This article originally appeared on Jan. 31, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here.
Rumors surfaced late Thursday that Microsoft (MSFT) had selected internal candidate Satya Nadella to become its third CEO. The news came as a surprise to many, but it shouldn't have.
In TheStreet on August 27-- the day after Steve Ballmer announced he was retiring -- I suggested that Bill Gates was most likely to select Nadella. Why did I think this? Of all the people on the Microsoft board, Gates is undoubtedly the strongest. He's the founder. The rest of the board all pretends that they are meeting their fiduciary responsibilities by asking tough questions and providing strong oversight. But it's Bill's company and it is Bill's board.
This suggested to me that it had to be someone with whom Bill was comfortable. As the search process played out, we saw that even the outside contenders for the job -- like Alan Mulally -- have all had a personal tie to Gates.
The company is under tremendous pressure from outside observers to change. The forced removal of Steve Ballmer certainly was a sign that the board knew that it needed a change of direction. Even though a search for the next head of Microsoft would go far and wide, considering a vast number of candidates, I never believed that Gates would opt for a radical choice.
Gates was never going to hand the keys to someone he perceived as a novice outsider who would rip apart the company indiscriminately -- all for the need to change. I'm not saying the company doesn't need some change. I'm just saying Gates was never going to go there. I also believe it was Gates' inherent conservatism that made younger candidates like Tony Bates unlikely choices.