August 26, 2013, 9:13 PM —
Image credit: REUTERS/Tony Gentile
Mere days into the Steve Ballmer Successor Watch, guessing who will be his replacement has become a new tech industry pastime.
Ballmer's announcement that he will retire within the next 12 months has unleashed strong, conflicting emotions -- tension and relief, sadness and joy, uncertainty and excitement -- among Microsoft employees, customers, partners, investors and observers.
After all, there has never been much drama regarding the CEO post at Microsoft. There was little doubt Ballmer would get it when co-founder Bill Gates handed it over in 2000. Ballmer had been for many years his second-in-command.
The situation is much different today. Ballmer has no heir apparent, and his retirement announcement took many by surprise. It had been assumed he'd stay at the helm at least for several more years, especially since he unveiled a major company reorganization just last month.
"There's no clear person that's been groomed for this," said Charlene Li, an Altimeter Group analyst.
Thus, the field is wide open, with a number of compelling candidates both inside and outside of the company. What complicates the guessing game is that it's not clear what board directors and the newly created CEO search committee are thinking.
"The real question becomes whether Microsoft's board wants the company to continue on its current trajectory, or whether it wants to take this opportunity to bring in an outsider with a visionary perspective," IDC analyst Al Gillen wrote in a research note.
If the board wants the successor to continue executing on Ballmer's reorganization, which seeks to make Microsoft operate more cohesively and transform itself from a software company into a provider of devices and services, it would be logical to look inside the company. On the other hand, if the board wants Ballmer's strategy to be revised and altered, the replacement should come from the outside.
What's clear is that whoever is picked will inherit a few big, well-known challenges, including Windows' weak position in the tablet and smartphone OS market; the dismal sales of the Surface tablet; and the years-long dilemma of whether to port Office fully to iOS and Android and risk hurting Windows' appeal.