I flew out to the Bay Area on Monday and spent the week talking to sources.
Now I’m stuck in SFO, waiting three hours for a delayed red eye flight back to New York.
So, to kill the time, I thought I’d share some of what I heard on a topic everyone wanted to talk about the past few days: Microsoft.
None of the following information came from first-hand, Microsoft sources.
It’s just bar stool gossip. It’s what the Northern California faction of the tech industry believes is going on at Microsoft.
People here say…
- Microsoft is in chaos. No one knows what to do right now.
- Ballmer didn’t present this summer’s big re-org for the company to the board until a week or so (maybe days) before it went through.
- Ballmer didn’t know he was going to get canned until the last minute. It was an execution.
- Neither did ValueAct, the big Microsoft shareholder.
- In short, Ballmer’s ouster was not a graceful, planned exit. It was a surprise execution. (Describing the firing, one source mimed firing a gun in the back of the head.)
- The firing was a Bill Gates production.
- Likewise, Gates is deeply engaged with the CEO search.
- Gates is planning on becoming a very active, hands-on chairman again.
- Gates is looking for a CEO who is comfortable with him being an active chairman, providing the vision for the company. Mainly, Gates wants someone with public company experience who will be able to manage Microsoft’s 125,000+ employees.
- This is why Nokia CEO Stephen Elop is a likely candidate for the job.
- Elop is a laughed-at candidate in the Valley. (“His claim to fame is being CIO at Boston Chicken!” said one VC this week.)
- One idea for Microsoft: Spin off its consumer business. Optimize the Windows and Office franchises and invest the cash in developing an AWS-for-the-enterprise business. Hire someone like Marten Mickos to be CEO.
- Otherwise, pretty much everyone here thinks Gates is the only guy who has a shot at turning around a company that is basically a victim of its own success. Microsoft’s problem, these people say, is its massive Windows “install base.” It makes too much money from a businesses that is inevitably on the decline.