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CEOs Leading the World Into the Cloud: Satya Nadella

Cloud computing has transformed the tech world in a short time, pushing businesses of all kinds to adopt software and services that can be used anywhere, and on any machine. Some huge hardware and software companies have been left behind, but others have changed the way they work and what they offer to become major providers of cloud computing technology. This is the first article in a three-part series on the CEOs of some of the largest tech companies in the world, and how they’ve helped their organizations adapt to, and thrive with, cloud computing.

Who is Satya Nadella?

When Satya Nadella joined Microsoft in 1992, “the cloud” didn’t exist. Neither did the Internet, at least not in the way we know it today. The first mass-market web browser launched in 1993, and it wasn’t until 1994 that Microsoft’s ‘90s nemesis, Netscape Navigator, would become a techie sensation.

But Nadella, who rose through Microsoft’s ranks to become its third CEO in 2014, has certainly become one of the tech industry’s leading cloud advocates. In the process, he’s transformed Microsoft from a lumbering developer of CD-based software to one at the forefront of cloud-based services and applications. Let’s take a look at how Nadella became one of the world’s most powerful Indian-born leaders, and how he continues to drive Microsoft forward to the cloud.

Humble beginnings and big ambitions

Satya Nadella began his work in technology by studying electrical engineering at Mangalore University. He graduated in 1988 and moved to the United States, where he earned a master’s degree in computer science at the University of Wisconsin in 1990. His career began at Sun Microsystems -- which Oracle acquired in 2010 -- but Microsoft recruited him to join the Windows NT development team in 1992.

Nadella’s relentless drive made him a standout performer at Microsoft, even among tens of thousands of highly competitive, exceedingly intelligent technology experts. Not long before he became Microsoft’s CEO, Nadella told an interviewer his powerful philosophy of life and work: “Be passionate and bold. Always keep learning. You stop doing useful things if you don’t learn.”

This passion for knowledge helped Nadella become vice president of Microsoft’s bCentral group in 1999, two years after he’d earned his MBA from the University of Chicago while still working full time at the company’s Seattle-area headquarters. In 2001, Nadella was promoted to corporate vice president of the Microsoft Business Solutions division, which also included a role heading up the Search and Advertising Platform Group.

Moving up at Microsoft

This role was Nadella’s first significant leadership position in a cloud-centric business segment at Microsoft, before cloud computing was a mass-market phenomenon. In 2006, in one of his earliest notable public statements on extending Microsoft’s reach in the cloud, Nadella said “We will continue to make strides in providing innovation in the realm of connected systems.” It wasn’t his most inspiring statement, but Nadella has since become known as one of the most eloquent executives in the tech industry, and you’ll soon see why. His work in this role gained him further visibility and led to his promotion to senior vice president of research and development for online services in 2007.

As the head of R&D for online services, Nadella oversaw development of Microsoft’s search engine, initially known as Live Search until its rebranding as Bing in 2009. In 2011, Nadella became president of Microsoft’s Server and Tools division and its Cloud and Enterprise group, which gave him direct oversight over virtually all of Microsoft’s cloud-based operations. In addition to overseeing the Bing search engine, he now also counted the Xbox live gaming platform and Microsoft’s Office 365 suite of subscription-based business software as part of his portfolio.

In late 2013, Nadella told Forbes that there were only three companies with “at scale” cloud operations at the time: Google, Microsoft, and Amazon. Nadella’s performance at the head of this critical business division made him the natural choice to replace Steve Ballmer, Microsoft’s second CEO and one of company founder Bill Gates’ best friends from his brief time at Harvard.

A different kind of CEO

Nadella sent an open email to the entire company when he became CEO, and it contains some essential insights into his approach to leadership, his views on Microsoft’s mission, and his plans for the future:

“While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation... Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.”

He went on to explain his vision, which should be inspiring to any engineer or developer who’s worked towards greater connectivity -- and to anyone who’s benefitted from having that greater connectivity in their lives:

“I believe over the next decade computing will become even more ubiquitous and intelligence will become ambient. The coevolution of software and new hardware form factors will intermediate and digitize — many of the things we do and experience in business, life and our world. This will be made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning. This is a software-powered world.”

Nadella’s philosophical and literary bent is unusual among major company CEOs, and he’s often cited poems and stories to emphasize a key point in interviews. One of his better-known quotes is “the best code is poetry,” which is certainly not something you’d expect to hear from his predecessors at Microsoft. Some of his philosophical approaches might also inform his attitude towards cloud computing.

Take this statement, which was part of his recently-published book Hit Refresh:

“If you could understand impermanence deeply, you would develop more equanimity. You would not get too excited about either the ups or downs of life. And only then would you be ready to develop that deeper sense of empathy and compassion for everything around you.”

This Buddhist-inspired outlook does help explain why Nadella has been on the vanguard of Microsoft’s cloud efforts for many years -- even though it might not seem so at first glance. The cloud is an essentially impermanent thing, after all. You run its software and services on your PC, or on your laptop, or on your phone or tablet, but the cloud doesn’t exist on any of those things. Its operation often takes place on servers thousands of miles away from the devices in front of you, and the cloud apps you use often change (at times quite significantly) without your direct input. Nadella’s ability to see his life’s work as essentially impermanent may also have given him the perspective to embrace change and drive his company forward into new areas, even when those areas seemed at first to represent existential threats to Microsoft’s legacy businesses.

Keeping Microsoft ahead in the cloud

Since becoming CEO, Nadella has continued to push Microsoft towards a cloud-first business model, and he’s supplemented core growth with several massive acquisitions:
  1. Minecraft developer Mojang, for $2.5 billion, in 2014.
  2. Professional networking platform LinkedIn, for $26.2 billion, in 2016.
  3. Software development version-control platform GitHub, for $7.5 billion, this June.
These three huge acquisitions have thus far been graded more favorably by tech-industry analysts than the major deals undertaken by Steve Ballmer, Nadella’s predecessor. Ballmer’s buyout of Skype has had mixed results for Microsoft, and his purchase of Nokia’s mobile-phone business was a disaster that eventually led Microsoft to write off nearly the entire thing and lay off most of its Nokia employees.

Thanks to Nadella’s leadership, Microsoft began 2018 as the world’s largest cloud computing company, with more reported cloud revenues than any other provider. Its 52 data center regions are more numerous than those of any other cloud provider, and some of these data centers are among the world’s largest and most technologically advanced. Nadella’s tenure has also been rewarding for Microsoft’s shareholders, as the company’s stock has grown by more than 160% since he took the reins in 2014.

Microsoft needed a CEO who could help them move into the cloud, and they seem to have found the right leader in Satya Nadella.