Microsoft’s resurgence on the back of its cloud business has been well documented. From being a company many believed would soon be forgotten five years ago to flirting with a trillion dollar valuation today, the core factor has been cloud. Microsoft’s winning cloud strategy has been driven by CEO Satya Nadella.
However, despite Microsoft’s huge cloud success, the company is not the leader in the sector. In fact, Amazon Web Services has significantly more market share than Microsoft Azure. Despite that, Microsoft is thriving in the cloud even though the company came from a different avenue.
When we think of companies that have exploded in the cloud, they grew within the sector as cloud organizations. These companies include AWS, Salesforce, and Slack. Microsoft is something of an outlier as it is the only company to make a properly successful switch from traditional IT company to the cloud.
In fact, Microsoft has achieved this cross-over in several aspects, with Azure and Office 365. Speaking to Business Insider, Microsoft chairman John Thompson says the company’s cloud success can be attributed to Nadella. Specifically, a major decision the CEO took early in his tenure.
Nadella eased back on the importance of Windows and Office, which were Microsoft’s main products for decades.
Cloud success is “clearly attributable to Satya,” Thompson said.
“While Windows was a very powerful platform for the company for many, many years, it clearly has evolved. And that It’s not just about cloud. It’s about what services you offer in the cloud.”
Nadella realized cloud was the future and decided to change the culture of Microsoft. It’s worth noting his decision to downgrade Windows and Office still irks some long-time Microsoft fans. These traditionalists believe Nadella is killing the Windows platform. While that’s open to debate, there is little doubt Nadella’s push to the cloud has paid off.
Thompson also points to the increasing move into open source Microsoft has embarked on since Nadella became CEO. For those who are familiar with the company, it is still a strategy that is amazing. Microsoft was completely against open source in the past. The company would fiercely chase rivals, especially those offering open alternatives to its products.
“At the core, the company has evolved to be an open source company, not just a Windows company,” Thompson adds.
Speaking about Microsoft’s market cap reaching a trillion-dollar valuation, Thompson puts it all down to Satya Nadella:
“I give him credit for that because that is at the core what drives the performance of the company day in and day out.”