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Microsoft CEO Nadella Touts New Opportunities to Lead

Microsoft Corp. (MSFT) Chief Executive Officer Satya Nadella said he will seek to focus on businesses where the company can lead, rather than harp on missed opportunities in areas like tablet computers and hardware.

“The question is, what is the next thing that is going to make us better?” Nadella said in a keynote interview yesterday at Re/code’s Code conference in Rancho Palos Verdes, California. “It’s the hunt for what is it that is the inflection point that matters more than what caused us to miss.”

In Nadella’s first public interview since replacing Steve Ballmer as CEO in February, he also said he doesn’t plan to change Microsoft’s plans for Xbox or sell off the Bing search engine. The company will continue to span both enterprise and consumer markets, he said. He highlighted Microsoft’s focus on products that run on any device, as well as the areas of Web-based cloud computing, mobile and business software.

As part of that effort, the Redmond, Washington-based company also used the conference to unveil a new Skype product that translates Web-conference conversations in real time. Set for a test release later this year, the Skype translator was demonstrated in a conversation between Gurdeep Singh Pall, who oversees Skype, and a German speaker. The product provides both a spoken and text translation and will initially be available as a stand-alone offering before being combined into the Skype application.

‘Global Product’

“Skype is a very global product -- it’s all about connecting people that are separated by distance,” Pall said in an interview. “One of the biggest barriers that still remains is really the language barrier.”

Microsoft isn’t sure how many languages will be included initially, Pall said. The company will release new languages as they meet the bar for translation quality.

The software relies on work by Microsoft’s research arm, as well as the Bing search unit, which has its own translation product for Web pages and Internet content, he said. The Skype service needs to use speech recognition to understand the speaker, machine learning for the translation, and text-to-speech technology to send the translation to the listener.

Since taking over, Nadella has sought to focus the world’s largest software maker on mobile and cloud products. He has signaled a desire to shift attention to producing software for rival operating systems like Apple Inc.’s iOS and Google Inc.’s Android and has shuffled management in areas like marketing, business development and the Xbox game console.

Tablet Event

A company event earlier this month to release a new Surface tablet was noteworthy for what the CEO chose not to unveil. While Microsoft showed a larger model of its Surface Pro, a planned smaller tablet failed to meet with the approval of Nadella and his executives and was pulled from the event, people familiar with the matter said last week.

At the session in New York, Nadella didn’t discuss the missing device and noted that Microsoft won’t seek to develop hardware to compete with its partners and will instead focus on areas where it can develop something unique. His comments suggest a more selective approach to building devices rather than going for the largest number of offerings.

In Nadella’s first quarter as CEO, Microsoft posted better-than-projected profit as cloud initiatives and cost controls begun under Ballmer boosted results.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Jillian Ward, Ben Livesey

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