Preston Gralla: Straight A's for Microsoft CEO Nadella at the 60-day mark

First impressions can be wrong. When Microsoft appointed Satya Nadella as CEO on Feb. 4, it seemed to be taking a safe path, turning to a 23-year company veteran -- someone unlikely to rock the boat or veer from the course the company has charted for decades.

That expectation keeps getting upended. It's still early days, of course -- Nadella's tenure stretches over just one quarter -- but what we've seen so far suggests that the new CEO is his own man and is willing to buck Microsoft's traditional ways. Since I have long maintained that Microsoft has to get unstuck from what it has always done, my two-month report card for Nadella was filled with A's.

Let's look at what he did in that brief time.

At the Mobile World Congress in February, Nokia announced that it would release an inexpensive line of Android phones in the developing world. That wasn't exactly a Nadella decision. Microsoft's acquisition of Nokia wasn't yet final, and the company couldn't be seen doing anything that might have been regarded as meddling in Nokia's affairs. But the deal was already in the works, and I just can't believe that Nokia would have made a move that was so opposed to what we have come to expect from Microsoft (Windows, Windows, Windows, always and forever, no operating system but Windows) without at least tacit approval from that company and its new CEO.

Nor does it seem likely that Nokia CEO Stephen Elop would push ahead with those Android phones if such a decision could make things uncomfortable for him in his forthcoming role as executive vice president of Microsoft's devices group.

The upshot is that Microsoft will soon own a company that is making phones that run a non-Windows operating system. Before Nadella, this would have been heresy.

Releasing Office for the iPad may not rise to the level of heresy, but it was a gutsy move. True, Nadella's predecessor, Steve Ballmer, made that decision. But Nadella could have vetoed it, or he could have delayed the release until a touch-based version of Office was ready for Windows tablets. I suspect that Ballmer would have waited. Nadella didn't.

If these examples don't convince you that fundamental change is underway at Microsoft, consider this: The company will be giving away Windows. At its Build conference, Microsoft announced that it will no longer charge hardware makers installing Windows or Windows Phone on devices with screens smaller than 9 inches. The New York Times estimates that Microsoft has been getting, on average, $15 per license for Windows Phone devices and smaller tablets. I see Nadella's willingness to forgo that potential revenue as evidence that he really believes in the devices-and-services future of the company. And it might give Microsoft a head start in the so-called Internet of Things.

Finally, I give Nadella an A+ for this Build announcement: Microsoft will bring back the Start menu in Windows. That's a symbolic move, but it shows a willingness to admit and fix past mistakes, something Ballmer was never very good at.

I also like that Elop is getting such a high position at Microsoft. He had been in the running to succeed Ballmer. Giving a rival a chance to shine shows that Nadella has confidence in his own role.

Of course, another early report card on Nadella's tenure was issued by a higher power than me: Wall Street. Two months after Nadella took the helm, Microsoft's stock was trading at more than $40, up 11% since his accession. I think that's the Wall Street equivalent of straight A's.

Preston Gralla is a contributing editor and the author of more than 35 books, including How the Internet Works (Que, 2006).

Copyright © 2014 IDG Communications, Inc.

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