The technology giant has begun the year with some big news and looks ready to make 2014 a year of exciting changes and developments. Microsoft (NASDAQ:MSFT) has announced a new CEO, a new role for its founder, Bill Gates (Trades, Portfolio), and is ready to refocus its business strategy and prepare for expansion into new markets.
The New CEO
The company’s stock was boosted more than 1% immediately following the official announcement of Satya Nadella—former head of Microsoft’s cloud and enterprise business—as the new chief executive officer.
The decision comes after months of anticipation about who would take the place of Steve Ballmer who had announced his retirement back in August of last year. Since the former CEO announced his plans to retire, the stock has risen more than 13% and managed to maintain this increase through the months of uncertainty and speculation about who would become the third head of the 40 year old company.
As former head of the cloud and enterprise business, Nadella’s expertise lies primarily in the areas of research and product development. Because of this, there is some concern about whether or not he will be able to form a business strategy that is driven by sales and marketing.
But perhaps his background in development is what will end up being the saving grace of the company. Steve Ballmer came from a sales background and under his leadership, the company began to seriously lag in technology and innovation. Investors can expect to see another bump in the stock price in the later months as the new CEO of Microsoft lays out his plans for the company.
The announcement of a new CEO came together with the announcement that Bill Gates (Trades, Portfolio) would be stepping down from his position as chairman of the company. However, he has no intention of leaving the company. In fact, he plans to devote more time to the company after stepping down, advising Nadella and helping shape the new direction of technology and product development.
Analysts approve of the decision as it could free up Bill Gates (Trades, Portfolio) and allow the company to take more advantage of the founder’s vision and innovative ideas, allowing them to develop exciting new products which could drive sales and lead to a reinvigorated growth rate.
“An era of transformation”
Microsoft has definitely taken notice of the changing face of the technology market in the 21st century and is ready to reorient its business to continue to be competitive in these emerging new sectors. The company’s new plans, although not officially announced as of yet, seem to be focused on expanding its cloud and enterprise services.
There is also likely to be a surge in innovative new devices coming from the company as Bill Gates (Trades, Portfolio) takes on a stronger role in technology and product development. The founder has also sparked intrigue among investors and consumers alike with hints of a brand new and more powerful operating system that will be coming out in the future.
In addition to its planned expansion into cloud and enterprise markets, the recent purchase of Nokia’s handset division comes as part of Microsoft’s plans to push further into the mobile market with the release of an exclusive line of Windows phones. However, competition is especially stiff in this area and the market leaders, Android (NASDAQ:GOOG) and iPhone (NASDAQ:AAPL), show no signs of budging, On the other hand, if this mysterious new operating system as innovative as Gates has made it sound, it could be a game changer across all its devices, including its forthcoming phones.
After a bit of a wild year, Microsoft appears to, once again, be back on track and ready to push forward. It has managed to create some healthy upward momentum since the middle of last year. With the game changing news that has come out of the company this month and the sure-to-be exciting plans in store for the future, Microsoft is definitely a great stock to add to your portfolio as it is almost certainly going to be very bullish over the next couple of years.