Another Microsoft Trojan? Sinofsky might just want a RIM job
OPERATION ELOP TWO is GO! Maybe
Analysis You are the Mussolini of Microsoft: you have the engineering operations of Windows and Office running on time, smashing their reputation for lateness.
You’ve run the $18bn Windows business unit for Microsoft, the world’s largest software company, and been in charge of the division building Office, the planet’s dominant personal productivity suite on the PC.
Your name was even starting to be dropped as a possible chief executive of Microsoft on the back of your latest creation, Windows 8. Yet after 23 years' of loyal service you suddenly find yourself without a job.
This is the question for Steven Sinofsky, who until Tuesday was the president of one of Microsoft’s biggest business units – Windows and Windows Live.
If you believe Sinofsky, he’s not looking for a job right now: he’s taking a break between product cycles, a move he’s encouraged others to make.
But no mentally functioning individual would, or should, believe this, given the importance of the work he was performing and his responsibilities inside Microsoft.
It’s not like Sinofsky needs the work: his 2012 remuneration package was worth more than CEO Steve Ballmer's, amounting to $8.5m. This included $658,333 in salary, an $1.5m bonus and stock and other allocations.
But somebody of Sinofsky’s character is an alpha-level, high-achiever type controller - somebody who doesn’t just run operations but changes their processes and structures to suit his vision of the world. He installed the culture of triads at Microsoft and even wrote a little orange book on how to manage.
It would seem logical for Sinofsky to land at another tech company. But where? Non-compete agreements in his contract with a company involved in so many markets will prevent him from joining many other tech employers - at least in the short term.
One option around this would be to "do an Elop", and join a company that suits both Microsoft and his new employer.
Stephen Elop was the president of Microsoft’s Business Division, home to Office, until September 2010, when he resigned and straight away became CEO of Nokia.
He moved to a company in crisis, with falling market share, and soon a strategic review was conducted - famously leading Elop to dump Nokia’s work with Symbian and Linux in favour of Windows Phone. This inevitably led to a whiff of suspicion of conspiracy.
But, let's imagine the Sinofsky move was some brilliantly conceived long play by Ballmer. In this scenario, Sinofsky would go to a company in a sector that would prove beneficial to Microsoft. But who and where?
Hardware would be the obvious move, whether it’s devices or PC, given Microsoft is now making Surface and is rumoured to be building its own phone.
RIM job for Microsoft's man?
One candidate is RIM, which has a fresh CEO but one who hasn’t managed to arrest the handset-maker’s market slide or raised its game among devs.
Two years into Microsoft’s supposed mobile rebirth with Windows Phone 7, and despite the Lumias coming from Elop’s Nokia, Windows Phone still has just 3 per cent market share. That's compared to 70-plus per cent for Android.
A RIM job and a strategic alignment could help Windows Phone on market share over time and it would give Microsoft control over a manufacturing process for any Microsoft phones. However, it would sour the relationship with Nokia, which would fret about being denied exclusive access to new features in new versions of Windows Phone.
How about another hardware move: Sinofsky is hired by a PC maker. Again, plausible given the arrival of Surface and the fact Microsoft has been hit hard by supply shortages on Windows RT Surfaces. PC makers, meanwhile, are struggling with falling revenues and profits, and market share.
Hewlett-Packard is probably out as it, too, as it has a relatively new CEO in Meg Whitman. She’s already engaged in executing on a turnaround plan and has given herself until 2016 to deliver.
The past catches up at HP
There’s another problem in the fact that at least one former Sinofsky colleague works there and won’t welcome his arrival. Bill Veghte is HP’s chief operating officer but had been one of three Windows Group senior vice presidents with Sinofsky and Jon DeVaan before Sinofsky was named Windows group head in 2009. Nineteen-year Microsoft veteran Veghte left Microsoft in 2010.
Then there’s Dell. Back under the control of Michael these past five years, Dell has diversified but fallen down the market-share rankings, losing its crown long ago to HP and now slipping to number three according to IDC and Gartner.
Is Sinofsky the turn-around man Dell needs? Certainly, for Microsoft, Dell has the manufacturing processes and channel to crank out and help push Surface along with Windows 8 PCs.
Microsoft’s other great weakness is the web. Years after the Bing invention, Google continues to hoover up online dollars. Meanwhile, on cloud, Amazon remains the juggernaut with Microsoft’s Azure missing customers and revenue targets.
Could Sinofsky do an Elop, and land at a friendly internet or cloud company? It’s hard to see one on a scale that’s in sufficient trouble that it would want to bring in a new CEO. Not after Yahoo!, with which Microsoft already partners on ads and search, hired Google’s Marissa Mayer this year.
Given engineering, developers and product are his strengths, it’s possible Sinofsky could end up at somewhere like Amazon, Facebook or Zynga, working on the product and developer ecosystem and making apps and services tuned to Windows, Windows Phone or other platforms. He’d certainly be following in the footsteps of a number of other ex-Microsofties in going to Amazon.
Some have speculated, or rather hoped, Sinofsky’s break with Microsoft is not permanent – that he’ll work elsewhere and return to Redmond wiser from the world, to assume the CEO’s post once Ballmer’s time has come.
That time, though, isn't coming soon and Ballmer plans to run Microsoft until the end of the decade. Of course, whether he actually makes it depends on Windows 8 and Windows Phone and the reaction of the Microsoft shareholders and board.
Long road back
This is a long and uncertain road back to Redmond for Sinofsky. In the meantime there’s bills to pay, reputations to manage, and visions to fulfill. If Sinofsky’s exit isn’t some elaborate Trojan ploy, then based on what we’ve seen before, he has a number of options open.
One is to become an angel investor; another is run his own start-up – like ex Sun Microsystems CEO Jonathan Schwartz; or maybe he could land at a less high-profile tech company, as happened to ex-Oracle president Charles Phillips, who beacme CEO of ERP specialist Infor. Alternatively, Sinofsky might make a tangential move to a different but somewhat aligned field. That's what happened to Shai Agassi, SAP's onetime high-flying product technology group president tipped for the CEO's post but who resigned suddenly in March 2007... and went to a Better Place, becoming CEO of the eponymous electric-car company. Agassi has now left Better Place.
No matter where Sinofsky lands, one thing is for sure: his new employer will need to be comfortable bringing on somebody famed for delivery but also for not working well with those who disagree with him. An employer's question will be: what do they value most? ®