Analysts have been calling for change at Microsoft Corporation (NASDAQ:MSFT) for quite some time, and the selection of insider VP Satya Nadella was initially a disappointment and seen a safe choice. However, another team of analysts has changed their views on the selection of Nadella. Morgan Stanley’s Keith Weiss and Melissa Gorham think Nadella will be able to bring about some big changes in how Microsoft executes its strategy.
How Microsoft workers see Nadella
They were at Microsoft Corporation (NASDAQ:MSFT) headquarters on the day the company revealed that Nadella would be the next CEO, so they began asking workers at the company what they think of him. Many of those they spoke with gave them answers they expected to hear, like that he had a very strong technical background and that he enjoyed learning new things. They also weren’t surprised to hear how committed he is to cloud computing.
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However, they were surprised to find out that Nadella’s co-workers at Microsoft Corporation (NASDAQ:MSFT) see him as having a “strong business acumen,” being an “agile and deft decision maker” and being willing to look for and adopt new ideas. In general, they say that the selection of an insider who also has a solid engineering background, paired with a more active advisory role for Bill Gates, was very well-received by employees there. The general consensus they got was that Nadella, with Gates at his side, would be able to keep Microsoft moving forward while also innovating.
Microsoft needs to innovate
One of the things many have complained about is that Microsoft Corporation (NASDAQ:MSFT) hasn’t really innovated very much over the last few years. However, the Morgan Stanley team thinks things could change at Microsoft. Specifically, they believe the way the company executes its strategy will improve.
Nadella’s willingness to look for alternative ideas, even when they don’t fit in with tradition at Microsoft Corporation (NASDAQ:MSFT), could mean he will be willing to find and utilize strategies that the company otherwise wouldn’t. For example, he decided to allow for open source code to be used in the Azure framework—something Microsoft never would have done before. Also the company began working with the Open Compute project and even partnering with Oracle Corporation (NYSE:ORCL), which had been a competitor in the past.
The Morgan Stanley team kept their Equal-Weight rating on Microsoft Corporation (NASDAQ:MSFT), suggesting that perhaps the long wait we had while Microsoft’s board chose Steve Ballmer’s successor will be worth it.
Shares of Microsoft Corporation (NASDAQ:MSFT) rose 1% in afternoon trading.