Particularly after the "Hell no, Steve must go!" chants from big-time investors, insiders, and employees, nobody expects CEO Steve Ballmer to stay at the helm of Microsoft until they pry his SideWinder keyboard from his cold, dead fingers. But no one has reliable deets on when he may depart, either, or how it might all go down, despite titillating rumors that surface regularly.
The latest scuttlebutt appeared on Windows8update.com, which passed along a tip from "someone who shall remain nameless" that SteveB "is set to resign as CEO of Microsoft sometime after the launch of Windows 8." Give the site credit for saying -- twice -- that this was a rumor and not intended to be taken as truth.
As pure speculation, however, I think it's right on the money. I've been watching Microsoft for a very long time; all you have to do is look at the known facts and connect a few dots. SteveB may be stubborn and bombastic, but he's not dumb, nor must he be thrilled by Microsoft's lackluster stock performance during his tenure. I also think he's aware of the monumental nature of his two biggest failures, Vista and anything mobile, and that things aren't looking terribly rosy in the cloud, either. It's time to go. The key questions are: Who will succeed him and how might he save face as he exits?
To fill Ballmer's shoes, another Steve
First and foremost, the only likely successor to SteveB at this point is SteveS, aka Steve Sinofsky. As I explained in January, the departure of Bob Muglia -- following Robbie Bach, Stephen Elop, and Ray Ozzie -- left only one viable internal candidate for the top spot: Steve Sinofsky, president of the Windows Division. I've heard Don Mattrick's name tossed around as well, but though Don's a techie of the first degree -- he heads Interactive Entertainment, which includes Xbox, Zune, and Kinect -- he doesn't have a pedigree from Microsoft's cash-cow divisions. COO Kevin Turner, also occasionally mentioned, had an illustrious career at Wal-Mart, but he's been tarred with the Ballmer brush.
Several industry pundits have suggested creative ways for Microsoft to reach outside the mother ship for Ballmer's replacement. The most appealing to me is Fortune magazine's suggestion that Microsoft buy Netflix and install Reed Hastings (who is both CEO of Netflix and a member of Microsoft's board) as co-CEO, alongside SteveB. Appealing as that may sound to investors and Hastings fans, of which there are many, the folks I know inside Microsoft wince at the thought of bringing in an outsider with no direct Microsoft line experience. "Preposterous" is the most polite phrase I hear.
Presuming Sinofsky is the anointed one -- either by explicit agreement or tacit understanding -- a whole bunch of observations fall into place.
The Windows 8 linchpin
There's no way on Gates's green earth that Sinofsky will work seriously on anything but Windows 8 until it hits RTM. Windows 7 was SteveS's crowning achievement, and Windows 8 has to be even better if the franchise is to continue. It's bet-the-company time, and nothing will get in the way of SteveS bringing Windows 8 to market. Industry observers who are looking for little hints about Sinosfky taking over the CEO mantle just don't understand how immersed and focused SteveS must stay to get the product out the door. Succession planning is a luxury that can start on the day after RTM. Surely both Steves understand that.
If Sinofsky's been promised the position, either explicitly or implicitly, we should all expect to hear exactly nothing about it: no leaks, tantalizing hints, eavesdropped conversations, or subtle innuendos passed on to the press by the inner circle. Both Steves are masters at manipulating the press and keeping mum. They won't let anything loose until they figure it's in their best interests to let the world know. Right now -- before Windows 8 ships -- is precisely the wrong time to fuel succession speculation.
On the other hand, when Windows 8 is fully baked, an unprecedented opportunity will arise, as sure as night unto day. Microsoft will declare Windows 8 the most fabulous, best-selling, far-reaching innovation in Microsoft history. Count on it. If Win8 sales numbers go south, not to worry: Microsoft will make up something that sounds plausible. Just look at what happened with Windows Phone 7 sales figures.
At that point -- when Windows 8 has started its meteoric rise, real or imagined -- the time will be ripe for a change at the top. Sinofsky can point to the bestest Windows ever, technically, and rightfully assume the mantle as Microsoft übergeek and CEO designee. Ballmer can take a bow or two for a job exceptionally well done and announce plans to drift into the sunset. The timing couldn't be better, regardless of Windows 8's technical prowess, market acceptance, or actual sales figures.
Timeline for a long good-bye
How will the transition work? Probably the same way BillG passed the baton to SteveB. To the outside world, that process took eight years, but the actual change of power progressed much more rapidly. Ballmer took over as CEO in January 2000. Gates continued to go to work every day until June 2006. At that point, Microsoft officially announced that BillG would gradually "transition out of a day-to-day role in the company" over a two-year period. It's widely accepted that SteveB was calling most of the shots long before BillG's official transition began. Gates continued as the public face of Microsoft for many years, while Ballmer ran the show.
If a similar pattern holds true, a parallel schedule would look something like this: Windows 8 hits RTM in summer/fall 2012. By the end of (calendar) third-quarter 2012, Microsoft announces that Sinofsky will take over as CEO or co-CEO, with Ballmer moving into a newly created position, beginning a six- to eight-year official transition. Ballmer continues in a publicly visible capacity, but backs away from daily operations.
In that scenario, Sinofsky would be calling almost all of the shots by 2014. In the ongoing battle of the suits versus the geeks controlling Microsoft, the geeks would once again take top hand.
Of course, anything could happen in the next three years. Einhorn could mount a hostile takeover. The Kinect could outsell Office. Facebook's market capitalization could roll over Microsoft's. Apple could buy Nokia. But barring any truly bizarre blips, I'd be willing to bet that we'll see Sinofsky running the Microsoft show by the end of 2014.
I, for one, wouldn't mind that a bit.
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