Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

Summary: As Steve Ballmer celebrates 11 years as Microsoft's CEO, the big question is: Should he be allowed to reach 12?

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Back in my dad's generation, there was a perception of success if you could land a good job with a good company where you could spend the next 40 years or so collecting a paycheck and then eventually a pension. You were faithful to your company and, over the years, the company rewarded you with pay raises, promotions and maybe a nice watch after 25 years or so.

Today, you don't see a lot of that. People - especially in the tech industry - move around at a faster pace. Maybe it's the lure of more money, a more flexible work schedule or just the opportunity to be more innovative that drives people to change jobs every few years or so. After all, no one wants to feel stale - stuck in a job where you're no longer making a difference.

In a sense, that's where Microsoft is now with CEO Steve Ballmer, who celebrates his 11th year as chief executive today. In a post this morning, colleague Mary Jo Foley reflects on the state of Steve Ballmer as the CEO of Microsoft. She notes that, increasingly, she's hearing cries for Ballmer to move on, for the company's board of directors to toss him out the way AMD's board of directors pushed aside CEO Dirk Meyer just a few days ago. But that's probably an unlikely scenario.

After all, it's hard to ignore Microsoft's quarterly financial reports. In October, the company reported strong Q1 numbers, with net income up 25 percent year-over-year as the twin cash cows - Windows and Office - continued to shine from an upgrade cycle. Likewise, Xbox carried the entertainment division.

But AMD's Meyer getting the boot seemed to have less to do with the quarter-after-quarter numbers and more to do with his failure to execute in mobile, an area that seems to be a high priority for the board. The same could be said for Ballmer. The company is barely in the smartphone war and really doesn't have much to offer in terms of tablets. But the lack of real vision from the top didn't really didn't ring true until Ballmer delivered a dismal, vision-less keynote speech to kick off this year's Consumer Electronics Show.

At the time, I wrote that it may be time to yank Microsoft off of the keynote stage. But maybe it's not Microsoft that needs to go. Maybe it's Ballmer.

Microsoft, the company, seems to have a lot of life in it - and certainly, this isn't one of those "Microsoft is dead" types of posts. The financials prove that Microsoft is still a force in the tech industry. But for how long? Trends are shifting. The competitive landscape in smartphones, tablets and even living room hubs (which is really what the Xbox is becoming) is getting more and more fierce.

Ballmer seems to have lost the vision - and, as Foley points out, there seems to be a "brain drain" happening at the mid-management and technical management levels of the company. Foley writes:

These individuals are the ones with institutional knowledge and staff loyalties that are hard to replace, and whose expertise is now benefiting Microsoft’s foremost competitors. That growing list of departures has started to give me pause and make me question my Ballmer backing….

The board may have some tough decisions to ponder over the coming year as it relates to the future of the company and the person who will lead it into the next generation. At this point, Ballmer doesn't seem to be that guy. He's been at Microsoft for more than 30 years and in the CEO position for 11 years now.

If that sort of tenure isn't a recipe for stale, I don't know what is.

Topics: CXO, Microsoft, IT Employment

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  • Time for him to go?

    They're finally really getting their mobile act together. This is no time to change captains.
    Michael Alan Goff
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @goff256

      What mobile act do they have together? They are so far behind it's not even funny anymore...
      ewell44
      • I bet you said the same about XBox, right?

        @ewell44
        Because there was Nintendo, Sony, and a couple of others, that MS didn't have a chance as they started with nothing.

        Worked out well for them.
        AllKnowingAllSeeing
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @goff256 can you enlighten us what their tablet strategy is? I watched the whole CES keynote and it wasn't even mentioned.
      BiffTannen1955
      • Alright, I'll explain it to you

        It starts with the move to ARM, which means they'll have to cut some of the fat. Then it is combined with a new interface that they're coming out with (or maybe they could use metro).

        The stars are aligning for a good tablet year next year. As I said, they're finally getting their mobile act together.

        Then there's the idea of seamlessly integrating desktop and mobile (through the ARM)
        Michael Alan Goff
      • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

        @BiffTannen1955

        Their mobile strategy was "mumble, obfuscate, change topics, show strengths, hide weaknesses, show breadboard prototypes, porting Windows to ARM, working devices soon to be announced at a future indefinite date." Thank you for coming and I'll see you next year to discuss the same topic as we did the year before.
        ConstableOdo
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @goff256
      Mobile "act" is right. It's seems the audience is leaving in droves after the first "act" bombed and the irate audience is demanding their money back from the box office. No need in staying around to watch the rest of the "play". Let's just bring down the curtain and turn off the footlights for WP7 as the critics have already given it enough unfavorable reviews. Let the marquee read "Closed indefinitely for lack of interest".
      ConstableOdo
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @goff256 <br>1. Their phone is poised to pick up the crumbs of Android and Apple, nothing more.<br>2. Selling $8 - $15 phone licenses won't make any money<br>3. None of the mobile OEMs or telcos give a flying rip, they are all rolling their own or slumming with Android.<br>4. Their two cash cows are completely unsuited for running on ARM for at least two more years<br>5. Their tablet strategy is a complete failure because they never got Intel to make ultra-low power chips that were powerful/cheap enough and they never optimized their OS and Apps for a completely mobile, touch-based, battery sipping device. <br>6. There is zero synergy between their PC business and their mobile business, especially because 100s of millions of Android/Apple users have already realized that you don't need Office or Windows or Intel in the mobile space.<br>MS and Intel simply thought that everyone would be locked into Wintel/Office forever and Android/Apple/ARM caught them completely off guard.<br><br>And I'm not even sure Microsoft can afford to pour billions and billions of dollars into mobile--like they did with the X-box--before it starts to turn a profit. The telcos and OEMs won't play along. There's a lot bigger chance that MS's mobile success will be more like their mp3 player "success" than like their game console "success."

      What's really scary is that Apple has figured out how to compete on price in smartphones and slates, yet they are still earning 30% to 40% margins.

      2014 will not be like 1984.
      Synthmeister
      • Let me look at these points one at a time

        1) Microsoft being in third place in the end (behind Android and iOS) is not the disaster you're making it seem. Being something other than top dog works for companies all of the time.
        2) You're right, they likely won't be making a lot of money off of the license alone. That isn't where Steve Jobs and Apple make their big money regarding the iPhone or where the Google guys make their money from Android. It's all about the marketplace. Nothing else matters.
        3) Except all of the people who made WP7 products, and will likely continue to make them.
        4) I would say closer to 1-1.5. They already have them working, they just have to make them work well.
        5) I think this is where ARM comes in. ARM can be trusted to make those low power chips.
        6) This is pretty much your best point. Windows has to evolve, and it is starting that process. Notice I didn't say that they have the great process down. They're slowly getting there,

        2014 will not be like 1984, but it doesn't have to be. Products aren't either a great success or a horrible failure. There are places between the two.
        Michael Alan Goff
      • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

        @ goff256
        1. I said "crumbs" not third place. Nokia and Rim will also be ahead of MS licking the crumbs off the floor.
        2. MS hasn't figured out any other way of making money in the mobile space. They don't make any significant money off the hardware, (Apple) the apps, the e-books, search, (Google) the music, the movies, the peripherals and the ads. The license strategy worked in PCs because they managed to get a monopoly on the OS and the Office suite and the OEMs had no other choices. They also were able to charge between $50 - $100 per license, not $8 - $15.
        3. All the mobile OEMs and telcos don't care about WP7 products in the mobile space. Just look at former WinMo stalwarts like Moto, HTC, LG, Samsung, Dell, HP and even BFF Intel. Sure, they'll make some WM7 devices and throw them against the wall to see if they stick, but they're not going to sweat any blood for WinMo7 like the PC OEMs used to do. Android and Apple are sucking all the oxygen out of the room and RIM and Nokia blocking the entrances.
        4. Even 1.5 years is a very, very long time in this situation, especially the tablet market where Apple alone is set to sell 40 to 60 million iPads in 2011.Android/iDevice sales will have quadrupled and HP, RIM and Nokia might even have time to come up with something interesting by then.
        5. This is where ARM comes in? ARM already came and left for the party with Android and Apple on either arm. And BTW, once WP7 and Office are on ARM, you still have to wait on all the 3rd party apps to migrate as well.
        6. They've wasted a decade in the mobile space, and will be relegated to being a small player in that space. Smaller even than the footprint they have in the mp3 player space. Their WP7/Office dominance will continue to allow them to post great earnings as a company, but they will be small potatoes in mobile.

        Over three years ago Balmer said "I like our strategy, I like it a lot." Now MS is an absolute bit-player in the mobile space and it will be at least one to two more years before they can even begin to compete.
        Synthmeister
      • I can smell the fanboy-ism from here

        Please come back when you have bigger points than "they're too late" "they won't make any money" and "But... but... Andoid and iOS D:".

        If all you can do is repeat those, then you seriously need to learn history.
        Michael Alan Goff
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @goff256

      Too many people confuse media appearances and sales schtick with reality. Ballmer is fine, as is MS.
      tonymcs@...
      • Of course Microsoft is fine

        Microsoft has been fine, and improving, over the past ten years. Next year? They'll be better than this year. The year after that? I think you get my point.

        The problem really seems to be the all-or-nothing. They don't realize that Apple likely worked on the iPhone since 2004 or earlier to get it to the first release. No, they seem to have a now-or-never sort of approach that is just embarrassing.
        Michael Alan Goff
  • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

    No.
    Loverock Davidson
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @Loverock Davidson

      Agreed and good thinking.

      Since he hasn't been making his objectives (i.e. mobile failures) and not making bonus he is pretty cheap to keep.

      A successful CEO that meets his objectives would be expensive.
      maskman01
    • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

      @Loverock Davidson

      As he is making a complete bollox up at MS, I wholeheartedly agree with you.
      Alan Smithie
      • A complete bollox?

        I'll assume you meant bollocks.

        -Most successful OS in the history of successful OSs
        -Best Office Software... still being the best office software
        -Moving to where there can actually be "windows everywhere" instead of it just being some sort of logo
        -An actual mobile strategy other than putting it out there and hoping for the best
        -A game system that is actually fairly revolutionary with the Kinect (seriously, the Wii doesn't compare)

        What has he done that is so horrible? I can only think of the tablet fiasco, but it seem,s like they're set to start fixing that soon. I hope they do, at least. Even with that one major mistake, he's not making anything "bollocks".
        Michael Alan Goff
      • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

        @goff256<br><br>1) Most successful OS ? No, you mean Desktop OS - Linux is installed on more devices than any other OS.<br><br>2) Mobile strategy ? What strategy stick a windows label on it and hope it sells and not be bringing up the rear ?<br><br>3) Office ? Who cares there are plenty of alternatives.<br><br>4) A game system ? It's a peripheral designed by an Israeli company that got the idea from the eye toy.<br><br>The man is a glorified accountant complete with all the imagination - he is no technological visionary or innovator.
        Alan Smithie
      • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

        No, no, the most successful OS in history in sheer numbers if use. Many companies who use Linux use their own specific type of Linux. If you're going to bring all of Linux, I'll bring all of Windows and point out that there are still more users.

        You obviously haven't been paying attention to their -actual- mobile strategy.

        There are alternatives, free alternatives, and yet this one still sells. It is because it is better than the others.

        And you think that Apple and Google never bought anything? Look at OS X. Look at Safari. Both are based on technology from somebody else. Look at Android. It's Linux with stolen Java.
        Michael Alan Goff
  • RE: Ballmer's 11th year as Microsoft's CEO; Is it time for him to go?

    Don't get rid of him yet - just look his record of achievements.<br>Let him stay till he's reached a natural end with MS.
    Agnostic_OS