Feb
04
2019
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After 5 years, Microsoft CEO Satya Nadella has transformed more than the stock price

Five years ago today, Satya Nadella took over as CEO at Microsoft, and by most any measure has been wildly successful. It’s common to look at the stock price as the defining metric of Nadella’s tenure, but the stock price triumph has followed something more fundamental and harder to measure: how he changed the culture of the entire organization.

Nadella’s term at Microsoft has paralleled my own here at TechCrunch. I started in April of 2014, and in one of my first posts, I wrote about the difficulty of substantive change inside an organization the size of Microsoft. In those early moments of both our tenures, I recognized a subtle shift was taking place, one toward service, something Microsoft hadn’t been known for under his predecessors Steve Ballmer and Bill Gates.

Microsoft’s five-year stock price journey under Satya Nadella. Stock chart: Yahoo Finance

But Nadella’s inauguration came at a time when technology itself was shifting, moving from a monolithic model — where IT shopped mostly at one vendor, and they were a Microsoft shop or an Oracle shop or an IBM shop, buying a full stack of products — to one where they subscribe to cloud services and choose the best of breed.

This was also happening against the backdrop of the Consumerization of IT, where power was shifting from large administrative departments to users and teams. Nadella seemed to understand all of this.

The shift in strategy, as I wrote, probably began long before Nadella was handed the keys to the CEO office, but perhaps it took a different kind of leader, like Nadella, to turn the battleship that was Microsoft Corporation. Every company has its own politics and biases, and I’m sure Microsoft did as well, but Nadella seemed to manage those, reorganizing the company over time, and shifting priorities. It didn’t come without the pain of layoffs, including one in 2017 when thousands of people were let go. Long-time executives like COO Kevin Turner and head of Windows and devices, Terry Myerson, also left the company.

But Microsoft went from a company trying to compel customers to buy an all-Microsoft, all-the-time kind of approach to one that recognized it was important to work across platforms and to partner widely. To show how serious he was, a year after he started, Nadella set aside his differences with Marc Benioff and Salesforce, and appeared at Dreamforce, Salesforce’s massive customer conference. That was hugely symbolic, given the two companies had engaged in dueling lawsuits over the years, but this was a new day at Microsoft, and Nadella was out to prove it.

In a quote I’ve come back to a number of times over the years, Nadella laid out his new vision of cooperation. While he was going to compete fiercely, of course, he also was going to cooperate where it made sense, because customers demanded it — and under Nadella, it’s all about the customer.

“It is incumbent upon us, especially those of us who are platform vendors to partner broadly to solve real pain points our customers have,” Nadella said at the time. He wasn’t ceding markets, or failing to compete when it mattered, but he also recognized to make customers happy, he had to partner when it made sense.

Back in the days before Satya, partners and developers talked about a much more hostile environment, where it was difficult to get things done, to get the resources they needed, and the attitude was not one of cooperation, but almost hostility. That changed under Nadella, and he should get credit for that.

That all matters, of course, because in the age of the cloud, Nadella’s Dreamforce quote is spot on. Customers expect vendors to cooperate. They expect open APIs. They expect the platform to be friendly to developers — and under Nadella’s leadership, all of this has happened.

The company has also paid closer attention to issues like accessibility, with features such as real-time captions and the new Xbox adaptive controller. Microsoft has instituted programs under Nadella to use AI to improve accessibility, and he has also spoken frequently about responsible AI development.

Nadella has also led an aggressive acquisition strategy using his company’s cash to buy companies big and small. The splashiest acquisitions were LinkedIn for a whopping $26.2 billion in 2016 and GitHub for $7.5 billion last year, but there have been a host of much smaller purchases, most for much less than a billion dollars, that have filled in holes around security, developer productivity, gaming and a wide variety of cloud services.

It is exceedingly difficult to successfully navigate these kinds of broad cultural changes inside a large organization, and while it is probably still a work in progress, Nadella has been mostly effective to this point. The stock price has followed that broader change, but it is not the story here. The story is one of leadership and change management inside a large organization.

Nov
14
2017
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Microsoft’s period of congenial cooperation could be over

 A couple of years ago while a guest of Marc Benioff onstage at Salesforce’s Dreamforce customer conference, Microsoft CEO Satya Nadella said something that seemed to signal a new period of amicable cooperation for his company. Several pieces of evidence seem to suggest that the period of friendly cooperation that was in full bloom in 2015 could be over, and not just with Salesforce. Read More

Jul
10
2017
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Microsoft experiences the triumph and tragedy of transformation

Satya Nadella When long-time Microsoft COO Kevin Turner left the company last year, it marked a key turning point in the Satya Nadella era. Turner’s exit enabled Nadella to start putting his own stamp on the company, and the layoffs, strategy shifts and personnel changes we’ve seen recently are a reflection of that. Read More

Nov
17
2016
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Open source and coopetition are the new normal

Two wooden figures holding hands in front of a lake. In a month of unexpected outcomes, we have also seen some tech partnership announcements, ones we thought we might never see. In fact, just this week we witnessed Microsoft joining the Linux foundation and Google joining Microsoft’s .NET foundation. You cannot minimize just how at odds these announcements are with what has been the reality of the tech industry over the last 20 years.… Read More

Aug
04
2016
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Why Microsoft’s Satya Nadella equates LinkedIn with Minecraft

Microsoft Minecraft You could make a case that Minecraft is the professional network of 10-year-olds, but you’d have to work pretty hard at it. That’s not what Satya Nadella means when he uses Minecraft as an example of why LinkedIn was a great acquisition target for Microsoft, speaking to Bloomberg today in an interview reflecting on Microsoft as a company advancing in years. Here’s the key… Read More

Jul
07
2016
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Ch-ch-ch-changes at Microsoft as COO Kevin Turner heads for the exits

Kevin Turner, chief operating officer of Microsoft Corp., listens during the annual Milken Institute Global Conference in Beverly Hills, California, U.S., on Monday, May 2, 2016. The conference gathers attendees to explore solutions to today's most pressing challenges in financial markets, industry sectors, health, government and education. Photographer: Patrick T. Fallon/Bloomberg via Getty Images In a blog post this morning, Microsoft CEO Satya Nadella announced that long-time COO Kevin Turner would be leaving after 11 years at the company.
At the same time, Citadel Securities announced on its website home page this morning that Turner would be coming on board as CEO.
Nadella gave the expected platitudes in the announcement, while thanking Turner for his service to the… Read More

Apr
06
2016
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Microsoft marches forward with its security plan, releasing Cloud App Security

Business man working with a secure cloud network on a giant touch screen. As Microsoft works its way toward implementing the security plan that CEO Satya Nadella outlined in a talk last Fall in DC, part of that has been creating tools and part buying them. Today, it announced that Adallom, a company it bought last year was becoming generally available and renamed Microsoft Cloud App Security. While the new name lacks the pizazz of the original, it does convey… Read More

Feb
25
2016
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Microsoft Begins Making Progress On Nadella’s Broad Security Vision

Business man holding smart phone while pressing a lock button to unlock it. Last fall, Mr. Nadella came to Washington and in a comprehensive speech the Microsoft CEO laid out Microsoft’s broad vision for security in the enterprise. Today, the company made a series of announcements in a lengthy blog post from Microsoft Chief Information Security Officer Bret Arsenault that starts to bring that vision into clearer focus. It’s probably not a coincidence… Read More

Jan
27
2016
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Office Online Gets Real-Time Collaboration For Files Hosted By Microsoft Partners

New-cloud-storage-options-for-Office-mobile-and-Office-Online-2-1024x768 Microsoft announced today that it is expanding the Cloud Storage Partner Program (CSPP) it first announced a year ago and launching deeper integrations with Box, Dropbox, Egnyte, Citrix and ShareFile. One new feature the company is touting is real-time co-authoring for Office Online, even if the documents are stored in the partner cloud services. This means that co-workers can collaborate on… Read More

Dec
02
2015
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Satya Nadella Says Microsoft Is “Very Focused” On Diversity, Welcomes Rev. Jesse Jackson’s Push For Inclusion

Satya Nadella At Microsoft’s annual shareholding conference today, Microsoft CEO Satya Nadella cited diversity progress in relation to the executive team and board of directors. In the last year, Microsoft nominated two women to the board of directors. That said, Nadella recognizes that Microsoft is still not where it needs to be, nor is the industry. RainbowPUSH Coalition’s Rev. Jesse Jackson,… Read More

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