Satya Nadella Needs to Pull a 365 at Microsoft

NEW YORK (TheStreet) - Microsoft (MSFT) CEO Satya Nadella's success or failure will most likely hinge on Office 365 and Windows Azure - both of which could transition the company from desktops and large IT data centers to mobile devices and cloud computing. However, Nadella will most likely focus on trying to change customer and investor perceptions about the company's existing status quo. 

Instead of some radical change, for instance a spinoff of Xbox, the wildly successful console business, and Bing, which has a web search partnership with Yahoo! (YHOO), Nadella is more likely to try to weave more coherent ties between Microsoft's growing range of assets.

In that sense, he won't likely pull any major U-turns or 180's in his first days at Microsoft. Those expectations are underscored by what is already in motion at Microsoft.

The company, arguably, already has seamless software offering that can succeed in a mobile world. Office 365 combines all of Microsoft's traditional strengths in productivity with the ability to connect to mobile devices and cloud infrastructure. Windows Azure, meanwhile, represents years of investment in cloud infrastructure that now may increasingly generate revenue and profits for the company.

One of Nadella's most important challenges will be communicating the strength of Microsoft's big bets on the future like Office 365 and Windows Azure to customers and investors.

On a Tuesday afternoon webcast, Nadella said he would spend the bulk of his initial time as CEO speaking with customers, partners and investors. That indicates that communications will be an early priority of Nadella's, and possibly an area where he may succeed where the company has previously failed.

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