Chart: Microsoft's performance under Gates vs. Ballmer

Chart: Microsoft's performance under Gates vs. Ballmer

Summary: Microsoft has been treading water for a decade, but here is a chart that provides a great visual of how the company's value skyrocketed under Bill Gates and then flattened when Steve Ballmer took over.

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Honestly, it's surprising that Steve Ballmer hasn't come under more fire during the past decade for Microsoft's lack of innovation, dearth of new hit products, and a stock price that has continued to tread water.

However, those issues and Ballmer's plan to keep milking Windows and Office rather than push forward and look for the next big advances in personal computing may finally be catching up with him.

The graphic below (created by Erik Pukinskis) charts the market value of Microsoft during the past two decades, comparing the CEO reigns of Bill Gates and Steve Ballmer. You have to be a little bit careful with this chart. It's not completely to scale. Notice that the areas between 0 and 5 and 5 and 20 are much larger than the ones between 20 and 40 (and even this between 40 and 60). This gives a little bit of an exaggerated sense of how much Microsoft grew under Gates.

Nevertheless, it's pretty amazing how all of the growth happened while Gates was CEO and then things stagnated as soon as Ballmer grabbed the reigns. Of course, it's also important to keep in mind that the Gates-Ballmer hand-off coincided with Microsoft's big antitrust case with the U.S. government. However, even after the dust settled from that, Microsoft has continued to struggle.

To read about the criticism of Ballmer that is starting to bubble up, take a look at these recent posts:

ZDNet's Ed Bott has also penned a rebuttal of this line of thinking in his article, A closer look at Microsoft's 'lost decade.'

Is this criticism of Ballmer over-blown or long overdue? Jump in the discussion below to let us know your take.

Topics: Microsoft, CXO, Hardware, IT Employment

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68 comments
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  • It looks suspiciously like MS's growth was already flattening in 99.

    So it looks more likely that BG "jumped ship" when he realised that MS could no longer keep growing like it had been. This is contrary to the article's implicit suggestion that "Gates = Growth" and "Ballmer = Stagnation".
    Zogg
    • Like him or not

      @Zogg

      Gates knew what he was doing. He is a very smart man.
      The one and only, Cylon Centurion
      • Well, Take the Log chart and see the diff

        Its worse than you imagine. The Author of this article was being nice with Balmer.<br><br>Balmer has no clue what tech is about. Balmer has no foresight. Today he stated that PC's will not be replaced by Tablets. Steve Jobs in this respect think so, I respectfully disagree with both. Tablets may come for a while like netbooks did but replace a notebook or desktop, very unlikely. <br><br>What will end up happening is your cellphone will replace both your laptop and desktop and interfaces will do the rest. That's the real future.
        Uralbas
      • RE: Chart: Microsoft's performance under Gates vs. Ballmer

        @Uralbas<br><br>I don't think Jobs was saying the Tablet or iPad will replace the PC (at least not anytime soon); just that most people's "PC" use today don't require a full blown desktop of Laptop (trucks). Times have changed, lifestyle have changed and technology is allowing us to do more with mobile (moor's law, smaller, better, faster, more mobile).<br><br>I think the future will be more than just our cellphone or smart phones. Devices like the iPad and whatever new mobile devices down the road will play a huge part (as it is doing now). Any PC company that's not hedging their bets on mobile is bound to fail, or get left behind. Let Ballmer continue to fight it.
        dave95.
      • More like Gates knew who he was doing ...

        ... he "discovered" and "resold" more "open licensed" software ... P T Barnum would have been proud to know him.
        BrentRBrian
      • RE: Chart: Microsoft's performance under Gates vs. Ballmer

        @NStalnecker Agreed, Gates timed his departure very shrewdly.
        Zogg
    • Ever since government starts to mess with MSFT all sorts crazy lawsuits

      ... a successful company begins to suffer.
      LBiege
      • Antitrust is a distractor and a killer

        Antitrust is a killer ... just ask IBM.

        The pre-antitrust IBM would have snuffed Microsoft for MS-DOS and OS/2 .. instead IBM had to "take a hosing" from a puny butt company that nobody outside of Tandy, Apple or Compaq had even heard of ...
        BrentRBrian
    • RE: Chart: Microsoft's performance under Gates vs. Ballmer

      @Zogg Nah, Share price is not about how the companies could actually grow but all about "How people at Wall Street believe that the company could grow." And those guys are pretty dumb.<br><br>Many times those people only invest in the individuals over the companies. MS and GE have done well after Gates and Jack Welch was gone but the share never went up.<br><br>Let see Apple price after Steve retires or, worse yet, Berkshire Hathaway stocks after Buffett is dead.
      Dealing
      • Look closer at the actual chart.

        @Dealing The curve is *already* flattening off in 1999 *before* the point where Gates leaves. This implies that Gates saw that The Good Times were ending, and so decided to leave on a high note. If your interpretation were correct then the curve's gradient would still be rising in 1999 and would only dip *after* Ballmer takes over in 2000. But it clearly doesn't.
        Zogg
    • Wrong Gates was a visionary

      @Zogg

      Frankly there are ups and downs, its not statistically important if one year was flat - one flat year never turned Microsoft onto a decade of flat growth before - and you forget there were years of explosive Web 2.0 growth during Ballmer's reign.

      Ballmer simply failed to lead - he is not the visionary that Bill Gates is....

      What is the criticism here, that Bill Gates was a monopolist and Ballmer is not? LOL, they are both monopolists...but Bill Gates, in addition to that, was actually about finding the next great thing.

      Ballmer killed the Courier instead.
      rdupuy11
      • Doesn't anyone teach "best fit" curves to sample data any more?

        @rdupuy11 Thanks for the "corporate blah", but I'm judging purely on the evidence presented: the curve is flat between 92-93, there is a period of growth which I'm going to call "The Internet" (which wasn't Gates' idea, BTW - he almost missed it completely) and it's flattened out again by 99. And then Gates leaves.

        But if you want to tell yourself that Gates was a visionary then I suppose that's your business.
        Zogg
      • RE: Chart: Microsoft's performance under Gates vs. Ballmer

        @Zogg
        That pause in the early 90's is called DOS flattening out. 93 is roughly when 3.1 came out, which was a success. That success continued (actually escalated) with Win 9x. It wasn't the internet, because almost nobody had a modem in 93. hell, most people didn't have a computer, which also contributed to the growth.

        I think Gates has more vision than Ballmer, but if the handover happened in 93, MS's market cap still would have skyrocketed in the 90's. There was no alternative and PCs were the name of the game.
        notsofast
      • RE: Chart: Microsoft's performance under Gates vs. Ballmer

        @rdupuy11 I think we're all becoming more than a little weary of hearing Gates described as a visionary. Sure, he behaves like a visionary, and the sycophantic hoards of toadies that admire him for his vast wealth treat him as one, but that's the last thing he is.

        In about 2005, in a remaindered book store, I picked up a book on Microsoft, a huge volume published in 1998. Remember that date, it's important. In it Gates describes how something called the Microsoft Network was going to join everyone up all over the world. I checked the index and sure enough, the internet wasn't mentioned! Neither was the World Wide Web.

        The true visionaries recognised the net and the web as the future, long before this date. What Gates was doing was the oldest con trick in the world, he was attempting to divert attention back on himself as the guru, the 'visionary', the answer to all our needs. Of course all this was simply attempting to maintain an old fashioned monopoly. It's the same trick drug dealers play... and it failed. The internet boom actually completely passed him and Microsoft by - on the other side of the road.

        For at least 10 years, Gates had no competitors. But someone did spot the importance of the net. The first iMac, a project Apple had been working on before Steve Jobs returned in 1997, was the first internet ready personal computer - announced in 1998. It was therefore in that year the decline of Microsoft actually began, because their focus had been on maintaining a Microsoft centric vision of the world. And that hasn't changed. Microsoft are still currently lobbying the US Congress to give them a greater hold over the net. There's nothing visionary about that kind of behaviour. It isn't even part of a viable business model.

        So, what can we say about Ballmer? Ballmer is a used car salesman [at best] who was in the right place at the right time. And that right place and right time was when Gates bought Q-DOS from Seattle Computer, and then did the deal with IBM. And that was the basis of Microsoft's success - the IBM clone monopoly. That really doesn't even take any clever business skill, never mind some faux visionary qualities.
        Graham Ellison
    • RE: Chart: Microsoft's performance under Gates vs. Ballmer

      @Zogg
      Hard to tell but maybe not. The graph is not to scale between 20 - 40 and 40 - 60
      rengek
      • Flat is flat, regardless of how it's scaled.

        @rengek The choice of scale only affects how steeply the curves rises or falls.
        Zogg
  • I'll take Gates, though I'd come across as being selfish

    as that would take him away from the humanitarian work he is getting done at the moment.
    John Zern
    • Such as

      I'm sure they appreciate his money but what is Gates actually doing?
      Richard Flude
    • @Richard Flude

      It looks like he's more hands on then many of these multi-billionaires (Steve Jobs, Eric Schmidt, even Larry Ellison). He does travel to these countries, and he does talk with the world leaders face to face, so he is taking an active roll in what he doing.

      The fact that it's less news worthy then who's on "Dancing With The Stars" or what (in)famous actress is the news again for being drunk doesn't mean what he's doing is un-important, just that as a people, we suck for not being as interested as we should.
      AllKnowingAllSeeing
    • @Pliny - A world full of talk

      "He does travel to these countries, and he does talk with the world leaders face to face, so he is taking an active roll in what he doing."

      That's my question, what is he doing?
      Richard Flude