January 31, 2014 12:05 am

Microsoft cloud chief Satya Nadella tipped for top role

Satya Nadella©Bloomberg

Satya Nadella: likely successor to Steve Ballmer

Microsoft’s directors could name a successor to Steve Ballmer as chief executive within days, according to two people familiar with its plans, setting the stage for only the third leader in the software company’s 39-year history.

Satya Nadella, the executive in charge of Microsoft’s cloud and enterprise division, is seen as the likely successor, one of these people said, while cautioning that the board had yet to meet to make the formal selection. The company did not immediately respond to requests for comment.


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The elevation of an insider would disappoint shareholders who have been agitating for a more drastic change in direction following Mr Ballmer’s departure, perhaps even extending to a spin-off of its video game and search engine businesses.

Late last year, hopes that Ford boss Alan Mulally would take the reins fed rising expectations on Wall Street that the company might make deeper changes, though Mr Mulally eventually said publicly that he was not in the running.

An appointment of Mr Nadella would be likely to go down well with Microsoft’s rank and file, where he is seen as a popular and consensus-driven engineer. An Indian-born computer science expert who has been at the company for 22 years, he ran Microsoft’s consumer online services business, including its Bing search engine, before moving across to the enterprise side of the business.

Microsoft announced Mr Ballmer’s departure in August but said he would stay for up to a year while it searched for a successor. An unofficial deadline of the end of last year passed without a decision, though John Thompson, the outside director leading the search, said that the company still planned to end its search for a chief executive in the early part of 2014.

The committee of Microsoft directors leading the search is reported to have approached a number of outside candidates, including former Hewlett-Packard boss Mark Hurd and Ericsson chief Hans Vestberg, before narrowing its scope down to internal candidates.

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One potential concern for outsiders has been the influential role of co-founder Bill Gates as the company’s chairman, something that could limit the scope for a newcomer to make significant changes. Mr Gates’ influence over the selection process has drawn fire from some corporate governance experts, who have argued that it could put off good candidates.

The appointment of an insider would reduce the pressure for changes on Microsoft’s board to stem Mr Gates’ sway, according to one of the people familiar with the company. Mr Gates has already seen his formal influence over the company diminish steadily in recent years as he has sold a large part of his personal stake, putting him on course to lose his position as Microsoft’s largest individual shareholder.

Other insiders who have been considered for the job include Tony Bates, a former Cisco executive and boss of Skype, who came to Microsoft when it acquired the internet phone company. Stephen Elop, who left a top job at Microsoft to run Nokia, has also been seen as a top contender.

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