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After Ballmer: What is Microsoft's strategy for the future?

There is little sense in adding to the avalanche of criticism that cascaded down on Microsoft CEO Steve Ballmer since he announced he was leaving the company. The strategic missteps he made in his tenure as CEO the past 13 years are well documented. Why he couldn’t find a single technology visionary inside or outside the company with whom he could formulate a compelling strategy for the future remains a mystery.

The more important issue at hand is finding a successor with such a vision and, as importantly, clearing a political path for him or her to execute that vision. The difficulty here, one Microsoft’s major competitors don’t have to deal with, is finding such a visionary that also can manage at $70 billion-plus software company, a company with a rough and tumble political environment.

There is an excellent chance such a candidate doesn’t exist. Inside the company the only one who could grow into that role is Satya Nadella, currently Microsoft’s executive vice president of the company’s Cloud and Enterprise group. He has the job title that perfectly positions him for making some of the tough decisions involving all the pieces of Microsoft’s cloud strategy (think devices and services), with a Masters in computer science he has the technical chops to walk the walk and, at 43, he is young enough to have a good feel for where the new technology trends are coming from.

Oh, and one added benefit to Nadella taking the throne — as my colleague Diana Hwang points out — he has the right amount of geek chic to sell that vision to younger IT professionals coming up through the ranks.

Outside the company, there are few to no prospects that might realistically be interested in taking on the challenge, despite the potentially huge financial rewards if he or she is successful. It is doubtful that a Lou Gerstner will emerge as he did in the early 1990s to save IBM, or a Steve Jobs coming back in 1997 to do the same for Apple.

Microsoft could go the conservative route and hire from within, someone like Craig Mundie, a proven, professional manager who wouldn’t rock the boat and carry on with what Ballmer has put in place. But that is not what Microsoft needs. It needs someone who has the guts to trade in the existing boat for one that is faster and more agile.

The new CEO, likely an outsider, will have help Microsoft  rethink what it wants to be, which most recently is to be a devices and services company. As part of that process, one of the toughest decisions he or she must make is dropping the Surface tablet/desktop. It is a noble attempt at trying something innovative, but it has inspired few to make any sizable investments.

If the new CEO can’t dissuade the company from dropping it completely, at least he or she could stop selling it directly and let Asian-based, high-volume suppliers sell it. That would at least give the company something of a customer base to sell Windows 8 to. Microsoft now, and never has, had a promising future as a systems hardware company. But with the acquisition of Nokia, a new CEO would have trouble getting out of the business of selling devices.

The second tough decision, related to the first, is to release the version of Office for iPad the company has had locked up in the vault for well over a year, according to sources inside the company. Ballmer personally laid down the law that the iPad version of Office would not ship at the same time as the version for Windows, for fear it would hurt sales of the Surface.

Well, that’s all a moot point now. As we come up on the one-year anniversary of the Surface, the company has sold between one and two million units. Microsoft likely would have sold millions of copies of Office for iPad in that time. Microsoft has a much more promising future as a software company.

In fact, it may have a more promising future as a software and services company. With devices out of the way, Microsoft would do well to think about what Web services it can deliver, most importantly, for Office. If the company is going to ask corporate users to pay $100 a year to switch to the Web-based version of Office, it would be nice if the company could deliver something to users other than their own-cloud-based data. Delivering new value-added services for Office, such as better analytics for instance, might entice both existing and new users.

Such services, I would assume, would be delivered from Windows Azure which would offer Microsoft a boost to that platform, which sorely needs more cloud-based applications.

We’ll save for another time what the new CEO must do to address the corrosive nature of Microsoft’s in-house politics.

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