Who will Microsoft Corporation (MSFT)’s next CEO be? Stephen Elop’s strategy could involve focusing mostly on Office and dumping the Xbox.
Microsoft Corporation (NASDAQ:MSFT) was said this week to have narrowed its CEO candidates from 40 down to a much smaller list, but the search could still continue for a few months. Nonetheless, at least one of the candidates who are supposedly on the company’s short list is saying what he might do if he became CEO.
Elop might refocus on Office
Some analysts have said in the past that Microsoft Corporation (NASDAQ:MSFT) should sell off the Xbox division and / or Bing. Former Nokia CEO Stephen Elop appears to agree, according to a report from Peter Burrows and Dina Bass of Bloomberg. They cite sources who claim Elop would refocus Microsoft on Office, particularly by making it available on Android, iOS and other mobile platforms.
He reportedly wants to move away from using Office to drive demand for Windows on PCs and mobile devices. Bloomberg’s sources also said he might consider selling or shutting down the Xbox division and also the Bing search engine.
Would Elop be a good CEO for Microsoft?
One of the biggest questions investors and Microsoft Corporation (NASDAQ:MSFT) have to ask is whether Elop would be a good CEO for the company. After his turnaround failure at Nokia, I wouldn’t think so, and his supposed strategy isn’t too encouraging either. It just doesn’t seem like it’s enough. Elop is already set to return to Microsoft as part of the sale of Nokia’s devices division, but this doesn’t mean he has to be CEO. In fact, I would hope Microsoft doesn’t choose him. It’s bad enough he’s taking over the hardware unit, which includes the Xbox and the Surface tablet. However, his experience could be put to good use under the leadership of a CEO with a history of turnaround successes.
Nomura analyst Rick Sherlund, who arguably is one of the closest to Microsoft, thinks Ford Motor Company (NYSE:F) CEO Alan Mulally will get the top job at Microsoft. Let’s hope he’s right because I think Mulally can do great things there.
Maximizing Office sales at Microsoft
One thing I think Elop does have right, if Bloomberg’s sources are correct, is seeing Office as something more than a means to try to push sales of Windows devices. There’s no denying that PC shipments are still falling, and this is something Microsoft Corporation (NASDAQ:MSFT) must deal with. Office is more than just a means to sell more Windows devices, so it certainly does deserve more of a focus. Shifting it to the subscription model through the Office 365 product is a step in the right direction. However, Office isn’t everything Microsoft has to offer. Its enterprise businesses are also a key part of the equation.
Sherlund agrees with Elop’s supposed view in suggesting that the Xbox and Bing should be sold or spun off. He thinks the company is trying to do too much. Microsoft Corporation (NASDAQ:MSFT) has said recently it wants to shift its focus to hardware and services. This means that devices like the Xbox could still play a role in the company’s future. However, the Xbox division is healthy and could probably stand on its own if Microsoft decides to move in this direction.