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Analysts: Nadella A Good Pick For Microsoft

REDMOND, WASH. – Observers of the IT industry were mostly positive about Microsoft’s recent selection of Satya Nadella as its new CEO, and the naming of Symantec’s former CEO John Thompson as the company’s new chairman.

The former head of the company’s Cloud and enterprise division was selected as Microsoft’s new CEO to replace Steve Ballmer, who announced his resignation last August.

Nadella, 46, is only the third chief executive in Microsoft’s 39-year history, following co-founder Bill Gates and Ballmer, both of whom will remain on the board that Thompson will chair, following Gates’ decision to step down for a new role as technology adviser to the new CEO.

India-born Nadella is a 22-year Microsoft veteran who has been involved in some of the company’s fastest-growing and most profitable businesses, including its office and server and tools businesses.

Most Microsoft watchers said it’s still too early to predict how the changes may shape the future strategy and standards of the company, but the addition of Nadella at the very least illustrates Microsoft’s commitment to building its Cloud offering, which doubled its volume through his leadership in the company’s last fiscal report.

Cloud computing, which Nadella took on seven months ago, is a new and developing area for Microsoft. The software giant has traditionally focused on developing programs for installation on personal computers rather than on Internet-connected remote servers.

Craig Stice, IHS computer electronics senior principal analyst, said Nadella “was chosen due to his tenure with the company, his strong engineering background, as well as the fact he most recently was the leader of Microsoft’s Cloud and enterprise group, which he has been doing very good things for since taking that position. I think it was the right decision for Microsoft as Nadella seems to be a well-respected leader within the company as well as it appears he is bringing Bill Gates back in to get more involved in an advisory role.”

Stephen Baker, industry analysis VP at The NPD Group, also agreed with the hire, saying: “Microsoft is too big and complex a company to ask someone to come in and run, especially someone from outside the industry.”

“I think it is great for the consumer business that he is an enterprise guy,” he continued. “With the advent of BYOD and the growth of enterprise technologies into the consumer marketplace having someone who understands the enterprise should help them find ways to migrate the technology to the consumer market more effectively than they have in the past.”

As for how the hire will ultimately pan out for the PC giant, IHS’s Stice said: “I think there will be a couple businesses that people will be watching initially for results – the first being their PC Windows software business. It’s been well publicized that Windows 8 has not been as successful as hoped, so it will be interesting to see what changes or modifications will be made to future software launches, including technical features, strategies, and maybe most important execution.”

“Adding on to that, how does Microsoft handle their mobile software strategy which they’ve struggled with,” he continued. “Also, Microsoft has been making very big strides in the Cloud and Enterprise group. This market is going through a tremendous evolution, so his ability to get ahead of it and define themselves as a leader in this space will be critical.”