Who’s who guide to Microsoft’s ‘Game of Thrones’

Tectonic shifts are now rumbling through Redmond on an almost daily basis, and the Big One — the naming of Microsoft’s next Big Kahuna — is expected shortly. Rumors within the ‘Softie rank and file say Steve Ballmer’s replacement could be made public any day now. Here’s a brief synopsis of the latest news, complete with an updated scorecard you may want to use when the big day arrives.

Yesterday Microsoft announced that former System & Tools head and onetime Gates heir apparent Eric Rudder, currently head of Microsoft research and development (formally Executive VP of Technology & Research), will henceforth be known as Executive VP of something-or-another (formally Advanced Strategy), a new position that’s largely undefined and obviously located in Siberia. Craig Mundie saw a similar transition to “Senior Advisor to the CEO” in January.

Mundie and Rutter join Ballmer, Steve Sinofsky, Ray Ozzie, Bob Muglia, Andy Lees, and earlier departees — Jim Allchin, Nathan Myhrvold, Greg Maffei, Pete Higgins, Brad Silverberg, Jeff Raikes, J Allard, Robbie Bach, Charlie Kindel, Rane Johnson, Don Mattrick, Chris Liddell, Kurt DelBene, Richard Rashid, Mark Hurd, and a legion of other legends — now out to pasture. Dozens of the best computer industry minds of the past two decades have publicly hit the streets, and many more extraordinarily talented people (Jon DeVaan, Grant George, and Antoine Leblond come to mind) have simply dropped from sight.

Don’t shed a tear for those folks, by the way. They were all very well compensated. According to SEC Form 4 records, Rudder had 919,624 shares of Microsoft stock as of Sept. 19; Sinofsky had 1,176,195 on Sept. 12; and Ozzie had 998,739 on Nov. 18, 2009 — the last date I can find any recorded trade. MSFT closed yesterday at $38.155. You do the math.

Some industry gazers have criticized Ballmer for making managerial changes while his term’s so short, but that’s silly. Ballmer isn’t making these changes. The new CEO (or CEOs) is/are clearing the stage, in preparation for the big announcement.

Changes being made go far beyond executive offices. Most telling, Microsoft abolished the stacked ranking system yesterday. Quite likely the most hated part of the “Microsoft Experience” and the root of such widespread animosity that HR director Lisa Brummel is frequently called the “Most Universally Hated Exec at Microsoft,” stacked ranking stands as testament to Ballmer’s, uh, management skills. The fact that it’s now gone says there’s someone else pulling the strings.

Of course, TechNet is still on the skids, but at least we’re seeing some progress. (I digress.)

Here’s a scorecard you can tuck into your hip pocket (or Evernote) to bring up when the Big Kahuna surfaces. Let me lead with my two odds-on favorites, and a guy who could really make a difference:

• Ford Motor CEO Alan Mulally will undoubtedly be part of the new ruling class, although it’s anyone’s guess if he’ll take on the official title of CEO. There’s been so much press about Mulally — and his talents and friendships with key Microsoft stockholders are so well known — that Microsoft couldn’t ignore him any more than J.J. Abrams could ditch Yoda.
• I still figure Tony Bates holds the inside track. Executive VP of a newly created unit called Business Development (corporate strategy, customers, and developer support), Bates joined Microsoft in October 2011 when Microsoft bought Skype. In fact, he may be the most enduring part of that acquisition. Bates turned Skype into an enormously profitable enterprise, and he got Microsoft to shell out $8.5 billion to buy it. He has strong cloud experience, going way back. The big question is how Bates and Mulally would split up the pie: Would Mulally act as consigliere? Could Bates play COO to Mulally’s CEO — with a clearly defined (if not publicly known) succession plan? Bates is 46 years old; Mulally is 68.
• And the hometown favorite: Paul Maritz, who’s been knocking out cloud-based home runs since he left Microsoft 13 years ago. With a solid desktop-based background in Windows, Maritz went on to lead VMware, most recently turning out an amazing, “visionary” cloud glue called Pivotal. Maritz is the one person I hear of that regular Microsoft techies (some of whom were around 13 years ago) would love to work for. Maritz is 58.

Mulally and Bates made Reuters’ “exclusive” list of four Microsoft CEO candidates left standing. The other two were:

• Executive VP of Microsoft’s Cloud and Enterprise group Satya Nadella, who certainly has the technical chops for the job. He’s been with Microsoft for 21 years — started with the nascent Online Services Division, moved up to lead Bing, then Server & Tools — and he really gets the cloud. My guess is that he’s too valuable in a technical role and probably not perceived as enough of a business heavyweight to take the CEO position. Nonetheless, he’ll be a key part of the new Microsoft.
• The final last man standing named by Reuters, Stephen Elop, was in the news earlier this week, and not in a good way. Rightly or wrongly, he was quoted in Bloomberg as saying that Xbox and Bing could be sold off, and Office should rule the roost. This seemingly internal discussion was corroborated by no fewer than three Elop honchos speaking out of school. While Elop may or may not have said what’s been attributed, the overall effect was chilling.

(Consider that Office’s main claim to fame is its inscrutable native file format: Dozens of competitors have tried to manipulate Office docs without breaking them, and none have succeeded. It’s hard to imagine betting Microsoft’s future on the impenetrability of DOCX, XLSX, and PPTX formats.)

Elop has a short history with Microsoft — he led the Business Division (read: Microsoft Office) in January 2008, moved to Nokia in September 2010, managed to sell Nokia’s phone business to Microsoft earlier this year (collecting a cool $25 million on the way), and will return to Microsoft early next year, once the deal’s done. Prior to Microsoft, Elop held executive positions at Lotus, Boston Chicken, Macromedia, and Juniper, leaving a rather controversial trail.

The Reuters article says Microsoft has narrowed its short list down to five individuals, but it only names four. The article says that three of the candidates are “internal,” but it isn’t clear if Elop is internal or external or somewhere in between. Bloomberg popped up two days later and said that the final candidate is COO Kevin Turner.

• Turner joined Microsoft in 2005, from Wal-Mart, where his last job was CEO of Sam’s Club. He now has a very broad spectrum of duties at Microsoft, including head of sales and marketing, online advertising sales, corporate support (including IT), PR, customer support, and a handful of major “other” functions. By all accounts, he’s respected and capable — but whether he’d turn any Wall Street heads as CEO remains open to question.

Those are the people most frequently mentioned as the latest survivors in the ongoing Microsoft “Game of Thrones.” A year ago, I had a much longer list. Raikes and Bill Veghte remain dark horses, but they seem less likely to occupy the corner office with every passing day. Reed Hastings is doing a stellar job at Netflix, driving its stock into the stratosphere, and it’s unlikely he could be lured away.

As we enter the last episode of the season, it’s still hard to tell who will be left standing. And there’s always next season.

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