Why 'One Microsoft' may be better with two CEOs

Why 'One Microsoft' may be better with two CEOs

Summary: As Microsoft chief executive Steve Ballmer celebrates 14 years at the software giant's helm, a new boss is slated to land in the next few weeks. But what if there were two?

TOPICS: Microsoft
(Image: CNET)

Mulally out. Mollenkopf out. Perhaps, Vestberg in?

As Microsoft chief executive Steve Ballmer celebrated 14 years at the company's top spot on Monday, speculation remains over who will replace him to steer the world's most well-known software giant through its toughest period yet.

Recent nuggets from the rumor mill pick out Ericsson CEO Hans Vestberg as the latest in-the-running candidate to be Ballmer's successor.

But we're still no closer to finding out who will take the top role at a company that -- despite recent enterprise and consumer-focused troubles over Windows 8 -- still draws in significant profits quarter-over-quarter.

Microsoft isn't going anywhere any time soon, nor is Ballmer -- if they can't find a suitable replacement.

Vestberg has an impressive resume and a wealth of industry knowledge. He oversaw the dismantling of Ericsson's decade-long mobile devices joint venture with Sony, and has worked in every part of the technology company, according to Bloomberg, which first broke the story.

But his choosing was likely to come as a "surprise" to many on Wall Street, Reuters says.

The software giant is structured as one of the more fractionated in the industry, which shifted even further in its recent July management reorganization — making it more complicated to read than its previous five set divisions. And that still doesn't include the soon-to-be-included Nokia's devices and services unit, which has yet to complete but has already been given the thumbs-up from European and U.S. regulators.

But the aesthetic changes to how it looks internally haven't changed what the company dishes out to the end public.

With two greatly differing yet interoperating units that will propel Microsoft into the next few years, at a time when its bread-and-butter offerings are changing in the face of an ever-evolving industry — from declining PC sales, a monopolistic mobile industry, and an emerging cloud market — two CEOs may make more sense than one.

Because with such a sprawl of various business units all punting towards the same goal, separated by two often-contrasting values between the business and consumer (not to mention the in-between bring-your-own-device ("BYOD") customer), the challenge is finding a leader that can fulfil both roles.

Microsoft remains a cluster bomb of billion-dollar businesses. From Azure to Xbox, Surface to Windows, Office and server software. Each unit could be split off and blown up into its own company. 

While "One Microsoft" may be the running tagline, the company can be sliced, albeit unevenly, down the middle: devices and services, two separate yet intermingling divisions that entangle dozens if not hundreds of different variables in their own right. 

And that's going to be the company's biggest headache for its "One Microsoft" value: Who has the chops to take on both? 

It's not the first time that two CEOs been considered. Recode (formerly AllThingsD) editor Kara Swisher threw around the idea late last year when speculation was rife and many now discounted candidates were still in the running.

It would, in essence, take the SAP (although that will soon change) or Workday approach. Both companies have two bosses sharing responsibility across different areas of each company.

In SAP's case, Jim Hagemann Snabe focused on products and solutions, while Bill McDermott took on sales and ecosystem activities. They both share marketing and other governance roles. For Workday, both Dave Duffield and Aneel Bhusri co-founded the company; but while Duffield sees Bhusri as the "heir to the throne," according to one interview, he also makes separate decisions in the company's running.

It's not a perfect picture, though. Then-named Research in Motion had two chief executives, Mike Lazaridis and Jim Balsillie. And recent history showed how well that worked out.

Sometimes there isn't just one good candidate. In any case, Microsoft's forward-looking vision has to take into account what's important from a product and service perspective going forward.

What's important to Microsoft is the continued focus on its "devices and services" mantra. Vestberg may well fit the bill with more than ten years experience in the mobile industry, thanks to the Sony co-operative that propelled "Sony Ericsson" into the public light. 

His weakness, according to Reuters, is his lack of experience in consumer products. While his name is just a rumor at this point, with nothing confirmed by Microsoft or Ericsson, the software giant will want someone with greater all-round experience.

Or, at least someone with enough skills and business-sense to take on one half of the company. 

Taking the cream of the crop from either side and pairing them up in a power-sharing agreement — a cloud leader and a mobile leader — could be the only way Microsoft forges ahead against its competitors in an increasingly turbulent time for the technology industry.

It's a tale of two halves: the Surface, Xbox, Windows Phone, and the lesser-known Perceptive Pixel devices, and others — as well as the vast array of enterprise-based servers, cloud technologies, Office products and other business-related products and services.

Because Microsoft hasn't been for some time "just that Windows company."

Pairing Vestberg, or any other mobile industry-focused candidate, with a business services candidate may be fitting for Microsoft's fractured division nature. Likely matches could include enterprise guru like Microsoft's Satya Nadella, or even Skype's Tony Bates — both of which have been previously slated to take on the leadership role.

In spite of the products and services wedge that cuts not-so-neatly down the middle of Microsoft, the wider software, devices, and services ecosystem is pulling together — and it still revolves around Windows, even if it isn't the front-running business anymore.

But that doesn't require one person at the top controlling both things. It can, but it doesn't have to be. Having two chief executives who can talk to each other would make more logical sense than having one unique character controlling both — and badly.

Topic: Microsoft

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  • This would be a breathtakingly stupid error, and I don't imagine they will

    make it.

    We saw with RIM - it just doesn't work.

    Give the new CEO very strong deputies, people who can master large chunks of the organization, think strategically, and work independently. Give the new Microsoft CEO a Chief Software architect with Bill Gates' management skills and critical mind, and give him a Jonny Ive in Devices div.

    But for heaven's sake, whatever you do, make the buck stop somewhere!! Someone must be in charge. Without accountability, there's no responsibility.
    • One Data Point Ain't Universal

      Yeah, we saw it fail at RIM.... but they were already failing. So at best, the dual CEO thing didn't fix RIM. But nothing else anyone there was willing to do would have fixed them.

      If you read the article, you'd know that this approach was very successful at SAP. I'd bet it's not the solution for everyone, but Zack does help build the case for Microsoft. And if the BOD can't isolate a single individual they believe capable of being the next Gates, this is a possible course of action.
  • Why 'One Microsoft' may be better with two CEOs

    Microsoft is just fine with one CEO. Too many complications with having 2 CEOs. If the load needs to be split up then you have presidents and vice presidents of the divisions. Also there is a board overseeing the operations as well. The idea of having 2 CEOs just means more possibility of conflict and would harm Microsoft instead of helping them.
  • they would be better with zero CEOs

    The position is a complete waste of resources, its time to downsize the management structure.
    • Just how

      Do you propose to run a company without a CEO? Who would be in charge?

    It's huge, moves slowly, and has a brain the size of a golfball.

    And just like a dinosaur, it's core products (Office and Windows) are heading for extinction!

    Microsoft was ran into the ground by Ballmer. That's not something you can reverse overnight.

    They missed enterprise Networking (remember Novell), they missed the Internet and now Mobile.

    The writing is on the wall for MS.

    If they hadn't spent the last 3-decades being so arrogant and greedy, they might actually have more consumer support.
    • Do you enjoy spamming?

      This article is about "Why 'One Microsoft' may be better with two CEOs".

      You're posting about "Several Opinions about why I irrationally hate Microsoft, in addition to three other non-related things and another Opinion".
    • Nearly every Fortune 500 company is run like this ...

      It is inevitable. Young companies take risks during their growth period that cannot be maintained once the company has something to lose - especially once they go public. Stockholders run scared and so do board members.

      Just look at Apple. Jobs' body wasn't cold before the Apple board started putting the pressure on Cook to make Apple even more profitable by cutting prices and increasing market-share. Jobs was a FOUNDER, Cook is an employee. It will be the same with the next CEO of Microsoft. Once Gates and Ballmer are off the Microsoft board (whenever that happens) the next CEO will face the same problems.

      As for Ballmer, during his tenure he triple Microsoft revenues while doubling their profits.
      M Wagner
    • orandy, you sound like a jealous child

      you so want to be like everyone else that you say the dumbest things because you figure if you believe it, then everyone else will believe it, too, and they'll except you.

      Just grow up, or move on back to Sesame Street, I really don't care what one you choose.
      • It's "ACCEPT" not "EXCEPT"...

        Not bad for a child, huh?

        You may not be a child, but you're about as educated and intelligent as a poor one.

        If you can't properly form a sentence, get an education before replying to my post.
        • The smartest man in the world made a typo.

          By your logic, he must be mentally retarded, right?

          "... it's core products (Office and Windows) are heading for extinction!"

          "If you can't even properly form a sentence, get an education before replying to my post."

          Hi there, hypocrite.
          • while on the subject

            It should be its not it's...it's = it is only, its is the possesive form.

            As for the subject of the post, I think there should be only one CEO, by definition it is Chief Executive Officer. He may be just a figurehead with oversight only, but it needs to be just one.
    • So how long

      Have you anti-softies been saying that Microsoft is at it's end?
    • I wish I'ld have Ballmer's lame skills

      I'ld love it to "run my company into the ground" and while doing so, trippling profits and creating 3 new business divisions.

      So basicaly, you are complaining that microsoft didn't succeed in putting a windows logo on every single little and big device and/or chip that works with 1's and 0's and is connected to the internet.

  • Why not multiples of 3?

    Zack, what has happened to your ability to think coherently? Your reasoning seems to always be borderline absurd. Why don't we see some coherent content in your writing?
  • Why, yes Zack, just look what two CEOs did for RIM (BlackBerry)!

    Sorry for the sarcasm, Zack, but having both Ballmer and Gates on the Board will be challenge enough for any single CEO. Having two CEOs being sent in differing directions by the two most powerful board embers would be a nightmare.
    M Wagner
  • Let's face it...

    There will always be two CEOs as long as Bill Gates is actively connected with Microsoft.
    • If Bill Gates wanted the job...

      ...he'd have it. It's clear that while he wants to retain influence over company policy, he doesn't want to manage the day to day affairs of the company, which is what CEOs do.

      The title is chief *executive* officer, meaning that it's his job to implement the decisions of the Board of Directors, which is normally the principal policy making body. An effective CEO will play a major role in shaping that policy, but he is an *executive*, not usually a dictator (unless he holds a controlling interest in the company all by himself).
      John L. Ries
      • "...it's his job to implement the decisions of the Board of Directors"

        So, basically, the Microsoft CEO has to do what Bill Gates tells him to do?
        No wonder they're having a hard time finding a Ballmer replacement.
        • Bill Gates

          Is not the entire board - and in his day Gates also had to implement decisions made by the board. This is how most major companies are run.