Home opinion-and-analysis Open Sauce Ballmer's departure is far too late

Ballmer's departure is far too late

Microsoft chief executive Steven Anthony Ballmer has set at least one record during his tenure: the moment he announced he would be stepping down, the shares surged and the company's market capitalisation went up by aound $US24 billion.

And Ballmer's personal wealth rose by $US1 billion as he holds a fair amount of Microsoft stock.

It would be extremely difficult to find any CEO who has had that kind of effect on a company; true, it's not the kind of thing for which you'd like to be remembered, but for someone of Ballmer's ilk, the money is probably the more important factor.

Currency of any kind has always reigned supreme over any other indicator of value at Microsoft; the company has always been a marketing organisation first, and a technology company second. Ballmer is a great follower of that tradition.

One more statistic, this from AllThingsD, may be of interest: on the last day of 1999, before Ballmer took over, Microsoft's capitalisation was $US600 billion. On the day before he announced he would be leaving, it was less than $US270 billion. Whew!

Ballmer took a leaf out of deposed Australian prime minister Julia Gillard's book by headlining his letter of departure "Moving forward". What is surprising is that there is not a word of thanks to Microsoft co-founder Bill Gates in that missive.

Gates and Ballmer were buddies at Harvard, and when Ballmer ascended to the post of chief executive in the year 2000, it was very much with Gates' blessing. Gates stayed on as chairman until 2006. But after 33 years, it looks like even Gates, often cited as Ballmer's greatest supporter on the board, feels that his buddy overstayed his welcome.

While both earnings and profit have gone up during Ballmer's reign - from earnings of $US23 billion and profit of $US5.8 billion in 2000 to revenues of $US77.9 billion and profit of $US21.9 billion for the 12 months that ended in June 2013 - this is for the most part from market sectors that were conquered in the 1990s.

Microsoft grew to dominate the desktop computing market in the 1990s, often by using tactics that would have earned a nod of approval from the Cosa Nostra, and Ballmer was nothing if not aggressive in retaining this share.

But new markets remained out of reach, no matter what they were. Ballmer was not an ideas man, not an inspirational person, not a technology person. He was selling products that had gained dominance well before he came in.

Windows Vista was the biggest stuff-up of his reign and that was enough to throw the whole Windows line out of whack; a hurried update, Windows 7, had to be brought to market and soon there were so many versions of Windows floating around that take-up fell. Windows 8 was anything like a revolutionary change and its sales have been tragic; a quick update had to be planned for that too, and it will be released hardly a year after Windows 8 came to market.

Whether it be mobiles, music (who, in his or her right mind, would name a music player Zune?), or tablets, Windows is not even second in the race. It is way back in the shadows and the next five years will see it fall even further behind as portable devices continue to outsell PCs.

In July, Microsoft announced a restructure that would see it reorganised into engineering, marketing and business development divisions. Ballmer was probably seen as unable to guide this kind of set-up.

Given that mobile devices will take quite some time to provide the functionality of a PC, Microsoft's Windows and Office cash cows will continue to prop up the company for the next few years. Even IBM continues to make money though its heyday is long over.

But we are slowly coming to the stage when Microsoft will become just another technology company. And for that, to a large extent, Ballmer will be responsible.

Photo: Courtesy Microsoft


Did you know: 1 in 10 mobile services in Australia use an MVNO, as more consumers are turning away from the big 3 providers?

The Australian mobile landscape is changing, and you can take advantage of it.

Any business can grow its brand (and revenue) by adding mobile services to their product range.

From telcos to supermarkets, see who’s found success and learn how they did it in the free report ‘Rise of the MVNOs’.

This free report shows you how to become a successful MVNO:

· Track recent MVNO market trends
· See who’s found success with mobile
· Find out the secret to how they did it
· Learn how to launch your own MVNO service


Sam Varghese

website statistics

A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.