It won’t come as a surprise that Microsoft engineers are keenly interested in who’ll be the company’s next CEO. So when board member and search committee member John Thompson said that he expects the job will be filled early next year, it created quite a stir.
It shouldn’t have.
Microsoft’s $7.5 billion buyout deal of Nokia’s devices and services business isn’t expected to close until the first quarter. If you believe the speculation that Microsoft will name the device-maker’s former CEO Stephen Elop as its new chief, it will have to wait until that billion-dollar deal closes. In the meantime, Elop is serving a dual role at both companies: Executive vice president of devices and services.
Why Elop and why wait for the close?
Despite reports that Elop has fallen off Microsoft’s short list, there are a number of reasons that he’s likely still on it, according to a Dice News source familiar with the software giant’s thinking:
- Microsoft’s Business Division accounts for the largest slice of its revenues, $24.7 billion in fiscal 2013. Elop served as its president from 2008 to 2010, when he left to become Nokia CEO. “Look where Microsoft makes it money. They’re not going to put it in jeopardy with a car guy,” says the source, referring to talk that Ford Motor CEO Alan Mulally is a front-runner.
- Mobile and cloud computing are two of Redmond’s key initiatives. To address the mobile piece, just look at the Nokia deal. Who led Nokia as CEO? Elop. Although the company’s performance didn’t dramatically improve under him, its business had the right mix of what Microsoft was looking for.
Still, why wait until the Nokia deal closes? One big reason comes to mind: What if the agreement hits a snag and doesn’t close? The value-add that Elop brings to the table with his knowledge of the mobile space — particularly as it relates to Microsoft’s major smartphone partner Nokia — will be diminished. Elop may also wish to return to Nokia as its CEO. Microsoft has cleared two major hurdles in clearing the transaction: gaining Nokia shareholder approval and regulatory approval in both the U.S. and Europe.