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Cognoscenti anoint Nadella as next Microsoft CEO

January 31, 2014 02:58 PM ET

Whether it's Nadella, as everyone with a keyboard seems to believe, or someone else, the new chief executive will need to, as Gartner analyst David Smith said today, "Dig the company out of the hole it's dug for themselves" on a number of fronts.

"Job one is mobile and tablets," said Smith in an interview today. "Nadella, if it's him, or whomever takes the job, has got to do things differently. You have to believe that Ballmer was a big part of the decision making in the past, and many of those decisions have to be rethought."

Other than pushing mobile, which Microsoft has been trying to do with little to show for it, the new CEO must refocus on developers, a historical strength of Microsoft, and make some fundamental changes to Windows 8, the firm's flagship operating system, said Smith.

"And Nadella, again if it's him, has to bring in some talent who understands mobile and tablets," said Smith. "He doesn't have that experience. For all their talk, Microsoft is still a software company."

Previously, some suggested that if Microsoft picked an unproven insider -- like Nadella -- he or she would be tag-teamed with a more experienced executive, perhaps from the board. Those thoughts have been resurrected in the last 24 hours, as some reports claimed that Gates would step aside as chairman, either at the announcement of a new CEO or shortly after, with John Thompson, a former CEO of Symantec, appointed in Gates' place.

Thompson, who has been on the Microsoft board for two years, has led the CEO-search committee, and was the one who told investors late last year that a new chief would be named early in 2014.

Moorhead thought an arrangement like that would make sense if the partner had a background to fill the gaps in the background of the new chief. "Nadella will need to be augmented by someone with a lot of consumer experience and success," Moorhead said, echoing Smith.

There may be some logic to such an arrangement, or even in Gates downsizing his role on the board to assist the new CEO in a more hands-on manner. But the reality is that Nadella, for one, has run a big business: Server and Tools generated $19.4 billion in revenue during 2012, the last full year it was a separate division.

The final fiscal year of Gates' rule as CEO, all of Microsoft booked revenue of $19.7 billion, about the same as Nadella's outfit produced in 2012.

On Friday, investors seemed to applaud the news of Nadella's inevitable ascension to CEO, with shares up 2.4% by 2 p.m. ET, although the price was still down 3% from the last year's high of Dec. 4, 2013.

"Nadella's a fresh face, though not a fresh face in that he's an outsider," said Smith. "That's good news to enterprises, I think, because he has a good track record in the cloud, and done the right things in situations where they have not always done the right things. So people should be somewhat optimistic."

covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at Twitter @gkeizer, on Google+ or subscribe to Gregg's RSS feed Keizer RSS. His email address is gkeizer@computerworld.com.

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