"They will look at both internal and external candidates," said Moorhead, noting the promise made by the Microsoft board to search far and wide. "But I believe they have to look at outside more than inside. The object of the strategy is change. Investors want to see a change. If they choose an insider, it will appear as if Microsoft isn't committed to change. So the optics of the thing looks good only if they pick an outsider."
Cearley echoed Moorhead, saying it's "highly likely" that the selection committee and board would focus on new faces. But he also pointed out another reason why outsiders have to be considered.
For all Ballmer's faults, real or perceived, there is no one now at the company who can match him. "There's no clear and obvious successor, no obvious person inside the company who has all the skill sets," said Cearley. "So I think it's highly likely that they'll be looking outside at candidates in the IT industry as well as ones not in the IT industry."
While a new CEO must have credibility among Microsoft's workforce, technology is so pervasive that people from other industries should not be automatically precluded. "The world today is not divided between technology and non-technology companies. Every company has a huge technology component. What the candidate needs is a strong appreciation of technology," Cearley said.
With no immediate successor named, said experts, it was clear that Microsoft did not have a CEO succession plan. If it had had a current executive in mind, the board would have announced the promotion Friday, they said. The long search timeframe also pointed to the lack of a plan.
Instead, long-time Microsoft watchers were reduced to playing Kremlinologists, the intelligence analysts who once studied photographs of Soviet Union military parades to predict who was on the way up, who was on the way out.
Those pundits went for broke on Friday, handicapping the chances that a new CEO would arise from a pool of current and former executives, including Stephen Elop, now the CEO of Nokia, a close partner of Microsoft; Paul Maritz, former chief executive at arch-rival VMware; Satya Nadella, now the head of the company's cloud and enterprise group, but before that the leader of the revenue-generating Server and Tools Division; and even Steven Sinofsky, the former head of Windows who was ousted last November after clashing with Ballmer.
To the analysts, picking from current and past executives would be a mistake.
"If [Ballmer] gets to pick a clone of himself with the same direction and strategy, Microsoft is in big trouble longer term," contended Jack Gold of J. Gold Associates. "What they need is a leader with a new direction, a visionary who can bring back innovation and provide products people are willing to spend money on. Unless such a leader is found, Microsoft is in for a continued, albeit slow, decline."
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