Microsoft's Ballmer: On Longhorn and other regrets

Microsoft's Ballmer: On Longhorn and other regrets

Summary: Microsoft's outgoing CEO opens up about his biggest regrets during his 13-year CEOship.

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When Microsoft CEO Steve Ballmer announced he'd be stepping down back in August, I had a chance to ask him about his biggest regret during his CEO tenure.

ballmerregrets

His short answer was "Longhorn," the repeatedly delayed and ultimately recast operating system that finally was released as Windows Vista in January 2007.

When Ballmer and I talked last month about defining moments of his 13-year CEO tenure for a piece I wrote for Fortune, Longhorn came up again. Ballmer said he considered it one of four defining moments of a good part of his CEOship. (The other three, for those who are curious, were the resolution of outstanding legal issues; the new business-unit structure, which Microsoft only just recently undid with its "One Microsoft" reorg in July 2013; and the reconfiguration of his working relationship with founder Bill Gates once Gates became Chief Software Architect in 2000.)

"When I look at it and I say, okay, what's the thing that I did that I feel -- that I regret the most, not just in my CEOship but my whole time here, it's absolutely 'Longhorn becomes Vista.' That was the single biggest mistake I made," Ballmer told me during a sit-down interview in his office in Redmond at the end of November 2013.

"Why?" he continued. "Not only because the product wasn't a great product, but remember it took us five or six years to ship it. Then we had to sort of fix it. That was what I might call Windows 7.

"And what we wound up with (was) a period of let's say seven or eight years where we had the A-team -- not all of the A-team but a bunch of our best people -- tied up not driving. We did not make years progress in eight years, and there were other things those people could have been working on, (like) phones," he conceded.

Ballmer said he personally takes responsibility for the situation.

Ballmer: 'We tried to fight it off'

"The mistake wasn't just an executional mistake. It was a technical strategy mistake. We tried to fight it off," he said.

"The big things are the important things to get right in this industry, but then you've got to execute with cadence," he continued. "People think it's about changing strategy every three seconds, because that's what people say. 'Oh, the industry changes so fast.'"

But in reality, Ballmer said, "a few big bets really pay off." He noted that Apple's "bet on touch and low power" ended up working out well for the company. Google made a big bet on search. Microsoft made a bet on PCs and software, and more recently, the data center with Windows Azure.

With Longhorn, Microsoft started out with the wrong technology approach, the wrong focus by the company's tech leadership and the wrong cadence.

Longhorn kind of fell through the cracks. "It wasn't Bill (Gates') thing and it wasn't (former Windows Chief) Jim (Allchin)'s thing and I didn't get it," Ballmer admitted.

"When I look back and I say it was sort of a focus issue, because we weren't focusing on what we needed for engineering cadence, bite-size approach, what was the big bet that that represented," he said.

"I'm willing to admit when I first started as CEO is probably when I made my biggest mistake. And a lot of what we've been doing is just the last five or six years is really catching back up from the mistake that really you could say I made with Bill and Jim Allchin earlier in my CEO days," Ballmer said.

I asked Ballmer whether either almost buying Yahoo in 2008 -- or ultimately backing away from the acquisition -- was something he regretted or considered a mistake.

"I'd call it mostly -- in the grand scheme of things -- not monumental to the company's fate either way," he said.

"I think it's important for us to build up the capabilities that we're building up in machine learning and search and the like. And we were headed down that path, and the scale and volume of Yahoo (with whom Microsoft has a search partnership deal) has mattered. There's no question about that.

The decision to bid on Yahoo "had a lot of economic synergy, a lot of product creation," Ballmer said. But "in the annals of history, it will be really smart we didn't buy it, because the market collapsed, of course. It would have really looked silly to have bought it."

Ballmer noted that, after Microsoft withdrew its bid, Yahoo attempted to forge a deal with Google. But the antitrust regulators weren't going to allow that. If they had, "you would say, hmm, who knows what position we would find ourselves in," he said.

While the Yahoo deal was big because of its $45 billion size, Ballmer said, "in the grand scheme of the shape of the company I don't think it will be in the top 10."

Another regret Ballmer did have, however, was how long it took the company to make money with Xbox, he acknowledged. Microsoft launched the first Xbox in 2001 and the second, the Xbox 360, in 2005. Up until 2010 or so, Microsoft lost money on every console sold, according to estimates.

Ballmer said he still believes Microsoft made the right move in getting into the living room with Xbox. He isn't sorry he gave the team a lot of freedom in creating and building the product.

"But what you're trying to do is make money for the long run, not the short run," Ballmer said. "So I feel bad about how we got here on Xbox, but we've built a heck of an asset. And could we have built it a little cheaper, yes. But we built it. We weren't swayed from building an important asset."

Ballmer said he's feeling good about where the company is right now with the Xbox One.

"We have almost a full Windows System now back in it," he noted, referring to the Windows 8 and Hyper-V underpinnings of the platform. " And I'm glad we built a base. I'm glad we built some enthusiasm. I kind of wish we were a little closer to the Xbox One architecture sooner in the process."

Topics: Steve Ballmer: The Exit Interview, Microsoft, Windows, Leadership

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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124 comments
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  • I am glad Vista is now openly regarded as having gone south

    I appreciate the candour. A lot of companies won't own up to their missteps. To me, it is not weakness to admit a failure, it is a sign of growth - as a company or individual; it means you learned something.

    Failure is a great teacher.
    Mac_PC_FenceSitter
    • Yep

      As long as one survives the schooling.

      One element of the Vista story that is overlooked is the degree to which worries over Wall Street Analysts and a flat stock price influenced the decision to ship in late 2006. Partners didn't have enough time to be ready on day 0 and many needed 6 months to be ready. That synchronization mis-step got Vista off on the wrong foot.

      At the time I thought the pundits' main point—Microsoft can't ship—had some validity and investors should be miffed. Now, as I view all the foolish advice given Apple over recent years, maybe I need to rethink. Longhorn was ambitious and, regarding the rdbms file system overlay, barking up the wrong tree. There were problems with the code base regarding dependencies and had that issue been addressed in 2000-2001 when the Longhorn roadmap was being developed, that might have allowed the shipping of a solid product in 2004 or 2005. Ah well, might have beens.
      DannyO_0x98
      • I still like the idea of the WinFS file system, as a geek

        It is just such a cool idea. But as everything became cloud centric a few years later, it would have had a short useful life even if it had worked. :)
        Mac_PC_FenceSitter
        • Windows 8 is a bigger mistake than Vista

          With Windows Mobile, Microsoft tried to put a desktop interface on a phone. The icons were so small you'd have to poke them with a stylus pen.

          With Windows 8, Microsoft was at it again, but this time they put a phone interface on a desktop computer.

          Nobody wants it. It's Microsoft's biggest failure because, by forcing people to use a phone interface the goal was to act as a promotion for Microsoft phones and tablets.

          It had the opposite effect. Microsoft phones and tablets are a sales disaster. Windows Phone and Surface tablets are dead in the water.

          And while we're at it, why not ask Ballmer if he regrets scoffing at the iPhone in 2007. He laughed at it and didn't think it would be a big success.
          Vbitrate
          • This is MSes biggest mistake

            This is Gate's and Ballmer's and MSes BIGGEST mistake. They still truly believe that one IS and one interface suits every big of hardware from phones to desktops to point of sale to music players to watches and so on. The Windows Mantra is the death knell for MS.
            global.philosopher
          • Zune + Kin + Surface = FAIL

            Which other failures would Ballmer like to take credit for?

            Zune, Kin, Surface?

            Take your pick.
            Vbitrate
          • LOL...

            Azure, Windows Server, Windows 7, Xbox 360/One, Office, HealthVault, ... Cherry picking goes both ways.
            TechNickle
          • .....

            The zune was a great product and the zune software was and is still far superior then the ipod and itunes setup. I still use my original zune and zune hd. The issues was Microsoft did absolutly zero advertising or marketing for it. The next gen zune would have had bluetooth and wifi with browser which would have made it an all around device killing the ipod but it never got there. Yes the kin was dumb from the get go, Vista was a hog until after all of its changes and picks then still was at best ok. The surface is a giant fail. The windows phone is a giant fail. Windows 8 or 8.1 is a fail. When Microsoft had Windows mobile they were close but need to adapt the desktop. They needed to make it more like how phones are today with the icons more in colums and larger with the start button being a physical button or tray button. Thats what they should do now and get rid of the god awful metro/ modern garbage. Pretty much he was clueless his entire time in.
            Fletchguy
          • I also very much liked the Zune

            but the touch interface failed, suddenly rendering a really good player a chocolate teapot :(
            HarbingerOfLunch
          • I Want it

            Works great; Faster than 7 and I don't ever need to see the start screen if I don't want to.

            And while we're at it, Windows Phone sales are on the rise globally. They aren't a threat, but they're not DOA, either.

            http://www.kantarworldpanel.com/Global/News/Nokia-and-Windows-global-momentum-continues

            While technology moves fast, it's still a marathon as opposed to a sprint; MS has the resources and the talent to stay in the race.
            d20dad
          • In what way

            is Win 8 Faster than 7?
            I hear this all the time and I for one don't see it. Sure if you have the right MB and hardware it can boot faster but that's it. If you installed Win 8 fresh then yeah it looks faster but do the same with Win 7 and its the same.
            Go ahead show me one other thing other than boot and shut down times that is faster in any measurable way.
            I'll wait.
            piiman
          • Win8 Faster

            I guess you really haven't used Win 8.1.
            Right now, I am accessing IE11 using the desktop. My wife just asked me what the weather was like, so I hit the Windows logo key, gave her the weather report and at the same time, saw I just received 12 e-mails, what was current in the news, what my stocks look like and what events are on my calendar. Then I hit the Logo key again and I am back on my desktop.
            Try that with ANY other OS!
            fiosdave
          • Yep, any other OS

            Ever heard of widgets? Or taskbar notifications? Or pop-up notifications in general?
            Daniel Foerster
          • Pratical sense, this unkwnown

            Ever heard of "having everything you might need to know one key away, without wasting resources or battery, to go back your work in an instant"?
            sireangelus
          • They're in the race

            but running in the wrong direction
            HarbingerOfLunch
          • VBitate is right

            W8 is a colossal failure too mainly because of the idiot interface. Only thing good about it is the OS engine is getting more robust and easier to recover from failures and has better virus protection.
            But look at IE what a joke that is as a staunch Microsoft partner I ignores Chrome and FireFox for years. Now my default browser is Chrome. I had to as even as I speak IE freezes and crashes and have had to resort to Chrome anyway even with the same URL's. Generally though Ballmer was honest about his mistakes and that counts
            Technoscape
          • I don't care whether or not he has regrets

            The important thing here is that senior management get paid massive amounts of money for failure. Windows-8, Vista, The new Outlook social-connector crap that fills your mail window with a big-blue head... These people are supposed to be so talented, and yet they seem to be completely feckless, and when something goes wrong such as the banking crisis they suddenly have no knowledge of what their minions were doing
            The pros and cons of Windows-8 are irrevelavent because if people don't like it they won't buy it. Windows-8 is a perfect example of this. The size and relative position of the ugly large child-like tiles bear no resemblance to their significance, and a touch enabled desktop would only suit an orangutan and the health and safety natzis would soon demand armrests and helmets.
            In short when something is broken fix or replace it, and regret it later!
            techietubby
          • The CEO income is out of control.

            The problem is we had 30 years of income stagnation for the middle class and we have uncle fester and friends fail big time and he still gets his millions. Who here earns millions too for failure?

            We keep seeing the 1% make disastrous mistakes and still earn millions and are subsidized by society. We have corporate socialism where we publicize the loss and privatize the profits.
            johny bizaro
          • Your Chrome is peeling

            You should really check the US-CERT website. Chrome has many more vulnerabilities than IE11.
            Here is the latest:

            Google has released Google Chrome 31.0.1650.63 for Windows, Mac, Linux and Chrome Frame to address multiple vulnerabilities. These vulnerabilities could allow a remote attacker to hijack a web session, spoof the address bar or cause a denial of service condition.
            fiosdave
          • EI vs Chrome.

            While not a big fan of Chrome I do still have less problem and complaint with it's function...
            FireFeo