Microsoft's new CEO will have tougher road than Ballmer

Microsoft's new CEO will have tougher road than Ballmer

Summary: Microsoft's new CEO will be like an NFL coach taking over a 10-6 team. You either win a championship or you fail. Simply put, Microsoft isn't screwed up enough to make the new chief look like a hero.

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Microsoft is in the market for a new CEO within the next year and while running a technology leader may be appealing the new captain may have a tougher time than outgoing chief Steve Ballmer.

On Friday, Microsoft surprised the tech industry by announcing that Ballmer was going to retire in a planned transition. Ballmer was a lightning rod, but the real shock was that he was stepping down---especially as Microsoft just set itself up to be a services and devices company.

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We have a short list of potential Ballmer successors and you can nitpick over Microsoft's product choices all you want. But here's the reality: Microsoft's job isn't getting any easier. The tech giant is sprawling and it's unclear whether it can compete with Google, Apple and Amazon---three companies with more focused businesses.

More: Microsoft's Ballmer on his biggest regret, the next CEO and more | Microsoft's Ballmer: Why Microsoft doesn't want to be IBM (or Apple) and more | Ballmer's leaving: Who's next? | Microsoft's next CEO: Who's on the short list? | Here's Microsoft CEO Ballmer's goodbye note to the troops | Microsoft CEO Ballmer to retire in the next 12 months  

The biggest challenge for Microsoft's new CEO can be found in one simple question: What's the glue holding the company together?

During the Bill Gates era and part of Ballmer's rein the answer was clear: Windows.

Today Windows isn't necessarily the glue of the company. The new glue may be the cloud.

Microsoft's latest mission statement to be a "devices and services company focused on empowering customers in the activities they value most" is a bit mushy by design. Microsoft is a tech conglomerate of multiple billion dollar companies. There's no way a new CEO---internal or external---will know every one of those businesses well. Consider:

  • Google is search and ads. 
  • Amazon is commerce and cloud. 
  • Apple is hardware, software and ecosystem. 
  • Microsoft is a work in progress.

The new CEO will have to take on a transformation started by a guy leaving and better define Microsoft. Should Xbox be spun off? Do Microsoft's consumer and enterprise businesses really go together? Does Microsoft need to be more about corporate software where it is doing very well? What is Windows going forward? Is Microsoft a cloud company first and foremost?

An answer like "all of the above" probably isn't sufficient.

Ballmer's record as Microsoft CEO will be mixed. He missed the mobile curve. Vista was a disaster. Windows 8 was a ballsy move that hasn't paid off just yet. Microsoft has a strong cloud position, but Wall Street is starting to freak as capital expenses for data centers is projected to rise from 4 percent of revenue in fiscal 2013 to 9 percent of sales this year, according to Barclays.

Shareholders aren't going to give Microsoft the leeway to spend heavily to keep up with Google and Amazon on infrastructure.

Simply put, the new CEO for Microsoft will be in a tough spot. The company isn't a disaster where there will be a 2-year honeymoon just to stabilize the patient. The new CEO won't look like a savior because Microsoft doesn't need to be saved. The CEO following Ballmer will be more akin to Virginia Rometty taking over at IBM as CEO than Marissa Mayer at Yahoo or Meg Whitman leading HP out of the abyss. 

However, Microsoft also isn't firing on all cylinders and is transforming its approach. Microsoft is a tweener company that should arguably be broken up. In many respects, the new CEO is like an NFL coach taking over a 10-6 team. You either win a championship or you fail.

Topics: Microsoft, Enterprise Software, Windows

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  • Elephant in the Room

    Elephant in the Room = Open Source, Free Software.
    e8hffff
    • What has this to do with anything?

      Microsoft already produces some open source software, as well as its traditional closed source. Azure supports both.

      Despite what some fanatics think, users and even most IT don't care much about the development model used for a piece of software. Really what is that to most people? Eric Raymond may care but Joe Delivery Guy doesn't, and neither does Suzie Sysadmin for that matter. Does it do what I want? Only terribly important question.
      Mac_PC_FenceSitter
      • It is also very incomplete.

        Does it do what I want? yes? fine.

        Next part..

        Does it also do what I DON'T want?....
        jessepollard
        • Yawn.

          unbiased as always /s
          William Farrel
  • agree -and as Bill - Steve will be chairman

    Bet on it
    cyrrusthevirus
  • If Ballmer did good

    Why he is fired?
    ac1234555
  • Ballmer a product of his environment

    It's hard to say if the incompetence displayed by Ballmer was his or a product of his environment. From my experience, when a scapegoat is identified and removed, the new guy oddly exhibits the same problems.
    Jim Frederick
    • Maybe...but the guy will have a harder time regardless

      Ballar took control with MS riding high. The new CEO will receive a company that is surviving off legacy software. There mobile offing strategy needs to be completely redone if they are to stand any chance at all. They need to simplify product line up and stop following Apples strategy, they don't have the reputation to pull it off. They need to focus on their strengths and leverage from there. If they take on Apple on Apple's turf they will lose, case in point the Zune. IMHO

      They need a CEO from out side MS.
      KBabcock75
      • MS didn't take on Apple with

        Zune. They released a device similar product to the Ipod. To say the were competing they would have had to release a music store alternaltive to Itunes. Maybe the problem was that MS didn't compete with Apple across the board even after Itunes for Windows was released.
        Orlbuckeye76
        • Your right, lert me correct...they tried to compete with Apple.

          The fact that MS was un-prepared and shipped an incomplete product/strategy does not change that fact that they were attempting to take on the Apples ipods and they got their rears handed to them. Zune was a good product but not better and cost the same amount as an established and well liked iPad. End result...failure.

          If you look at the pads you see the same thing happening again. Ballar is making the same mistakes again.
          KBabcock75
  • Microsoft

    No matter who runs it? Microsoft sucks!
    Pablo Cree
    • No they don't

      Apple does.
      LoveZelda3
    • re: Microsoft

      Thanks for your insightful comments ... now go back playing with your crayons.
      perrrob
  • Where have I seen this before???

    Ballmer : next guy
    AS
    George W : Barack

    The company is splintered, certainly not settled into the reorg. It's a similar mess compared with the WMD FUD and financial ruin that Bush left in his wake.

    To the new guy: good luck, and I hope you don't end up a scapegoat!
    lorint
    • Oh goodness

      Please not another BO.
      That's the last thing the world needs.
      Azzras
    • ..

      If you think a moron like Obama who has done all his own damage intentionally your either retarded or in denial
      Fletchguy
      • Uh?

        Very educated and insightful comment, but what does it have to do with Ballmer's replacement at MS?
        Eleutherios
    • financial ruin that Bush left in his wake?

      You mean the one created by the Socialists (democrats)? Bush was in the White House, but the Democrats had control of Congress. They are the ones that voted to let Fanny Mae, and Freddy Mac issue sub-prime Mortgages. Good thing my house is paid off, as it's lost half of it's value, due to the Democrats and their foolish spending.
      Troll Hunter J
  • The new leader will have to be able to...

    take Microsoft and change it into two companies, one focused on business which it already is great at doing and the other becoming leaner and focused in the consumer field. The business side is going to take care of itself for now but the consumer side is the one that needs the overhaul. When I read articles about Microsoft it fall into one of these categories each time.
    The consumer is the driver behind both categories but when you talk about Apple and Google with Microsoft it is the consumer category that takes precedence. Microsoft was late into the game with consumers and they have created a new OS that is different than those two. I use Windows Phone and like it better than either of the others from an appearance standpoint. When I look at either Apple or Android they both look the same to me. Apple's is closed while Google's is open and they each have their own problems. One is terribly expensive while the other is cheaper but more prone to malware and fracturing of system.
    Right now Microsoft is in the position to make a big change for consumers if they get the right leader who will make sure that the business side is separate from the consumer side and they increase the focus on the consumer side. It would help if they would listen to the consumer more than they do now. It never hurts to find out what the consumer really wants in an operating system rather than listen to all the techies moan about whether or not that system lets them change it at their whim.
    Any company that listens to what is being said about their product makes positive business enhancing decisions about their product.
    tom_268@...
    • ...

      Whic is exactly why microsogt is in trouble. They font listen to the consumer and do exafyly the opposite of expressed needs and desires. Wp is a giant fail the os has been shown to be attractive to almost no one in 4 years. The percentage is just above rims usage. Win 8 and 8.1 are alreadt dead due to microsoft ignoring tens of millions voicing distaste in the modern ui and no startmenu. Microsoft unless slamming brakes on and hoinh back to consumer desires is screwed. The cloud idea may be the final nail.
      Fletchguy