Long time Microsoft chief executive Steve Ballmer will be stepping down within the next 12 months. The company's board has chosen recruitment firm Heidrick & Struggles International to find his replacement. The shoes may not be so easy to fill.
News of Ballmer's departure comes just days after an class action suit was filed against Microsoft by disgruntled shareholders over its statements concerning the performance of the Surface RT tablet. The company took a nearly US$1 billion write off for what it called "inventory adjustments" for that product.
The company underwent a major realignment in July, but many watchers wondered if the culture could change.
More immediate issues are how Microsoft finds sales of PCs slumping, key OEM partners receiving better sales from tablets and smartphones, and the overall lackluster performance of Microsoft's stock (even as it was profitable and very well managed). The drumbeat for Ballmer's ouster isn't anything new among pundits, and Steve Jobs famously said that Microsoft was "irrelevant" and wouldn't change as long as Ballmer was in charge.
The real question is whether Microsoft can change. I spent years covering the company and am close with several other reporters that follow it. The consensus has been that nobody internally was ready and that external candidates would not be able to succeed in its culture (case in point: Ray Ozzie).
Many talented people remain at Microsoft, but my understanding is that it's mainly because they like their product groups. Other talented executives that I knew have since moved on to Google, start-ups or retirement. One of the biggest issues is its employee rating system, which doesn't encourage a "for the company view." Other 'old timers' say it hasn't been the "same place" post antitrust trial.
That's not to say that its latest consumer products aren't promising - they are and sales of its phones are rising. Microsoft makes excellent enterprise servers, development tools, and SQL Server is a strong offering. It's not all bad for Microsoft, and a new CEO might be just what it needs for another growth cycle. That task would require a strong, disruptive personality.
Don't expect Bill Gates to ride in to save the day - he's checked out and focused on his foundation work. My colleague Mary Jo Foley has received a copy of Ballmer's "goodbye note" and has compiled a list of possible replacements.