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Cognoscenti anoint Nadella as next Microsoft CEO

Gregg Keizer | Feb. 3, 2014
Months-long search may end where it started -- inside the company -- if cloud group's veteran leader gets Ballmer's chair.

To some, Gates has been too involved.

Many sell-side Wall Street analysts have hoped that others on the board would overrule Gates and bring in someone from outside. Those analysts pinned hope on an executive with more experience running a major company, even if that meant they were not well-versed in software. That's one of the reasons why Mulally's name lingered so long, and why others, such as Qualcomm COO Steve Mollenkopf and Ericsson CEO Hans Vestberg, have been bandied about.

To Wall Street, an outsider would be more likely to shake up the company, perhaps sell off poor-performing assets like Xbox, or even split the firm into consumer and commercial entities, all to boost the price of the stock, which has been mired for years.

Whether it's Nadella, as everyone with a keyboard seems to believe, or someone else, the new chief executive will need to, as Gartner analyst David Smith said today, "Dig the company out of the hole it's dug for themselves" on a number of fronts.

"Job one is mobile and tablets," said Smith in an interview today. "Nadella, if it's him, or whomever takes the job, has got to do things differently. You have to believe that Ballmer was a big part of the decision making in the past, and many of those decisions have to be rethought."

Other than pushing mobile, which Microsoft has been trying to do with little to show for it, the new CEO must refocus on developers, a historical strength of Microsoft, and make some fundamental changes to Windows 8, the firm's flagship operating system, said Smith.

"And Nadella, again if it's him, has to bring in some talent who understands mobile and tablets," said Smith. "He doesn't have that experience. For all their talk, Microsoft is still a software company."

Previously, some suggested that if Microsoft picked an unproven insider -- like Nadella -- he or she would be tag-teamed with a more experienced executive, perhaps from the board. Those thoughts have been resurrected in the last 24 hours, as some reports claimed that Gates would step aside as chairman, either at the announcement of a new CEO or shortly after, with John Thompson, a former CEO of Symantec, appointed in Gates' place.

Thompson, who has been on the Microsoft board for two years, has led the CEO-search committee, and was the one who told investors late last year that a new chief would be named early in 2014.

Moorhead thought an arrangement like that would make sense if the partner had a background to fill the gaps in the background of the new chief. "Nadella will need to be augmented by someone with a lot of consumer experience and success," Moorhead said, echoing Smith.


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