Pondering Microsoft: And the Winner Is ... Unclear

Channel pros aren’t sure yet what the naming of Satya Nadella as CEO means for their relationship with Microsoft. By Rich Freeman

For a process conducted behind tightly closed doors, the selection of Microsoft's new CEO sure attracted a lot of knowing predictions from would-be prognosticators. Candidates as varied as Ford Motor Company president and CEO Alan Mulally, former Nokia CEO Stephen Elop, and Tony Bates, once CEO of Skype and now head of Microsoft's Business Development and Evangelism group, were all said at various times to have the inside track.

When the fog of speculation cleared, however, the search committee headed by John Thompson, Microsoft's newly crowned chairman, announced that it had chosen 22-year company veteran Satya Nadella to replace Steve Ballmer as only the third CEO in Microsoft's nearly 39-year history.

Andrew Brust, for one, greeted the news with a smile. "I have been rooting for him through most of the selection period," says Brust, who is CEO of Blue Badge Insights, a Microsoft-focused analyst firm based in New York, N.Y., and a long-time Nadella admirer. "I've been impressed with his style and have seen that he commands respect from people on the product teams, both on the engineering and marketing sides."

Microsoft partners who shared their thoughts about Ballmer's bombshell retirement announcement with ChannelPro-SMB last summer are less sure what to expect.

Kevin Royalty, managing partner of Total Care Computer Consulting LLC, in Centerville, Ohio, and a member of Microsoft's elite Most Valuable Professional community of external tech experts, calls himself cautiously optimistic. Back when news of Ballmer's impending departure first broke, Royalty urged Microsoft to replace him with an outsider capable of bringing fresh thinking to the company. Now he concedes the wisdom of naming someone who knows his way around Microsoft's complex culture. "I'm kind of glad that it's somebody inside Microsoft," he says. "They know what feathers not to ruffle."

The Flip Side
Bob Nitrio, on the other hand, is less hopeful. Selecting an insider like Nadella suggests that Microsoft has little interest in significant change, says Nitrio, who is CEO of Ranvest Associates, a small business solution provider in Orangevale, Calif. "They're planning on staying the course that they're already on," he states.

That's a disappointing prospect to Nitrio and many other channel pros who've grown increasingly frustrated with Microsoft in recent years over moves like its decision to phase out the Small Business Specialist partner program and discontinue the fully on-premises edition of Small Business Server in favor of partially or wholly cloud-based solutions like Windows Server Essentials and Office 365.

"They've consistently tried to push things to us as partners and say 'this is good for you," Nitrio complains. The company has also been unreceptive to feedback from the channel, he adds. "We haven't had that kind of dialogue with Microsoft for such a long time that I think a lot of people have simply given up trying," Nitrio says.

Royalty, who shares that view, sees the changing of the guard at Microsoft as an opportunity for the company to mend frayed communication lines with its partners. An appearance by Nadella at Microsoft's next MVP Global Summit in the fall, he continues, would be a promising step in that direction. "We haven't had Steve Ballmer address the MVPs in probably three years," he says.

What About SMBs?
For his part, Michael Cocanower, president of Phoenix, Ariz.-based solution provider and MSP itSynergy, would like to see Nadella show greater enthusiasm for the SMB market than Ballmer did. "He's certainly saying all the right things," states Cocanower, who watched Nadella's inauguration day webcast on February 4th. On the other hand, he notes, Nadella has spent most of his time at Microsoft in enterprise-oriented roles. "I understand a lot of their revenue comes from the enterprise [but] there's also tremendous potential in other market segments," he says.

One aspect of Microsoft's business that Cocanower believes is all but certain to benefit from the switch to Nadella is its product lineup, which grew increasingly stale under Ballmer. "It felt like there was kind of a loss of innovation," Cocanower says. Thanks to his background in Microsoft's product groups, Nadella has technical chops Ballmer lacks, Cocanower argues, making him more likely to restore the company to its former place on the leading edge of IT.

The return of Bill Gates to Microsoft as Nadella's part-time technology advisor is similarly encouraging, he adds. Brust, though, is less sure. "I can't tell yet if it's mostly for public consumption or if it's substantive," he says of Gates's new post. "If there were a way to get [Gates] involved in product brainstorming and vetting I think it would be great, as the company has suffered for the lack of it."

Ultimately, Brust notes, only time will tell exactly how any of the changes Microsoft has made in recent months will impact its future. Cocanower agrees. "Let's talk a year from now," he says.

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