Nadella as CEO: By playing safe, Microsoft takes a risky bet

Microsoft's choosing insider Satya Nadella as its next CEO may seem the smart, safe thing to do. But by choosing 22-year Microsoft veteran Nadella, Microsoft would be taking the riskiest bet of all.

Numerous news sources, including the New York Times, Bloomberg, Reuters, and The Wall Street Journal all reported that Microsoft has decided to name Nadella as CEO. It's as safe a bet as Microsoft could make. He's been with the company 22 years, knows it as well as anyone, and so should be able to easily navigate its thorny, turf-protecting culture.

Update: Nadella was named new CEO on February 4.

He's head of its corporate software and cloud computing businesses, which right now are at the core of Microsoft's strengths. With him at the helm of Microsoft, you can be sure those key businesses will continue to get the resources they need -- and bring in the revenue the company needs.

He's got the right technical chops for the job, given his educational background in computer science, and his stint at Sun Microsystems before joining Microsoft. And he's got an MBA from the University of Chicago Booth School of Business, so has a solid business background as well.

So what's not to like?

Rick Devine, chief executive of TalentSky, which has has recruited executives for Microsoft, summed up to the New York Times Nadella's appeal this way:

"Satya is the stay-the-course guy."

And that's exactly the problem. If Microsoft was on the right course, then a "stay-the-course guy" would be the right choice. But Microsoft isn't on the right course, at least when it comes to the biggest growth area and the future of technology, mobile. There it's on the wrong course. Windows Phone is stuck with dismal market share in the world's largest smartphone markets, with 4.3% in the U.S. and 1.1% in China. Sales of Nokia's flagship Lumia Windows Phone line actually dropped in the fourth quarter, which should have been the time of the largest sales for the year, given it was holiday buying season. And Microsoft still can't gain any traction with Windows tablets. In fact, it's losing money on every Surface it sells.

That's where Nadella won't help things. If Microsoft wants to succeed in mobile, and remain relevant to the continuing evolution of technology, it needs to succeed in mobile. And that means someone with an outsiders' eye, willing to shake things up, to take gambles.

That's not Nadella's forte, and he's unlikely to do that. He's a safe, solid bet. You can be sure that he'll make sure that Microsoft's core businesses continue to thrive. But when it comes to mobile and the future, choosing the safe solid bet is a mistake, and the riskiest move Microsoft can make in choosing a new CEO.

From CIO: 8 Free Online Courses to Grow Your Tech Skills
Join the discussion
Be the first to comment on this article. Our Commenting Policies