- 2018 was a fantastic year for Microsoft shareholders.
- But Microsoft CEO Satya Nadella told journalists Monday that the price of Microsoft’s shares, or its stint as the world’s most valuable company, wasn’t the kind of metrics that thrill him.
- Instead, Nadella says that it’s more instructive to measure the impact that Microsoft has on the economies in which in participates.
2018 was a standout year for Microsoft shareholders. But that success wasn’t a focus for Microsoft’s CEO Satya Nadella, he told journalists Monday at an invitational media day at the company’s headquarters.
To recap: In July, the stock hit an all-time high of above $US108 a share. It hit another all-time high over $US115 a share in October. Microsoft even dethroned Apple as the most valuable company in the world in November, and held the distinction until early January when it was overtaken by Amazon.
Nadella told the gathered journalists that he’s not the type to celebrate these milestones, though.
“I’m not one of those guys who says, ‘let’s celebrate some market cap measure.’ That’s just not stable,” he said.
He said he was far more interested in how the many people outside of the company who rely on its products for their livelihoods, are faring, instead.
“Our business model is about creating more surplus outside us. We will only be long-term success when the people are making more money around us,” he said.
This is a nod to a theory espoused by former Microsoft CEO Bill Gates, an advisor to Nadella, that you can only call something a platform when the total value of the ecosystem around it is more valuable than the company that created it. In other words, other companies need to succeed for Microsoft to call itself a success on its own terms.
Nadella added that his upbringing in India makes him particularly sensitive to the need for companies to contribute to the economies in which they participate.
“As a guy who grew up in a country that was colonised by multi-nationals without necessarily contributing, I’m always cognisant of that – this thing about showing up and saying I collect rent and no local contribution,” he said.
That said, Microsoft doesn’t share much data about the impact of its ecosystem, except in the occasional press release. For instance, in October, IDC released several reports predicting Microsoft’s cloud will create about 125,000 jobs collectively in several Arab nations over the next five years.
That said, despite Nadella’s lack of enthusiasm, there may still be many more days of share-price highs for him to not celebrate.
Although Microsoft’s shares have floated back down to the low $US100s, Wall Street analysts are generally bullish on the growth of the company’s cloud computing business, and believe the stock will zoom up again. Some analysts think Microsoft could be the next company to reached become worth a trillion dollars, after Apple and Amazon. Its market cap is currently over $US780 billion.
Business Insider Emails & Alerts
Site highlights each day to your inbox.