The current CEO of Microsoft, Satya Nadella, recently shared his opinion on what he thinks is one of the biggest strategic mistakes that the company once made – not predicting the emergence of search engines, which Google later leveraged to its advantage. During a recent appearance on a podcast with YouTuber Dwarkesh Patel, Nadella shared how this mistake taught the company a valuable lesson about how value is created in tech trends.
“We (Microsoft) missed what turned out to be the biggest business model on the web because we all assumed the web was about being distributed,” the Microsoft CEO shared. “Who could have thought that search would be the most valuable among all the ways of organizing the web? Google did and did it well.”
This is because, according to Nadella, while it is important to recognize technological trends, it is even more important to understand where the real business value is. “These business model shifts are probably harder than the actual tech trend shifts,” he said, “because everyone gets the technology, but they don’t understand the business of it.”
Nadella has been lucky enough to have been a part of many important transitions in the technological world during his career. These include the shift from mainframes to personal computers, the client-server model, and the birth of the World Wide Web and the Netscape browser. He explained how Microsoft moved into the “browser moment” but failed to realize that search would be the king of the internet.
Working at Microsoft since 1992, Nadella has been a part of many of the company’s evolutionary changes. The Microsoft CEO, who has a degree in electrical engineering, computer science, and business administration, has his hands full steering the company through new realities, which are now centered on AI and cloud computing, while making sure that the company learns from its past experiences.
