My personal opinion is that for Microsoft this is a much better solution than to hire an external CEO with an MBA and no background in software/technology. If the news are true then I wish all the luck to Mr. Nadella.
I don't think BillG would have allowed hiring someone with an MBA and no background in software/technology. He is still the majority shareholder (from what I've read) and sits on the board.
Satya has an MBA too. I was just commenting on my previous comment. I guess author meant that someone just with MBA as a qualification and no relevant tech background would have been bad deal since MBAs get hired in leadership role even if they may or may not possess relevant domain knowledge.
Nobody is going to get hired as CEO of an $80 billion a year company with just an MBA. It would be an MBA plus 20-30 years of business experience, and these days it's almost impossible to avoid technology completely. I'm not even sure domain knowledge is important for a CEO of a company that size: once you become a $50 billion plus company, you don't have time to get involved with the details of the business.
>I'm not even sure domain knowledge is important for a CEO of a company that size: once you become a $50 billion plus company, you don't have time to get involved with the details of the business.
Steve Jobs and CEOs in-between kind of make a counter-example.
Read the biographies of Steve and Steve; Jobs was not an expert, but was familiar with technology of that era. His father taught him electronics, and Jobs was working at Atari as an technician.
They have to make capital allocation decisions, based on the direction the market is taking. An MBA might be able to tell whether China or India needs more marketing dollars, but they won't know whether it's better to invest billions into different R&D efforts.
The executive in charge of mobile isn't going to tell the CEO "look, Windows phone is busted, just fire us and put everything behind a major effort to sell small-medium businesses turnkey enterprise systems."
Why? My experience has been that handing the reins tech companies over to accountants or "business people" has been fair to disastrous more frequently than handing them over to tech people with some business training.
I disagree. Technology people tend to focus on the shiny, which really isn't what Microsoft needs at this point. They're just too big and they play in too many fields where they end up competing with themselves in half of the markets they play in.
After ten years of Ballmer, what Microsoft needs now is a professional manager to sort out the mess he left. They have no shortage of great technology people; what they need is someone to bring the organization to heel behind a universal vision.
Microsoft is not on the verge of great growth or in the position anymore to build "the next big thing." That ship has sailed for them, as all the people capable of building the next big thing have been run off by the ineffective management (or never hired in the first place) and work at Google or Facebook now. Microsoft is, however, at risk of losing a significant portion of their revenue should the PC industry continue its slide and start being displaced in the enterprise.
Nadella is the best choice that is available. I still hold that the best candidate out there for the job is Mark Hurd, but he apparently wasn't interested for the same reason a lot of other outside candidates weren't interested: Microsoft has an infamously poisonous corporate culture, and everyone who worked for an outside CEO would be trying to undermine him and take his job.
I totally disagree on the "professional manager" - that's what ballmer was. and this is coming from someone who thinks ballmer is unfairly criticized.
(eg - what google and apple unleashed on the world in the past 10 years was a major historical shift - coming from product/technical people at their core. arguably, this shift was one that only a newbie or outsider could pull off. 20/20 hindsight to say "microsoft could have dominated those arenas" when they had so many other verticals of strength to tend to. (and 20/20 hindsight for me to say this as well...))
IMHO microsoft needs to keep focusing on hacker-friendliness - they have a great lock on the corporate world, but the corporate world is starting to look to the hacker community for direction.
what do i mean by this?
big companies can't be trusted to just get brand loyalty and keep buying your stuff until they go out of business. look at RIM - Blackberries were mandatory company accessories, now it is BYOD. Look at the server market - the biggest consumers of servers (FB, GOOG) are using designs they made themselves. Tougher for Dell and HP to keep selling ready-made servers. How long before other major corporations are doing the same?
the enterprise market is more tech savvy than times past, and only getting more so. high-level technical creativity and intuitive understanding of product potential is vital.
I always thought the amount FB/GOOG spend on servers is a tiny fraction, when compared to the sum of what all the other companies in the world spend. Do you have a source where I can verify this claim that Dell/HP are having a hard with their server divisions because FB/GOOG isn't buying from them?
This is a honest question as I often am not aware of the whole picture (and have a hard time picking the right sources for that kind of information -- not sure who to trust in a marketing war).
The GP isn't arguing that Dell/HP are hurting because they lost their biggest customers. It argues that they're at risk of losing many customers in the future, because enterprise IT departments will emulate Facebook and Google.
If that is his argument, then I think it's wrong. Small and medium business will never do that for sure. They don't have the knowledge, resources or anything. The ROI is nonexistent for them.
Even for big corporation, what would be a good number of servers for them to reach a critical mass where it is worth keeping all those HW engineers and increased support staff? They want to sign a contract, get regular supported servers, with warranty, etc, and focus on their core business. They get it from the regular folks of HP, Dell, IBM, etc.
Of course there are exceptions but are they numerous enough to say Dell and HP are doomed? I hardly think so. Corporations in HPC market might take a stab at creating something like this. The folks running app/DB/web/whatnot servers for ERP, financial, etc applications?
Interesting that you bring this up the day after Microsoft donates a bunch of server designs to the Open Compute Project. I definitely think that hybrid cloud approaches will squeeze out middlemen like HP and Dell. OEMs and customers are going to be the big winners here.
In a lot of respects I agree with you. Microsoft needs someone who will fix their ridiculous enterprise agreement / contract / sales process and win back the hearts and minds of CIOs around the world. In my personal opinion, this has to be job #1... at least for the Finance+Sales organization.
They also need credibility with consumers and techies on their R&D and hardware/platforms side. Not that they don't have decent stuff now, but they have approached it like a large enterprise rather than as a hip tech company and it's really unsexy for people to proclaim their love of Azure vs [insert ANY other PAAS/IAAS here]. Just as an example.... Windows Phone and the whole Windows OS strategy is something else they should publicize better. At this point, hardly anyone is building Metro mobile apps because it's really unclear WTF Microsoft is doing beyond Windows 8.1, and what will happen to Nokia or their very few other hardware partners if sales don't take off. The Surface Pro is a really nice tab and fits well into a lot of IT strategies, given it hits both the "I want a sexy tablet!" and the "I need my freaking Excel and my goddamn PowerPoint animations!" sweet spots. MS has a ton of potential and loads of talent. They just need to motivate it toward the right objectives, and I think choosing a new CEO from within will help them get there way faster than hiring an outsider, especially one from a non-tech company.
A CEO doesn't work in a vacuum, nor does he need to be the most knowledgeable person in the room. He can pay other people to think for him and ask the right questions. It's not an easy job, but it necessitates taking a 10,000 foot view of everything. Knowing how to navigate a corporate alliance or a merger is much more important than anything technology-specific.
