Microsoft Extends CEO Search

While Wall Street seems to want Microsoft to choose Alan Mulally as its next CEO, it's beginning to look more like that ship has sailed. Microsoft Lead Independent Director John W. Thompson, who also heads the search committee to find the next CEO, Tuesday revealed the search will continue into next year.

Technically, the search committee has plenty of time to make a decision. Ballmer gave his 12 months' notice back in August of his plan to retire. But most analysts and watchers have gone under the assumption that the board would announce a new CEO by year's end. Apparently realizing that won't happen, Thompson took the unusual step of saying so in a brief blog post that offered little evidence of where the committee was headed.

Some follow-up reports yesterday suggested the board wants someone from Silicon Valley with a strong background in technology. It's reasonable to assume, as Nomura Securities Analyst Rick Sherlund suggested, that the board hasn't offered Mulally the job -- though it hasn't ruled him out yet. It appears, however, that if it felt Mulally was the best candidate, Microsoft would have picked him by now. The fact that he hasn't committed to staying at Ford, which is irking the automaker's board, suggests he hasn't ruled out a move to Redmond if offered the position.

If by chance Microsoft has offered him the job and he's still dragging his feet, the board should fish or cut bait with him for the sake of both companies. One candidate with both tech and management chops that was under consideration, Qualcomm COO Steve Mollenkopf, fell off the list when the mobile processor vendor named him as its CEO.

Another outside favorite is Paul Maritz, the former CEO of VMware Inc. and now CEO of that company's spinoff, Pivotal. Not only did Maritz boost shareholder value for VMware during his stewardship of the company, he has a vision of technology few leaders have today. Maritz also was a former senior exec who spent many years in the inner circle of founder and Chairman Bill Gates and Ballmer. However, while this friendship may carry positive weight for Maritz, tipping the scales the other way is the fact that many of his talking points as CEO of VMware were to marginalize the value of Windows, both on the client side and in the datacenter.

While surely he could spin his way around that, it's a moot point. Maritz told Sherlund over lunch last week he's not interested. With Maritz not being an option, Sherlund has been talking up his longtime colleague and successor at VMware, Paul Gelsinger, who also has strong management and technology credentials. But Gelsinger may have his sights on the top job at VMware's parent EMC when its current CEO Joe Tucci retires.

Thompson said in his post that Microsoft has honed in on about 20 candidates. Wall Street may want an external heavy hitter but Microsoft may be best served by an insider like Satya Nadella. Just like making sure a new version of software is ready to ship, Microsoft (which we all know has a checkered past in that regard)  is being deliberately careful on who will be only the third CEO in the company's history. On the other hand, uncertainty can't sustain Redmond for too much longer.

Posted by Jeffrey Schwartz on 12/19/2013 at 10:51 AM