In four years, CEO Satya Nadella has transformed Microsoft from tech has-been to high-flier — and the most valuable company in the world. In an exclusive interview, he shares his secret: a new-look culture that has radically changed how Microsoft operates, inside and out.
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n early 2016, two years into running Microsoft, CEO Satya Nadella needed advice from one of his newest employees, the cofounder of an app-tool maker Microsoft had just bought. Nadella was close to pulling off his blockbuster $27 billion acquisition of LinkedIn, but he wanted to talk about another company he coveted: GitHub. “Can we do it?” Nadella asked the executive. “Have we earned the trust?”
Back then, the answer was no. GitHub is the virtual watercooler of software development, a site where millions of programmers talk shop and share code across company boundaries. Microsoft had earned a reputation during its 1990s heyday as its polar opposite, an insular software belligerent, and GitHub was seen as wanting nothing to do with it. But after watching Nadella lead the Redmond, Washington-based giant for two years, GitHub made a surprise move, choosing Microsoft over Google as its acquirer this past June.
The December 31,2018 issue of Forbes featuring Satya Nadella.
It was the latest coup for Nadella, 51, who’s breaking free of Microsoft’s recent past by returning it to its roots under cofounder Bill Gates.
“Bill used to teach me, ‘Every dollar we make, there’s got to be five dollars, ten dollars on the outside,’ ” Nadella tells Forbes, in his first sit-down interview since the $7.5 billion deal closed.
Great companies were once built on Microsoft’s code, Nadella says he was reminded by Gates. Nadella’s mission: Rebuild Microsoft brick by brick until it can happen again. “That’s what I want us to rediscover,” he says.
Signs of Nadella’s progress are found everywhere. From a Microsoft voice assistant that integrates with Amazon’s Alexa to a deepening alliance with Samsung and, most crucially, in its financial statements. Revenue, at $110 billion, is growing at a double-digit percentage after slumping for most of the past decade, in large part because of the hard-charging—and high-margin—cloud suite the company has built around Office and Azure, Microsoft’s challenger to Amazon’s cloud juggernaut.
Net profits are at $16.6 billion, an increasing share of which is attributable to Azure, which is growing at 91% annually with multiyear contracts only just starting to boost the bottom line. Microsoft ended November as the most valuable company in the world, eclipsing Apple and Amazon. The consensus among analysts is that it will hit $1 trillion in market cap sometime next year.
Read the complete Just 100 2019: America’s Best Corporate Citizens
Much of the credit belongs to Nadella, a Microsoft near-lifer who took the reins from Steve Ballmer in 2014 and immediately started knocking down walls.
