Microsoft CEO Search: Mulally and Nadella Take the Lead

Ford's CEO and the head of Microsoft's cloud business are the frontrunners while Silicon Valley throws its support behind Tony Bates.

For months, Ford CEO Alan Mulally has been considered the frontrunner in the search for Steve Ballmer's replacement as CEO of Microsoft. However, the company is said to be also weighing an internal candidate whose career aligns with the company's goal to become a cloud computing powerhouse.

Microsoft insiders told Bloomberg that the software giant's board of directors "is focusing on Ford Motor Co. Chief Executive Officer Alan Mulally and internal executive Satya Nadella as part of a group of more likely candidates to become the next CEO of the world's biggest software company, according to people familiar with the matter." Tony Bates, former president of voice over IP (VoIP) innovator Skype—Microsoft acquired Skype in 2011 for $8.5 billion—and Nokia CEO Stephen Elop are technically still in the running, but their prospects aren't as rosy, according to the report.

Ballmer is set to retire by August 2014, the chief executive announced this summer, after more than 13 years at the helm. Following the July 11 announcement of a massive reorganization effort, part of the new "One Microsoft" strategy, Ballmer said an Aug. 23 statement, "There is never a perfect time for this type of transition, but now is the right time."

Just as Microsoft's leadership is embroiled in spearheading the One Microsoft strategy, Mulally is leading a similar effort at Ford. A Ford spokesperson told Bloomberg that "Alan remains completely focused on executing our One Ford plan. We do not engage in speculation."

Nadella is the head of Microsoft's Cloud and Enterprise computing group. He has been with Microsoft since 1992.

"Nadella and his team deliver the 'Cloud OS,' Microsoft’s next generation backend platform," reads his executive bio. Cloud OS "not only powers all of Microsoft’s Internet scale cloud services (including O365, Bing, SkyDrive, Xbox Live, Skype and Dynamics) but also fuels global enterprises around the world to meet their most challenging and mission-critical computing needs," added the company.

Bates has Silicon Valley's vote.

All Things D's Kara Swisher wrote on Nov. 29 that "more than a dozen tech leaders in Silicon Valley, as well as several top Microsoft execs I have talked to over the last week, have a single choice to lead the company: Tony Bates." A source told Swisher that Bates "is a bold choice that would say a lot to the rest of the tech world that Microsoft is ready to engage."

Microsoft co-founder and former CEO Bill Gates is involved in the process of choosing a new CEO. "As a member of the succession planning committee, I'll work closely with the other members of the board to identify a great new CEO. We're fortunate to have Steve in his role until the new CEO assumes these duties," he stated.

Gates himself is facing pressure to step down as chairman. Reuters reported on Oct. 1 that three top investors are "lobbying the board to press for Bill Gates to step down as chairman of the software company he co-founded 38 years ago." Apart from Gates' diminishing financial stake in Microsoft, the investors are concerned about his influence over the CEO selection process.

The anonymous investors, who collectively own over 5 percent of the company's stock, fear that Gates' role as chairman "effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes."

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...