Report: Huge Microsoft shakeup coming. Gates might give up chairmanship, Nadella in as CEO

Microsoft(s msft) is considering having co-founder Bill Gates step down as chairman of the board of directors and naming insider Satya Nadella its new CEO, Bloomberg News is reporting. If true, this is blockbuster news.

It appears some recalcitrant shareholders —┬áthe cohort that pretty much forced Steve Ballmer into his slow-motion exit as CEO — have also been roiling the waters over Gates, who co-founded Microsoft with Paul Allen 39 years ago. Their contention is that Gates needs to pick between running his philanthropic efforts — the Bill and Melinda Gates Foundation — or focus on Microsoft. And the thinking seems to be not even Gates can do both.

Bloomberg wrote that Microsoft director John Thompson, former CEO of Symantec and a top exec at IBM Software, could step in as chairman. Thompson has been leading the CEO search.

Speakers: Satya Nadella - President, Server and Tools Business, Microsoft

Satya Nadella – President, Server and Tools Business, Microsoft

A Microsoft insider said nothing has been announced internally but said the rank and file just want this drawn-out drama to end. Until a new CEO is named, no one knows even whether the reorg announced last summer (by Ballmer) will proceed.

As for Nadella, he is a respected veteran executive with the company having run the business applications division, Bing, and now Server and Tools. Other internal candidates include Tony Bate and Stephen Elop. And the list of rumored outsider candidates is a who who of Global 500 execs, including Ford CEO Alan Mulally, Ericsson CEO Hans Vestberg, and Qualcomm CEO Steven Mollonkopf.

If Gates is out as chairman, it’s a seismic event, but even if he remains on, Nadella would be only the third CEO in Microsoft’s storied near-40-year history.

I’ve reached out to Microsoft for comment, but don’t expect any to be forthcoming until the news is public. As expected, Microsoft had no comment.

Here’s a clip of Nadella talking to Om Malik at our Structure conference last June:


This post was updated several times after it was published with additional details.