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August 28, 2013

What Does Microsoft’s Future Hold?

The Impending Retirement of CEO Steve Ballmer Raises a Myriad of Questions

The upcoming exit of Steve Ballmer from Microsoft still has the industry abuzz.

Who will succeed Ballmer as CEO? Will it be an outsider or an insider?

The announcement of Ballmer’s retirement is still too fresh to be able to answer any of these questions with any certainty, but that has not stopped the speculation from running rampant.

Microsoft announced Ballmer’s supposedly uncoerced retirement last Friday, saying he will exit the company he has headed as CEO for 13 years after his successor is chosen.

Ballmer, who joined Microsoft in 1980, last month introduced a major shakeup at the company — one that put the firm’s focus on all divisions working together toward a common goal rather than separately as has been the norm for years.

Steve Ballmer

Steve Ballmer

And, according to news reports, it looks like the changes Ballmer announced will go ahead.

Ballmer disbanded Microsoft’s eight product divisions to make way for four new, broader divisions that will focus on teamwork to propel the company back to its former glory at the top of the technological heap — a position now belonging to firms such as Google, Apple and Samsung.

Along with the division changes come changes in leadership. Ballmer re-organized the responsibilities of the majority of his senior executives.

But it is entirely possible many of these senior executives will be scrutinized by the board of directors’ special committee as possible replacements for Ballmer.

Chaired by board director John Thompson, the committee has already begun its search for the next CEO.

According to analysts, while Microsoft is looking both inside and outside the company at potential candidates, the committee is leaning toward its own senior executives.

John Thompson

John Thompson

“It does seem like if they are going to continue down the path of this devices and services strategy that they probably get somebody who was part of formulating this strategy or who can stand fully behind it. I don’t know if most outside candidates would be willing to do that,” McAdams Wright Ragen analyst Sid Parakh told Reuters.

On the downside, however, very few insiders are “broadly exposed to all areas of the business,” IDC analyst Al Hilwa was quoted by the news agency.

According to Reuters the following candidates have a crack at the top position: Satya Nadella, Tony Bates, Terry Myerson, Qi Lu, Julie Larson-Green, Eric Rudder, Kevin Turner, Jeff Raikes and search committee leader John Thompson himself.

The following is a more in-depth look at each candidate and the new role each plays in Ballmer’s restructuring plan:

Satya Nadella, Cloud and Enterprise Group leader

Nadella, who led Microsoft’s Server & Tools business, is now head of engineering for Microsoft’s back-end technologies such as datacenter, database and specific technologies for enterprise IT scenarios and development tools. He also leads datacenter development, construction and operation.

Tony Bates, Business Development and Evangelism Group leader

Terry Myerson

Terry Myerson

The former president of Skype, as the new business development leader, focuses on key partnerships, especially Microsoft’s innovation partners (such as OEMs, Nokia and Yahoo) as well as on evangelism and developer outreach.

Terry Myerson, Operating Systems Group leader  

Myerson, who was head of the defunct Windows Phone engineering division, now oversees engineering for the Windows, Windows Phone and Xbox operating systems. The core cloud services for the operating system are also in this group.

Qi Lu, Applications and Services Group leader  

Lu, head of the former Online Services Division, now leads engineering for Bing, MSN, Office 365, Office servers and clients, Dynamics CRM and ERP, Skype, Yammer and Lync.

Julie Larson-Green

Julie Larson-Green

Julie Larson-Green, Devices and Studios Group leader

Formerly head of Windows and Surface engineering, Larson-Green now leads engineering for hardware such as Surface and Xbox as well as for games, music, video and other entertainment.

Eric Rudder, Advanced Strategy and Research Group leader

Rudder’s focus is on “the intersection of technology and policy” at Microsoft. It is his job to drive Microsoft’s “cross-company looks at key new technology trends.”

Kevin Turner, Microsoft’s chief operating officer

As COO, Turner leads worldwide sales, field marketing, services, support, and stores as well as IT, licensing and commercial operations.

Qi Lu

Qi Lu

Jeff Raikes

Raikes retired from his role as president of the Microsoft Business Division and overseeing the Information Worker, Server & Tools Business and Microsoft Business Solutions Groups five years ago. He is now the chief executive officer of the Bill & Melinda Gates Foundation.

Search committee leader John Thompson

Thompson, who joined the Microsoft Board last February, is the chief executive officer of privately held Virtual Instruments and the former chairman and CEO of Symantec Corp. In his earlier career, Thompson worked at IBM in sales, marketing, software development before becoming general manager of IBM Americas.

The other big question, of course, is will the new CEO, whoever he or she may be, be able to steer Microsoft onto the right course in the future?

Ballmer has been accused of not only missing the mobile movement but of wrecking PC sales with the disaster that was Windows 8. But, according to The Wall Street Journal, under Ballmer, Microsoft’s annual revenue has more than tripled to nearly $78 billion — one of the largest profits in its own industry and industry in general.

The new CEO will be required not only to keep profits on an upward swing, but be an innovation driving force to put Microsoft at the top once again ahead of Google, Samsung and Apple.



2 Responses to “What Does Microsoft’s Future Hold?

    I have asked myself many times about what the future looks like for Microsoft. They have made, in my opinion, tons of bad choices. Plagued by bad product launch after bad product launch. It would be great to see them redeem themselves and rise to the top again. They have a pretty steep uphill climb I think though.

    avatar pengetahuan says:

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