Cramer: 'It's time to break up Microsoft'

Microsoft is an unwieldy business and should be broken up, CNBC's Jim Cramer said Friday, and the tech giant needs a savior like Ford's Alan Mulally to drive a corporate "miracle" and get the company back on track.

Although Cramer dismissed the rumor that Mulally would jump to Microsoft—because his job isn't yet complete at Ford—Cramer said that in theory, Mulally would be a good thing for the company.

"I still think Alan wants to get to $3 to $4 earnings power for Ford before he's done," Cramer explained on "Squawk on the Street" Friday. "He's worked miracles at Boeing, he's worked miracles at Ford—he could work miracles at Microsoft."

(Related: Ford CEO plays down reports of an early exit)

Cramer said that Mulally's strategy would be to find the right people who are "charged up" to bolster Microsoft's business and would simultaneously avoid troubled, high-cost acquisitions like those that have plagued the company in the past.

Cramer predicted that Microsoft would eventually be broken into three pieces, adding that "it is too big, too unwieldy and it's not getting anywhere. It's time to break up Microsoft."

Microsoft has to do "something wild," Cramer explained, like spinning off the Xbox business that is "buried within" the company, or turning Nokia back into a pure cellphone company and using the proceeds to buy a company like Sprint. "You could go buy Netflix with Xbox," he said, and run the Windows business like a utility company with reliable cash flows.

(Related: Microsoft: Xbox One pre-order supply nearly sold out)

Cramer listed the big components as the Windows operating system business, an entertainment business—including Xbox—and the "other" business with the Nokia cellphone division as a cornerstone.

Jim Cramer's charitable trust owns shares of Ford Motor.

—By CNBC's Paul Toscano. Follow him on Twitter @ToscanoPaul and get the latest stories from "Squawk on the Street."