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From: Steve Ballmer
To: All Employees
Date: Feb. 4, 2014
Subject: Satya Nadella - Microsoft’s New CEO

Today is an incredibly exciting day as we announce Satya Nadella as the new CEO of Microsoft. Satya will be a great CEO, and I am pumped for the future of Microsoft. You can read the full announcement here.

Satya is a proven leader. He’s got strong technical skills and great business insights. He has a remarkable ability to see what's going on in the market, to sense opportunity, and to really understand how we come together at Microsoft to execute against those opportunities in a collaborative way. I have worked closely with Satya for many years and I have seen these skills many times. He is not alone, though. Our Senior Leadership Team has never been stronger, and together this group will drive us forward.

Microsoft is one of the great companies in the world. I love this company. I love the bigness and boldness of what we do. I love the way we partner with other companies to come together to change the world. I love the breadth and the diversity of all of the customers we empower, from students in the classroom to consumers to small businesses to governments to the largest enterprises.

Above all, I love the spirit of this place, the passion, and the perseverance, which has been the cornerstone of our culture from the very beginning.

Stay focused and keep moving forward. I am excited about what we will do. Satya’s appointment confirms that.

Thanks for making Microsoft the most amazing place to work on the planet, and thanks for the chance to lead.

Steve

From: Satya Nadella
To: All Employees
Date: Feb. 4, 2014
Subject: RE: Satya Nadella – Microsoft’s New CEO

Today is a very humbling day for me. It reminds me of my very first day at Microsoft, 22 years ago. Like you, I had a choice about where to come to work. I came here because I believed Microsoft was the best company in the world. I saw then how clearly we empower people to do magical things with our creations and ultimately make the world a better place. I knew there was no better company to join if I wanted to make a difference. This is the very same inspiration that continues to drive me today.

It is an incredible honor for me to lead and serve this great company of ours. Steve and Bill have taken it from an idea to one of the greatest and most universally admired companies in the world. I’ve been fortunate to work closely with both Bill and Steve in my different roles at Microsoft, and as I step in as CEO, I’ve asked Bill to devote additional time to the company, focused on technology and products. I’m also looking forward to working with John Thompson as our new Chairman of the Board.

While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation. This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places — as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.

As we start a new phase of our journey together, I wanted to share some background on myself and what inspires and motivates me.

Who am I?

I am 46. I’ve been married for 22 years and we have 3 kids. And like anyone else, a lot of what I do and how I think has been shaped by my family and my overall life experiences. Many who know me say I am also defined by my curiosity and thirst for learning. I buy more books than I can finish. I sign up for more online courses than I can complete. I fundamentally believe that if you are not learning new things, you stop doing great and useful things. So family, curiosity and hunger for knowledge all define me.

Why am I here?

I am here for the same reason I think most people join Microsoft — to change the world through technology that empowers people to do amazing things. I know it can sound hyperbolic — and yet it’s true. We have done it, we’re doing it today, and we are the team that will do it again.

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.

It will better connect us to our friends and families and help us see, express, and share our world in ways never before possible. It will enable businesses to engage customers in more meaningful ways.

I am here because we have unparalleled capability to make an impact.

Why are we here?

In our early history, our mission was about the PC on every desk and home, a goal we have mostly achieved in the developed world. Today we’re focused on a broader range of devices. While the deal is not yet complete, we will welcome to our family Nokia devices and services and the new mobile capabilities they bring us.

As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile and cloud-first world, and do new things.

We are the only ones who can harness the power of software and deliver it through devices and services that truly empower every individual and every organization. We are the only company with history and continued focus in building platforms and ecosystems that create broad opportunity.

Qi Lu captured it well in a recent meeting when he said that Microsoft uniquely empowers people to "do more." This doesn’t mean that we need to do more things, but that the work we do empowers the world to do more of what they care about — get stuff done, have fun, communicate and accomplish great things. This is the core of who we are, and driving this core value in all that we do — be it the cloud or device experiences — is why we are here.

What do we do next?

To paraphrase a quote from Oscar Wilde — we need to believe in the impossible and remove the improbable.

This starts with clarity of purpose and sense of mission that will lead us to imagine the impossible and deliver it. We need to prioritize innovation that is centered on our core value of empowering users and organizations to “do more.” We have picked a set of high-value activities as part of our One Microsoft strategy. And with every service and device launch going forward we need to bring more innovation to bear around these scenarios.

Next, every one of us needs to do our best work, lead and help drive cultural change. We sometimes underestimate what we each can do to make things happen and overestimate what others need to do to move us forward. We must change this.

Finally, I truly believe that each of us must find meaning in our work. The best work happens when you know that it's not just work, but something that will improve other people's lives. This is the opportunity that drives each of us at this company.

Many companies aspire to change the world. But very few have all the elements required: talent, resources, and perseverance. Microsoft has proven that it has all three in abundance. And as the new CEO, I can’t ask for a better foundation.

Let’s build on this foundation together.

Satya

Satya Nadella should be selected as Microsoft's third CEO

 

If Microsoft does announce as expected that it has selected Satya Nadella as its next CEO after a six month search, the decision will trigger delight and despair in different circles. But the presumed ascension of Mr. Nadella has less to do with him being an internal candidate than it does with him being able to effectively navigate the complex internal structure and politics of a company that, frankly, was already transforming itself when Steve Ballmer announced his intention to step down.

Last week, Bloomberg, Reuters, The New York Times and The Wall Street Journal all independently cited sources close to Microsoft's decision making process in reporting that Mr. Nadella was close to being named as the firm's next CEO. Not unexpectedly, this news set off some emotional responses.

To Microsoft insiders, Nadella is an excellent choice. A 22-year veteran of the software giant, Mr. Nadella has weathered decades of political infighting and has risen to the top of his field. He now runs the firm's Cloud and Enterprise group, which emerged from the Microsoft reorg as an obvious successor to the Server and Tools business that he previously led. This matters because roughly two-thirds of Microsoft's revenues come from the business customers that are now transitioning, with Microsoft, from traditional software solutions to cloud-based services.

Detractors, however, were hoping for a transformational outsider, someone like Ford CEO Alan Mulally who would independently evaluate Microsoft's various strategies and cut and cull where needed. And to them, Mr. Nadella, while qualified on many levels, is simply the safe choice, a way for Microsoft to continue on its current strategy unimpeded.

While I do believe that Microsoft would benefit from a thorough and independent vetting of its various businesses, Mr. Nadella is most certainly the best internal candidate for the CEO position and one of only a handful of individuals anywhere who have both the experience and qualifications to run a company that is as complex as Microsoft. His appointment as CEO would also allow for a quicker and more seamless "devices and services" transition, especially for those parts of Microsoft that are currently in a strange holding pattern, awaiting the outcome of this search.

As important, news that Microsoft co-founder Bill Gates might step down from his chairman position at the firm and take a more hands-on role working alongside Mr. Nadella on product strategy should please virtually any Microsoft follower. To an outsider pick, a Gates-led board of directors would be seen as a hindrance, since Gates would presumably have a meddling effect on any attempt to change the strategy. But with Gates working more explicitly with Mr. Nadella, he can proactively impact Microsoft's strategy rather than work from behind the scenes to scuttle plans with which he does not agree.

Ultimately, the decision to hire from within may be the only way to ensure that Microsoft's next CEO—whoever is picked—sticks with the highly-scrutinized role for a reasonable amount of time. Microsoft doesn't have a good track record of bringing in high profile outsiders, and while there are obviously some exceptions, the flameouts outnumber the successes by a wide margin. After decades of stability under Gates and Ballmer, it's important that the next CEO not come and go quickly, since such a turnaround could be perceived as evidence of the firm's continued fall from prominence.

Satya Nadella is a well-spoken and brilliant engineer who has already navigated the transition from software to services in one of Microsoft's biggest and most important businesses. He will provide Microsoft with the leadership it needs at this important moment in its history, and will help the firm finish its transition from its software past to its devices and services future. Mr. Nadella is the right choice for Microsoft's next CEO.

 

By Paul Thurrott

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