Microsoft's Gates highlights tough requirements for new CEO

BELLEVUE, Washington Tue Nov 19, 2013 6:28pm EST

1 of 2. Microsoft Chief Executive Steve Ballmer answers questions at the company's annual shareholder meeting in Bellevue, Washington November 19, 2013.

Credit: Reuters/Jason Redmond

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BELLEVUE, Washington (Reuters) - Chairman Bill Gates said on Tuesday he was pleased with Microsoft Corp's progress in finding a new chief executive but outlined the difficulties in picking the next leader of the world's largest software company as it seeks to reinvent itself as a mobile computing power.

Gates is part of the four-man committee that gave itself a year to find a successor to Chief Executive Officer Steve Ballmer after he announced his plan to retire in August. Sources close to the process have said the search is down to a handful of candidates, but the company itself has been largely silent.

"We've been doing a lot of meetings with both internal and external candidates and we're pleased with the progress," said Gates at Microsoft's annual shareholder meeting in Bellevue, Washington. "We're looking at a number of candidates and I'm not going to give a timeline today."

Ballmer said in August he planned to retire within 12 months, and the CEO search committee - headed by lead independent director and former IBM executive John Thompson - tasked itself with finding a replacement by the end of that period. Sources close to the company expect an appointment no later than January.

Gates, who in previous years did not address the shareholders' meeting with prepared remarks, went on to describe the challenges of finding the right person to lead Microsoft.

"It's a complex role to fill - a lot of different skills, experience and capabilities that we need," he said. "It's a complex global business the new CEO will have to lead. The person has to have a lot of comfort in leading a highly technical organization and have an ability to work with our top technical talent to seize the opportunities."

Gates paused briefly and choked up with emotion after he thanked Ballmer for his work at the company, saying both he and Ballmer have a commitment "to make sure the next CEO is the right person, for the right time, for the company we both love." Gates and Ballmer are the only two CEOs in Microsoft's 38-year history.

Gates, who co-founded Microsoft with Paul Allen in 1975, then left the stage and sat in the front row of an audience of around 400 people, alongside other members of the board. That was a departure from previous years when he remained onstage and occasionally answered questions.

Microsoft has not shed much light on its CEO search, but sources close to the process have told Reuters the company has narrowed its shortlist of candidates to just a handful, including Ford Motor Co chief Alan Mulally and former Nokia CEO Stephen Elop, as well as former Skype CEO and internal candidate Tony Bates, now responsible for Microsoft's business development.

Microsoft remains highly profitable and last month beat Wall Street's quarterly profit and revenue forecasts.

But the company has come under criticism for missing some of the largest technology shifts in the past few years from Internet search to social networking, and Apple Inc and Google Inc are now at the vanguard of a mobile computing revolution that is eroding its core PC-based business.

Microsoft's shares closed down 0.5 percent at $36.74 on Nasdaq.

(Reporting by Bill Rigby; Editing by Gerald E. McCormick, Bernard Orr and Lisa Shumaker)

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Comments (3)
funny4life wrote:
Anyone who says Microsoft missed the ball on shifts in technology does not understand technology. The best Microsoft could have done was released Windows RT a few years sooner to a very weak market with a confusing operating system. Now thanks to Intel, full affordable Windows tablets are starting to appear. I honesty don’t see any reason to use a Android or Apple tablet at this point. They are very limited in what they can do and are almost like toy’s compared to the new Windows tablets.

Nov 19, 2013 8:19pm EST  --  Report as abuse
Well, there is something else “that is eroding Microsofts core PC-based business.” With Windows 8, MS ignores the needs of about 450
million Win XP users and of about 600 million Win 7 users.

1) From Win XP (about 450 million worldwide users as of Nov 2013), you can only upgrade to Windows 7, if you first upgrade to Vista. But Vista was not quite ready, and never was properly fixed. So, forcing Win XP user through the Vista disaster makes people think
twice about upgrading. Anyone who has ever gone through upgrades that failed, and who’s gone back to what worked before, will agree.

So, as a Win XP user, if I want to go to Win 7, I have to basically start over and reinstall each and every program. Do you even understand what kind of a definite and obvious hurdle or disincentive this is to make the jump to Windows 7. Talk about MS shooting itself in the foot big time.

2) Likewise, if you want to upgrade from Win XP to Win 8, you are out of luck, because you’d have to go to Vista, then 7, then Win 8. So you have to start over fresh and reinstall all programs you
have on your Win XP computer. If you like Win 7, and you hear about
Win 8, then you will automatically decide to stay with Win 7 for as
long as possible.

3) Windows 8 makes the big mistake of saying “one size fits all”.

In other words, for Windows 8 in the worldview of Microsoft there are apparently no specific customer groups that need to be satisfied, i.e. there are no big biz, medium biz, small biz, personal customers, there is no scientific, education, goverment, military markets, there are no desktop and mouse users, there are neither old, middle aged or young people. There is only touchscreen and Windows Phone.

To get my point: With Win 8 Microsoft makes absolutely no effort to satisfy any of these various target markets, with the possible exception of the “very young social crowd of computer users” who are to be found only on such major time waster entertainment sites as facebook, twitter, snapchat, hulu, netflix, etc. These users are happy to jump around on the metro interface because they have nothing else to worry about.

4) Windows 8 is a non starter, because it makes the transition for
users coming from Win XP, Vista (if any), and Win 7 quite difficult.
It is akin to a slap in the face for Win XP and Win 7 users. Win 8.1 does not fix the very basic things that need to be fixed. It is not
just about having a start button, it’s about being able to do quite
simple things, like e.g. “try to make a shortcut on the desktop, when on the metro screen”, “try yo open a link in a new tab or window, when in Metro screen”, “try to print something”, “try to open, close, minimize, maximize and resize windows”. “Try to find a file.” “Try to figure out whether a program is closed or still running, which is important for security”. All of this has been made difficult or impossible. Why is destroying or hiding away functions that worked before, apparently a main goal of new operation systems?

And yes, I bought a Windows 8 computer, worked with it for a while, and then brought it back to the store. I read about Win 8.1, but the changes made there are not sufficient.

Windows 8 is a no go for me, unless and until Microsoft comes out of
“freakishly stubborn mode” and reintroduces or re-enables all the basic practical functions from Win XP and Win 7. Give the customer what they want, and not what you think in your “overgeeked brain-goof method” it has to be. The majority of personal computer users
ARE NOT GEEKS. Why oh why dear Microsoft, do you think that car makers try to make cars that “just feel right” to the customer? Why are there sporty, economic, ritzy, classy, safe, insane and reasonable cars? Because what floats the customers boat, sells. What doesn’t, won’t.
Once you think that question through, you might come closer to make a smarter decision. Here’s my guess: Just from looking at Ballmer I feel that Microsoft must be suffering from such an astounding unimaginable power-trip, and that only those people who are on similar power-trips can even be near major egomaniacs for a full work day, if not a career. Bill Gates does not do anything to improve that situation, and the rest of the board members, I really don’t know what they do there, except saying yes to the latest outburst. Egofreaks cannot ever admit that they were wrong. And that’s why there is no change yet.

Here is a forecast: By Feb or March 2014, the people who need to
upgrade from Win XP to Windows 7 will not be able to do so, because
your Office Max, Office Depot, Staples will carry only Windows 8 computers, but not the Windows 7 models people will want to buy.
Of course I could be wrong, but that the way it looks from here.

Nov 20, 2013 1:07am EST  --  Report as abuse
James.inv wrote:
Microsoft needs a CEO who can turn the company around by not just keeping up with new technology trends, but lead the organization as well. Bates is fresh blood; he seems to be a person who can combine different perspectives into one focal point for Microsoft. Giving Bates the CEO’s seat will give Microsoft an opportunity to move away from its orthodox mindset towards a fresh and more modern direction.

Nov 25, 2013 1:02am EST  --  Report as abuse
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