Microsoft Needs a Businessman and An Outsider At the Helms - Jon Peddie

Next Chief Executive Officer of Microsoft Described

by Anton Shilov
08/26/2013 | 10:56 PM

While Microsoft Corp. remains the world’s largest software developer, its recent losses of market share to companies like Apple and Google clearly indicate that the firm needs a new direction for itself. While at present nobody on the planet knows who is going to become the next chief executive of Microsoft, an educated guess could describe a person that Microsoft needs.


Jon Peddie, the head of Jon Peddie Research who has been analyzing the computer market for several decades, believes that Microsoft does not necessarily require a new visionary – like Bill Gates – on the role of chief executive officer, but rather needs a business executive who will recognize potentially profitable products and technologies at the early stages of development and will not hold the company back.

“There have been so many changes recently at Microsoft, I do not know who I would pick. It seems pretty clear Microsoft is looking outside for the next president. Microsoft has always admired IBM, and Louis Gerstner in particular. He was a businessman and not a visionary. Gates was a visionary, and Ballmer more of the businessman. I think Microsoft is changing its direction and business in such a way they (the BOD) will look for someone from a big company (like GE or IBM) who will take the company in a slightly different direction,” explained Mr. Peddie in a brief conversation of X-bit labs.

Louis Vincent Gerstner was chairman of the board and chief executive officer of IBM from April 1993 until 2002 when he retired as CEO in March and chairman in December. He is largely known for IBM's historic corporate turnaround in the 1990s. When he was hired to lead IBM in 1993, he was an outsider from the IT industry and even wanted to disaggregate the company at some point. Instead, he consolidated IBM, but ceased to develop a number of products in order to concentrate on what the company did well: providing leading-edge services and selling advanced products to enterprises.

Microsoft is in process of a major transition these days and its future direction is pretty much clear: the world’s largest software maker’s strategy will focus on creating a family of devices and services for individuals and businesses. Creation of such products and services should not be a problem, the company has a lot of internal talent and a lot of money. What Microsoft does need is to roll-out competitive products and services on time and not be afraid of competing with its traditional.

“Microsoft has plenty of smart people who can come up with product ideas. They have so much money they can acquire any other technology/company they think they need for their growth strategy. With the company moving into the hardware business (tablets, Xbox, etc.) and competing with its customers by doing it, it seems clear there are no limits on what the company can or will do, and what markets it might enter,” said Jon Peddie.

Microsoft’s reorganization is at full swing and a lot of important strides have already been made. The software giant has moved to continuous product cycles; brought universal user interface to PCs, tablets, phones and Xbox; introduced its own brand media and business tablets. Nonetheless, no matter how right the transitions at Microsoft are, it looks like neither investors nor the board of directors believe in Steve Ballmer and that someone else could be better.

“One thing is clear, the investors and board of directors definitely want someone other than Steve Ballmer, who has been criticized as holding the company back, and is held responsible for the company’s share price; whether that is fair or not I do not know, but that is what has happened,” concluded the renowned analyst.