How has Microsoft changed under Satya Nadella

Manager Satya Nadella at Microsoft has changed these 5 things

Microsoft recently reached a new milestone. For the first time in the company's history, the Windows inventor achieved more sales with its Office 365 cloud software suite than with its classic Office software package, which is installed on the user's computer.

This milestone was also positive for investors, because with the booming business of renting software over the Internet (cloud computing), Microsoft shares recently climbed to a new record high of over US $ 74 - Microsoft shares rose within 5 Years by more than 130%.

Microsoft boss Satya Nadella, who took over the helm from Steve Ballmer in 2014, is considered to be the maker of the success. But what has Satya Nadella changed at Microsoft so that the US software company is so successful again?

Before moving to the top of the company on February 4, 2014, Satya Nadella managed the cloud and enterprise business at the world's leading software company Microsoft. This explains many of the manager's strategic directional decisions. 5 things Satya Nadella changed at Microsoft:

1. Focus on the cloud business

Like no other Microsoft manager before, Satya Nadella has decisively advanced the cloud business at Microsoft. Since the release of Windows Azure in 2010, the cloud computing platform has been expanded quickly and rapidly, so that Microsoft is now number 2 in this market behind Amazon Web Services (AWS).

The intelligent cloud business was most recently responsible for US $ 6.7 billion and thus for around 28.5% of total Microsoft sales. Azure sales recently grew by around 97%.

2. Microsoft returns to profitability

No less important for Microsoft's triumphant advance in recent years was the return to profitability. Six months before Satya Nadella took office, Microsoft still had to show a quarterly loss.

Nadella responded with tough measures and has initiated one of the largest layoffs at Microsoft, which has cost several thousand Microsoft employees their jobs. But the cuts were apparently necessary, Microsoft is now making profits again and is growing at double-digit rates in the cloud.

3. Microsoft pulls out of the cellular market, peace with Apple

Nadella's predecessor Steve Ballmer had arranged the deal to take over the Nokia cell phone business. But Satya Nadella never made a secret of the fact that he didn't like the deal very much.

In the spring of 2016, the mobile communications adventure was over. Microsoft sold the cellular phone business to Foxconn Technology and the newly formed HMD Global for $ 350 million. Microsoft had previously written off the majority of the purchase price (approx. 7.2 billion US $) on the acquired Nokia division.

Incidentally, Microsoft made peace with Apple, ending a decades-long feud between the two companies. In 2014, Microsoft's Satya Nadella announced that Office apps will also be available on the iPad in the future.

4. Microsoft launches first laptop

Microsoft is now getting involved in the portable PC market for the first time. In 2015, Microsoft presented its Surface Book and thus its first laptop ever. At that time, the Surface Book was already about twice as fast as the MacBook Pro from Apple, making Microsoft a serious rival to Apple in this category for the first time.

At the beginning of 2015, Surface sales exceeded the billion-dollar mark for the first time - thanks to the popularity of the Surface Book and Surface Pro with corporate customers.

5. Microsoft buys LinkedIn and becomes number 1 among business networks

It was the largest takeover in Microsoft's history to date. In 2016, Microsoft announced the acquisition of the career network LinkedIn - for $ 26.2 billion. This is the first time Microsoft has ventured into the social media market on a larger scale and catapulted itself to number 1 among business networks in one fell swoop - LinkedIn contributed US $ 1.1 billion to total sales in the most recent quarter.

Conclusion: Microsoft is developing into a cloud giant under Satya Nadella

No question about it, with Satya Nadella a breath of fresh air is blowing through the Microsoft offices, opening up new perspectives for employees and investors. Under Satya Nadella, Microsoft has advanced to become a cloud giant with offerings such as Office 365 and Azure, and with LinkedIn, it has also had a say in social media.

It remains to be seen whether Microsoft can seriously challenge Apple in the hardware segment with its Surface product family. The bottom line is that the change in management in 2014 has already paid off for investors. Thanks to Satya Nadella, Microsoft is much better positioned and more profitable than it was 5 years ago - and this is also reflected in the Microsoft share.

Some analyst firms (Wells Fargo and Bernstein) therefore expect the Microsoft share to continue soaring and already see price targets of over US $ 80 for the paper.

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