Empire restarts: Can Nadra save Microsoft?

Source: Internet
Author: User
Keywords Cloud computing Big Data Microsoft Google Apple data center data center

In the past 10 years, the most powerful force in the history of science and technology has fallen (although profitability remains strong). Some blame Microsoft's woes on Bill Gates, the founder, but most of them point to his successor, Ballmer. "Vanity Fair" special editor Besseny Macklin (Bethany McLean) recently published a "Empire restart" long article, opened a variety of insider stories of Microsoft, including the collapse of the gates and the relationship between the Ballmer, Ballmer is not to be seen, the third CEO Satia Nadra how to choose, The challenges and opportunities he faced after Gates ' return, and so on.

The following are the main contents of the article:

In some ways, Bill Gates, Microsoft's founder and first CEO, is quite similar to Satia Nadra, Satya Nadella, who became Microsoft's third CEO this February. Both are engineers, businessmen, are very rational knowledge of the people. As a result, they will probably be able to live in harmony and seamlessly run Microsoft to help it overcome the enormous challenges it faces today. Gates spent the past 6 years spending most of his time and energy on a charitable foundation of $40 billion trillion, and when Microsoft announced February 4 this year to appoint Nadra as the new CEO, Gates decided to devote 30% of his time to Microsoft's business.

Many outside Microsoft feel that the Golden age of Microsoft is over, and that companies with more than 100,000 employees are confused about the status quo and don't even know what they want. Both Gates and Barnard insist that this is not true, and that they are adept at describing the big vision as a way to convince Microsoft not only to be united but also to have a vision. In their view, this new world of unlimited computing power, where your device is connected to your world anywhere, should belong to Microsoft. They even have their slogan: "Reshaping productivity".

"I think of success from the perspective of our influence. Nadra said.

However, in the opinion of critics, influence is precisely what the current Microsoft lacks. Andreessen Horowitz analyst Bennedict Evans (Benedict Evans) posted that Microsoft's share of all computing devices, including PCs, handsets and tablets, had plummeted from 90% in 2009 to only around 20%. The staggering decline was not due to Microsoft's declining share in the PC market, but to its growing smartphone and tablet market.

Even Microsoft's new chairman, former IBM executive John Thompson, told Fortune magazine last winter, "there are some aspects of Microsoft that look something like IBM in the 1990 's." This is not a gratifying contrast, as anyone in the tech community knows that IBM was the company that had been taken down from the top of the tech industry 20 years ago by the young and imposing Microsoft.

Microsoft's three-fourths profit comes from two basic businesses: the Windows operating system and office. From a financial standpoint, Microsoft is still exceptionally strong. In the past 12 months, the company recorded revenue of 86.83 billion U.S. dollars, net profit of 22.07 billion U.S. dollars; it currently has a net cash amount of $85.7 billion.

However, the company is facing multiple threats at the same time, given the volume of Microsoft, it is all the more staggering. Rivals such as Google and Apple have upended Microsoft's business model, and it has become unknown how Windows will adapt to the new era; those opponents are even challenging office. In Silicon Valley, there are two sayings that are accepted as truth. One is that profit always follows influence, the other is strategic position and financial position are different.

Many people blame Microsoft's woes on Ballmer (Steve Ballmer). The gates ' many years of friends and his successor as CEO of Microsoft in 2000, he stepped down in February this year to end his controversial tenure in a way that most people would expect. After 5 months of new CEO selection, Microsoft finally chose to have been in the company for 22 years of Nadra.

The difficulty for Microsoft's board to find the new CEO is that there are not many outside candidates willing to accept the job. Both Gates and Ballmer are very aggressive and aggressive. Because of the rift in Ballmer's departure, the two had broken off and stopped talking to each other. At the time, the two were still on the board, making it very likely that the new CEO's decision would be difficult.

The balance of power between gates and Ballmer is not what it looks like. With Gates's current stock-selling pace, his Microsoft stake will be cleared by 2020. Mr Ballmer, who sells less shares, is now holding more than gates. Mr Ballmer holds 333 million shares of Microsoft, worth about 15 billion dollars, and a share of 4%, the company's biggest individual shareholder.

He abruptly withdrew from the Microsoft board in August, calling it "a number of new things" to do. "I'm going over that page." "he said. This makes Nadra's work easier.

However, being CEO of Microsoft may still be the hardest job in the business world.

Who's been stuck in the company?

Microsoft was the most profitable technology company in 2008, with a profit margin of 15%. In 2013, it was the second-most profitable company (after Apple) with a profit margin of 12%. Under Ballmer's leadership, Microsoft's annual profit rose almost twice times to $21.8 billion.

"Ballmer never got the recognition he deserved. "He's talented and good at trying to make more money from windows and office," says a former Microsoft executive. ”

Ballmer was willing to admit his mistakes. "I may have screwed up one or two things, and I'm sorry for that," he said. I'm not sorry about the social network, Facebook did a great job and I didn't regret that we missed the market. I feel a little different about the search, and so does the phone. We should have done better. Mobile phones make me feel more uncomfortable than search. ”

In Mr Ballmer's eyes, however, his "biggest mistake" was neither the handset business nor the search business. It was a software project called Longhorn, which took place at the beginning of his tenure. The Longhorn project, launched by Microsoft in 2000, was supposed to be the next generation of Windows. Gates, who was the Chief Software Architect (from 2000 to 2006), led the project after retiring as CEO. "It's an undesirable ambition project, an ambition to a project that cannot be made." A former Microsoft executive said. Gates is a macro-tech expert, not a product specialist. The engineers told him that what he wanted could not be done, but he was unwilling to listen to their advice. To make matters worse, just as Longhorn basically failed, Apple launched Tiger and made what Longhorn wanted. After spending 3 years on the project, Microsoft has to push back. The renamed "Vista" operating system was finally launched late, missing some important features, and many of the deficiencies that caused strong dissatisfaction.

"My worst job lasted from 2001 to 2004," Ballmer said, "and the company paid the price." I assign contingent resources to Longhorn, not to mobile phones or browsers. All our resources are tied to the worst of things. "It is inconclusive who should assume this responsibility, but it is undeniable that neither Ballmer nor Gates has been able to prevent this defeat, although almost everyone else knows it will."

Mr Ballmer tends to point out that the boundaries of power are not clear, which is part of the reason why his tenure is difficult to assess. "Before I became CEO, I thought I was completely responsible for the company," he said. "But it was not until Gates left Microsoft in 2008 that I felt I was in full control." "As we all know, Mr. Ballmer and Gates battled fiercely during the first year of the transition." In addition, engineers are dissatisfied with Ballmer's time to find gates. Some of the Microsoft employees of that era compared Ballmer and gates to "Mom and dad" and confessed to not knowing whether it was mom or dad.

"He doesn't know how to make me CEO, and I don't know what to do," he said. "said Ballmer.

Within Microsoft, Mr. Ballmer's tenure was judged differently, a former executive said. "In some ways, the way people look at gates and Microsoft is almost like a Rorschach test (note: A very famous personality test, and a rare projection of personality tests)." "In the eyes of the legendary Gates era, Microsoft's current predicament is always the fault of Ballmer," he said. In the eyes of others, the answer is not so clear. Gates left Mr. Ballmer a mess. "The former executive commented on Gates. That year, when Ballmer became CEO of the company, Microsoft was identified as a market monopolist by the US government and was asked to split in half, a price immeasurable for gates and his company. In addition, the dotcom bust caused Microsoft's share price to collapse, making it a once-tight relationship between the already wealthy long-term staff and the new hires who missed a night of getting rich.

In fact, Microsoft created a confrontational culture at the beginning. But the company's youthful-hour-inspired stuff leaves seeds for future problems. For Gates and Ballmer, a former executive said, "They tend to be overly enthusiastic so that things become abusive." That's bad, after all, you've become an example of what other people are trying to imitate. Perhaps Gates and Ballmer would have tolerated that, but the people under it would have been a bad bet. ”

Many people compare the relationship between Ballmer and gates to marriage. "They're like couples that are off the clutch," he said. A person who knows two people said.

The friendship between the two began when they were at Harvard, the core of which was a deep respect for each other's IQ. Ballmer said he had been at Stanford University Business School for a year and joined Gates because he was the smartest person he knew. Even now, Ballmer believes that Gates "has more CPU and storage space than anyone I know."

The insider of Ballmer's departure

No one knows what it would be like if Gates hadn't left Microsoft. But there is always a special reverence for the founders of Microsoft, which his successors never had. In their view, even if Gates does not bring a solution, he will not be as troubled as Ballmer. Even investors who think Microsoft should try to keep chasing are increasingly dissatisfied with Mr Ballmer's billions of dollar investment in new projects. Other investors want Microsoft to streamline its structure and return cash to them.

Ballmer did not want to be forced to make a choice between the options, but rather to keep all the options. He did not want to give up the idea that Microsoft would "grow new muscles" to capture the next trend, and he did not wish to tell investors what they wanted to hear. He once refused to meet with the shareholders, who therefore disliked him.

Mr. Ballmer used to say he wanted to be Microsoft's CEO until 2017, when his youngest son graduated from high school. He said his ideas had changed. He told the board in 2010 that his goal was to leave the period from 2013 to 2015. He said he had even started interviewing external CEO candidates from companies such as Amazon, Apple and Oracle. But they couldn't find any suitable candidates.

At the same time, he is facing increasing pressure. The new Windows 8 system is considered one of Microsoft's biggest failings. Microsoft's second-largest shareholder, the mutual fund giant Capital Group, secretly encouraged the company to change. ValueAct, a hedge fund with a 2 billion dollar stake in Microsoft, also asked for a board seat. You can clearly feel that the board has been marginalized for a long time. But there are no signs of imminent CEO change, both internally and externally.

Indeed, Mr. Ballmer had no intention of leaving in July 2013 when he announced a massive restructuring of the entire company. Behind the scenes, he has also begun to negotiate a deal aimed at revamping Microsoft. He thinks the company must also make hardware. At the time, the two companies with the biggest increase in industry profits were Apple and Samsung, especially Apple, which climbed to 21% per cent of its technology industry in 2013 years from 7% in 2008.

For Mr. Ballmer, the signal was obvious, so he began talks with Nokia since December 2012. The transaction has advantages and disadvantages. Nokia is basically the only surviving company that makes Windows Phone phones. What would Microsoft's mobile business look like if Nokia fell?

However, on August 23, 2013, Microsoft suddenly announced that Ballmer would be leaving. Most big companies often appoint new CEOs while announcing the retirement of old CEOs, and Microsoft says it is only just beginning to look for new CEO candidates. It is widely believed that Gates wanted to leave, or, as one former executive said, "The day when Mr. Gates no longer supports him as CEO".

However, there is a version of the story. According to several sources, Microsoft's Board of Directors has become more divided over the takeover of Nokia as the deal enters its countdown period. Ballmer once told a friend that he would not seek to buy the company if he had not been the advocate of the board. So he was surprised at the inconsistent attitude of the board. At the same time, he believes Microsoft must buy Nokia.

At a board meeting in late June 2013, Mr. Ballmer announced that he had reached an oral agreement with the company's top brass to approve the Microsoft board, according to sources. Ballmer thought the deal had been settled, so the dinner after the board meeting had left for his son's high school graduation. The next day he came back to the company and found that the board had failed: they said they would not do the deal, which was non-negotiable. For Mr Ballmer, the intolerable seems to be Gates ' endorsement of the board. He felt betrayed.

He was furious and told the board clearly that if they did not approve the deal, he would leave. "That was my best idea," he said now, "if we don't do it, then you have to find someone else to come up with a good idea." ”

He said the board told him they wanted him to stay and they finally agreed on a slightly different version of the deal. In September, Microsoft announced that it would spend $7.2 billion on its equipment and services business. Why did the board finally change its mind? Because they realized that without Nokia, Microsoft would be in the smartphone market. But for Mr Ballmer, the damage has been done, and in many ways. He said he was well aware that although there were no new CEO candidates, he couldn't stay. He decided that cultural changes were premised on higher levels of change. "The water is too deep for Microsoft's board," he said. "Both sides have this feeling. The source said no one had tried to stop Ballmer from resigning, even gates.

Now, the scientific and technological community is very famous for a partnership and deep friendship may have come to an end. In a video of the Verge's emotional farewell to his staff, he burst into tears and did not mention gates. "Like all classic romantic stories, they don't have a happy ending," he said. A person who knows two people said.

New CEO Selection

The disagreement between the two has brought trouble to Microsoft's new CEO selection (at the time they were still company directors), but in fact, the task was extremely tricky. Consider all the other factors: whether Microsoft has a disagreement about the need for a new CEO with an engineer background and an internal or external candidate, the board feels that it has long been tied to the former CEO and wants to enforce control;

At first, there was public opinion that Alain Murali, Alan Mulally, who was considered to be good at turning the tide, would be CEO of Microsoft. It was said that Mr Mulally was beginning to doubt that he felt he should not be asked to complete the formal interview process. Until January this year, Mulally officially announced that he would stay at Ford, but according to sources, he had not actually won the machine.

Microsoft's board also saw Steve Mollenkopf, Qualcomm's Steve Mollenkov chief operating officer, but Bloomberg reported that he was appointed as the new CEO in less than 24 hours. Another potential candidate is Paul Maritz (Paul Maritz), He is a former senior executive at Microsoft and has held senior positions in other tech companies. However, there are Pietermaritzburg that Microsoft is too far behind in a number of important battlefields to streamline its structure and make important decisions. Gates did not approve, so Pietermaritzburg felt he would not be free to do what he wanted in that position.

The pressure on Microsoft's Board has increased as the search has not progressed substantially. Some directors once felt that another director, former IBM executive and Symantec CEO John Thompson wanted to be Microsoft's new CEO, and Gates said with some excitement that he would not support Thompson, who would be a better candidate. Among the few internal candidates, Bormer, chief operating officer and former Wal-Mart executive Kevin Tena (Kevin Turner).

Some of the directors suggested the appointment of Ericsson CEO Mr Vestberg Hans Vestberg, but the latter repeatedly postponed meetings and some directors felt he had no intention of becoming Microsoft's new CEO. At a meeting on January 19, the board finally decided to appoint Nadra.

Microsoft announced February 4 that Nadra would become the new CEO, announcing that Gates would be the outgoing Chairman and Thompson to succeed. "Gates was exhausted from fighting these people," one observer concluded. ”

Interestingly, gates, bent on philanthropy, did not leave the company he founded, but decided to return. He says he's not going to take one-third of his time on Microsoft's business. "is to take out 30% of the time." He corrected. "He believes he can give Microsoft something that other people can't bring." "People familiar with him said.

So did Bauer leave quietly? He did leave Microsoft, but it remains to be seen how low-key he will be. He says he now has 7 major events, including learning Hebrew, fitness, civic duty, running the Clippers team-and managing his Microsoft stake. He said Microsoft's holdings accounted for 65% to 70% of its net worth. He had no intention of selling those shares, partly out of loyalty, partly because he felt Microsoft was worth investing. "I want to be a good shareholder," he said, "I'm not going to be active for active shareholders, I'm not going to be negative, I'm not going to sell it because I don't like something." At the same time, he said he was clearly aware of the lessons of the past. He has met Nadra several times, but not in the Microsoft Headquarters campus. "It's not that I have some kind of allergic reaction to the Microsoft headquarters," he said, "but I want to give him some space." ”

Nadra Times

"This is the 37th day I took office, who in the count?" "This is Nadra, who is just 47 years old, opening a meeting at Microsoft in March. It was the first time he had spoken to the top 100 executives of his company about his worldview, his vision of Microsoft and his future path to development. A longtime Microsoft executive was impressed by Nadra's calm. "He is very enthusiastic, but not without losing the affinity." He is very optimistic, but not blindly optimistic. "What surprised the executive most was what Ned had not done. "He can completely abandon the former management. ”

Although he has been in Microsoft for many years, and gates have a variety of similarities, but Nadra and the company's tradition runs counter. He asked his team of senior executives to read non-violent communication (nonviolent communication). He is very friendly and has a bright smile. Employees, peers and those older than him all like him. Everyone likes Nadra. "You can't dislike him," says a former Microsoft executive. Gates liked him, and Ballmer liked him. He is a good man. "You're going to want to follow him," said Greg Sullivan, head of Windows phone department, Gregg Sullivan. ”

One reason for the board's choice of Nadra, it is said, is that he is "an insider, and he can bring something that outsiders can bring". He has actually contacted people outside the company, from rivals to venture capitalists. This is unusual for a person who comes from a closed company.

He liked to ask, "What's the difference without our world?" "A former executive who doesn't like Microsoft's traditional culture says that" he is obviously very loyal to Microsoft, but he is also open to challenging the situation. ”

Nadra was born in Hyderabad, the southern Indian city, and his mother was a Sanskrit professor and his father was a Marxist economist.

He travelled to the United States in 1988 with a master's degree in computer science from the University of Wisconsin-Milwaukee and an MBA from the University of Chicago Booth Business School. He entered Microsoft in 1992, engaged in enterprise class business, responsible for office work. He later took part in the development of the company's online service. After taking over the business, he became head of the server and Tools department in early 2011, which is dedicated to selling Windows software and services and helping to manage their technical needs in large parts. He was among the 5 executives who reported directly to Mr. Ballmer.


With the development of mobile devices and cloud computing, the new computing industry is vastly different from the past. In the past, companies ran Windows PCs and Windows servers internally, installing the necessary software on their devices. Everyone uses windows, so developers have developed a variety of software programs for the system. This is a virtuous circle for Microsoft. Today, processing power is in the cloud, and complex applications can be run on the web, not pre-installed software. In addition, people are increasingly moving from PCs to mobile devices for office and entertainment--android and iOS devices are selling more than 10 times times as much as Windows devices. Who will develop software for anyone who uses Windows? The software you want is not on Windows, will you use it? For Microsoft, the virtuous cycle has become a vicious circle.

Part of the reason Microsoft is not doing so in the mobile world is that rivals have subverted its business model. Google does not charge for its Android system, but makes money from search ads on devices. Apple is able to set a high price for its iOS products because they have a nice design and a good combination of hardware and software. Microsoft continues to require device manufacturers to pay for Windows Phone licensing fees. It has not been pushing office to a mobile phone or tablet computer that has systems outside of Windows. "Before the whole idea of the company was windows first." "Heather Bellini, an analyst at Goldman Sachs, said Hayser Belligny. That's understandable: it's the way Microsoft has always been making money.

Nadra faces a dilemma because he has to sketch out a cloud-based future and maintain the momentum of the lucrative Windows Server business. So he did a series of anti-Microsoft traditions. He personally approached startups to see why they didn't use Microsoft's product services. He has invested a lot of research and development resources into Azure, a cloud platform developed by Microsoft's special team, which has taken away the best resources from Microsoft's most lucrative business. Marco Iansiti, a professor at Harvard Business School who wrote the Marco Iansty case study, called the actions "very bold".

The azure core uses Windows Server technology, which helps existing Windows applications seamlessly run in azure. Technical Experts sometimes refer to Microsoft's product as a "hybrid cloud", because the company can use both Azure and the internal Windows Server. Nadra also supports open source software to some extent, allowing developers to use non-Microsoft technology to develop applications that run on Azure. This increases the appeal of azure.

Microsoft must attract developers to develop new software for Windows again, allowing Windows to return to the center of a new virtuous circle. But that's a lot of difficulty. Currently, Windows itself has a fragmentation problem: an application developed for a Windows device does not necessarily apply to another Windows device. If Microsoft were to develop new killer apps, it would almost certainly have to be developed for mainstream Android and iOS devices. This, of course, strengthens both ecosystems.

Microsoft had been reluctant to open windows and office, and the industry was in an uproar when Nadra announced that it would provide office for Apple's ipad in less than two months. Nadra also announced that Windows will provide free of charge to less than 9-inch devices, namely mobile phones and small-scale tablets.

In a way, these are just small actions, but they mean a lot. "This is the first time I have heard Microsoft executives admit they are behind. "They provide free money for 25 years," says one institutional investor. Windows itself is a fundamental change. ”

"I am very excited about the status of Office. "The company has become open to new things," Gates said. You might say that I should have urged this change long ago. In any case, we now have Ned to work on this. ”

On Wall Street, Barnard has not made any mistakes so far. Since he took office, Microsoft's share price has risen 30% and the market value has increased by 87 billion dollars. "It's funny," said one observer, "that he is neither a businessman nor a financial analyst." But he was able to find a common language with investors, and they were amazed at how soon they took office. "But the honeymoon period is relatively easy to get through.

Ballmer's advice to Nadra is: "Be bold and do the right thing." ”

In September, Microsoft announced Nadra's first major acquisition after taking office: buy "My World" (Minecraft) developer Mojang at 2.5 billion dollars. Although players are worried that Microsoft will mess up the game, the deal gives Microsoft Access to a younger generation who doesn't even know who it is. Another sign of Microsoft's change is that it says it promises to make "my world" more than just compatible with its own devices, bringing it to various platforms, From Android to iOS to Sony PlayStation Nadra also made some changes to the board, introducing fresh blood instead of three permanent directors and adding a board seat.

However, despite his popularity and style, Mr Ballmer and Gates are quite different, but there are questions about how much difference Microsoft will make in the future. Inside Microsoft, he is a "security card" almost a cliché: he will maintain the status quo, whether in the maintenance of consumer business or reshaping management. Microsoft Management still has a lot of people in the company, according to several insiders. "He is not the Genghis Khan you may need." A former executive evaluates Nadra. There is a "game of power" atmosphere inside Microsoft, and everyone is waiting to see who will leave. But most of Mr Ballmer's executives are still at Microsoft.

How Nadra and Gates coexist

The big question, though, is what gates will mean for his return. Given his age and his absence from the scientific community, can he bring value to Microsoft? And the key question is, who is the real CEO? Mr Ballmer's advice to his successor: "He needs to be in power and he needs to recognize that he is the decision-maker." ”

Gates and Ned are not worried about the problem. "When you know that ' gates is going to review ' or ' We're going to talk to Gates about something," the energy generated is not replicable. "I mean, you have to admit that the founders of the company are at different levels and have different positions," Nadra said. To be honest, I want to make the most of that ... Because it can motivate employees to come up with the best things for gates to see. ”

Asked what he would do if he disagreed with Barnard, Gates said, "He is the company's helm, so he's the boss." He said he learned a lesson from his work experience with Mr. Ballmer and that he was "not fully aware" of the industry because he was busy managing charitable foundations.

"You know, I grew up in the Microsoft era when both gates and Ballmer were in it." "If I've learned anything in the meantime, that's how to do things when Gates is around," says Nadra. ”

It is too early to tell what will happen to Microsoft, at least partly because Nadra is not easy to decipher. Take his recent decision to cut 18,000 people, mainly to take the completion of the acquisition of Nokia shortly after the surgery. Although he called it the normal outcome after the big takeover, it was, in other people's view, essentially the repeal of the big strategy for Ballmer's involvement in hardware.

Asked if he could become Genghis Khan, he did not respond positively. "I think we are different in style, but in making tough decisions, honestly I will do it in a very different way," he said. ”

"When we write the business history of 20th century and 21st century, Microsoft will have a whole chapter," said Peter Tufano, a friend of Mr. Ballmer's Peter Tufano and dean of Business College at Oxford University. "Indeed." A few years later, whether that chapter will be a joy or a worry, will be met.

Translator: Lebang

(Responsible editor: Lvguang)

Related Article

Contact Us

The content source of this page is from Internet, which doesn't represent Alibaba Cloud's opinion; products and services mentioned on that page don't have any relationship with Alibaba Cloud. If the content of the page makes you feel confusing, please write us an email, we will handle the problem within 5 days after receiving your email.

If you find any instances of plagiarism from the community, please send an email to: info-contact@alibabacloud.com and provide relevant evidence. A staff member will contact you within 5 working days.

A Free Trial That Lets You Build Big!

Start building with 50+ products and up to 12 months usage for Elastic Compute Service

  • Sales Support

    1 on 1 presale consultation

  • After-Sales Support

    24/7 Technical Support 6 Free Tickets per Quarter Faster Response

  • Alibaba Cloud offers highly flexible support services tailored to meet your exact needs.