Heir Apparent MIA

By Reuters  |  Print this article Print

Microsoft is entrenched in business and consumer consciousness as the company that owns the Windows OS and the Office productivity suite. But Apple has made serious inroads recently, capturing the imagination of both business and consumers with its iPad tablet device. Is Microsoft's efforts to protect its core markets hampering innovation? Some say yes.

If not Ballmer, then who would run Microsoft? Some entertain the idea that Gates will emulate Jobs at Apple and return to usher in a magnificent revival. But people close to Gates say there is "zero" chance of that happening, as Gates is consumed with fighting killer diseases and improving education through the $33 billion Bill & Melinda Gates Foundation.

The latest favorite in a long line of executives tipped to succeed Ballmer is Steven Sinofsky, the 45-year old who runs Microsoft's Windows unit, but he is not regarded as the anointed heir. Microsoft says it has a succession plan but will not talk about it publicly.

The problem in finding a worthy successor is that Microsoft executives tend to be either software experts -- a "Bill guy" -- or financial and sales oriented -- a "Steve guy". (Only two of Microsoft's 18 senior leaders are women.)

Microsoft's five operating divisions don't act as fully standalone businesses, which some argue means no executive is getting the ideal training to be CEO, where you must combine knowledge of software and sales.

"They need to take more of a Hewlett-Packard model, or a General Electric model, where they partition the company into some small number of semi-independent businesses," said one former executive, who asked not to be named. "Then you get very senior CEO-quality people running those businesses. That's what Microsoft needs to do and that's how you find a successor to Steve."

Breaking Up Is Hard

That's exactly what some have been advocating for years. Break the company into smaller units that must survive on their own merits. "Jack Welch at GE would fix this in a New York minute," said Dodge at Google. "Any business must be number one or two in the market or get out."