Microsoft hunts for a new CEO as the Steve Ballmer era winds down

It's official, Satya Nadella is Microsoft's next CEO, and on his first day on the job he's sent a letter to the whole staff. In the letter, Nadella speaks of what he thinks makes Microsoft a great company, and where he thinks it can go in the future. He warns that "While we have seen great success, we are hungry to do more. Our industry does not respect tradition — it only respects innovation." Nadella also lays out a bit of his plan for the company. He mentions that he requested Bill Gates to help out more than he has in the past few years, and perhaps more importantly, he speaks generally of focusing the company on what it does best. He says "We need to prioritize innovation that is centered on our core value of empowering users and organizations to 'do more.'" You can read the letter in its entirety below.

The Verge Live on Microsoft’s new CEO Satya Nadella

It’s official: Microsoft’s search for a new CEO is over. Following recent speculation, the software giant is indeed appointing Satya Nadella as its new CEO to replace Steve Ballmer. The 46-year-old Nadella will take over immediately, allowing Ballmer to retire early. Nadella had been one of a number of candidates that Microsoft is believed to have interviewed for the role; the company originally said it was pushing to name its Ballmer successor before the end of last year. Despite the fact that the search extended into 2014, the timing of the CEO announcement is important as it places Nadella in charge ahead of the closure of Microsoft’s Nokia deal and the company’s ongoing reorganization.

Today is a very humbling day for me,” says Nadella in an internal memo to Microsoft employees. “It is an incredible honor for me to lead and serve this great company of ours.” In the broad letter, Nadella outlines his reasons for working at Microsoft, along with his 22-year history at the company. “While we have seen great success, we are hungry to do more,” he notes. “This is a critical time for the industry and for Microsoft. Make no mistake, we are headed for greater places — as technology evolves and we evolve with and ahead of it. Our job is to ensure that Microsoft thrives in a mobile and cloud-first world.”

In addition, the report says that Microsoft's board is considering replacing founder Bill Gates as the company's chairman. Board member John Thompson is named as a possible replacement. Thompson recently revealed details about the company's CEO search, and he's said to have pushed Ballmer in the past to adapt more quickly to the competition.

As for the reported CEO replacement, Nadella is no stranger to Microsoft. He's been at the firm for over 20 years. He studied Electrical Engineering in India before he eventually moved to the states to study computer science. Before joining Microsoft, he worked at competitor Sun Microsystems until 1992. Once he arrived in Redmond, he worked on research at the company's online services division before rotating through a few different positions including working at times on Office and Bing. More recently, he's worked to realign Microsoft’s cloud services. Significantly, he has not been heavily involved with the company's consumer-facing products.

Microsoft is on the verge of massive change. CEO Steve Ballmer has announced his retirement, and the software giant doesn’t have an immediate replacement waiting in the wings. After 38 years with just two CEOs, the company is searching for its perfect match — someone to move software out of traditional boxes and into service efforts, an individual who can steer towards new a hardware push.

That’s a tall order. After months of searching, the company revealed last week that it’s not planning to name Steve Ballmer’s successor until 2014. While many had expected a new CEO by now, the search will continue over the holiday period and into the new year. Microsoft identified over 100 candidates and spoke with several dozen before focusing in on a group of 20 individuals. This group has now narrowed, and the current speculation is now centered on four key names: Ford CEO Alan Mulally, former Nokia CEO Stephen Elop, Microsoft cloud and enterprise boss Satya Nadella, and former Skype president Tony Bates.

Microsoft has been hard at work looking for a CEO to replace outgoing leader Steve Ballmer, but it looks like we'll have to keep waiting for the company's final choice. Despite a desire to have a new CEO ready to go by the end of 2013, the company has just admitted that its search will go on for the time being — the company expects its search to be complete in the early part of 2014. Microsoft board member John W. Thompson admitted as much in a blog post released today.

We identified over 100 possible candidates, talked with several dozen, and then focused our energy intensely on a group of about 20 individuals, all extremely impressive in their own right. As you would expect, as this group has narrowed, we’ve done deeper research and investigation, including with the full Board. We’re moving ahead well, and I expect we’ll complete our work in the early part of 2014.Of course, finding a replacement for Ballmer isn't easy — Thompson notes that Microsoft has only had two CEOs in its history, so finding a third isn't something the company and its board will take lightly. We've heard details on a number of individuals rumored to be on Microsoft's short list for CEO, but a strong front runner hasn't emerged yet. Ford CEO Alan Mulally seemed to be at the head of the pack, but Ford recently reaffirmed his intention to stay with the automaker through 2014.

Microsoft has been hunting for a new CEO to replace Steve Ballmer since August — the company has said it hopes to get someone on board before the end of 2013 — and now a new name has entered the running. According to a report from Bloomberg, Microsoft is said to be considering Qualcomm Chief Operating Officer Steve Mollenkopf for the job. Mollenkopf joins the rest of Microsoft's rumored short list, which is reported to include Ford CEO Alan Mulally, former Nokia CEO Stephen Elop, Microsoft cloud boss Satya Nadella, and former Skype president Tony Bates.

At the same time, it's looking like Mulally is becoming a less likely candidate; earlier reports had him pegged as a front runner, but Bloomberg's sources indicate that he has faded as a leading candidate over the past two weeks due to concerns with his lack of technological experience. At the same time, a Ford board member said that Mulally was planning to stay with Ford through the end of 2014. A lack of technology experience wouldn't be an issue for Mollenkopf if he becomes Microsoft's CEO — he's worked with Qualcomm since 1994 and is now second in charge at one of the leading mobile chip manufacturers. Qualcomm's success in mobile might be a factor that makes Mollenkopf more attractive as the company continues to make its Windows Phone platform a key part of its strategy for the future.

Ford CEO Alan Mulally has been floated as a leading candidate to succeed Steve Ballmer as Microsoft's chief executive. But Ford board member Edsel Ford II says Mulally will be sticking with the company through the end of 2014. That would seem to disqualify him from taking the reins at Microsoft, since the tech stalwart is looking to find a new CEO inside of a year. "Alan is staying through the end of 2014 and that’s all I know," said Ford II, who is the great-grandson of founder Henry Ford. Speaking to Bloomberg TV, he reiterated the point again later. “Frankly, he has told us that his plan is to stay with Ford through the end of 2014." Mulally himself has said the same though, though he's generally sidestepped questions on his future. Some have theorized that, if hired, Mulally would essentially serve as a "caretaker" CEO, tasked with getting Microsoft back on the right track before stepping aside for another, longer-term replacement.

Mulally, 68, has led Ford since 2006, and is credited with turning the company's fortunes around through the mid- to late-2000s as other American automakers were struggling to survive. He and departing Microsoft CEO Steve Ballmer share a close relationship, according to The Wall Street Journal. Ballmer reportedly sought Mulally's advice as he mapped out Microsoft's ambitious reorganization that the company announced over the summer.

Who will be Microsoft's next CEO? Reuters is reporting that the company now has a shortlist of just about five names, including Ford CEO Alan Mulally, former Nokia CEO Stephen Elop, Microsoft cloud boss Satya Nadella, and former Skype president Tony Bates. Citing anonymous sources, the publication writes that the hiring process could still take a few more months and that Microsoft is still interviewing other candidates — challenging a previous rumor that the company might have a new chief executive by the end of the year.

Some Microsoft investors might not be happy with the idea of Bill Gates and Steve Ballmer continuing to guide Microsoft after retiring from the CEO role, but it seems likely that both will continue to do just that. On November 19th, company shareholders will vote on the new board of directors, and today the board has recommended that both Gates and Ballmer be re-elected to their positions there.

Gates has served on the board of directors since 1981, and is presently the company's largest individual shareholder with 4.52 percent of the company's stock. Ballmer joined the board in 2000 when he became CEO, and holds 3.99 percent. All other directors hold less than 1 percent of the company at present, though investment firm BlackRock has 5.57 percent. If they stand together, Gates and Ballmer could still wield a substantial amount of power at the company. Hopefully, Microsoft's new direction, whatever it is, will be compatible with their leadership behind the scenes.

What does the Microsoft of the future really look like?

It's been four weeks since the company announced its $7.2 billion plan to acquire Nokia's phone business, cementing CEO Steve Ballmer's plan to transform Microsoft from a software provider into a devices and services company, and the answer is getting fuzzier by the day.

In Steve Ballmer's tearful farewell to Microsoft, he assured employees that they would build amazing things without him at the helm. "We will deliver the next big thing... we will change the world again." Some shareholders, however, believe that the company can't make necessary changes simply by replacing a CEO. Today, Reuters is reporting that three of the top 20 Microsoft investors are also calling for Microsoft chairman Bill Gates to step down.

According to Reuters:

Alan Mulally is known for turning companies like Ford and Boeing around while at the helm, but while Microsoft may be hoping he can do the same thing again after its CEO Steve Ballmer steps down sometime within the next year, Mulally isn't speaking to the possibility just yet. According to USA Today, Mulally denies that he's already planning on making the jump over to Microsoft from his current position as Ford's CEO. "I love serving Ford and have nothing new to add to [my] plans to continue serving Ford," he tells USA Today. Mulally has reportedly also mentioned that he will stay on at Ford until at least 2014.

But Microsoft is apparently considering him nonetheless. Bloomberg News is now backing up an earlier report from Reuters, saying that Microsoft's board is looking at Mulally as a potential replacement for Ballmer. The board's considerations are reportedly still very early, however, with a decision far from being made. With Ballmer admitting to Microsoft's struggles in the mobile market, finding a CEO who can change the company's prospects may well be an important one. The company should have plenty of other choices though — including Nokia's outgoing CEO, Stephen Elop — but whoever it chooses will find a company amidst what's likely to be a complicated transition into bundled hardware and services.

Outgoing Microsoft CEO Steve Ballmer has always been a speaker and performer like no other — his absolute enthusiasm for his company is electric in person, turning ordinary corporate events into raw displays of emotion that are often criticized but never forgotten.

That energy was on full display earlier this week, as Ballmer led his last Microsoft employee meeting as CEO — he's announced his plan to step down within 12 months, and the search for a new chief executive is currently underway. And while earlier reports hinted at the intensity of Ballmer's feelings during his speech, The Verge has obtained exclusive video of Ballmer's final moments on stage. It is powerful and touching footage — one of the most influential men in the history of technology saying goodbye to the company he helped create. It is also vintage, perfect Steve Ballmer: intense, emotional, and set to the Dirty Dancing soundtrack. The tech industry will never again have anyone like him.

Microsoft's Steve Ballmer bid farewell to employees today at his final company meeting as CEO. After announcing his intentions to retire within the next 12 months, Ballmer's speech today was clearly an emotional moment for him personally. According to sources familiar with the meeting, Ballmer told employees "we will deliver the next big thing... we will change the world again." During his hourlong speech, Ballmer discussed the Nokia deal and him passing over the CEO role to a new leader.

Microsoft announced a massive company-wide reorganization earlier this year, and now it's starting to reveal exactly how that will impact its businesses going forward. During a meeting with financial analysts yesterday, Microsoft CFO Amy Hood detailed how the software maker is moving from its traditional model to a new one based on devices and services. Previously, Microsoft has always generated most of its money through licensing software on PCs. In the future, Microsoft wants to make money through selling devices, advertising, cloud-based subscriptions, and its traditional licensing models. If it all sounds like a mix of Apple, Google, and Microsoft, that's because it is.

"We have a lot of opportunity with this new model," explains Hood. "We're creating economic value by doing it." Microsoft simplifies it down to three key areas that overlap: devices, enterprise services, and consumer services. On the devices side, Microsoft will sell its own hardware like Xbox One, Surface, and a range of Windows Phones soon thanks to the Nokia acquisition. Taking profits directly from owning the software and hardware combination is how Apple has generated vast sums through the iPod, iPhone, and iPad. It’s an Apple strategy that Microsoft is envious of. "Everybody is trying to adopt Apple's strategy," said Apple CEO Tim Cook in a recent interview discussing Microsoft's Nokia plans.

Speaking at Microsoft's financial analysts meeting today, CEO Steve Ballmer was refreshingly realistic about the company's struggles in smartphones and tablets. "Mobile devices. We have almost no share," he admitted on stage, before noting he didn't know whether to be enthusiastic over his admission or uncomfortably tense. "But I'm an optimistic guy, any time we have low market share sounds like upside opportunity to me." That upside opportunity is the key reason Microsoft moved to secure Nokia's phone business.

With longtime Microsoft CEO Steve Ballmer having announced his plans to retire, everyone is hungry to find out who his successor will be. And while early rumors pointed to outgoing Nokia CEO (and longtime Microsoft exec) Stephen Elop, some prominent voices are pushing for the company to hire someone that specializes in turning around troubled firms. Reuters reports that "at least three" of Microsoft’s top 20 investors are urging its board to consider Ford CEO Alan Mulally and Computer Sciences CEO Mike Lawrie, citing "several" sources familiar with the matter.

Mulally is credited with helping to turn around the culture at Ford, reinvigorating tired brands like the Taurus. His name has been floated for the past week, and the Ford board is reportedly open to letting him step down as early as the beginning of 2014. But so far, the former Boeing engineer is staying quiet, telling Reuters that he is "absolutely focused on serving our Ford." It's also worth noting that Steve Ballmer holds Mulally in particularly high esteem, writing in 2009's Time 100 that "changing industries can upset even the most seasoned executive. Not Alan. He understands the fundamentals of business success as well as any business leader I know."