Microsoft CEO speculation intensifies as leading external candidate withdraws from the race

Ford Motor Company chief executive Alan Mulally has taken himself off the list of potential successors to outgoing Microsoft chief executive Steve Ballmer, significantly increasing the likelihood the tech giant will now opt for an internal candidate.

Mulally was viewed by many analysts as the leading external candidate for the position, and is generally credited with overseeing a turnaround at the US auto giant.

However,Reuters reports that Mulally has formally withdrawn his bid, stating that he intends to remain at Ford through 2014.

News of Mulally’s increases the prospects of an internal candidate, such as former Nokia chief executive Stephen Elop, Cloud & Enterprise group boss Satya Nadella or Business Development chief Tony Bates taking the top job.

In August of last year, Elop emerged as an early favourite for the position, with bookmakers offering 5-to-1 odds of him taking the helm of the tech giant after outgoing chief Ballmer announced his resignation.

However, Elop was also criticised by some analysts, who point out Nokia suffered a 27% year-on-year slump during the second quarter of 2013, with an overall quarterly loss of €115 million ($A190 million), before the company was eventually being taken over by Microsoft.

In mid-September, at least three of Microsoft’s top 20 shareholders urged the company to consider turnaround experts as a potential replacement to outgoing chief executive Steve Ballmer.

Turnaround experts including Ford chief executive Alan Mulally and Mike Lawrie, the boss of IT services firm Computer Sciences Corp, were recommended by the shareholders as potential candidates for the position.

By November, sources within the company believed Mulally had firmed as the favourite for the position, with a leaked internal memo calling for a candidate with ““[An] extensive track record in managing complex, global organizations within a fast-paced and highly competitive market sector; track record of delivering top and bottom line results.”

The company is expecting to announce its new chief executive in late January or early February.