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Ivan Petkov

Which company has changed the chairman of its board of directors for the first time in its 39-year history and its CEO for only the third time? You are right it is Microsoft, which is a symbol of the personal computer and which has faced numerous antitrust cases filed against it. This is the company that holds over 90% of the market of desktop computers, but it is also the company that has recently "slept through" the mobile revolution of smartphones and tablets. Whether it is loved or hated, the fact is that the software giant from Redmond is an important factor in today's technological world and it will have to face a lot of difficult and crucial decisions.

The changes in the highest echelons of Microsoft go along with the surprising and unprecedented information about a possible change in the policy of the software giant. The company is considering the possibility of the Windows operating system supporting Android applications. To this, we can add the fact that Nokia, which was acquired by Microsoft last year, is planning to launch its first Android phone in India.

Photo: @evleaks

Will we witness a shift in the policy of the company?

The magnificent four

We have all heard about Bill Gates. A co-founder of Microsoft, he was the only person to have held the post of "Chairman of the Board of Directors" until recently. Since 2000, Gates has given the helm of the company to his closest collaborator Steve Ballmer and since 2008, he has devoted himself to the foundation established by him and his wife. The billionaire philanthropist had rarely been involved in the company’s affairs, although his close associates claimed that he controlled the situation.

It is hard to believe the latter, as the company had experienced several significant crises, each of them showing its increasingly inadequate response to the rapidly changing market. I will only mention the emergence of netbooks for which Microsoft had extended the support of the ubiquitous Windows XP operating system, which was followed by another crisis due to the negative reception of Windows Vista by private and corporate customers. While the company was trying to regain its lost reputation and preparing to launch Windows 7 in order for it to replace Vista, smartphones had appeared on the horizon. When the mobile revolution was supplemented by tablets, Microsoft was in the position of a trader offering a product from an increasingly shrinking market. Of course, it would be ridiculous to give up a company with billions in annual earnings. Moreover, the company had successfully segmented its products, covering several key markets, except that of mobile devices.

Against this background, Bill Gates had repeatedly expressed his full support for, and confidence in, the skills of his successor Steve Ballmer. Over the past three years, the company has tried to catch up with the competition but Windows 8 RT for tablets and Windows Phone for smartphones have not become very popular, despite the great effort. There were some funny situations, namely Oprah Winfrey advertising Microsoft mobile products through her iPad and episodes of aggression on the part of Ballmer towards employees using competing products.

Finally, Bill Gates has yielded his leading role in the company, albeit for form’s sake, and received the title of Microsoft Technology Adviser. Many people consider this as retirement, although Gates himself says that he will again devote some time to working directly with various technical teams.

"My time will be about two-thirds Foundation and one-third Microsoft. I will focus on product work mostly," states Bill Gates.

In his words, the cloud and mobile devices can help people communicate and collaborate in new ways. "The operating system won’t just be on one device and the information won’t just be files - it will be your history, enabling you to review memories of things like kids growing up," said Gates.

Even the popular Office suite of business applications has plenty of room for innovation, adds the technology adviser to Microsoft.

Here is what Bill Gates said after leaving the post of chairman of the board of directors:

Steve Ballmer, who had headed the company since 2000, announced last August that he was retiring. There was persistent talk about changes in Microsoft, and journalists and analysts shared information from internal sources that the shareholders were exerting strong pressure for changes at the highest levels of the company management. A major restructuring was undertaken and a few believed that there would be a drastic change in the management. Stephen Sinovski who was indicated as a successor to Ballmer had just left the company. Despite rumours of a great lack of trust in Ballmer on the part of Microsoft employees, it seemed that the confidence declared by Bill Gates would strengthen his position this time.

As it turned out later, this was not enough. Ultimately, Ballmer had to retreat and the change that had long been awaited had happened. In his official statement, Ballmer informed us that his successor would be elected in the next few months or within one year. Moreover, a special committee had been formed to look for a man of vision and innovative spirit, wanting to change the lagging position of the company. This role did not appeal to the software giant, as demonstrated, and it was not good at it as it had been too accustomed to its monopoly position.

Here is what Steve Ballmer said upon parting:

After many months of speculation and mention of all sorts of names of prominent executives from corporate America, the company has eventually selected an insider. The reason is that all external applicants refused, one by one. There was a view that none of the possible external candidates would want two former executives to interfere in theirwork.

The new Microsoft CEO is Satya Nadella, one of the long-time company employees. Who is Satya Nadella?

Nadella is 46 years old, married and has three children. He has worked at Microsoft for 22 years, during which time he has held a variety of posts. Significant achievements  include his attempts to turn Bing search engine into a major rival of Google as well as the rapid development of Microsoft cloud services and their presentation to corporate clients.

He is described as a quiet and humble man. Nadella himself states that family, curiosity and thirst for knowledge are what characterise him most. He had worked at Sun Microsystems before joining Microsoft. He has acquired Master’s degrees in Computer Science from the University of Milwaukee and in Business Administration from the University of Chicago.

Here is the first statement by Nadella:

John Thompson is the man who has replaced Bill Gates, heading Microsoft board of directors. There is not much talk about him. He joined the board of directors of the company in February 2012 and his resume shows that he was "executive manager" at Symantec and Virtual Instruments. He is a member of several government committees. Here is his statement after the election of Satya Nadella:

"It is very important how the three of them will get along. It is not clear whether Satya will be permitted to make the important changes which Microsoft needs both as regards products and people," states Bill George, a professor at Harvard University, for Reuters.

The majority of analysts expect that the appointment of Nadella will not lead to major changes in the behaviour and development of Microsoft. He is defined as "a safe bet". "The strategy set in 2013 shows the direction of the company," states Sid Parak, an analyst at McAdams Wright Ragen. Its main points are focused on devices and services, and on integration of platforms. Even when Ballmer announced his retirement, it was expected that the next CEO should just follow his plan, being able to further develop it if necessary. Nadella along with Bill Gates seems like the right choice as regards the achievement of this goal. The question is whether this is the right strategy for Microsoft, although the company's management seems to be convinced of its success.

Time of changes

Just a week after the announced changes the rumours about the first steps taken by Nadella are multiplying. The most challenging and daring one comes from the technology blog, ''The Verge'', which claims that, according to inside information, Microsoft is considering the option of  Windows supporting Android applications.

The idea is still at an early stage of discussion but it has gained the support of employees occupying different posts in the company. If it is implemented, Android applications will appear in Windows Store and they can be installed on both Windows Phone and Windows 8.

In technical terms, the installation support for Android in Windows is feasible, and it is gradually becoming easier. The reason is that CPU manufacturers Intel and AMD have already developed chips that support parallel operation of both platforms.

The main concern of opponents of the proposal is that it can lead to the disastrous end of the Windows platform in general. If developers knew that their applications for Android would be used by Windows users, it would be useless and meaningless for them to put effort into creating programs just for Microsoft platforms. According to those who are hesitant, however, although this may lead to a decline in mobile applications for Windows, it will not affect the traditionally more complex programs for the operating system.

Another point is that, through this decision, Microsoft will motivate more users to continue using Windows devices, without resorting to the use of other platforms. Android has a very large user base, which can be a kind of attractive point to Windows, if there is significant compatibility between both platforms.

This unprecedented move would be dictated by both Microsoft, which is lagging behind in terms of mobile devices and its poor results over the past two years while trying to catch up with its competitors. Microsoft has attempted to encourage developers to develop more applications for Windows Phone and Windows 8. The company has developed additional software that helps the conversion of applications from other platforms to Windows, reduced the differences between the versions of the operating system for the different devices and has even offered some financial incentives. However, the popularity of mobile products running Windows is far from what is desired, as their market share is only about 3%.

The challenges before Microsoft are greater than ever. The PC market is shrinking, Windows 8 is facing a cold reception from users and the presence of the company on the growing market of mobile devices is timid and unsatisfactory. The new management should focus on innovation as a source of development. In conclusion, I will mention one of Satya Nadella’s reflections, which describes the situation very well: "Our industry has no respect for tradition, it respects only innovation."