‘One lesson learned’: Satya Nadella on Microsoft’s biggest oversight

Microsoft CEO Satya Nadella said that his biggest oversight was failing to anticipate the dominance of search, which Google capitalised on.

Stating that this was “one lesson learned,” he added that “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,” in a podcast with YouTuber Dwarkesh Patel.

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“Who would have thought that search would be the biggest winner in organising the web?” he mused. “And so that’s where we obviously didn’t see it, and Google saw it and executed super well.”

He mentioned that a big lesson in this was how “you have to not only get the tech trend right, you also have to get where the value is going to be created with that trend.”

“These business model shifts are probably tougher than even the tech trend changes,” he noted.

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Examples would be the four major technological transformations Nadella was part of, including the first from mainframes to personal computers and then to client-server architecture.

Another example was the emergence of the web, during which the Mosaic browser was released shortly after Nadella joined Microsoft. This was followed by the Netscape browser.

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“We had the browser moment, and so we had to adjust. And we did a pretty good job of adjusting to it because the browser was a new app model,” he added.

Nadella joined Microsoft in 1992. Before that, he was a member of the technology staff at Sun Microsystems. He earned a bachelor’s degree in electrical engineering from Mangalore University, a master’s degree in computer science from the University of Wisconsin – Milwaukee and a master’s degree in business administration from the University of Chicago.