by Brad Moon | August 26, 2013 12:29 pm
Longtime CEO Steve Ballmer is retiring from Microsoft (MSFT), and while there’s plenty to be said about the timing, what it means for MSFT’s future and what Ballmer’s legacy ultimately will be, the more immediate question is “Who’s next?”
Microsoft’s board has its work cut out for it, and has a number of questions to ask. Insider or outsider? PC expert or mobile visionary? Marketing guru who can channel Ballmer’s infamous fist-pumping style to fire up the faithful, or a methodical, reserved engineer/operations person like Apple’s Tim Cook?
The list of candidates keeps growing, but since we’re still firmly in the territory of speculation here, let’s look at three marquee names that would represent the kind of drama that makes tech analysts and investors alike drool.
All are former Microsoft executives, but that’s about all the trio has in common:
The president of Microsoft’s all-important Windows division from 2009 through 2012, Sinofsky was also heavily involved in the Office products for a decade and oversaw development of the highly successful Windows XP.
Business Insider and others openly named Sinofsky as Ballmer’s heir apparent, the Microsoft CEO-in-waiting. The guy knew Windows and Office (the company’s crown jewels) inside and out, and he was leading the charge to a post-PC future with the tablet-friendly Windows 8.
However, with the release of Windows 8, the wheels fell off the Sinofsky bus. While the poor reception of the long-awaited but critically panned OS was never blamed for his departure, Ballmer fired Sinofsky just weeks after Windows 8 dropped.
With Ballmer on his way out, could Sinofsky return to reclaim what once seemed to be his destiny, to lead Microsoft?
Reality Check: Sinofsky was let go less than a year ago and Ballmer — the guy who fired him — is likely to have at least some say in who his successor will be. Presumably, Ballmer won’t be too keen on changing his mind, especially so soon. There also were reports that Sinofsky’s aggressive management style had alienated other Microsoft executives, including Bill Gates. A polarizing leader who likely has some unfinished fights with existing senior staff probably is not what Microsoft needs right now.
Microsoft’s board has to be dreaming of the Apple (AAPL) story. A PC pioneer that’s in big trouble throws a Hail Mary move and brings back its glorious co-founder who reinvigorates the company, and sends the core PC product to the sideline as it conquers new markets. Meanwhile, the stock goes ballistic.
Bill Gates, the Microsoft co-founder and former CEO, technically still is with the company, but in a part-time, largely advisory role as chairman. For all intents and purposes, he retired from day-to-day Microsoft involvement in 2008 to focus on his Bill & Melinda Gates Foundation.
Having Bill Gates return to take the helm of Microsoft — even if it was only for a defined term of several years while a successor was groomed — would be a huge boost to company morale and likely to provide at least a short-term surge in MSFT as investors and employees alike hoped for an Apple-like second act for Microsoft.
Reality Check: This seems unlikely. Gates is one of the world’s wealthiest people. He already brought his company to the pinnacle, and it’s not exactly on the verge of disappearing today,just stagnating or slowly declining. And unlike Jobs, he wasn’t pushed out — he left. He’s completely dedicated to running his foundation and enjoying time with his family. In short, he has nothing to prove by returning, no pressing financial need to do so and his company is not in need of immediate rescue. Count Gates out.
Microsoft has said repeatedly that it’s transforming itself into a devices and services company, and that phrase is even spiked out in Ballmer’s official retirement announcement.
Nokia (NOK) CEO Stephen Elop is leading the Windows Phone 8 charge — the cornerstone to Microsoft’s attempt to adapt to a mobile world. While Nokia isn’t exactly setting the world on fire and many question Elop’s decision to go with Windows instead of Android, Nokia’s Lumia line of Windows smartphones has almost single-handedly moved Windows Phone from an also-ran into third place in the battle for mobile OS market share.
So Elop knows more than a little about devices, and he’s well-versed in the potential of Windows for the mobile market. He also held a senior role at Microsoft, heading the division responsible for Office, one of the company’s most consistently profitable products.
Bringing Elop on board as CEO — possibly buying Nokia and bringing it under the Microsoft fold as part of the “devices” mandate — would be a big move that could shake up the smartphone market and give Microsoft a new head of steam, with the comfort of having a guy at the helm who also understands the value of legacy products.
Reality Check: Each of these candidates is a long shot, but of the three, Elop seems the most plausible. Nokia and Microsoft are closely aligned at the moment, and Nokia is hurting. Now could be the time to snap the company up, make it the official Windows Phone division and bring Elop on board to run the whole thing.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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