Microsoft names new Xbox chief, promotes enterprise/cloud chief


Phil Spencer, until now the head of Microsoft's (MSFT +2.4%) game studios, is now in charge of the entire Xbox unit (hardware, games, Xbox Live). He takes command of a business that has seen several high-profile departures over the last year (inc. division chief Don Mattrick and product chief Marc Whitten).

Interestingly, Spencer will report to OS chief Terry Myerson rather than Stephen Elop, who will be in charge of Microsoft's other hardware ops once the Nokia deal closes (taking over from Julie-Larson Green). His gaming background is particularly noteworthy in light of how the PS4's strong gaming focus (along with its lower price) is seen as contributing to its sales lead over the Xbox One.

Also: Microsoft has made former Azure development chief Scott Guthrie the permanent head of its enterprise/cloud ops (includes products previously within the Server & Tools unit), and promoted him to the status of EVP. Guthrie has been enterprise/cloud's acting chief since Satya Nadella was named CEO.

Shares are making fresh post-Dot.com bubble highs amid a tech rally.

From other sites
Comments (17)
  • jammerculture
    , contributor
    Comments (402) | Send Message
     
    Smart. Take the peoples in charge of the greatest successes within the units and put them in charge of the whole thing.
    31 Mar 2014, 12:33 PM Reply Like
  • Kamminga
    , contributor
    Comments (186) | Send Message
     
    Not only that. MSFT is clearly totally committed to the Nokia deal. So firstly watch the share price, and secondly watch NOKs Q1 results, which will show D&S separately. Can't wait....
    31 Mar 2014, 01:23 PM Reply Like
  • joshvegas
    , contributor
    Comments (512) | Send Message
     
    Nadella seems to do it all by the book:)
    Good to see ne 52w high.
    31 Mar 2014, 01:36 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    2months in Nadella is the man for the job. Every week seems like a 52-week high, even 10-year highs.
    31 Mar 2014, 03:22 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (1214) | Send Message
     
    Everybody seems to think this Nadella guy is alright - who would've ever guessed? From the way it sounded, I thought this company would've been out of business by now...

     

    2-3 months ago, he was an "insider" (dirty word) who wouldn't be able to change anything, and Mulally was the only guy for the job; it's amazing how wrong the media and analysts look already - maybe it's because that line was never based on reality anyways?

     

    Is everybody done whining about the fact that the CEO search took a whole six months? Has it done the irrevocable damage so many were calling for?

     

    Disclosure - long MSFT for a few years now, and not going anywhere soon.
    31 Mar 2014, 04:10 PM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    As fun as it is to bash the media and analysts when new 52-week highs are being made, I don't think that's a fair assessment. Mulally was Wall Street's preferred choice, but Nadella was seen as a decent alternative. Microsoft's shares moved higher after the first report came out stating he'll get the job.

     

    http://seekingalpha.co...
    31 Mar 2014, 05:05 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (1214) | Send Message
     
    In all fairness, I was bashing them at the time; I think there conclusions and suggestions throughout this whole process have been ludicrous. I think the same thing will prove true with Bing a few years from now (time will tell).

     

    By the way, I don't care what the stock does in the short term; I'm laughing at the conclusion that an "insider" cannot do the type of things Nadella has already started to do (in less than 60 days). That was a narrative many reported, without any rationale for doing so. They simply regurgitated the Wall Street line as expected.

     

    As you note (and many reported), Mulally was the preferred Wall Street pick. What I'm still waiting on is an explanation as to why, as well as why an "insider" is a poor choice (and yes, people were making that argument at the time ). I never did, and likely never will, get an answer.

     

    Now you will see the tide turn - people follow the stock price for their conclusions, and now Nadella was an ingenious pick for MSFT; the right man at the right time. How quickly we forget things like this SA post from January 8th about Nadella: "concerns exist about Nadella's business/sales expertise." Are those concerns gone now - or is there still concern about his business expertise? What would he need to have done to gain this expertise - running the second largest (with revenues in excess of $20 billion) and fastest growing division at Microsoft didn't meet that hurdle?

     

    Finally, this is from December 18th: "Microsoft (MSFT -1.4%) is down 3% over the last two days, as worries grow (thanks to John Thompson's recent comments) Alan Mulally (F -6.7%) won't be named Steve Ballmer's successor." Sounds pretty dire - like the firm that was calling for a 10% boost on Mulally's hire, and a 10% decline for anybody besides him; in my mind, it was all pure nonsense - but it got repeated without question.

     

    One would hope somebody would stand up and say, can you really be so certain about a CEO before he is even hired after some recent "saviors" who quickly fell back to Earth (like Ron Johnson)? And maybe there is another individual on this planet who is capable of running MSFT besides Alan Mulally?

     

    People weren't asking those questions for the most part - particularly in the media and among the analysts.
    31 Mar 2014, 08:53 PM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    << What I'm still waiting on is an explanation as to why, as well as why an "insider" is a poor choice (and yes, people were making that argument at the time ). >>

     

    I think the reasoning was that an insider was less likely to make big moves regarding cost cuts, or the shedding of unprofitable/lightly profitable businesses such as Bing and Xbox. Assuming an investor wants Microsoft to do those things, it's still a valid concern regarding Nadella.

     

    << How quickly we forget things like this SA post from January 8th about Nadella: "concerns exist about Nadella's business/sales expertise." >>

     

    That quote isn't relaying media or analyst thinking. It was relaying concerns members of Microsoft's CEO search committee had about Nadella, per Kara Swisher's sources. Here's the full paragraph from the re/code article:

     

    "Mulally’s decline as frontrunner was already clear in December, as was much reported (including by me), returning focus on other candidates. Internally, the leading one is enterprise chief Satya Nadella, who is a favorite among employees due to his geekier cred. Still, there are worries that Nadella does not have significant enough business and sales expertise."

     

    Nadella has a very strong product management and engineering background, but unlike many (though by no means all) enterprise software CEOs, he isn't a sales guy. I'm guessing that was the concern among certain committee members.

     

    << Microsoft (MSFT -1.4%) is down 3% over the last two days, as worries grow (thanks to John Thompson's recent comments) Alan Mulally (F -6.7%) won't be named Steve Ballmer's successor." Sounds pretty dire - like the firm that was calling for a 10% boost on Mulally's hire, and a 10% decline for anybody besides him; in my mind, it was all pure nonsense >>

     

    I'm sorry that you took those words to sound dire. They were simply relaying a fact: The stock fell because it appeared more likely that Mulally wouldn't get the job. Just as it rose after it was reported Nadella would get it.
    31 Mar 2014, 09:58 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (1214) | Send Message
     
    "I think the reasoning was that an insider was less likely to make big moves regarding cost cuts, or the shedding of unprofitable/lightly profitable businesses such as Bing and Xbox. Assuming an investor wants Microsoft to do those things, it's still a valid concern regarding Nadella."

     

    Is there any evidence to suggest that is the case - that an insider would not be willing to make reasonable changes if they're justified? Does being an employee of Microsoft mean you are not allowed to do those things if you become CEO?

     

    "I'm sorry that you took those words to sound dire."

     

    The suggestion by the analyst that the market cap would swing by $60 billion on the decision - yeah, I would say that's pretty dire. This is what I'm talking about when I say media / analysts; of course they were dead wrong (they being analyst Kash Rangan of BAML), but that's besides the point...
    31 Mar 2014, 10:57 PM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    << Is there any evidence to suggest that is the case - that an insider would not be willing to make reasonable changes if they're justified? >>

     

    Given that senior execs (inc. Nadella) have been brought up within the system, and might also feel some loyalty to Gates and Ballmer, it's not far-fetched to think that an insider could be less willing to back big changes Gates and/or Ballmer would oppose.

     

    While the CEO search was going on, there were multiple reports about how outside candidates were worried Gates/Ballmer's continued influence would prevent them from making the changes they wanted. Correctly or not, there was a belief that an outsider like Mulally was more likely to shake things up.

     

    << The suggestion by the analyst that the market cap would swing by $60 billion on the decision - yeah, I would say that's pretty dire. >>

     

    You were quoting a sentence about a 3% change over two days. That's what I was responding to, not anything about an analyst's opinion.
    1 Apr 2014, 01:14 AM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (1214) | Send Message
     
    "Given that senior execs (inc. Nadella) have been brought up within the system, and might also feel some loyalty to Gates and Ballmer, it's not far-fetched to think that an insider could be less willing to back big changes Gates and/or Ballmer would oppose.

     

    While the CEO search was going on, there were multiple reports about how outside candidates were worried Gates/Ballmer's continued influence would prevent them from making the changes they wanted. Correctly or not, there was a belief that an outsider like Mulally was more likely to shake things up."

     

    So basically your answer is yes, ANY insider is less likely to institute changes, without knowing ANYTHING about the individual in question. When I hear generalizations like that, I start to get skeptical; you might make the exact opposite argument - that someone who has worked on Bing (like Satya, for example), would know better than any outsider what challenges the business faces long term, and can act accordingly. Just a thought...

     

    "You were quoting a sentence about a 3% change over two days. That's what I was responding to, not anything about an analyst's opinion."

     

    And here was your first quote, which started this whole conversation: "As fun as it is to bash the media and analysts when new 52-week highs are being made, I don't think that's a fair assessment."

     

    Do you think it was dire to predict a $60 billion swing in market value based on whether or not Alan Mulally was hired? That's more than Costco's entire market cap, as a reference point.

     

    More importantly, can anybody know with that much certainty that he was the man for the job? You might want to check what JCP stock did when RJ was hired before you answer. That gets back to the root of this whole discussion - knowing things with too much certainty (like that an outsider can't change anything important, and Mulally is the ONLY guy for the job, and so on).
    1 Apr 2014, 08:01 AM Reply Like
  • Eric Jhonsa
    , contributor
    Comments (1276) | Send Message
     
    << So basically your answer is yes, ANY insider is less likely to institute changes >>

     

    That's not what I said at all. I simply explained why Wall Street thought an outsider was more likely to implement major changes. Time well tell if that assessment was correct or not.

     

    << Do you think it was dire to predict a $60 billion swing in market value based on whether or not Alan Mulally was hired? >>

     

    Yes. But that wasn't mentioned in the quote you were previously replying to.

     

    FWIW, I think Nadella was a decent CEO choice, and his age and enterprise/tech chops might make him a better one than Mulally long-term. But I think the odds are also lower that he'll back major restructuring moves or cost cuts in the near-term. Though I've definitely seen crazier things happen.
    1 Apr 2014, 03:12 PM Reply Like
  • Transcripts&10-K's
    , contributor
    Comments (1214) | Send Message
     
    "Yes. But that wasn't mentioned in the quote you were previously replying to."

     

    I should have quoted that individual analyst in my first comment rather than painting the analyst community with a broad brush - duly noted. The media is largely just a mouth piece for the analysts (regurgitating their opinions without requiring an explanation for the questionable ones), so the same goes for them - my apologies.

     

    "But I think the odds are also lower that he'll back major restructuring moves or cost cuts in the near-term."

     

    This could start a whole different discussion: is there any reason to think a major restructuring or cost cuts are needed? Let's just stop here lol
    1 Apr 2014, 03:50 PM Reply Like
  • wil3714
    , contributor
    Comments (2273) | Send Message
     
    Transcript brings up many good points in that $60B in value change over night. The market does act irrational. If Mulally was the right man or Nadella, or Tony Bates etc its all speculation.

     

    I hear people talk of a tech CEO needs a background in tech. Thats total BS since Jobs was more of a businessman/marketer, not technology
    1 Apr 2014, 08:43 PM Reply Like
  • Ruffdog
    , contributor
    Comments (3267) | Send Message
     
    Stephen Elop is being left out in left field; if the NOK deal does not go through, he is history.
    31 Mar 2014, 05:21 PM Reply Like
  • 192492
    , contributor
    Comments (9) | Send Message
     
    Long msft since 1987. 62 cents a share for most. Once, was 60 will be there again.
    31 Mar 2014, 10:29 PM Reply Like
  • User 15079272
    , contributor
    Comments (84) | Send Message
     
    I don't think nadella has proven himself at all though i do think he is a good choice. 60 is not enough time to change things drastically. I think he has helped change the perception of the company to a more positive one. the only person i didn't want was Elop for CEO. the course MSFT is on right now is still one set out by balmer. Nadellas vision will become more apperant after a full year or two when he has had time to influence the change he wants. a company as large as MSFT can't change that rapidly. I am Long MSFT and if microsoft can execute properly over the next 5 years and there are no major market issues the stock will likely hit $50 by years end and $100 in 5 years(if executed properly). that second prediction is a wild guess seeing as there are to many variables to take into consideration in that time frame.
    1 Apr 2014, 12:59 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs