Ballmer makes it to year 11 as Microsoft CEO

Ballmer makes it to year 11 as Microsoft CEO

Summary: Eleven years ago today, January 13, 2000, Steve Ballmer was appointed CEO of Microsoft. Increasingly, many, including me, are wondering how many more years he'll continue in that role.

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Eleven years ago today, January 13, 2000, Steve Ballmer was appointed CEO of Microsoft.

Increasingly, many, including me, are wondering how many more years he'll continue in that role.

There are more than a few shareholders and Microsoft employees who want Ballmer tossed. After his seeming disagreement over future direction with Server and Tools President Bob Muglia -- who announced this week he is leaving the company after 23 years -- I've heard from even more folks carping for Ballmer to go. If Ballmer won't go gracefully, they say, the Microsoft board should do what AMD's board just did to former CEO Dirk Meyer and force Ballmer out.

I have said on previous occasions that -- despite the fact that I've been on the Ballmer-interview blacklist for more than 15 years -- I still considered him the best person for the Microsoft CEO job. And last we heard from Ballmer on the topic of his CEO stewardship plans, two-plus years ago, Microsoft's CEO made it clear that he had no plans to step down voluntarily until 2018 or so, when his youngest son was off to college.

Yes, Microsoft's stock price is stagnating. But the company is still managing to break profit records (as much by trimming costs, these days, as via sales of new products), in spite of imminent-demise predictions by various analysts and company watchers.

The question -- for me -- always comes back to whether there is there someone who could do a better job than Ballmer leading Microsoft? I'd say if the pool of candidates is restricted to current Microsoft management, the answer is no. (Those calling for Bill Gates to return as Microsoft CEO need to give up that pipe dream. Gates has moved on, though he remains chair of the Microsoft board.) Because of the dismal record that outsiders have at succeeding and lasting at Microsoft, I'd say a non-Softie, as appealing as that may sound from a new-blood perspective, has a low likelihood of making it for long as Redmond's CEO.

Ballmer has been with the company 30 years and in the last few, molded Microsoft to be more in his image. Most of the "Gates guys" -- the techie managers favored by BillG -- are gone now, replaced by the MBA types favored by SteveB. (One exception is Steven Sinofsky, the President of Windows, who was a Gates guy. Supposedly, he also is one of Ballmer's chosen, and can seemingly do little wrong in Ballmer's eyes.)

AMD's Meyer supposedly was forced out by the board because he refused to get with the mobile program. According to reports, he wouldn't accelerate AMD's plans to build new chips for mobile devices, despite the fact he knew that's what the company needed to do.

Ballmer also has been sluggish in pushing Microsoft to get with the mobile program. The company nearly missed the window of opportunity in the smartphone space. And the jury is still out as to whether Windows Phone 7 will be able to gain lost ground quickly enough to keep the Softies in the smartphone race.

The same thing is threatening to happen in the slate/tablet market. Ballmer is continuing to champion publicly the idea that Windows 7 is a great slate/tablet operating system. But unless Microsoft has some secret -- like an interim Windows release with a touch-centric interface -- up its sleeve before Windows 8, Microsoft is not going to be able to provide an operating system to its partners that will enable them to create slates that can compete battery-wise, dimension-wise and price-wise with the iPad and Galaxy Tablets. not to mention the horde of other coming Android slate/tablets.

Ballmer hinted in his "goodbye BobMu" note that he felt the Server & Tools Business needed new management to make Microsoft more competitive in the cloud. I'm curious to see who Ballmer thinks will be more aggressive in that space, whether it be another Softie or an outsider. Microsoft execs admitted last year that the company's message that users could have it all -- public cloud, private cloud and/or hybrid -- was confusing, and that they planned a concerted effort to lead with the cloud. (Hence, the "We're All In" campaign.) Since then, Microsoft's been pushing its partners and customers full-speed-ahead toward the cloud.

When a company is as big as Microsoft, it takes time to turn the ship. But it shouldn't take so long to correct an off-guided product course. Why didn't Microsoft do a reset on its smartphone until 2009, when it was clearly going down the wrong path? Why was the Kin allowed to launch? Why does management think it is OK to let tablets and slates eat into PC demand until 2012 or later, when Microsoft finally will be ready with a slate-optimized operating system?

A changing of the guard, even a sweeping one like has been happening at Microsoft for the past couple of years, with the departures of Bob Muglia, Ray Ozzie, Robbie Bach, Stephen Elop, Jeff Raikes and Kevin Johnson, doesn't necessarily mean, to me, that Ballmer needs to go. Constant reorgs are a way of life at Microsoft, and not everyone agrees with the new world order (especially those who believe they are deserving of a guaranteed spot as Microsoft's CEO).

What I find more worrisome is the brain drain happening at the mid-management and technical management levels of the company, with departures of folks like Brad Abrams, Chris Wilson, Doug Purdy, Brad Lovering, Ian Ellison-Taylor, etc. 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....

I am not expecting Microsoft's board to hand Ballmer his walking papers any time soon. But I'm wondering already if the Board will have more strenuous questions for SteveB -- and maybe more bonus cuts -- for Ballmer this year when evaluation time comes around, if not before.

Do you think Ballmer is going to hang on until 2018 as CEO? Should he?

Topics: Software, Enterprise Software, Legal, Microsoft, Operating Systems, Windows

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Ballmer can still fix it

    just GPL the windoze code or adopt Linux.
    Linux Geek
    • RE: Ballmer makes it to year 11 as Microsoft CEO

      @Linux Geek
      Of Course!!! Why wouldn't giving away your product make you more profitable?!!? It works so well for the Linux community as a whole.
      Cyrorm
      • RE: Ballmer makes it to year 11 as Microsoft CEO

        Ballmer is doing an acceptable job at everything except Mobile computing. Why doesn't MS have some sort of duumvirate where Ballmer runs everything else but Mobile?
        nomorebs
    • RE: Ballmer makes it to year 11 as Microsoft CEO

      @Linux Geek
      No, as a long time shareholder, giving away Windows would make me want to get rid of him.

      The stock is undervalued and the price has been stagnant for a long time. I don't blame Balmer, though. He should stay.

      New blood is needed to fill the Bill Gates / Ray ozzie gap, though.
      Schoolboy Bob
      • RE: Ballmer makes it to year 11 as Microsoft CEO

        @Schoolboy Bob

        Sir, I'm sorry, but you're an idiot. The stock isn't undervalued. It's a very good representation of what Ballmer has done to Microsoft. Cut you're losses and sell.

        And giving away an OS doesn't mean the company won't be profitable. Red Hat finally broke the Billion dollar company mark and that's exactly what they do. And their customer base isn't nearly as large as Microsoft's. When people finally realize that MS OS is not necessary, Red Hat stock will skyrocket.
        Acid_1
  • It's not too late

    To give him his papers...
    The one and only, Cylon Centurion
  • RE: Ballmer makes it to year 11 as Microsoft CEO

    I am really starting to think he needs to go also. I thought in 2010 that they were starting to turn things around but unless they announce a longterm strategy for a more flexible platform that integrates the services they offer in 2011, he should go. Also, they need a short-term strategy for damage control over the lack of a tablet strategy.
    uberlaff
    • Balmer is as relevant as MS today, very little

      MS profit comes from windows and office. Any monkeyboy can run these product lines until a point where their monopoly usefulness expires.<br><br>MS rose on the back of the market for PC compatibles, not it's products. Their cloned products rode the wave of inexpensive hardware to the point the network effect worked in their favour. They continue to ride this with their record profits today as global prosperity grows the demand for PCs. However in tech they're irrelevant, but for a laugh and a historical curiosity, as shown at the recent CES.<br><br>The MBAs are the perfect people to ride this out. They'll work out they can slash their wasteful R&D program and slash non-profitable areas to save even more.<br><br>Fun to watch, I expect chairs will be thrown. That Mary is blacklisted by Ballmer says much about the people he needs to have around him.
      Richard Flude
      • Sure thing, dude.

        @Richard Flude
        If ever someone would post the absolute wrong assesment of Microsoft, I think you're right up there.

        Some of the people here should try viewing things without their ABMer glasses on.
        AllKnowingAllSeeing
      • RE: Ballmer makes it to year 11 as Microsoft CEO

        @Richard Flude "However in tech they're irrelevant" has to be one of the dumbest things I've ever read on this site, and that, my friend, is saying a lot.
        Real World
      • RE: Ballmer makes it to year 11 as Microsoft CEO

        @Richard Flude

        You forgot a tiny little detail called XBox and XBox Live subscriptions. I think Ballmer needs to go as much as the next guy, but to say that MS profit comes exclusively from Office and Windows is completely short-sighted.
        Playdrv4me
      • Right on

        @Richard Flude <br>> Any monkeyboy can run these product lines ...<br><br>Exactly. How hard it is to manage a product line that can survive a Vista fiasco with record profits.
        xvision
  • RE: Ballmer makes it to year 11 as Microsoft CEO

    Ballmer's concerns about leaks of product futures has grown to the point where it is hampering the company. Sinosky's solution is to ask the top 10 big firms what is needed and ignore everyone else. This is not how Microsoft kept competitive in the late 1990's and early part of the last decade.

    I consult with a lot of small firms that in the past praised Microsoft for giving them access to Microsoft developers who could help them figure out how to do something new on windows, nowadays most of these firms can't get the time of day out of Redmond.
    oldsysprog
    • RE: Ballmer makes it to year 11 as Microsoft CEO

      @oldsysprog - I suggest to you that your "small firms" who cannot "get the time of day out of Redmond" are being ineffectual and are sitting back and expecting Redmond to come to them.

      Microsoft offers and participates in perhaps the most comprehensive set of events of any vendor in the IT space today. They run TechEd, PDC, MIX, Firestarter, SharePoint conference, and many others while also supporting many other 3rd party conferences around the world with speakers, money and resources. And each of these conferences has an army of 'softies present to answer your questions.

      And if you want a more personal relationship with Microsoft, then become a partner and engage with your area's partner liaison team who are there with the sole purpose of engaging with partners and helping you achieve your goals with mountains of information, tools and resources.

      Oh ... and regarding Sinofsky - if he really did just "ask the top 10 big firms what is needed and ignore everyone else", then Windows 7 would not be the product it is today.
      bitcrazed
    • He's not keeping it secret

      MS has nothing. Articles on ZDNet are now talking about products ideas that MS are recruiting for. It's hilarious:-)
      Richard Flude
      • They have more then you do

        @Richard Flude
        All you have is your personal bias and your usual ABM slant to every blog about MS.

        Wake up, OK?
        AllKnowingAllSeeing
  • Brain Drain

    I agree with Mary Jo's assessment that the most worrisome aspect is the departure of mid and technical management. As a Business Intelligence consultant, I do a lot of work for my clients with Microsoft's products (primarily SQL Server and SharePoint). In that area of Microsoft's business, the departures of Bill Baker a couple years ago and recently Donald Farmer (both of whom were very public faces of Microsoft BI) are concerning. The departure of 3 of the 4 division presidents over the last 2 years combined with the technical brain drain in middle management gives the impression of a serious crisis of confidence occuring internally.

    It is true that Microsoft is performing well financially, but to quote Ballmer from his email about Muglia's departure, "The best time to think about change is when you are in a position of strength ..."
    bizNtel
    • Have these departures ...

      @bizNtel,

      ... resulted in the company underperforming in the areas of the departures, or performing better? E.g. since the executive departures in the entertainment division, isn't it true the division has never done better? If the departures of executives result in the company performing better, are you going to hold that against Ballmer - when any other CEO would be congratulated? This whole expecting Ballmer to be perfect, and anything less than that means that he should be let go, is getting old.
      P. Douglas
      • RE: Ballmer makes it to year 11 as Microsoft CEO

        @P. Douglas,

        It's too early to tell what the impact will be on Microsoft's BI business. Microsoft has lost a little ground to it's biggest competitors according to Gartner and Forrester in 2010, but Microsoft has some great advancements that have recently been released (PowerPivot) as well as strong new capabilities in the pipeline (Project "Crescent" and other features in SQL Server "Denali").

        BI is a fairly unique beast within Microsoft, since its products cross the Microsoft Business Division (which owns Office, SharePoint and Dynamics) and the Server and Tools Business (which owns SQL Server). This presents challenges in coordinating release schedules of the various products that are highly interdependent and creating a unified strategy. The departures of Stephen Elop and Bob Muglia will undoubtedly make it challenging to maintain a unified cross-division strategy for BI, but the departure of product champions like Donald Farmer will most likely have a more immediate impact.

        A related area of concern for BI is the tablet space. I actually know more business executives that own iPads than average consumers, and many of them want to know how they can get BI on it. I'm sure this will eventually extend to Android tablets as they mature in the market. Project "Crescent" will be a good fit for a web-based approach, but an app-based approach would be more powerful.

        High-level strategy and employee retention are critical areas over which Ballmer can have direct impact. I'm not saying Ballmer should be let go immediately, but if I were a member of the board I would want to see an action plan to address these areas before they have a significant impact on the bottom line - hence "The best time to think about change..."
        bizNtel
    • Donald (Dot) Farmer left!

      Wow. Didn't realize he was gone, too. Shame.

      http://donalddotfarmer.com/2011/01/05/a-new-beginning/

      Thanks for letting me know. MJ
      Mary Jo Foley