The press, financial, and “watcher” community is obsessed with the question of who is being lined up as Steve Ballmer’s successor at Microsoft. They have been since the moment he became CEO, and with the latest reorg that question seems to have become more important than what benefit the reorg might bring to customers, products and services, employees or the bottom line. Right now I don’t see an obvious successor to Steve if, for example, he decided to chuck it all tomorrow and go focus on owning an NBA team. But that doesn’t mean there isn’t an eventual successor amongst the current crowd of Microsoft senior leadership.

Microsoft has had only two CEOs in its history, an iconic co-founder and a near-founder, with very different strengths and styles. Besides a typical Microsoft thread, that both are unbelievably smart, they have another similar thread. Both lived through the key history of Microsoft from almost irrelevant startup to tech industry leader to convicted monopolist to evolving giant. And they’ve had responsibility for all aspects of the company. Steve is best known for running the Microsoft Field (sales and service) before taking over as President and then CEO, but recall that earlier he had run product groups.

So when you think of Steve becoming CEO, here was a guy who knew every nook and cranny of the company as well as Bill Gates. Who was almost as much a part of the culture as Bill. And, importantly, was surrounded by both Bill and many of the other leaders who had built the company. There is a lot of good and bad about that, but the key point is that it seemed like and was (for a while) a pretty seamless and obvious transition in leadership.

Microsoft’s next CEO, whoever they are, is unlikely to be someone who ever experienced the company other than as a tech giant. They, and those around them, will recall the dark days of the DoJ battle from the perspective of middle management or external observer. They will have experienced the glory days of the mid-90s as individual contributors and first or second level managers, if they experienced them at all. They may not understand the lost five years or have any personal context on why it was necessary to institute the Trustworthy Computing program. They will have little personal experience on how Microsoft’s business model evolved. On “the playbook” as Bob Muglia used to call it. By definition this means the next CEO will be very different from either Bill or Steve. And depending on Microsoft’s state at the time of transition, this will be either a very good or very bad thing.

If you go back to the 2005 reorganization and the creation of quasi-independent business units with Presidents it looked like a perfect setup for developing the next CEO. After all, they were essentially supposed to be mini-CEOs. So you could look at the Presidents, see who was being most successful, see who was demonstrating the best leadership skills, see who was closest to meeting the needs of the company at the moment, and declare them the new CEO. And they were initially staffed by people who had similar history at the company to Steve. Also recall they had broader responsibility sets than those who were Presidents just prior to this weeks reorganization. Jeff Raikes had both Office and Dynamics. Kevin Johnson had Windows, Online Services, and STB.

Take Jeff Raikes as the perfect example. No one would have been shocked to see Jeff declared CEO if something had happened to Steve. In fact, even today if something happened to Steve and Microsoft needed an acting CEO during a search I would expect Jeff to be at the top of the list.

Jeff went on to be the chief executive of Bill’s foundation. His successor, Stephen Elop, left to become CEO of Nokia. Kevin Johnson left to be CEO of Juniper Networks. So this was obviously a workable model for developing a successor. Except of course if you really aspire to be a CEO, rather than specifically CEO of Microsoft, then you don’t have to wait for Steve to leave.

For the most part though the current Senior Leadership Team doesn’t have the seniority of that original set of Presidents, doesn’t have the breadth of experiences either inside or outside the company, and in the new structure doesn’t have the opportunity to be mini-CEOs before being given the top floor office in Building 34. That makes reading the tea leaves on a potential successor much more difficult.

So I’m going to give you my opinion on a number of members of Microsoft’s senior leadership and their potential to eventually be Microsoft CEO.

Let’s start with Qi Lu. I never really got a chance to interact with Qi but have always heard good things about him from my peers. I think he’s underrated by outsiders because of Online Services being a money-losing business. But that is an unfair way to look at things. If you’d told Steve Jobs his mission was to beat Microsoft in the PC business, and didn’t let him create the iPod, iPhone, and iPad then the world would have a very different view of him today. Qi’s job has been to go up against a similarly dominant, and perhaps monopolistic, competitor in Google. And he’s been making progress both on a market share and improving financials basis. He has survived a suicide mission. To the point where he’s just been entrusted with Microsoft’s largest and most profitable product family, Office. But what I most like about Qi is that he’s been innovative in changing the nature of search. Of pushing for Search as a platform on which great applications are built. And not just exposing and evangelizing the platform that way, but actually building a great set of apps for Windows 8. So here is the thing about Qi: he is one of the two SLT members who are the most Bill Gates-like (not that anyone could really come close to being Bill). If he continues to make progress in Search, and keeps Office healthy and growing, one has to imagine he is a viable CEO candidate. Looking out a few years the question at the time might be, does a $100B/year Microsoft need someone with more technological vision or more operational excellence.

Steve wanted someone to put STB’s move to the cloud into overdrive and that’s exactly what Satya Nadella has done. Under his watch Azure has gone from something where you could almost hear the crickets in the data centers to being unable to keep up with demand. And STB’s business, a bright spot for Microsoft ever since the late 90s, has continued its healthy pace of growth under Satya. Previously it was Satya who, when Microsoft got really serious about competing in the Search space, was tapped to build the Search and Advertising engineering organization. So while I gave all that credit to Qi, Satya had quite a bit of the strategy elements in place and the engineering organization built and executing even before Qi was hired. Then the two of them worked very well together to turn Bing into the only real alternative to Google. A funny story. When Satya was named to run Search engineering a friend at Yahoo told me that their executive staff felt that meant Microsoft wasn’t serious about competing in search. Who got the last laugh on that one? Satya is classic Microsoft. Smart, deeply analytical, etc. He’s proven he can lead a number of different Microsoft businesses (Dynamics being another one) and has two years as a mini-CEO under his belt. If one assumes over the next few years Microsoft takes the cloud computing lead from Amazon it will be hard to deny Satya is a potential CEO successor.

Tony Bates is the one SLT member I don’t know at all because the Skype acquisition happened after I left Microsoft. But again, I hear good things. Of all the potential internal candidates Tony is the most obvious successor on paper. He’s been a CEO. He ran a huge chunk of Cisco. Skype has been one of the smoothest and most quickly additive (at the strategic level) acquisitions Microsoft has ever had. So no wonder he’s been tapped to, amongst other things, drive future acquisition activity. In the old days I would have considered his new role a demotion; an indicator he was no longer considered good enough to run the all important product groups. But, Tony doesn’t need to prove he can run a very large engineering organization as he did that at Cisco. Tony’s been tapped to drive a number of areas that Microsoft have either never been Microsoft strong-suits or are struggling. Success leaves him a leading candidate for CEO.

So that covers the three leaders who have proven mini-CEO/CEO experience. Next up, the three newbies to the ranks of the SLT. Besides sharing that they have only recently reached the very top-tier of Microsoft leadership, these three share that they have a narrower functional experience base than Tony, Satya, and Qi.

Terry Myerson did an amazing job on Windows Phone. It is really difficult to communicate to an outsider the magnitude of the task Terry faced when he was tapped to create what has become Windows Phone. He didn’t pick the delivery date, that was cast in concrete before he started. He was given two years to ship an iPhone competitor, including building an engineering organization up to the task. Nearly every Microsoft executive or other senior leader I talked to didn’t believe he could pull it off. That wasn’t a reflection on Terry, it was a belief that two years was just an impossible timeline. Yet Terry did it. And then he had to do it again by switching from the Windows CE kernel used in Windows Phone 7 to the NT kernel use in Windows Phone 8. He’s proven he can run an engineering organization. Of course Windows Phone has been less successful on the business front than on the technical front. And Terry does share in the responsibility for that. On the other hand in the 18 months that Terry was mini-CEO (although he was never named a President) of Windows Phone, and thus has primary business responsibility, we’ve started to see it gain some real traction as a result of the Nokia partnership. Now Terry has been handed what is probably the most critical pure engineering leadership role in the company. While I think he’ll do an excellent job, and prove he deserves to be in the ranks of the most senior leadership of the company, it doesn’t seem like a job that sets him up to be CEO. Most likely he’d need to take on another, more business-oriented, role between this one and being a serious CEO candidate.

With the departure of Steven Sinofsky last November Julie Larson-Green emerged from his shadow to become one of Microsoft’s most discussed executives. Julie has been one of the most influential leaders at Microsoft for quite some time, having lead the program management disciplines for both Office and Windows. In 2008 the 1000 or so of Microsoft’s most senior technical leaders voted her the technical recognition award for the Office Ribbon. Julie’s biggest weakness when thinking about her as a CEO candidate is that her entire management career has been in a single discipline. The last 7 months as a broader engineering leader isn’t enough to judge her ability in larger leadership roles. Julie’s new role leading Microsoft’s efforts to become a Devices company should change all that. If Microsoft finds itself up there with the big boys as a devices company then Julie becomes a serious candidate for a CEO role. If not at Microsoft, at another major hardware company.

I met Tami Reller during the course of Microsoft’s acquisition of Great Plains Software and thought she was going to make a great addition to Microsoft. I would even have voted her “most likely to succeed”, certainly of anyone other than the hard corps engineering folks with no broader ambitions. But I couldn’t imagine at the time that she’d rise to Microsoft’s most senior executive ranks. It would be hard for me to see Microsoft with a finance person as its CEO, but of course over the last few years Tami has also had a marketing role at Microsoft. Again, not enough of one to think of her as a CEO candidate. Particularly since the launch of Windows 8 was not exactly a blockbuster. But in Microsoft’s new structure Marketing takes on a dramatically more prominent role than in the past. The opportunity to create the kind of marketing organization, and success, that would launch someone to CEO at other companies in other industries is there. It could make Tami a candidate at Microsoft, though without some experience running a large engineering organization Tami would be disadvantaged compared to other candidates.

There are three other SLT members that need to be talked about.

Eric Rudder might be the longest-serving SLT member besides Steve. Honestly, I’m amongst a crowd of technical leaders who have always wondered why Eric wasn’t named Chief Software Architect. Either instead of Ray Ozzie or after Ray left. Eric is in that category with Bill and Steve of being unbelievably smart, always the right characteristic for a Microsoft leader. But there are questions around his ability to run large organizations and unless those are put to rest I don’t see him as a CEO candidate. But CSA? Yes. Please.

As a general rule the COO job at Microsoft has not historically been seen as a stepping stone to CEO, so it’s no wonder most observers don’t talk about Kevin Turner as Steve’s obvious successor. When Bill was CEO the purpose of a COO was to shield him from a lot of the day-to-day operational details so he could focus on product, technology, and larger strategic issues. And Steve was taking care of Sales. While KT has probably been the most powerful Microsoft COO, he’s been no more involved in product strategy than his predecessors (unless that’s changed the last few years). If Steve and the board saw KT as a serious contender for Microsoft CEO they’d alter his responsibilities to have more direct control over product development and marketing. But absent that it seems like he’s destined to be CEO someday, just of a company other than Microsoft.

The last man standing as a mini-CEO at Microsoft is Kirill Tatarinov as the head of Microsoft Business Solutions. This is an odd case in which Steve agreed the dynamics of the business warrant that it retain a standalone joint business and engineering leader. But its a small business by Microsoft standards, and it hasn’t lived up to its promise. When Great Plains Software was acquired in 2001 the expectation was that Microsoft would turn ERP/CRM into a $10B business by the end of the decade. Despite numerous other acquisitions, particularly that of similarly sized Navision shortly after the Great Plains acquisition closed, MBS still isn’t even close to its original business goal. Microsoft doesn’t disclose MBS revenue separately, but if I had to guess it is still in the low single $B. Perhaps when Microsoft announces changes to its reporting structure we’ll have more insight into MBS. But basically, unless that business reaches the point where it is talked about in the same breath with SAP and Oracle (or he is given an alternate opportunity to demonstrate running something much larger that he has to date) I don’t see Kirill being considered as a candidate for Microsoft CEO.

If Microsoft needed a new CEO right now I’m pretty sure they would name an interim CEO and conduct a search. Some of the current SLT members might be considered, but I think the odds are that they’d hire an outsider (or perhaps a former Microsoft executive who is currently a CEO) to lead the company. However if Steve stays as CEO until at least 2017, which is the earliest he’d leave based on his own timeline, one or more of the current SLT members could emerge as a very strong candidate to replace him.