Recently sources claimed that Microsoft's board has a three-person list of internal candidates to replace Steve Ballmer as the company Chief Executive Officer, consisting of Chief Operating Officer Kevin Turner, business development and evangelism chief Tony Bates, and cloud and enterprise business chief Satya Nadella. Before narrowing the internal list, the board also spoke to Bing and Office chief Qi Lu and operating systems boss Terry Myerson.
As for outside candidates, the board is currently interviewing Ford Motor Co. CEO Alan Mulally and former Nokia Oyj CEO Stephen, who resigned as Nokia's CEO when the $7.2 billion sale of its devices and services business was announced months ago. Elop will supposedly become head of a new Microsoft devices unit that controls the Surface tablets and Xbox gaming consoles.
However sources claim that Elop believes Microsoft could create more value by maximizing the sales of Office rather than use the software to sell Windows-based devices. Even more, to sharpen the company's focus, as CEO he would actually sell off or shut down major businesses such as Bing, which has been a costly effort to take on Google's own search engine. The Xbox business could also be sold off if deemed not critical to the company's strategy.
Investors drove Microsoft shares to their highest price since mid-2000 earlier this week, thanks to a comment made by Nomura Holdings Inc. analyst Rick Sherlund. He said that fiscal 2015 earnings could be lifted by 40 percent if the company sold off its Bing and Xbox units. “Microsoft is trying to do too much, and these assets add no clear value to the overall business,” wrote Sherlund. He also predicts that Ford's Mulally will likely fill Ballmer's shoes.
Sources point out that while at Nokia, Elop cut 40,000 jobs and reduced operating expenses by 50 percent. There's a good chance Elop will impose job cuts and "belt-tightening" as well to create even smaller teams at Microsoft. He will also likely focus on what a customer can do with a device rather than the underlying operating system. As an example, he dumped Symbian because it wasn't gaining any ground on iOS and Android, and went with Windows Phone, believing Microsoft's OS would be a fast track to success.
Another clue to Elop's thinking, according to sources, stems from the way he handled Nokia's mapping and location-tracking software. Instead of making the service proprietary to Nokia phones, he turned it into a standalone software business called "Here". Amazon is the latest customer to use Nokia's mapping service in several of its products.
Bloomberg points out that in his earlier days at Microsoft as a senior executive, Elop cut a deal to offer Office on Nokia's Symbian phone software. Then in 2010, the company added free, scaled-down versions of Word, PowerPoint and so on that anyone could access via the Internet. Elop also reportedly oversaw the development of Office 365, a hosted version of the popular suite that requires an annual subscription instead of a software purchase.
