Wall Street's list of possible successors to Steve Ballmer is short, so far. The issues whoever ends up replacing him at Microsoft will face is tall.

No matter who it is, she or he may be exactly what the company needs, Microsoft watchers say: fresh blood.

(Read more: Microsoft CEO Ballmer to step down within 12 months )



"I think Bill (Gates) would like the successor to be someone that he knows and someone that he is comfortable with. I don't think that person is necessarily an obvious person in the company," said Rick Sherlund, head of U.S. technology research at Nomura Securities, on CNBC's Squawk on the Street.

"I do not believe there is a successor in waiting ... Unfortunately, at Microsoft there has been enormous turnover of senior people under Ballmer, so we are left with no obvious choices here."

That may bode well for the company, though, because there are major changes needed that are only possible with someone from outside the company, analysts say.

(Read more: In the vista of Ballmer's Microsoft, famous failures but also solid success)

"CEO changes are tough when you are in a business like this. Microsoft missed the transition to tablet, missed the transition to smartphones, those problems are all still there," said Dan Niles, CIO of AlphaOne Capital Partners. "The new CEO needs to be amazingly good because he is going to have his work cut out for him."

Pushed out?

Ballmer's announcement comes just one month after the company's corporate shake-up. While Ballmer had probably hoped that the push to turn the company around would help ensure his position, shareholder activism proved that the shake-up wasn't enough and investors wanted Ballmer out, analysts said.



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(Read more: Will Microsoft Investors Win From Shake-Up? )

"I think that this validates that the shareholder activism agenda is likely to be accomplished one way or another," Sherlund said.

The most notable investor who wanted Ballmer out was probably Bill Gates, Niles said.

"The only way Steve Ballmer is gone is because Bill Gates wants him gone, in my opinion. There's no other way this happened," Niles said.

Microsoft's stock surged by 7 percent after the company announced Ballmer would be leaving, adding $24 billion to the company's market capitalization from Thursday's close.

However, investors shouldn't expect the growth to last in the long-term, Niles said.

(Read more: Steve Ballmer's bench is empty: Who's next at the helm? )

"I think in the near-term the stock probably heads higher, but let's not forget this business has a lot of issues and there's a lot of precedence for replacing the CEO and still having the stock go a lot lower," Niles said. "I hope they do some out-of-the-box thinking and they get somebody from outside the company. If they bring someone from inside the company, I think that's going to be a very bad decision."

But who?

Some big names suggested as viable candidates include Steven Sinofsky, former president of the Windows Division; Scott Forstall, former senior vice president of iOS software at Apple; and even Bill Gates. And while these are all interesting candidates, it's unlikely any of them would take the job, Milanesi said.



Sinofsky had a reputation much like Forstall (difficult to work with), so it wouldn't make sense for Microsoft to bring him back, said Carolina Milanesi, a technology analyst for Gartner. As for Gates, it's unlikely he would come back to run the company since he has moved onto other projects.

"It's not necessarily going to happen, but it would be interesting for the industry since Jobs is no longer with us. They were both seen as pillars in the industry," Milanesi said. "We don't have a leader like that in the industry right now, there's a lot of good leaders, but not necessarily such a big person personality wise."

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