Microsoft Deal Thrusts Nokia’s Elop Into Ballmer CEO Race

Stephen Elop’s return to Microsoft sees him emerge as a strong contender for Steve Ballmer’s job

Days after the announcement that Microsoft is to acquire Nokia’s phone unit, there is increasing speculation that Stephen Elop could be Steve Ballmer’s replacement.

Stephen Elop left Microsoft in September 2010 for the CEO position at Nokia, but in the end returned to Redmond’s fold almost three years to the day after leaving for Nokia. That is thanks to Microsoft’s $7.1 billion (£4.6bn) acquisition of Nokia’s Devices and Services units.

Trojan Horse?

Just weeks before the deal, Microsoft CEO Steven Ballmer announced plans to retire in the next 12 months.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in an 23 August statement.

Elop-Stephen-Nokia-CEO-top-preferredBut just as many people have speculated that Elop left Microsoft and joined Nokia with every intention of converting Nokia devices to Microsoft’s mobile platform, many believe the idea that Elop delivered Nokia to Microsoft – a company he could someday run, as it has been speculated for years – isn’t a novel one.

“I feel like this was in the works the whole time,” Roger Kay, principal analyst with Endpoint Technologies, told eWEEK. “It always felt to me that he was a Trojan horse, going into the centre of [Troy].”

Still, Kay said the move is a risky one.

“Microsoft is betting big money that both of these wobbling giants aren’t going to collapse,” he said. “But it’s a reasonable bet and a prudent bet.”

Jack Gold, principal analyst of J. Gold and Associates, agrees Elop is no small part of the deal.

“I think it’s as much about getting Elop back as it is getting into the handset business, although having handsets under their own roof was not trivial,” Gold said in a 3 September research note.

“Microsoft gets Elop back on board as an executive, and that is a clear statement that Microsoft needs additional ‘new thinkers’ when it comes to management and when it comes to new product thinking,” Gold added. “Elop did a good job at Nokia, given the cards he was dealt, and his presence may spur Microsoft to rethink some of the strategy. This puts Elop high on the list of potential successors to Ballmer.”

Microsoft CEO

The decision to sell to Microsoft has the Nokia board’s buy-in, Gartner Research Vice President Carolina Milanesi pointed out to eWEEK, suggesting the larger picture. “But the setup makes it easier for him,” she acknowledges.

Forrester analyst Ted Schadler also expects that an Elop promotion is likely.

“Here’s what I think will happen,” Schadler said in a 3 September blog post. “Microsoft will elevate Stephen Elop’s position, possibly to CEO, perhaps at the 11th hour of Ballmer’s departure,” he wrote after a first bullet point.

(His second bullet point has Microsoft achieving the role of “significant third player.” While still behind Google and Apple, it will be a “very vital competitor and supplier,” Schadler wrote.)

Microsoft’s Ballmer says the public shouldn’t read too much into what the deal means for Elop’s future, the The Wall Street Journal reported 3 September, following an interview. “But he acknowledged,” the report added, “his longtime associate has gone from being an external candidate to an internal candidate.”

The report also added that in selecting Elop to lead the integration of the new business, Ballmer selected a “respected ally” and valued partner. Elop, Ballmer said, was one of the few people he called before publicly announcing his planned retirement.

A Microsoft purchase of Nokia has been in discussion for some time. Most recently, in June, The Journal reported that the pair were close to a deal that ultimately fell apart over price.

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Originally published on eWeek.