Microsoft investors hungry for the company to recreate its business model have reportedly called for its co-founder Bill Gates to resign as chairman and leave with outgoing CEO Steve Ballmer to allow the company to have a fresh start.
Three of the top 20 investors in Seattle-based Microsoft called for Gates to resign out of fear that his role would limit a new CEO's power to pivot the company away from dependence on the PC market and more toward the cloud and mobile industries, sources told Reuters on Tuesday. Those three investors collectively hold 5 percent of the company's stock, while Gates is the largest individual shareholder with 4.5 percent of the company's stock, so Gates' removal is unlikely, Reuters added. This call for Gates' removal highlights an intense desire to revamp Microsoft ahead of Ballmer's plans to step down as CEO before August 2014.
Gates handed the CEO title to Ballmer in 2000 and shifted to focus on his philanthropy work with the Bill & Melinda Gates Foundation. Gates has also been selling about 80 million Microsoft shares each year as part of a plan that would end his financial stake in the company by 2018, according to Reuters.
Despite the decline of the PC market Microsoft still reported $77.85 billion in annual revenue for the fiscal 2013 year during its last quarterly earnings report in July. Ballmer has been criticized for allowing companies including Google to take advantage of the rise of mobile and cloud technologies since 2000, but critics trying to remove the old guard would go too far if they removed Gates, says Al Gillen, system software analyst with International Data Corporation market research firm.
"Bill Gates has brought a lot of value to the company, and his invo1vement still has some value," Gillen says. "It's somewhat shortsighted on the part of investors to want to remove Bill Gates."
The push to remove Ballmer makes it unlikely that a new CEO would come from within the old guard of the company, which Gillen says has been hesitant to redesign strategies within the company, including its software licensing business model. Gates also has focused mainly on his philanthropic work since 2000, and much of the decision-making in the company since then has been made by Ballmer, Gillen says.
Microsoft's purchase of Nokia announced on Sept. 3 is among the company's steps to become a device provider instead of merely a software provider, but more needs to be done for Microsoft to adapt its business to succeed in the increasingly device-centric world, Gillen says.
"Some things are going to have to be broken at Microsoft," Gillen says. "The new CEO has to be willing to rethink everything."
Alan Mulally, chief executive of Ford, may be the leading candidate to replace Ballmer, according to AllThingsD. Mulally was a former CEO of Boeing Commercial Airplanes based in the Seattle area,