Steve Ballmer says he and Bill Gates recommended Nadella as Microsoft CEO, praises his performance

Key Points
  • Ballmer provided insight into why the stock didn't grow as much under him as it has under Nadella.
  • Microsoft gave credit to Nadella for growing cloud services like Azure.
Former Microsoft CEO Steve Ballmer in 2012.

Former Microsoft CEO Steve Ballmer says that he and Bill Gates recommended current CEO Satya Nadella to the board, and he is not surprised he's doing a great job.

In a recent interview, Bloomberg's David Rubinstein asked Ballmer if he was surprised when Nadella was chosen to be the company's new leader. Ballmer said no.

“He’s the recommendation I made,” Ballmer said. "He's the recommendation that Bill Gates made. I thought he was a candidate to replace me, which is why we moved him into his last job, which was running one of the big divisions. And I was glad he got the job, because he's done a great job."

Nadella has succeeded in changing the way the financial community views the company, Ballmer said. "He’s done a good job of repositioning the company in investors' minds."

Microsoft has tripled its stock under Nadella's leadership, spanning almost four and a half years, whereas the stock's performance was not nearly as dramatic as it was under Ballmer. On Thursday the company is expected to report some $109.48 billion in revenue in its 2018 fiscal year, which would be up 13.3 percent, according to Thomson Reuters.

Ballmer said Microsoft stock didn't grow to the degree that it has under Nadella, despite sales growth during his tenure, because he came in in 2000 at the height of the dot-com bubble and because a judge ordered that Microsoft be broken up in its U.S. antitrust case shortly after he took over.

He said he felt investors thought he was spending too much money and were unsure if newer initiatives would result in major profits.

Ballmer said Amazon has had more success than he had expected in the cloud business, where Microsoft is currently focused. But he pointed to progress with Microsoft's own cloud products.

"We started this thing called Azure and Office 365, and my successor Satya has taken the thing to very much new heights," Ballmer said. "The only chance to reposition the company really came when Satya started."

Ballmer remains Microsoft's biggest individual shareholder.

Watch the full Bloomberg interview here.

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