Microsoft's next CEO will contend with mobility, platforms, and consumerization

Microsoft's next CEO will contend with mobility, platforms, and consumerization

Summary: Under Steve Ballmer, Microsoft solidified its stronghold on enterprise solutions. But what challenges will his successor face?


Microsoft remains one of the great global technology companies, a solid member of the Fortune 50. Although it no longer enjoys the reputation for innovation it did in the 1990s, it’s a critical player in every aspect of end user computing (including devices, software, browsers, development platforms, and services) and of other technology product and service markets.

As CEO, Steve Ballmer solidified Microsoft’s stronghold in enterprise solutions. Microsoft built and maintained – or built and made itself into a key challenger – in several enterprise markets. Microsoft Office remains a titanic success, even as it faces lower-cost competition from Google and others. Windows Azure has been cultivated into a full-fledged contender in the cloud services market. Exchange remains entrenched in enterprises, as do many of Microsoft’s Server and Tools offerings. Microsoft remains the company to beat in some of these markets, and has become a formidable challenger (e.g. as Azure takes on Amazon Web Services) in others.

On the consumer side, Xbox and its Xbox Live services stand out as a major success of Ballmer’s tenure. And overall, revenues have grown considerably during his tenure, even if not at the rate investors might have liked to see.

At the same time, it’s important to point out some of the unresolved challenges that Microsoft has faced during the Ballmer era:

  • Struggling to find relevance in the face of the mobile revolution. Microsoft remained wedded to PC-oriented computing models even after as the initial smartphone wave (Blackberry) and then the modern, app-rich smartphone wave (from 2007 forward with Apple’s iPhone) proved the criticality of mobile to computing. A great example is tablets: Forrester wrote a report in November, 2011 in which we asserted that Microsoft was already late to the tablet market (in 2011…) – even though Bill Gates had proclaimed the tablet the future of computing as early as Comdex (in 2000). By the time Microsoft released proper tablet OSes – in October, 2012 with Windows 8 and RT – Apple’s iOS and Google’s Android had sucked up consumer and developer interest. It remains to be seen if Microsoft can come from behind here.
  • Releasing several OS misfires. Microsoft has had its share of operating system misses over the years: Windows CE, Windows Mobile, and most certainly Windows Vista. While Ballmer’s Windows organization steadied the ship with Windows 7 following the failure of Windows Vista, the “reimagining of Windows” with Windows 8 hasn’t gone as smoothly as many at Microsoft would have hoped, though Windows 8.1 shows promise in improving the OS’s fortunes.
  • Losing connection with consumers… just as the age of consumerization dawned.Microsoft once ruled the imaginations of consumers world-wide: the release of Windows 95 was a rock star event (quite literally – the Rolling Stones’ “Start Me Up” was commissioned as the theme song for the OS). Over the years, Microsoft became more and more an enterprise company, losing touch with consumers. This wouldn’t have been a problem, except that during Ballmer’s CEO tenure consumerization took off, and consumer-oriented players (Apple, Google, Samsung) began to dominate the fields of computing, software, and mobility.

All three of these battles still loom ahead, as the next Microsoft CEO will put his or her strategic imprint on how the company chooses to contend with mobility, the platform wars, and consumerization. The company has resources and talent on its side, but needs a faster-moving strategy to address these challenges.

Topics: Microsoft, Consumerization

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  • Ballmer: good work

    In the only thing that Ballmer has made a mistake it is in copying the strategy of Apple, people to equality of benefits and price not choose products Microsoft, the "wave" Microsoft has happened, Microsoft should offer clearly superior products to the competition to be successful and to achieve that in devices, it is very difficult but impossible. If MSFT wants to be devoted to the hardware production should choose products that even have a long one on the way to improvement in other words where it is possible to contribute great innovation. The successor of Ballmer should agree with this concept. The selection of the new CEO should be made inside MSFT, a young person that has highlighted intellectually, reflexive, talkative and capable for the businesses. Can it be E. Rudder?
    luis river
  • Steve Ballmer is a hero!

    Thank you Steve for your dedication to you users! You were the happy medium that made everything just right!!! Love Microsoft under your reign. I hope the best for your retirement.
  • massive

    The next MS Ceo has a massive job on hand. MS is still a huge IT company and it's transitioning into a device n services company. Good luck to the next candidate. I hope he has vision, listen well to customers and play well with key players
  • microsoft's new CEO will contand with mobility platforms and consumerizatio

    I think Ballmer just got tired. he made it to the top did his best. I wont judge his performance
    Even Steve Jobs and Apple had their troubles lets face it Apple is strong because of the sales of the Iphone, and Ipad. if these 2 Apple products loose enough sales Apple is in deep trouble Ballmer leaves Microsoft with it's Enterprise business strong, the Xbox is still popular, MS office still sells well,. The MS Surface Pro tablet has an 85 percent approval rating of people who bought one. the Surface pro problem is it cost too much to buy to some folks. Weak Windows 8 public acceptance and the failure of Windows RT sales hurt Ballmer's
    Microsoft but windows 9 when it comes out would remedy that. windows RT will sell better if it stays on the market 2 more years and gains more apps. Microsoft will survive. It has the money and resources to do that.
  • Next CEO

    Must be a creative, not just someone that knows how to sell existent products and services.
  • There is an alternative reason to the sudden Balmer departure...

    ...the stock holders have been successful in their challenge, and Microsoft will be broken up and sold in pieces.
    Tony Burzio
  • Ballmer succession

    Steve Ballmer says that the new CEO of MSFT should be continuator in the strategy of the company, I believe personally that it is a serious error, it is necessary as CEO a visionary person that is ahead at the times like he made in Apple Steve Jobs, we want an artist and we don't want a bureaucrat thirsty of money.
    Otherwise the new CEO will bring misfortune, suffering and ruin.
    luis river