Microsoft CEO candidate understands the danger

by Steve Blum • , , , ,

Vestberg living large at CES.

“It’s normally not given that the winners in the first phase are the winners in the second phase”, said Hans Vestberg, CEO of Ericsson at CES last week. It might be that someone on the Microsoft board was listening hard, because the rumor of the day has Vestberg on the shortlist to be its new CEO, replacing Steve Ballmer, who announced his impending resignation last year.

Vestberg was talking about the challenge in front of Ericsson, which was an early behemoth of the mobile phone business, but has remade itself as it fell far behind in handset manufacturing and its infrastructure business lost ground as voice networks were upgraded to handle broadband. But also it’s a deadly accurate description of the predicament that Microsoft is in, as its 30-year dominance of PCs becomes increasingly irrelevant in a mobile-centric world.

As a successful CEO and thought leader in the mobile industry, Vestberg can set a new direction for Microsoft. The bigger question, though, is whether he – or anyone else – can make the floundering company respond and steer it onto course. Other candidates have reportedly taken themselves off the list because Ballmer remains on the board and Bill Gates is still the chairman, potentially handcuffing any new CEO. Microsoft benefitted in the past but largely suffers now from harsh competition between internal fiefdoms. Vestberg joined Ericsson as a college student and has never worked anywhere else – it’s a fair question whether his experience coming up the ranks of a major Swedish company is the right preparation for a parachute assault on the baronies of Redmond.

There’s no doubt, though, that he’s a plausible and applaudable choice, far preferable to any internal candidate. The problem with Microsoft is that no one there seems to realise that the industry is in a new phase and it isn’t a winner anymore. More than anything, Microsoft needs the perspective and insight that an outsider like Vestberg can bring.