Staying in the comfort zone

Ballmer has held almost every management job at Microsoft, including running Windows development. But Enderle said he appears to have fallen into the common CEO trap of staying within his comfort zone -- which in his case is being a "super sales guy."

Ballmer has his defenders. "I think Ballmer is a capable manager," said Jim Prevo, CIO at Green Mountain Coffee Roasters, which is a big Microsoft user. "My guess is that Microsoft has been evolving beyond the point where Bill Gates provides significant technical leadership for many years now."

Even Enderle thinks that for all of his failings, Ballmer remains a first-rate executive. "Ballmer could take [Eric] Schmidt alone as a CEO any day of the week," Enderle said, describing Schmidt as "largely a babysitter at Google."

Also, if Microsoft did decide to replace Ballmer before 2018, who would take over? Apart from Rick Belluzo, who lasted less than a year as Microsoft's president and chief operating officer before leaving in 2002, there has never been a clear heir apparent to Ballmer.

Three years ago, Microsoft created a troika of divisional presidents reporting directly to Ballmer: Jeff Raikes (Microsoft Business Division), Kevin Johnson (Platforms & Services) and Robbie Bach (Entertainment & Devices).

Raikes, who has worked at Microsoft for 26 years, was a little more equal than the others, according to Bajarin. But in January, Microsoft announced that he would retire from the company, effective in September. Raikes said last month that he plans to become CEO of the Bill & Melinda Gates Foundation, the philanthropic organization set up by Gates and his wife.

Kevin Turner, who as chief operating officer is responsible for Microsoft's sales, marketing and service organization, joined the company three years ago from Wal-Mart Stores, where he was best-known as its longtime CIO. "I want to see him make some hard decisions in his current role first," before considering him as a potential CEO candidate, Enderle said. He added that Ray Ozzie, who replaced Gates as chief software architect, is "a good technology guy and a coordinator, but in an administrative role, he would hate it."

Enderle's dark horse as a possible successor to Ballmer is Bob Muglia, senior vice president of Microsoft's Server and Tools business unit, which is responsible for developing products such as Windows Server, SQL Server and Visual Studio. "He is doing a fabulous job," Enderle said. "If all of Microsoft's divisions were doing as well as Server and Tools, the stock would be up two to three times." Muglia will be 58 in 2018.

Bajarin, meanwhile, calls the 46-year-old Bach "an interesting guy. He's got a mix of marketing, tech, operations [and] charisma." But, Bajarin added, Bach's chances of one day becoming CEO "are contingent on making the consumer businesses, which are so important to Microsoft's future, a success."

If Ballmer isn't going anywhere soon, what should he do to improve Microsoft's performance?

One: cut Microsoft's marginal efforts while talking up the areas where it's excelling, Enderle said. Two: change his management style. And three: focus on product development and quality in the same way as HP's Hurd and EMC CEO Joe Tucci -- two examples cited by Enderle.

John Halamka, CIO at CareGroup Healthcare System and Harvard Medical School, also pointed to product quality as a key focus area. Halamka said the length of Ballmer's tenure at Microsoft "will be dictated by revenue growth, and that does not happen long term unless the product quality is acceptable to the public."