As part of the restructuring, Microsoft dissolved its five business units -- the Business Division, which housed Office; Server & Tools, which included SQL Server and System Center; the Windows Division; Online Services, which included Bing; and Entertainment and Devices, whose main product was the Xbox console. It replaced them with four engineering groups organized by function, around operating systems, applications, cloud computing and devices, and by centralized groups for marketing, business development, strategy and research, finance, human resources, legal and operations.
Some industry experts believe that rather than unify Microsoft, a better strategy would be to give its divisions more autonomy, because the company's product line has become too diverse with products as different as the Xbox gaming console and the SQL Server enterprise database.
Others who have been rumored as viable candidates are IT industry executives, and most are either current or former high-ranking Microsoft executives.
They include Satya Nadella, executive vice president of Microsoft's Cloud and Enterprise Division, Kevin Turner, the company's COO, who was CIO at Walmart and CEO of Sam's Club, and Stephen Elop, Nokia CEO and former division president at Microsoft who is due to return to Redmond when Microsoft's acquisition of Nokia's smartphone business is completed.
In addition to Nadella, other top Ballmer lieutenants who have been said to be in the running include Operating Systems Engineering Group leader Terry Myerson; Devices and Studios Engineering Group chief Julie Larson-Green; Applications and Services Engineering Group leader Qi Lu; marketing head Tami Reller; and Tony Bates, the former Skype president who was just named leader of the Business Development and Evangelism Group.
"There are good leaders inside of Microsoft and it's too early for anyone to assume that there are no viable internal candidates to succeed Ballmer," Forrester's Johnson said. "Nadella is a standout."
Besides Elop, other former Microsoft top executives who have been mentioned include Kevin Johnson, who is retiring as Juniper Networks CEO, and Paul Maritz, the former VMware CEO.
Among outsiders, the names of Sheryl Sandberg, Facebook's COO, and Jon Rubinstein, who played a key part in Apple's iPod development and later became CEO of Palm before it was sold to HP, have figured. Rubinstein is now a board director at Qualcomm. Another outsider being mentioned is Mike Lawrie, CEO and President of IT services provider CSC.
"There seem to be lots of names being bandied about," said industry analyst Jack E. Gold from J. Gold Associates. "I honestly don't think anyone knows at this point who is on the board's radar, nor what the rankings look like."
Gold, who doesn't think the board is in a hurry to pick a replacement, views Elop as a top candidate, and believes that a Microsoft insider will most likely be chosen, even if that's not the ideal route to take.
"They need some new thinking and new strategies coming out of the leadership. A shakeup along those lines -- even more than Ballmer did a few months back -- would likely make sense, but I'm not confident that it will play out that way," Gold said via email.
Ballmer announced in late August that he would retire at some point in the next 12 months. Ballmer's decision stunned the industry because his retirement hadn't been expected for another several years, and certainly not a month after unveiling a broad restructuring of the company.
A week after Ballmer's retirement announcement, Microsoft announced that it had signed a "cooperation agreement" with ValueAct Capital, one of its biggest investors, that gave the investment firm the right to appoint its president to Microsoft's board. Many observers speculated at the time that Ballmer decided to retire in order to appease ValueAct and avoid a proxy fight. One of the biggest knocks against Ballmer has been that Microsoft's stock price has been stagnant during his 13-year stint as CEO.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.