Is Microsoft’s five-month long search for a new chief executive officer finally over? According to a report out of Bloomberg, yes. Microsoft is ready to name Satya Nadella as the company’s next CEO and enterprise cloud chief to replace the departing Steve Ballmer. You may be surprised to hear that Microsoft’s board is also considering replacing co-founder Bill Gates as chairman, though Gates may soon become more involved with product development.
This new direction comes at a critical point in Microsoft’s plans as it looks to shape its products towards the future of mobile devices to better compete with Apple and potentially steer the company away from its PC-based products. This is why Ballmer looked to reorganize Microsoft’s structure before leaving and agreed to buy Nokia’s mobile handset business for $7.2 billion last year. Now the company is turning to Nadella, a Microsoft information technology veteran since 1992 with experience in cloud storage, server software, search and other business applications. Since 2011 Nadella has boosted Microsoft’s server revenue from $16.6 billion to $20.3 billion today. “Microsoft is a contentious enough place that you wouldn’t want to bring in someone who lacked credibility with the engineers,” said Michael Cusumano, a professor at MIT’s Sloan School of Management.
But the biggest change brewing may come with the chairman position potentially going to John Thompson, Microsoft lead independent director and a longtime Symantec chief executive who took the company from $600 million to $6 billion in sales over a 10-year run through 2009. And this could be a good thing, according to FBR Capital Markets analyst Daniel Ives. If the board brings an insider like Nadella to serve as the company’s third CEO, Microsoft should turn to an outsider to fill its chairman role:
If they are going for the CEO who is right down the hall from Steve Ballmer, you’ve got to give investors a bone. It would obviously be a big change and a historic change but it’s obvious Microsoft needs change in terms of strategy in terms of the next leg of growth.
Image via David Paul Morris/Bloomberg