Earlier this month, one analyst — Israel Hernandez of MKM Partners — predicted that Microsoft's share price would droop to the low 30s if Mulally wasn't The Guy.
There's evidence that Hernandez and other like-minded analysts are right. In early December, when Ford board member Edsel Ford II said Mulally would stay at the car company, Microsoft's stock stumbled, losing 2.4% of its value that day. As of Friday, it was down 4.2% from the price before Ford's remark.
Others will question the selection of an outsider. Although those critics may acknowledge that Microsoft needs fresh blood, they will argue even louder that the technology- and engineering-driven company cannot be managed by someone who lacks direct experience in its eccentricities and its disparate parts, and who may have trouble gaining confidence of the troops.
None of those opinions are guaranteed to be correct.
Many questioned the choice of Louis Gerstner as IBM's CEO in April 1993, for example, largely because he came from RJR Nabisco and American Express — not exactly technology hotbeds — and had no experience running a tech company, much less one the size of IBM, then a corporation with a mailbag of problems.
And the naysayers pointed out Gerstner lacked the "vision thing," the pixie dust assumed as a prerequisite for any tech CEO and a characteristic many deem critical in Microsoft's next leader. Gerstner, who years later was credited with bringing IBM back from the brink and transforming it into a profitable services vendor, acknowledged his lack of "vision" early on.
"The last thing the company needs is a vision," Gerstner said at a press conference in July 1993, when he announced massive layoffs and an $8 billion charge against earnings. "It needs a series of tough-minded, market driven strategies for its businesses, and that's what we're working on."
And insiders haven't always worked out.
In 1992, Digital Equipment Corp. named Robert Palmer as the CEO successor to co-founder Ken Olsen. Palmer, then a seven-year veteran of DEC, had been praised by analysts for his success driving the company's Alpha architecture and resulting processors. But Palmer couldn't salvage the company. Within four years, DEC had disappeared, sold at a fire sale price to Compaq. And Palmer got the blame.
"Bob Palmer was the wrong CEO for the times," said Peter DeLisi, currently a consultant, but someone who spent 16 years at DEC, in a September interview with Computerworld.
Even the people who pick Microsoft's next CEO could be proved dead wrong in retrospect. It's not like that hasn't happened before.
"Leo is a strategic thinker with a passion for technology, wide-reaching global experience and proven operational discipline — exactly what we were looking for in a CEO," said Hewlett-Packard director Robert Ryan in a September 2010 news release announcing the hiring of Leo Apotheker as HP's new CEO.
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