Re-evaluating Steve Ballmer: Satya Nadella isn't the only reason Microsoft is cool again

With Satya Nadella's popularity on the rise and Microsoft's momentum picking up, it's time to look back and realise where much of that praise should be directed.
Written by Mary Branscombe, Contributor
Former Microsoft CEO Steve Ballmer

Microsoft is having a good few months. Windows 10 is looking good and HoloLens has put Redmond firmly in the cool column for at least a few days (as has the news that Windows 10 will be free for Raspberry Pi 2 developers).

There are the usual complaints about upgrades that have to be withdrawn and replaced, the usual scepticism about whether Windows Phone can win more market share, and the way Microsoft never quite manages to include all the details in any announcement. But at the same time Microsoft is on a roll of popular product launches and decent financial news - and the company's increasing openness is getting attention in the developer and open source community.

Open sourcing projects is changing attitudes inside Microsoft, with developers educating each other about the importance of building a community around their product and changing their mindset from owning projects to shepherding them.

That's a very new thing for Microsoft and it has all the hallmarks of CEO Satya Nadella, who talked last summer about making Microsoft go "open source internally" for its own projects. Likewise the Internet Explorer team is hiring people from Mozilla and from the 'open web' evangelism community who would once have seen Microsoft's browser as part of the problem.

Many of these changes that are flowering under Nadella - and the products he's getting the praise for launching - go further back in the company's history.

Microsoft didn't write Office for iPad in the weeks between Nadella taking over and the apps launching. Yes, they'd been held back to rewrite for iOS 7 when Microsoft saw how much of an advance that was over iOS 6. But they were also held back to get Nadella off to a good start.

And you don't build a hardware project like HoloLens in less than a year (which is how long he's been CEO).

Similarly, the roots of Microsoft's current open source enthusiasm go back a long way. Sometimes they were under the radar but they were certainly catalysed by XML co-creator Jean Paoli moving to run Microsoft Open Technologies (the open source, open standards subsidiary) in April 2012 - under former CEO Steve Ballmer.

Nadella's put his own stamp and direction on things, but he has also inherited a lot from Ballmer, as well as benefiting from just not being Ballmer.

You can thank the dotcom crash as much as the rise of Apple for the fact that Ballmer presided over a huge drop in Microsoft share price (as he noted in late 2013, the Microsoft share price was then 60 percent of what it was when he became CEO, while profits were three times what they'd been then).

For every Zune, Kin, and Danger acquisition, there was a SQL Server, Azure, Lync, Skype, or Xbox - the list of successes is actually longer than the list of failures.

Of course Ballmer had failures and made mistakes; every CEO does that (look at Nadella getting diversity issues so wrong at the Grace Hopper conference). But because people are so ready to think poorly of Microsoft, when most people think of Ballmer, they think of the caricature. The real businessman was rather different, with several different personas.

Often what people saw was the sales guy filled with literally bounding enthusiasm, pretending to smash an employee's iPhone. That was a role Ballmer was ready to play; sometimes too readily.

When Microsoft ran the first MIX conference in 2006, to re-establish credibility with web developers and the open source community, Ballmer sat down to be interviewed by long time Apple expert Guy Kawasaki - the original Mac evangelist.

It was a nuanced, wide-ranging conversations with no banned topics on-stage, or in the open Q&A session. But what the audience wanted was Mr Monkey Boy chanting 'web developers, web developers, web developers' - and Ballmer obliged.

And what is the story behind that original 'developers, developers, developers' video where the sweat is pouring off a dancing, chanting Ballmer - the video that did so much to paint him as a clown in popular perception? Apparently he had a fever of 102 but refused to miss an internal sales meeting and was rushed back to bed afterwards. That certainly fed the perception of Sales Ballmer as sports coach, booming and roaring from the touch line.

The animus that Microsoft earned over the years often fell on Ballmer, because of that perception - and because he was easy to misinterpret. Calling Linux a cancer sounded vindictive and helped make Microsoft enormously unpopular in some circles. But actually, what he said was that Linux licencing was viral like a cancer and it metastasised into the rest of the code it was attached to. It's not the prettiest metaphor - but it is a pretty good description of the GPL licences, as some companies have been finding out in court recently. And he didn't shout it either; to him it was just a bald statement of facts.

I've heard stories of employees sitting outside his office waiting for a meeting, flinching at the volume of Sales Ballmer enthusing at someone to fire them up, and entering nervously - only to have Ballmer grin and let them in on his secret. The booming was an act and for their own meeting his voice wouldn't rise above a normal conversational volume.

That kind of intense but quiet conversation often meant you were talking to Numbers Ballmer. Look back at the Office 2103 event in San Francisco, where Ballmer talked about the productivity software market with both passion and percentages. Or if you think Ballmer didn't understand the shift away from Windows as a big earner for Microsoft, go back to what he said at the annual shareholder meeting in 2013 and compare it to the 'Windows as a Service' announcement Nadella made.

"The notion of being able to deliver a DVD to somebody and call it a day, which is beautiful, it's a beautiful economic model, I love it, that day won't be there 10 years from now. There will be a cloud service that requires a level of capital investment, et cetera, to go forward. Whether there's business of delivering a DVD to somebody who makes hardware and then having them pay you for it, remember we have a competitor in the operating systems business in Android that's entirely free, so maybe you can deliver the DVD, the question is how do you really drive and monetize the value. I do think there's a transformation in our future and it's great to invest, to sustain our presence, but I do think we have to make the bets for the future," Ballmer said at that 2013 meeting.

He has a phenomenal grasp of operations, with key figures and numbers on the tip of his tongue. When HP and Microsoft set up a joint competency in unlimited communications that IT professionals could study for, Ballmer joined then-HP-CEO Mark Hurd on stage at the announcement. Hurd is famous for knowing his numbers and he started showing off; quoting Microsoft figures for sales and margins. Without missing a beat Ballmer jumped in with the equivalent figures for HP. It didn't sound scripted either; it sounded like Hurd trying and failing to one-up Ballmer.

Build 2012 featured a rare appearances of Demo Steve (a role we'd seen more in the 90s), showing enthusiasm plus a firm grasp of product details. During the keynote he gave a demo on his own personal Perceptive Pixel device, showing how he used the 82-inch screen to run Microsoft. The Surface Hub launch? "Eventually, we're going to have 82-inch slates at a price point where people can afford them and want to put them in a lot of conference rooms and classrooms and the like," Ballmer said back in October 2012.

Then there's Intense Ballmer. Although many things led to Microsoft's modern focus on security, then-Windows chief Jim Allchin used to tell the story of how Ballmer went to a family wedding and ended up spending the weekend trying to fix a relative's tower PC. It was riddled with viruses so he took it home to fix, brought it to work in his car and staggered into a Monday morning meeting with Allchin and dropped it in front of him. "That machine was so owned it was unbelievable," Allchin commented. A Microsoft team spent several days cleaning it up and brought it back to Steve who noted that this was only one PC; this problem was how bad PC malware could get and that was what he wanted fixed.

Attracting his attention to a project could be a mixed blessing. Come up with an idea he liked and you could suddenly have a new job that didn't have the resources or backing from other divisions that you'd need for it to succeed. Ballmer promised publicly that the second version of Windows Smart Display would let you log in to Windows locally and remotely at the same time; it's tempting to assume that commitment to using the same licence twice is one reason the second version never shipped.

Sometimes, the problem was that he didn't say no. For instance, he backed Photon long after he should have killed it, which is why Windows Phone 7 was a stopgap hastily built to catch up after years of stalled mobile development. He called the Longhorn and Vista debacle his biggest regret, because he let it go on for so long.

And of course, there's Angry Ballmer. If something went wrong that you should have thought about, the phone call you would get from Ballmer might register on the Richter scale. He could clearly be as difficult to work with as any other CEO. But neither Angry Ballmer nor Sales Ballmer were the only modes he worked in.

Satya Nadella is harder to read. His enthusiasm is quieter, if no less intense. He's more likely to quote poetry than sales figures. He appeals to Microsoft employees who are comfortable having an engineer in charge. And Nadella clearly benefits from decisions Ballmer made years before he took over. If you like what Satya Nadella is doing to Microsoft, look back - without the sterotypes - and see how much of it was made possible by Steve Ballmer.

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