How Satya Nadella has changed Microsoft in just one year

One year ago, Microsoft appointed long-time Microsoftie Satya Nadella as the company's historic third CEO, and by all accounts, it's been a helluva ride for the company ever since.

Much of it good. Some of it not so good.

What everyone can agree is that Nadella immediately set about creating a more cooperative Microsoft willing to partner with competitors, not just shoot bullets at them.

That was in stark contrast to the highly combative CEOs it had before, co-founder Bill Gates and early sales chief Steve Ballmer. Remember in Gates' darkest hour, his competitive tactics led the U.S. government to convict Microsoft on antitrust charges, declaring the company's headlock on the PC market a monopoly.

And Ballmer was also notoriously hard-charging.

Nadella still has a lot of work to do before the world sees Microsoft as back in the saddle again. But he's made tremendous progress.

Here is what he's already done to completely change Microsoft in the past 12 months:

He's built excitement for Windows again, thanks to Windows 10. It will bring back some of the classic look and feel long-time Windows users love, and work well on a touch device. Plus upgrading will be free for Windows 7 and Windows 8 users.

Business Insider's Steve Kovach has been using an early version of it on a Surface Pro 3 for a while and says, "Microsoft's new version of Windows, Windows 10, is different, and I think it's the beginning of a fresh start for Microsoft's flagship operating system. ... It's early, but I can already tell Microsoft is cooking up a winner."

He's built excitement for Windows 10 among developers. A version of Windows 10 will run on any device, any size, like tiny embedded computers, PCs, tablets, Xbox, wearables and huge screens. Developers will be able to write apps for one version of Windows 10 and move them over to other versions with little extra work. He's promised that developers will be fairly easily be able to bring their older Windows apps to the whole Windows 10 ecosystem.

He's making it easier to bring Android and iOS apps to Windows: He's offering developers the "Holy Grail" in app development, tools that let an app developer write the app once and easily convert it to all Windows versions and to iOS and Android. After seeing the new tools, one developer told us, "This was a very strategic move. Microsoft is offering a lot of support, making it easy to work with them."

He's rolled out a bunch of new products that show what the "New Microsoft" is all about. Nadella's vision for Microsoft is to "reinvent productivity." And he's already rolled out a bunch of examples of new productivity apps such as:

• Delve (his personal favorite) which is sort of like Google Now.
• a new version of Power BI, which lets normal business people make sense of floods of data.
• Skype translator is a real-time translation tool for Skype users.
• Microsoft Sway, a cloud presentation tool that takes on Prezi and Microsoft's own PowerPoint. (Microsoft even featured an iPad in its Sway ad.)
• A new version of its Outlook email app for iPhone. ("Holy moly is it good," Business Insider's Kovach raved). This was a particularly impressive accomplishment because it came from an acquisition, Acompli, that Microsoft turned into a product in record time, a few months.

He's built excitement for up-and-coming new Microsoft products. Microsoft's computerized glasses, HoloLens blew folks away when it was demonstrated. We'll have to see if lives up to its promise and if so, we want it! Office for Windows 10, the much-awaited touch version of Office, looks good too.

He's turned some of Microsoft's most bitter rivals into partners. He buried the hatchet with Salesforce so thoroughly that its CEO Marc Benioff has been singing Nadella's praises. Even more shocking, he's crafted a partnership with rival Oracle.

He's overseen Microsoft biggest layoff ever - to the applause of employees. Microsoft has cut 18,000 employees, most of them from the feature-phone business of acquired company Nokia. But a good 5,000 were cut from Microsoft, as part of a general re-org of an awkward structure. The company is leaner and faster. Instead of alienating the workforce with these cuts, remaining employees are fairly happy. He's got an 82% approval rating from Microsoft employees on Glassdoor.

Nadella basically ended Microsoft's war with Apple and Android. He's still competing with them, but not treating them like pariahs. Microsoft even used Apple's iPad and iPhones with Microsoft software and cloud services in public demos at its developers' conference and at its big customer conference. And Microsoft is reportedly set to invest in a company called Cyanogen, which oversees a "fork" of Android not controlled by Google.

Under Nadella, Microsoft ended "one of the most egregious price gouging experiences in personal technology," as blogger Paul Thurrott at Supersite for Windows called it. Microsoft said it would end the tactic of making Xbox users pay for an upgraded Live Gold subscription just to use the entertainment features included in the console.

He talks to Wall Street analysts at the quarterly conference call. That's something that Ballmer didn't do. He is striking the right tone between confidence and humility.

He launched Microsoft into the hottest new market, called the Internet of Things (IoT), which will become a $1.6 trillion market within four years, Microsoft says. Microsoft launched a new database, a new cloud service, a new big data analysis service for IoT apps and he's bringing a version of Windows to a $35 ARM computer called Raspberry Pi.

He made Windows free for all devices with nine-inch or smaller screens, a major business-model change for Windows.

He ended some of Microsoft's tackier marketing tactics. For instance, Nadella's Microsoft ended its "Scroogled" Google-bashing campaign. Microsoft isn't exactly chummy with Google, but it's dropped the tacky ads and the tacky attitude. The Scroogled.com address now takes you to a site called "Why Microsoft" and outlines Microsoft's major product lines.

That said, he's still facing some huge challenges.

• He hasn't convinced Wall Street that he can grow revenues, and profits, on free versions of Windows and new cloud productivity apps. Particularly as they cannibalize cash-cow products like Windows and Office.
• He has to figure out how to make Windows Phone successful, or come up with another plan so Microsoft can become relevant on smartphones.
• Windows 10 absolutely, positively has to be a huge success with enterprises, as well as consumers and re-spark the PC market.
• It has to fix weak sales in the big growth market of China. It has also been struggling in Japan.

Overall, though, Nadella has had a pretty remarkable first year. The stock shows it: even after a poor earnings report last week knocked about 13% off the price, the stock is still up 16% since he took over, and up 20% since his predecessor, Steve Ballmer, announced his retirement in August 2013.