Microsoft CEO Satya Nadella has told employees that he worries about Microsoft’s long-term survival. At a recent internal town hall, he pointed to the collapse of Digital Equipment Corporation (DEC), saying that he is “haunted” by the fate of DEC, a onetime industry leader that vanished after failing to adapt to key technology shifts. He pointed to DEC’s collapse as a warning sign, stressing that Microsoft must avoid a similar downfall as it navigates the AI transition.
“Our industry is full of case studies of companies that were great once, that just disappeared,” Nadella told employees, “I’m haunted by one particular one called DEC,” as per The Verge. This reference was personal as well, recalling that his very first computer was a DEC VAX and that he once aspired to join the company.
Nadella pointed out that DEC’s downfall indirectly opened doors for Microsoft. “Some of the people who contributed to Windows NT came from a DEC lab that was laid off,” he said, noting how shifts in the tech landscape can redirect talent across companies.
READ: UK, US ink multi-billion dollar tech deals during Trump’s visit; Microsoft pledges $42 billion (
“Some of the biggest businesses we’ve built might not be as relevant going forward,” quoted by The Verge. Acknowledging this transition, Nadella said, “All the categories that we may have even loved for 40 years may not matter,” he warned, stressing that a company’s survival depends on continually proving its worth by delivering meaningful value to society and the market.
These comments came as the context of corporate fragility came up after a UK employee remarked that Microsoft seemed “markedly different, colder, more rigid, and lacking in the empathy we have come to value.” Rather than brushing it aside, Nadella admitted the concern was valid and pledged that leadership would reflect on how to improve.
“I deeply appreciate that, the question and the sentiment behind it. I take it as feedback for me and everyone in the leadership team, because at the end of the day, I think we can do better, and we will do better,” he told the audience, as per an audio recording obtained by CNBC.
READ: Amazon, Microsoft, Apple lead surge in H-1B sponsorships despite ‘America First’ push (
Nadella’s candor landed as both a caution and a call to action. His point was clear: even the strongest companies can slip into irrelevance if they fail to evolve. DEC’s collapse is proof that early success offers no guarantees, and Microsoft cannot afford complacency in an AI-driven era.
At the same time, his remarks carried a personal weight. Haunted by the lessons of fallen giants and mindful of criticism from within, he seems intent on guiding Microsoft through the next wave of change while also repairing the trust and empathy employees feel has been lost.
Microsoft has lived through the consequences of missing a major shift before, most notably the mobile revolution, a lapse that Bill Gates himself described as his “greatest mistake ever.”
Today, as artificial intelligence reshapes the industry, Nadella is sounding a similar alarm. With products like the Office suite accounting for roughly a fifth of Microsoft’s revenue, he acknowledged the risk that AI could erode even its strongest businesses. “Some of the margin that we love today might not be there tomorrow,” he cautioned, underscoring that survival will depend on adapting faster than the disruption closing in.