The appointment of Satya Nadella as the new CEO of Microsoft is just the beginning of this company’s third act. Under Gates, the company was the technology upstart that crushed IBM and outsmarted Apple to become the defining force in technology from the mid-90s until the mid-2000s. Under Ballmer, it grew into a powerhouse of revenue, even if it lost its death grip on tech. And now, under Nadella, it needs to find a new role in a rapidly shifting tech landscape that risks relegating it to being yet another big corporate IT provider, like IBM before it.

I’ve never been the CEO of a major international technology company, so – unlike so many pundits – I’m not going to offer him some advice. But I do think the challenge ahead of him throws the challenges of the age of the New Normal into stark relief.

The winner of the Old Normal

Microsoft was the perfect technology company for the old normal. It was the company that could operate around predictable upgrade cycles for corporate clients who bought their products en masse. It was a company built around selling the information age to companies structured around the industrial age. And during the very early years of the transition, that was a winning strategy.

In a sense, it was – and still is – a company built around the idea that the technology revolution is done. Desktop PCs are here, and that Microsoft owns them. Windows lies at the heart of computing, and everything orbits around that.

Change is incremental from there, and as long as the change wasn’t too dramatic, customers would happily stay with them, even at very high prices. I was once deeply involved in a process to replace Microsoft Office in a company with Google Apps, but we were eventually stymied in our efforts because a couple of board directors were completely unable to imagine working life without Microsoft Outlook as a central part of it.

But this reliable stream of income has brought problems with it, summed up well by Marco Arment last month:

Microsoft’s customers don’t like change. They’re accustomed to getting everything they want, exactly as they want it, with no surprises. They won’t tolerate anything else.

If Microsoft releases anything too different, enterprise customers will simply refuse to buy it, demanding that Microsoft keep selling the old version indefinitely.

Microsoft’s Misses

Microsoft has a history of missing the new thing that goes back before Ballmer. The company missed the internet under Gates’s watch, but managed to turn things around to dominate it with Internet Explorer, only to lose that lead again. Those times when it has been able to articulate what the future will be – it was early to both tablets and smartphones – it wasn’t able to articulate it successfully. And then it wasn’t able to catch up fast enough when Apple then went on to articulate that future successfully and commercially.

The nature of Microsoft’s core customer base suggests why: they’re so inherently conservative, and the corporate culture of Microsoft so aligned to matching that, that it’s genuinely hard for them to innovate markedly. The current Windows 8 fiasco just underlines that.

The new reality – the New Normal – is that technology is shifting and changing around us year-on-year. The Cloud has rapidly gone from being a buzzword to a key part of how many people operating – liberating their data from their devices. And as the devices and data diverge, that opens up the possibility of using a broader range of devices, big and small. “Mobile” is becoming a inadequate word to sum up the diversity of computing devices that will surround us soon.

What lies beyond mobile and cloud?

Nadella’s first comments to Microsoft staff said that they need to figure out what the company is in a mobile- and cloud-first world. That’s skating to where the puck is, though. They need to figure out what Microsoft needs to be in the world that the convergence of mobile and cloud will birth, and then help make that transition happen. The alternative? Selling diminishing numbers of products to their shrinking conservative corporate base, whose employees and competitors are already routing their way around those IT restrictions. That would be a sad end for such an iconic technology company.

So, Natella’s challenge is to take that company and reinvent it for the New Normal, while the revenues from his traditional customer base remain strong. The clock is ticking, and I certainly don’t envy him the challenge – but I’ll be watching eagerly to see what his first moves are.