Fresh off the news that CEO Steve Ballmer is set to retire within the next year, Microsoft has a big choice to make: Who will lead the company into what promises to be a very competitive future?

Ballmer said on Friday that Microsoft needs a leader as it transitions into a company focused more on the mobile space.

My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company,” Ballmer stated. “We need a CEO who will be here longer term for this new direction.”

The move creates an opportunity for the Redmond, Wash.-based software giant to make a bold move.

Microsoft has outgrown having founders run the company,” noted Yankee Group VP of research Carl Howe, commenting specifically on a CNET article. “With almost 100,000 employees now, Microsoft needs a chief executive who has big company management skills, comes from outside Microsofts fierce political battles and can create confidence on Wall Street in Microsofts future. Yankee Group believes that Microsofts search committee should take a page from Apple: It should hire a seasoned interim chief executive with the characteristics I just mentioned while that person grooms a younger, permanent CEO successor. Once the successor is up to speed, the interim CEO would step down.”

Lou Gerstner, the man credited with turning IBM around in the 1990s, would be a great short-term choice, Yankee Group says.

“One of our three candidate picks for CEO would be a leader who has made elephants dance and has the gravitas that would make Wall Street swoon: Lou Gerstner. Hes someone who has been there and done that and would buy time for Microsoft to reinvent itself for the future,” Howe added.”

Microsofts board of directors has created a special search committee to find Ballmer’s successor. That committee includes company founder and former CEO Bill Gates.

Follow senior online managing editor


@Craig_Galbraith

on Twitter.