Microsoft Narrows CEO Search, Strategic Shift Possible

Former Microsoft exec Stephen Elop is reportedly one of the finalists for the CEO role.

Former exec is reportedly one of the finalists for the CEO role.

Microsoft is under a lot of pressure from institutional investors to make significant changes to its product and go-to-market strategy to return the company to growth. This pressure is likely the real reason CEO is retiring. And the candidates on the replacement shortlist could bring some interesting changes.

Last week, Reuters reported the list has been narrowed to four candidates – Ford’s Alan Mulally, ’s Stephan Elop, CEO Tony Bates and Microsoft head Satya Nadella. Bloomberg is reporting that Microsoft COO is also on the list.

Of the five leading candidates, Elop is the one attracting the most attention as he is voicing ideas for how to radically transform Microsoft. On his potential list of changes is selling the Xbox gaming unit, selling or shuttering the Bing search engine, and porting Microsoft software such as Office to Google’s and ’s iOS.

Driving Elop’s position is a core belief that Windows is no longer the center of the Microsoft universe. While .1, the update to the latest generation of the franchise operating system, is selling well, it’s not doing as well as previous versions as its success is tied directly to . Office products, however, are selling well because they can be platform agnostic. Elop believes Microsoft could maximize its potential by decoupling Office from Windows.

Mulally, who basically rescued Ford from oblivion after a successful career at Boeing, reportedly isn’t interested in leaving the car company. However, he keeps showing up as a top candidate for the job. While analysts are mixed over whether Mulally is

the right fit for Microsoft, his selection could bring interesting changes. He basically reformed Ford by making the company focus on the customer experience, maximizing resources and cutting costs. His appointment could bring a no-nonsense approach to Microsoft management and go-to-market strategies.The other candidate are known quantities. While well versed in Microsoft operations and products, Turner, Nadella and Bates are status quo candidates. Turner, in particular, bleeds the current Microsoft strategy and point of view, often follow up Ballmer on hard-charging defenses of products and business models.

If Vegas were giving odds on the CEO search, the favorites would go to Elop and Mullaly. Both have interesting potential consequences for the channel. A refocusing on core products and services, particularly if units such as Xbox are shed, would provide greater resources to the channel. Solution providers would see greater emphasis placed on servers, cloud services and systems management products, while products tied to PCs are given a more measured approach.

The wild card in all this is can Microsoft simply shed units and redirect resources. Bing has become so integrated with Windows, it’s hard to separate the two from an operational perspective. Moreover, Xbox is a billion-dollar and very profitable business; the forthcoming release of Xbox One is proof of Microsoft’s resolve for the gaming business. And, of course, Ballmer’s Microsoft One reorganization and strategy would have to be unwound for any of this to happen.

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