altman. A weekend of behind-the-scenes maneuvering and a move of employees threatened by Nadella helped bring Altman back and stabilize the startup, reassuring clients and shareholders. “He handled it like he was in the World Series of Poker playing with little kids,” Ives said.

Ongoing challenges

Nadella's tenure has not been without its hiccups, especially as the world relies heavily on Microsoft products — sometimes to the frustration of the people who use them.

Cybersecurity experts say its tendency is to sacrifice security for convenience, including the gung-ho rollout of AI big language models. The company's trademark suite of work tools, Microsoft Office 365, has been successfully infiltrated in recent years in embarrassing high-profile compromises that allowed high-level Russian and Chinese cyber operators to access the email accounts of senior US officials and members of Microsoft's senior leadership team. .

It has stepped in to provide cloud hosting to Ukraine ahead of Russia's 2022 invasion, but networks serving NATO allies are constantly peppered with infiltration attempts. That, and the worsening ransomware scourge, led Nadella to call for a Cyber ​​Geneva Convention with Russia and China.

And despite Nadella's aversion to “competitive fire,” Microsoft is once again attracting the kind of antitrust scrutiny that Gates and Ballmer faced in previous years. Nadella's convincing testimony in a federal court hearing last summer helped convince a judge not to block Microsoft's acquisition of video game giant Activision Blizzard, but the company now faces another round of questions over its partnership with OpenAI.

None of those challenges are likely to keep the 56-year-old Nadella, who earned $48.5 million in total compensation last year and will chair Microsoft's board through 2021, from his leadership roles anytime soon.

“From everything I could gather, he was really enjoying himself,” Lensho said. “We're in very, very, very interesting times. I hope he stays around for a while.”

One more thing! HT Tech is now on WhatsApp Channels! Follow us there so that you never miss any update from the tech world. To follow HT Tech channel on WhatsApp, click Here Join now!

Source link

Leave a Comment