The Future of Microsoft, According to New CEO Satya Nadella

If software is eating the world, Microsoft wants a bigger bite.
Microsoft

Note: This article was first posted on Jan. 30. On Feb. 4 Microsoft announced that Nadella is indeed its new CEO.

Bloomberg reports that Microsoft is getting ready to name Satya Nadella as its next CEO, but Microsoft has yet to confirm. The Indian-born executive presently leads the company’s cloud and enterprise division, which is also the division that helped propel Microsoft to record revenue in its most recent quarter. Quartz interviewed Nadella in December about his vision for the company, which is largely as a “devices and services” company that capitalizes on the power of the cloud. Here’s more of what he said:

“The way I think about what’s happening broadly with technology and business [is that] as a percentage of GDP, IT spend is actually increasing. Sometimes its unclear when you just look at IT budgets, because this notion of ‘software is eating everything‘ is very true. You look at marketing: everything that’s happening in marketing is digitized. Everything that’s happening in finance is digitized. So pretty much every industry, every function in every industry, has a huge element that’s driven by information technology. It’s no longer discrete.

“There’s 2 trillion dollars of IT spend. This is inclusive of everything that’s happening in hardware, networking, software platforms, applications. That is all going to get disrupted by the move to the cloud.

“This notion of digitization of nearly everything, that’s a global phenomenon. As as a a percentage of GDP, IT spend broadly defined is only going to increase. That’s a pretty good spot to be in if you’re a technology provider. Then the next question is what is the shape of that spend? And that’s one of the places that we as a company have bet that there are two forms in which which people will consume technology is in devices and services or in cloud and devices broadly.

“So what used to be these distinct categories are getting mixed up in the move to the cloud. So one of the things is [that] sizing the cloud opportunity is interesting. Because in the past we’re used to sizing it by ‘here is how much is used for storage, here is how much it is for operating systems.’ Whereas in the cloud all of these things come together. It’s much more packaged. So for us, we built a big business here, but we’re still a low share player. We have a significant commercial business but in the big scheme of things, when you say 2 trillion dollars, we’re nothing. So the way we look at it is how do we become part of the fabric which is helping with this digitization of everything.”

If Nadella does become the CEO of Microsoft, it appears that Microsoft is girding itself to directly battle Google’s and Amazon’s cloud services.

Presented by

Leo Mirani is a reporter with Quartz in London.

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