Microsoft has promoted Satya Nadella, who led engineering for Bing and online advertising for the last three years, to president of Server and Tools, where he’ll run Microsoft’s fastest-growing business segment and lead the company’s push into the cloud.Part of Steve Ballmer’s key brain trust, Nadella took over Microsoft’s search efforts when they were floundering, oversaw some key acquisitions like travel search information company Farecast, and led the rebranding effort from Live Search to Bing.
Microsoft’s search business is still losing money hand over fist — overall, consumer online services have an operating loss of more than $500 million each quarter — but it’s growing market share, thanks in part to a deal with Yahoo where Bing will provide Yahoo’s search results. Nadella can’t take full credit for that deal — the wheels were in motion before he took over — but definitely was in the right place at the right time.
Google appears increasingly worried about Bing’s advances. Eric Schmidt recently called Microsoft — not Facebook — Google’s fiercest competitor. Last week Google tried to manufacture a “scandal” about Microsoft’s tracking users around the Web, including as they conduct searches at Google, and using this user information to make Bing results better. Microsoft has in fact been doing this pretty openly for years, and Google searches are only one of many inputs being used.
Nadella now gets a chance to run a successful and profitable business. Server and Tools, which includes Windows Server, SQL Server, developer tools, and cloud computing initiatives like Azure, has shown consistent revenue growth of more than 10% for almost a decade (barring a fall off during the last recession in early 2009), and has earned $6.2 billion on $15.9 billion in revenue over the last four quarters.
He replaces outgoing president Bob Muglia, who was asked to step down after a conflict with Ballmer.
Also noted: Windows Azure technical leader Amitabh Srivastava is leaving the company. He previously led networking technology for Windows. .
Now don’t miss: The Secret Brain Trust That REALLY Runs Microsoft. Nadella is on the select list.
Here’s Ballmer’s email to Microsoft employees about the changes.
From: Steve Ballmer
Sent: Wednesday, February 9, 2011
To: Microsoft – All Employees
Subject: New Leadership for Server and Tools Business
Today our Server and Tools Business is in a position of strength due to our leadership in the cloud, significant product advances such as Windows Azure, and the proven ability to excel and grow in the face some of the toughest competition we’ve ever seen.
In deciding who should take the business forward, we wanted someone with the right mix of leadership, vision and hard-core engineering chops. We wanted someone who could define the future of business computing and further expand our ability to bring the cloud to business customers and developers in game-changing ways.
With that in mind, I am extremely pleased to announce that I am promoting Satya Nadella to president of Microsoft’s Server and Tools Business, effective immediately.
As we said initially, we looked both externally and internally, and I talked to a number of very strong candidates. Satya was the clear choice given we were looking for a person with a deep understanding of and vision for the rapidly merging worlds of servers and services, as well as experience in managing cloud infrastructure and services at scale.
Satya has the ideal skill set for this opportunity, having worked in the Server Group in his earlier years at Microsoft and most recently serving as senior vice president of the Online Services Division where he has effectively been CIO of one of the largest cloud infrastructures in the world, spanning our Search, Portal, and Advertising platforms.
In his role in the Online Services Division, he led the overall R&D efforts for some of the largest online services and drove the technical vision and strategy for several important milestones, including the critical launch of Bing, new releases of MSN, Yahoo! integration across Bing and adCenter, and much more.
Satya is also well-known for his leadership. He has strong collaboration skills, is decisive in both decision-making and delegating, and has strong customer insights, engineering and business expertise. He also knows how to structure organisations for outstanding performance.
Equally as important, he has demonstrated the ability to cultivate talent and build a world-class engineering organisation, attracting some of the brightest technical minds from within Microsoft and across the industry.
Please join me in congratulating Satya, and welcoming him to his new role.
As I announced previously, Bob Muglia will work through the summer and help onboard Satya. I want to thank Bob again for his extraordinary contributions to Microsoft and his insights and assistance in the months ahead.
In addition, Amitabh Srivastava, senior vice president in the Server and Tools Business, will leave the company. As I noted above, Windows Azure is in a great place, and Amitabh is ready to move to a new phase in his career. He has done stellar work for the company and will work to ensure a smooth transition with the Windows Azure team. I wish him well in his new endeavours.
And here’s what Nadella had to say about the change in an email to his new employees:
From: Satya Nadella
Sent: Wednesday, February 9, 2011
To: STB FTE Worldwide
Subject: RE: Organizational Changes
I am thrilled to get the opportunity to work with you all as part of STB.
My early career at Microsoft was in servers. Since then I have watched in admiration as you have built a great team and a great business, and in the process have fundamentally transformed the application development and backend server infrastructure landscape.
We are on a path to change the world again with our next generation application development and cloud platform, and I feel fortunate to be part of this transformation. Our core capability as a division – our computing infrastructure and platforms – is the key driver of computing going forward. Today we are seeing our existing customers move to the cloud to address issues of cost and complexity; tomorrow, our work as leaders in innovation will result in new scenarios and workloads (some of them unimagined!) enabled in the cloud.
Our application development and tools teams and products are one of Microsoft’s great assets that support all our businesses. We will continue to drive our roadmap in alignment with our sister divisions within Microsoft.
I like to have my head in the clouds and feet on the ground (something I learned from Qi). I want us to be principle driven. What I value most is coming together around a singular mission and working this mission with great teamwork, guided by our principles, authentic communication and impeccable coordination. Individual agendas cannot bog us down – we will make decisions and move on as a team. As teams and as individuals we need to continuously strive to improve ourselves and those around us. These to me are the keys to moving fast with least friction to deliver superior value to our customers, and to win in the marketplace.
I have tremendous admiration and respect for the leaders in STB. I have worked for Bob and worked with many others in the leadership team in the past, and I am looking forward to partnering with all of them – and all of you – to ensure a smooth transition and continued momentum.
As you also know from Steve’s mail, as part of this transition Amitabh Srivastava has decided to pursue other opportunities. The Server and Cloud team has achieved significant progress under Amitabh’s leadership and I am sad to see him leave the company. His legacy is a very strong team executing on a compelling vision – one I’m very excited about and believe in deeply. I have asked Bill Laing to step in as interim leader for this team.
We have a great opportunity ahead of us and my first priority will be to work with my leadership team to ensure we don’t slow down in seizing this opportunity. Let’s keep driving forward and increase our momentum together!
Looking forward to getting to know you and contributing to our joint success,