It should be no surprise at this point that Microsoft is no longer the dominant player it once was in the tech industry. As the market moves towards more mobile and user friendly technological devices, Microsoft needs to adapt, and quickly too. Unlike the early 2000s, the beginning of this decade presents formidable rivals to Microsoft such as Apple and Google. The past years have presented the success of many tech products, most of which are outside of Microsoft’s domain of desktop computing. Mobile devices such as Apple’s iPad and Samsung’s Galaxy Tablet have profited tremendously. The functionality of these devices have essentially made the use of a desktop computer obsolete in the mainstream consumer base. Among newer devices including tablets, smartphones and new PCs, only 15% run on the Windows operating system (OS). The Windows division has seen their profits decline by $2.8 billion from 2011 to 2013.
On February 4, 2014 Microsoft announced a new CEO, Satya Nadella. Nadella was previously the executive vice-president of the Cloud and Enterprise group at Microsoft. There he was in charge of computing platforms, developer tools and cloud services. Nadella was a leader in the development of Microsoft’s cloud computing infrastructure. During this period he grew the business into one of the largest within Microsoft, generating one quarter of the total revenue at $20 billion in the most recent fiscal year. Prior to his employment at Microsoft, Nadella worked with Sun Microsystems. He was born in Hyderabad, India and graduated from the Manipal Institute of Technology with a B.Eng in Electrical and Electronics Engineering, the University of Wisconsin with a MS in Computer Science, and the University of Chicago Booth School of Business.
Nadella is only the third CEO of Microsoft since its founding in 1975. The first CEO was Bill Gates until 2000, when he was succeeded by Steve Ballmer.
In addition to Satya Nadella’s appointment as the new CEO, Bill Gates will be playing a bigger part in Microsoft as technology adviser. Gates has been mostly absent from Microsoft since 2008, focusing on his work with the Bill and Melinda Gates Foundation. Previously he was the chief software architect with Steve Ballmer as the CEO. Nadella’s prior success at Microsoft brings hope of change after a decade of stagnation.
But can Nadella do enough to save Microsoft from failing in the face of increasingly successful competitors? Microsoft has already lagged behind competitors in terms of success in the consumer markets of the tech industry. This has happened despite early releases to get ahead of the competition such as that of the Windows Phone and Surface tablet, both launched before the products of Apple or Samsung. Unsold Surface tablets have contributed a loss of $900 million, and the division responsible for the Bing search engine reported a loss of $1.3 billion last year.
Satya Nadella has stated that “Going forward, it’s a mobile-first, cloud-first world,”. Many would agree with him on this statement, especially if one looks at the numbers. By the end of 2013, global PC shipments declined 6.9% in comparison to figures from the end of 2012. The decline has been consistent for the past seven quarters and is not likely to stop anytime soon.
It is certain that as the company moves forward Satya Nadella will have some difficult decisions to make. Shareholders of Microsoft have been pushing to have non-essential product lines cut to focus more on what has been deemed to be more important to the success of the company, such as the selling of enterprise software to businesses. This would make sense if one observes the recent struggles of Microsoft in the consumer market. However, abandoning product lines such as Xbox, Bing and the Surface tablet would most certainly be forsaking the work of Nadella’s predecessors.
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