Satya Nadella has given Microsoft Corporation (NASDAQ:MSFT) a new lease of life on the software front, thanks to a change of direction at the firm. It is no surprise that he tops the list of most influential tech leaders that was released by Juniper Research on Wednesday.
The list showed off some of the biggest names in tech including Tim Cook, Eric Schmidt and Mark Zucekerberg. Their places were a little bit of a shock, however. In second place behind Nadella was Jony Ive, Apple’s new Chief Design Officer.
Microsoft Cloud Prospects
Long before Satya Nadella took over, Microsoft was seen as an aging tech giant marred with growth concerns. The company found it tough to reinvent itself. Things changed for the better since he sat in the hot seat for the first time, however. Now Microsoft Corporation is setting the pace on the cloud front, an area that will dictate the firm’s growth for years to come.
The cloud has been a strong source of earnings at Microsoft as the firm gains market share at the expense of its peers. Revenues in the area have more than doubled thanks to growth in demand for cloud solutions.
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Shareholders also have something to smile about. Under Satya Nadella the stock price has surged, as prospects look bright in the software business.
Salesforce targeted for growth
Microsoft Corporation is seen as the one of the best stock picks for investors who want exposure to cloud based firms. The company plans to grow the cloud business to $20 billion in annual revenue by 2018. It will not be an easy task as competitors like Amazon.com, Inc. (NASDAQ:AMZN) continue to excel in the sphere.
Rumors were rife that Microsoft Corporation was keen on buying Salesforce. The $55 billion offer was turned down by that firm’s board. Salesforce.com, inc. (NYSE:CRM) is a pure cloud play that can provide further edge in the space to the latter.
Satya Nadella reportedly pushed hard for the deal to acquire Salesforce, but the two firms could not agree on a price. Salesforce CEO Marc Benioff wanted a price of $70 billion according to reports.
Salesforce has the upper hand in parts of the cloud business. The firm has a total market share of about 18% compared to Microsoft’s 6.2%.
Jewel in the cloud
FBR Capital Markets analyst Dan Ives told Reuters: “Salesforce is the golden jewel in the cloud, given its leadership position and stellar brand and distribution, all that would have fit well within the Microsoft ecosystem in our opinion.”
Nadella can, for the time being, take his place as the most influential CEO in Silicon Valley with pride, but there’s a hard road ahead for Microsoft. Without Salesforce growth in the cloud will be that bit more difficult to achieve.
Shares have gained just 2% since the start of the year. That’s not the kind of rise that earns a gold star, or any kind of award, from shareholders.