Microsoft investors should be particularly thankful this holiday season.
The stock has finally come back to life and is up about 40 percent this year, on top of its increased dividend.
It’s going to keep getting better. After a slow start with Windows 8, the operating system is now in a complete lineup of compelling products ready for shoppers, including a variety of touch-screen PCs for under $500, not to mention an array of Windows phones and tablets, plus the Xbox One.
Even more intriguing, though, is the imminent arrival of a new chief executive in Redmond.
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I’ll bet my gravy that MSFT jumps again soon when the company announces its next chief executive, apparently Ford boss Alan Mulally.
Based on my observations and conversations, I think Mulally will be announced as the new CEO within a week or so under an arrangement that brings him to the company for perhaps three or four years.
At 68, Mulally is unlikely to lead Microsoft through the next generation of technology. But he has experience and skills Microsoft desperately needs right now.
Really, Microsoft doesn’t need the next Bill Gates or Steve Jobs at this point.
It has a deep roster of geniuses who can see the direction that technologies are heading and who can create exciting products. It also has leaders who do a pretty good job running the organization and increasing sales.
No, what Microsoft needs in the short term is someone who can organize and tune a global manufacturing operation producing complicated, software-dependent devices that people love.
Remember, Microsoft is about to close on its $7 billion acquisition of Nokia’s mobile-device business. That will make it one of the world’s largest gadget manufacturers, with factories and distribution infrastructure around the world.
My guess is Mulally will be hired primarily to shepherd Microsoft through its transition to a “devices and services” company and to groom internal candidates to become a longer-term chief executive when he finally retires.
If you were filling that job, the best candidates anywhere would probably be Mulally and perhaps Apple CEO Tim Cook. One of them already has a house on Mercer Island and a deep affinity for Microsoft.
Another uniquely qualified candidate is Stephen Elop, the outgoing Nokia boss and a former Microsoft executive who knows both companies intimately. But with his radical overhaul of Nokia still a work in progress, Elop would be poorly received by investors, and by observers who believe Microsoft’s device business is doomed based on its past missteps.
Whoever takes the job is likely to announce job cuts next year, because there will be redundancy as Microsoft takes on 32,000 Nokia employees. The upside is that these cuts may appease the bloodthirsty investors circling Microsoft with cleavers.
There may be a mixed reaction to Mulally, especially around here.
Warm and fuzzy feelings about the homecoming of a “Seattle guy” would be slightly tempered by the recent behavior of Boeing Grinches in Chicago. Mulally’s been at Ford since 2006, but in Washington state he’s still associated with a company that just extorted billions in tax breaks, money we couldn’t find to educate our children, fix our roads and care for our poor.
As the former head of Boeing’s commercial-airplane business, Mulally also shares some blame for its overreaching with the 787’s global manufacturing scheme, which led to costly delays and major glitches.
Apparently that was a learning experience that helped Mulally do things better at Ford.
Lately he has been profitably running 77 factories and offices around the world, from Argentina to Vietnam. Among the ways, he improved Ford’s business to consolidate production around standardized vehicle platforms that can be scaled up around the world. He simultaneously won over consumers, producing some of the best-selling vehicles in America.
This turnaround — and the way he guided Ford through the recession without a bailout — secured Mulally’s legacy as a great business leader.
There aren’t many opportunities to write another chapter in a book like that, but realigning one of the most successful companies in history to secure its future would be a nice conclusion.
Then there’s the icing on the cake. After being passed over to head Boeing, Mulally would end his career running a company that’s three times larger by market capitalization.
Mulally has already helped his friend Steve Ballmer reposition Microsoft. It’s not a coincidence that Ballmer’s “One Microsoft” mantra echoes the “One Ford” theme around which Mulally organized Ford.
Ballmer, meanwhile, has been a whirlwind this year, setting a new course for Microsoft’s next phase of growth. He pivoted the business toward a subscription-services model, built a foundation for its devices business with the Nokia deal, and updated its personnel-management system.
At first I thought this was ego — trying to leave his mark for a bit longer.
Now I think Ballmer has been trying to make life easier for Mulally. With a clear road map in place, the company won’t lose momentum during the transition and tarnish the newcomer’s arrival.
That road map will also reduce distractions as the new boss gets up to speed while tackling the most pressing job in Redmond over the next few years: turning the world’s largest software company into the world’s largest device manufacturer as well.
I think it would be exciting to have a former airplane developer producing phones, tablets and PCs. As long as he doesn’t cut corners on battery design.
Brier Dudley’s column usually appears Mondays. Reach him at 206-515-5687 or email@example.com