'The House that Bill Built': The future of Microsoft

Microsoft's announcement that founder Bill Gates has stepped down to concentrate on technology does little to quell unease about the company's ability to face future challenges. Ashley Hibben investigates.

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Official LeWeb Conference Photos,, Flickr New Microsoft CEO Satya Nadella.
Photo credit: Official LeWeb Conference Photos, FlickrCAPEND

Microsoft finally concluded its extensive search for Steve Ballmer's replacement as CEO this week with the internal promotion of India-born Satya Nadella. He beat out external candidates that were rumoured to include Alan Mulally of Ford and Stephen Elop of Nokia.

As Chief of the company's Cloud and Enterprise Division, Nadella is touted as the ideal person to lead Microsoft's resurgence against the likes of Apple and Google in consumer electronics and business services. Nadella's background is the main reason behind his promotion, having overseen the bolstering of Microsoft's successful commercial services including Bing, Skype, and Xbox Live. He is also committed to the 'One Microsoft' reorganisation that the company underwent in July 2013; devices and 'services' are now the centre of Microsoft's future strategy, while software - the products upon which Microsoft's ubiquitous brand was built - has been left on the outside looking in.

However, the announcement that Bill Gates, co-founder of the software giant and arguably its most recognisable face, will step down as Chairman to take up a more involved role as Technology Advisor has left many questioning whether Microsoft can match its rivals in creating desirable services and devices. Some fear that Gates, whilst a past visionary in technology and thought to be better with consumer products than Nadella, will hinder the new CEO's ability "to believe in the impossible and remove the improbable". In short, can Nadella take Microsoft where it needs to go when it's founder Gates is still so involved with the company?

With hindsight, Microsoft under Bill Gates was ahead of its time in the early 2000s. Having achieved Gates' stated aim of putting a PC in every home, the company unveiled some of the first smartphones and tablets, only to see Apple arrive late to the party and steal the limelight with the phenomenal success of the iPhone and iPad in the late 2000s. Apple and Google turned technology into a desirable lifestyle accessory that Microsoft has been unable to match, with the possible exception of the Xbox.

The creativity and inventiveness has still always been present though; a recent Bloomberg piece highlighted Microsoft's announcement of a contact lens designed to test blood sugar from tears that went almost unnoticed in 2011. However, Google announced a near identical product last month which generated far greater acclaim and attention from the world's press.

Apple, meanwhile, has sought to tackle consumer and investor fears on the future of its trend-setting products, stemming seemingly from the rather dour manner of CEO Tim Cook, by hiring former Burberry CEO Angela Ahrendts as Head of Retail.

The question is whether Bill Gates can help his company evolve into a consumer brand on the scale of Apple or Google with a line of brilliant new products. The feeling is that for this to happen, Gates needs to be shown the door. This is unlikely at a company forged and dominated by his incredible efforts over the past 39 years.

However, the appointment of Satya Nadella suggests that Microsoft will continue to focus on what it does best: delivering practical software solutions that appeal to businesses and consumers that want to get things done in an increasingly connected world. This is the Gates and Ballmer strategy that has made them phenomenally wealthy if, at times, extremely unpopular. Nadella's appointment, despite his extraordinary talents, is unlikely to shake the foundations of 'The House that Bill Built'.

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