What exactly prompted Microsoft to name CEO Satya Nadella as board chairman? It is a reward for the company’s third CEO Satya Nadella hard work to reinvent the business model with a focus on cloud business as globally it is making business disruption.
According to analysts, Satya Nadella’s appointment as board chairman will strengthen his influence at the world’s largest software maker after more than seven years as the top executive.
Satya Nadella, 53, succeeds John Thompson, who will return to the role of lead independent director, a position he held before being named chairman in 2014, Microsoft said Wednesday in a statement.
According to Arvian Consulting, the appointment of Satya Nadella as board chairman is a vote of confidence in his leadership and underlines the confidence of the company in his decisions after he assumed charges as CEO in February 2014.
“Sathya Nadella helped the company to go for a thorough overhaul when the company witnessed failure in its attempt to get into the mobile handset and dwindling importance of Windows operating system. His focus on cloud computing, mobile applications and AI really helped the company to expand its foothold,” said Arvian Research.
His decision to move the Office software franchise business model to the cloud and to other operating systems really helped the company to expand its bottom line. The company’s shares have soared more than sevenfold and its market value is approaching $2 trillion as Microsoft has been restored to the ranks of the top technology companies.
During the third quarter ending March 2021, revenue rose to $41.7 billion, up 19% compared with the same period last year. According to analyst, it is the biggest quarterly increase since 2018. Profits jumped 44% to $15.5 billion during the same period. The results surpassed both the company’s and Wall Street’s expectations, underlining how Microsoft and other big tech firms have been winners in the coronavirus pandemic.
Commenting on th company’s performance, Satya Nadella said over a year into the pandemic, digital adoption curves aren’t slowing down. “They’re accelerating, and it’s just the beginning. We are building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform.” Satya Nadella.
Despite failures, Microsoft sales of personal computing products rose to $13 billion in the third quarter of financial year 2021. Personal computng products registered growth of 19% as compared with the same period last fiscal.
Due to pandemic, customers across the globe purchased more computers and opted for new devices with larger screens. Satya Nadela’s leadership also witnessed gaming revenue during the third quarter registering a growth of 50%, primarily by the growth in demand for Xbox gaming console, Xbox content and services.
John Thompson, 72, has been scaling back his work as chairman over the past few years, Microsoft said. The two have been discussing the new roles since last fall.
When Satya Nadella took the CEO job, Bill Gates stepped down as chairman of the company he co-founded, significantly reducing his role at Microsoft, and Thompson was tapped to replace him. The idea was that Nadella would benefit from mentoring by Thompson, a technology executive for several decades.
Satya Nadella, the company’s third CEO, will also be the third chairman in Microsoft’s history, following Bil Gates and John Thompson. Steve Ballmer, the CEO before Satya Nadella, never held the chairmanship as Gates kept that title for Ballmer’s entire tenure.
John Thompson will remain active as lead independent director, overseeing Satya Nadella’s compensation, succession planning, governance and board operations, Microsoft said in the statement.
It is interesting to note that Microsoft has closed in on Amazon’s lead in cloud computing. According to a recent data published by Synergy Research Group, while Amazon has about a third of the growing cloud market, Microsoft has surpassed 20% market share.