Ballmer’s long goodbye has been a long time coming

Microsoft chief struggled while Google and Apple eclipsed firm

 Steve Ballmer: not  yet clear whether the decision for him to step down was his lone, or if he was prompted by the board. Photograph: David Paul Morris/Bloomberg

Steve Ballmer: not yet clear whether the decision for him to step down was his lone, or if he was prompted by the board. Photograph: David Paul Morris/Bloomberg

 


No chief executive wants the company’s shares to jump sharply on the news that he or she is stepping down.

Pent-up relief, however, was the reaction to Steve Ballmer’s decision to retire as Microsoft chief executive within a year.

It has been a long time coming. Mr Ballmer has struggled mightily since becoming the boss in 2000 to keep Microsoft at the front of the computing and software industry, but has allowed it to be eclipsed by Google and Apple.

His reaction to the rapid change in consumer technology was to relaunch Windows, its flagship operating software, in such a radical manner that it alienated some users. He followed that up with a reorganisation that consolidated his grip and didn’t identify a clear successor.

We don’t yet know whether the decision was Mr Ballmer’s alone, or if he was prompted by the board, chaired by Bill Gates, its founder, which has been loyal to the man who became Microsoft’s first business manager in 1980. But Mr Ballmer was under mounting external pressure to show that he was still the right leader.


Huge franchises
In one sense, his tenure has been a success – Microsoft’s grip on corporate computing on desktop computers shows little sign of weakening, and it has expanded in servers. Its two big money-spinners, Windows and Office, remain huge franchises. But Mr Ballmer was under mounting external pressure to show that he was still the right leader.

It is on the consumer side that Mr Ballmer’s Microsoft has always seemed lumbering and not quite able to meet the challenge from a resurgent Apple under the late Steve Jobs, and the growth of internet giants including Google and Facebook.

It wasn’t an accident that Mr Ballmer’s memo in July outlining his reorganisation of the company cited being “nimble” as the first of its new priorities. The 100,000-employee software powerhouse has often been the opposite of that.

Mr Ballmer’s strengths have been his immense commitment and energy. His jazzed-up appearances at Microsoft’s internal conferences have become legend. He worked with Mr Gates from the early days of Microsoft and came to embody the company almost as much as its chairman.

But he lacked Mr Jobs’s intuitive sense of what consumers would want next. Microsoft’s “embrace and extend” approach of hopping on emerging waves of technology has not been adequate in the past few years.


Rapidly overtaken
Despite early efforts to develop tablets and mobile phones, it was rapidly overtaken by Apple. Google has since been more effective in challenging Apple with its Android open-source mobile operating system.

In the end, the buck stops with the chief executive and Mr Ballmer has faced not only heavy criticism but an effort to shake the company up by ValueAct, a US activist fund that has taken a $2 billion stake in the company.

Weak quarterly results in July following the unveiling of his reorganisation may have been the last straw. Mr Ballmer has finally taken the step that an increasing number of investors wanted, and announced his retirement from the company he loves.
– (Copyright The Financial Times Limited 2013)

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