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Microsoft’s Reinvention imperative for Success
Posted by: Live investor (IP Logged)
Date: February 23, 2014 10:08AM

Microsoft (MSFT) has recently been in the news for appointing the new CEO Satya Nadella, the third in the history of the tech giant. There were speculations that the company would appoint an outsider as the new boss before the appointment of the company veteran. The company wanted a leader who was familiar with the work culture of its business, and knew the company inside out. Microsoft found none better than Nadella.

However, quite a bit of apprehension has been sensed regarding Nadella’s ability to fill in his predecessors’ Bill Gates (Trades, Portfolio) and Steve Ballmer’s space.

Breaking the ice
Nadella gave his first interview after taking over as the company’s CEO to Adam Bryant. There were several predictable questions presented before the fresh leader. “What leadership lessons have you learned from your predecessor, Steve Ballmer?, And what about Bill Gates (Trades, Portfolio)?, What kind of role Bill is going to play with you?, Your management approach in your new role”, so on and so forth. But the most interesting piece came when he was asked to highlight on the “big picture” and how he would manage the new role vested on him.

The “big picture” is more about “reinvention”
Nadella identifies that the key to success in this arena is either to “reinvent yourself or invent the future”. He told the New York Times that the company has had massive success in the 39 years of its business with the sort of products it offered. But the future success doesn’t rely on past glory, it depends on the kind of reinvention that the Redmond headquartered company would make.

The tech giant can’t rest on its laurels if it wants to taste future success. Instead on harping around the past success it would need to reinvent itself to drive the future outlook and growth. In addition to delighting its customers by driving future invention, Nadella also carries a vision of transforming Microsoft into a place “where people find deep meaning at work”.

Nadella’s efforts would be backed by Bill Gates (Trades, Portfolio). Gates has assumed the new role as the Founder and Technology Advisor of the company. By virtue of his position, he would spend more time on the company’s innovation and technical advancement activities.

So where does Microsoft stand?
There is no doubt that Microsoft has done it in the past by taking over the likes of fellow giants IBM (IBM) and Novel when it comes to enterprise computing. If we consider the current consumer trends and the new entrants in the enterprise space, we know that Microsoft will have to undergo drastic changes. It is imperative for the tech company to strengthen its commitment to enterprise solutions and cloud technologies, given its high revenue dependence in this space.

Satya has relevant experience in this space. But the question remains if he would be able to successfully match his understanding with the way enterprise computing is evolving. All this would be a little clear with the passage of time.

Stocks Discussed: MSFT, IBM,
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