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Originally published February 4, 2014 at 6:45 AM | Page modified February 5, 2014 at 5:03 PM

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Corrected version

‘He knows his stuff’: CEO Satya Nadella is well-liked, low-profile

Nadella, as executive vice president of Microsoft’s Cloud and Enterprise division, helped build on a fast-growing division that last fiscal year brought in $20 billion in revenue — more than most companies on the Fortune 500 list.


Seattle Times technology reporter

Satya Nadella

New Title

Chief Executive Officer

Age

46

Family

Married to Anupama Nadella; three children

Education

Bachelor’s degree in electrical engineering, Mangalore University; master’s in computer science, University of Wisconsin - Milwaukee; MBA from University of Chicago.

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For a man just named Microsoft CEO, there is remarkably little known about Satya Nadella.

That’s even though Nadella, as executive vice president of Microsoft’s Cloud and Enterprise division, helped build on a fast-growing division responsible for providing servers, cloud platforms and other tools for corporations.

It’s an operation that last fiscal year brought in $20 billion in revenue — more than most companies on the Fortune 500 list.

Nadella, 46, named Tuesday to succeed Steve Ballmer as CEO, has also been the face of Microsoft’s cloud aspirations for the past few years. He’s played a big role in how Microsoft’s Windows Azure has become a viable competitor to Amazon Web Services.

He’s been credited with being a key player in helping shape, articulate and execute Microsoft’s strategy for the cloud, the term used to refer to services and data that live on remote servers and which can be accessed by users online. Cloud computing has become more important in recent years and will only become more so.

Compared with many of the other candidates reportedly considered to take Ballmer’s place, though, Nadella has been lower profile.

For one thing, he hasn’t appeared to campaign for the top job.

He’s too much of a class act to do so, say people who know him, many of whom also describe him as personable, very smart and charismatic. He is well respected within Microsoft and well regarded by Wall Street.

And he clearly possesses one primary quality Microsoft’s board said it was looking for: deep technical knowledge. Nadella’s experience covers some of the most complicated technologies in business today, from industrial-strength servers to complex online services.

But there are two knocks against Nadella.

First, he lacks experience with consumer devices — an area Microsoft struggles to gain traction in. It’s important for Microsoft to gain market share in tablets and smartphones, lest customers abandon Windows-based devices in favor of those running Apple’s or Google’s Android operating systems.

Second, he’s never been CEO of a company as big and complex as Microsoft.

Cloud aside, Nadella’s work as a leader within various divisions have largely involved executing a CEO’s or a predecessor’s broad visions and strategies, rather than crafting his own.

“He’s one of the nicest guys you could meet. He definitely seems to care about his people and his team,” said David D’Souza, a former Microsoft senior engineering executive and co-founder and CEO of mobile-collaboration app company Moprise. “He’s very passionate and a hard worker. He always executes well on strategy.”

But “he hasn’t had the opportunity to build something new himself and define a strategy,” D’Souza said.

Some doubt whether investors, who’ve sent Microsoft’s share price up lately over rumors that an outsider such as Alan Mulally would be named CEO, will be happy with a longtime insider.

“The question is whether making an insider like Satya CEO will satisfy Wall Street and others who want big changes at Microsoft, even if they have no idea what that would entail,” said a former Microsoft executive.

Huge division

But others say a lack of CEO experience is not necessarily a negative. “In many organizations, a division the size of [the one Nadella leads at Microsoft] would be its own company,” said Norman Young, a senior stock analyst at Morningstar.

“He’s got charisma, employees like him, and he’s got the acumen to lead the company. Not having been a CEO is not necessarily a minus here,” Young said. “When he speaks, he’s calm, smooth, charismatic. He knows his stuff.”

David Smith, an analyst at research firm Gartner, says he’s heard “nothing but good things” about Nadella.

As president of Microsoft’s Server and Tools division from 2011 to earlier this year, Nadella helped focus that group on several key priorities, including making it easier for companies to start using Microsoft’s cloud tools and simplifying the divisions’s bewildering array of product names.

Revenue went up, from $17.1 billion in fiscal year 2011, when he started, to $20.3 billion last fiscal year.

Nadella “executed by setting the priorities the right way,” Smith said.

Nadella grew up in Hyderabad, India, where he met his wife, Anupama Nadella, and where their parents still live, according to an interview Nadella gave the Deccan Chronicle in 2013.

In the interview, he cites playing cricket for Hyderabad Public School as teaching him about teamwork and leadership.

“He’s personable, sharp, bright, very charming,” said Ravi Sanga, a scientist from Normandy Park who’s a longtime friend. “He’s very interested when he talks to you. Very down to earth. Just a good, good man.”

In 1992, after a stint at Sun Microsystems, Nadella came to Microsoft as a program manager in the Windows developer-relations group.

He rose through the ranks and in 2007 was named senior vice president of the Online Services division. Tasked with heading research and development for the division, he was responsible for overseeing engineering and technical innovations behind Bing, MSN and the company’s ad platforms, as well as helping get off the ground Microsoft’s ad search partnership with Yahoo.

Kamal Jain, a research scientist at eBay, worked with Nadella on search technologies when Jain was with Microsoft Research Center.

In product-review meetings with Ballmer and Microsoft Chairman Bill Gates, which could get intense, Nadella always remained calm, defending his proposals deftly, Jain said.

Jain recalled the first time he met Nadella, when both were on a plane, with Nadella taking constant care of his daughters during the flight.

“In a similar way, he takes good care of his people and his duties,” Jain said. “He’s a very humble leader. He listens carefully. He makes sure people under him succeed. He mentors them well.”

Ballmer made a point to highlight Nadella’s experience with cloud services when he named him to lead Server and Tools in 2011.

“Satya has deep experience in both our server business and online services, which will help accelerate our momentum while setting the course to deliver the cloud-computing scenarios of the future,” Ballmer said in the news release announcing the appointment.

For his part, Nadella emphasized focus and teamwork in an email to Server and Tools employees.

Nadella inherited a division that was already growing by leaps and bounds. Its products — servers, database management systems, cloud services and other corporate IT tools — were largely responsible for establishing Microsoft’s dominance in the corporate world today.

Smith, the Gartner analyst, credits Nadella’s predecessor, Bob Muglia, for much of that. But Smith credits Nadella “more than anybody” for growing the cloud side of that division’s business, which, though still a small part of the group’s overall revenue, is seen as integral to the company’s future.

“What Nadella has done that has really made the cloud business more successful is he has addressed a very important issue — what I call the onramp to the cloud,” Smith said. Before, he said, there were no easy entry points for companies to get into Microsoft’s public cloud — namely, Windows Azure.

Last year, Microsoft said sales of Windows Azure, which launched in 2010, and related software programs had surpassed $1 billion. In June, it said more than 50 percent of Fortune 500 companies were using Azure.

For his work, Nadella was rewarded with a compensation package of about $7.7 million in fiscal year 2013.

Janet I. Tu: 206-464-2272 or jtu@seattletimes.com. On Twitter @janettu.

Information in this article, originally published Jan. 5, 2014, was clarified Jan. 6, 2014. A previous version of the biography box that ran with this story said Satya Nadella received a master’s degree in computer science from the University of Wisconsin. In actuality, he received the degree from the University of Wisconsin - Milwaukee.



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