The soft-spoken 54-year old, architect of Microsoft’s aggressive makeover into one of the world’s leading providers of cloud computing services under the Azure brand, has overseen the rise in the company’s market capitalisation by a whopping 600% to nearly $2 trillion, while revenues have nearly doubled from $77.85 billion in financial year 2013. Microsoft follows the July-June financial year. Nadella replaced Steve Ballmer as CEO of the Seattle-headquartered giant in 2014, at the same time that Gates stepped down as chairman of the company’s board to be replaced by John Thompson.
“What he (Nadella) has accomplished is absolutely extraordinary. He deserves this,” said Nandan Nilekani, co-founder and chairman of Infosys. “He has demonstrated how the leadership of a technology company should be in this day and age.”
Nadella joins a swelling roster of India-born executives who now occupy the chair at some of the world’s largest corporations. Fellow-Hyderabad native Shantanu Narayen, a friend and guide to Nadella, has been the CEO and chairman of Adobe since December 2007. Mastercard elevated its CEO Ajaypal Singh Banga as its chairman in January this year. Google CEO Sundar Pichai was elevated as CEO of Alphabet, the holding company in December 2019, after founder Larry Page stepped down.
In a statement on Thursday, Microsoft said that Thompson will continue to serve as an independent director, while Nadella “will lead the work to set the agenda for the board, leveraging his deep understanding of the business to elevate the right strategic opportunities and identify key risks and mitigation approaches for the board’s review”.
Nadella took charge at Microsoft at a time when the personal computer-focused company was struggling to make the shift to a world of mobile-led computing and was steeped in corporate culture that accorded primacy to internal competitiveness. The Hyderabad-born chief executive, who moved to the US for a graduate degree in engineering, swept in fundamental changes by introducing a collaborative team culture while shifting the business focus from selling yearly software licences to the pay-as-you-rent model even as he led the adoption of cloud as the driver of future growth.
“He has made Microsoft adopt the cloud and make it so relevant. The company has successfully dealt with the pandemic,” said Nilekani, whose company is one of the major partners for Microsoft.
In addition, Microsoft has also moved to partner with arch rivals such as Apple that has helped install Office software on iPhones, the de facto device for enterprise users globally. Nadella also wagered billions on smart acquisitions including that of GitHub, LinkedIn, Nuance and Minecraft. These deals have delivered handsome rewards to Microsoft.
Nadella, the company’s third CEO, will also be the third chairman in Microsoft’s history, following Gates and Thompson. Ballmer, the CEO before Nadella, never held the chairmanship as Gates kept that title for Ballmer’s entire tenure, Bloomberg reported on Thursday.
The change is a vote of confidence in Nadella, who was appointed CEO in February 2014. Thompson, 72, has been scaling back his work as chairman over the past few years, Microsoft said. The two have been discussing the new roles since last fall, according to the Bloomberg report.
Nadella’s stratospheric rise is drawing plaudits from former college-mates including parliamentarian Rajeev Chandrasekhar who said the rise of Nadella is an example of “how his generation of technology leaders have excelled not just in technology but also as leaders of global technology companies”.
“For decades Indians in the US distinguished themselves in design and development roles — Satya, Sundar (Pichai) have rewritten the narrative of Indian geek engineers into one of hard-charging global technology business leaders,” said Chandrasekhar, who worked in the US at Intel on the Pentium chips, before he returned to India to found BPL Mobile.
JA Chowdary, chairman of Indian Blockchain Advisory Committee and a former IT advisor to the Andhra Pradesh chief minister, who was a friend of Nadella’s father, former civil servant BN Yugandhar, said he has followed Nadella’s rise for decades since when he was an engineer at Sun Microsystems.
“He has taken risks and brought disruptive reforms at Microsoft. His strategy has worked and this type of innovative thinking is required in the technology industry,” said Chowdary, who set up India’s first software technology parks in Bengaluru, Hyderabad and Chennai.
“A fact that a student from our campus has been able to emerge as among the top business leaders is well received across generations,” said Dr Vinod V Thomas, professor of electrical & electronics engineering at Manipal Academy of Higher Education. “Nadella (during his student days) was not extraordinary and was also not on either end of the spectrum,” he said. Nadella met his teachers during his visit to Bengaluru in February last year.