CEO Satya Nadella admits Microsoft’s biggest mistake
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Microsoft CEO Satya Nadella in an interview with YouTuber Dwarkesh Patel.
New Delhi: Microsoft CEO Satya Nadella has acknowledged that one of the company’s biggest miscalculations was failing to foresee the dominance of search, a market that Google mastered with precision. He admitted that Microsoft initially assumed the web would remain decentralised, underestimating search as its most valuable business model.
Reflecting on this strategic oversight, Nadella called it a crucial lesson, stating, "We (Microsoft) missed what turned out to be the biggest business model on the web because we all assumed the web is all about being distributed."
Speaking with YouTuber Dwarkesh Patel, he elaborated on how Microsoft misread the potential of search while Google capitalised on it flawlessly. "Who would have thought that search would be the biggest winner in organising the web? We obviously didn't see it, and Google saw it and executed it super well," he remarked.
Nadella emphasised that merely understanding a technological shift is not enough; companies must also recognise where value creation will occur. He pointed out that adapting to shifts in business models is often more challenging than keeping pace with technological advancements. "These business model shifts are probably tougher than even the tech trend changes," he observed.
Throughout his career, Nadella has witnessed multiple technological transformations, including the transition from mainframes to personal computers and the rise of client-server architecture. He recalled the emergence of the web and how the launch of Mosaic and Netscape browsers forced Microsoft to adapt. While the company managed to adjust well to the browser era, it failed to anticipate the central role of search in shaping the internet economy.
Having joined Microsoft in 1992 after working at Sun Microsystems, Nadella has been at the forefront of various innovation waves. He holds a degree in electrical engineering from Mangalore University, a master’s in computer science from the University of Wisconsin-Milwaukee, and an MBA from the University of Chicago.
With IANS inputs