Government // Enterprise Architecture
Commentary
8/26/2013
02:44 PM
Michael Endler
Michael Endler
Commentary
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Ballmer's Legacy Still Incomplete

Clearly, Ballmer had to go. But will Microsoft's "device and services" plan seem any more viable once a new CEO takes over?

Reactions to Microsoft CEO Steve Ballmer's impending retirement have pooled around two main points of consensus: Ballmer needed to go, and whoever replaces him will have a face a tough job. Speculation has naturally turned to the embattled CEO's potential successors -- but let's not get carried away.

Ballmer won't be out the door for many months to come. The interim will largely determine whether Ballmer is remembered for finally pointing the company in the right direction with his "one Microsoft" reorganization plan, or for leaving a once-mighty company in disarray. Even on his way out, Ballmer will continue to shape the challenges his replacement will face, and thus who the ideal candidate might be.

Regardless, Ballmer won't have absolved himself of missteps. Though he increased Microsoft's revenues with his impassioned salesmanship, he also missed tectonic shifts in the industry, such as the shift to mobile, and spent billions on failed attempts to attract consumers. The company's valuation is less than half what it was when Ballmer took over, its stock price is around three-fifths of what it was just before Bill Gates stepped down, and the company is coming off a quarter that revealed Windows 8 to be a disappointment and its Surface tablets to be a fiasco. Given what Apple and Google have done over the last decade, Ballmer clearly wasn't getting the job done.

What's unclear: the worth of the assets Ballmer will leave to his successor. Ballmer architected the "one Microsoft" plan, and with the wheels of the machine already in motion, coming months will determined whether the current CEO created a foundation for the future or whether his construction needs to be razed and rebuilt from the ground up.

[ Ballmer badly bungled Microsoft's client services strategy. Can the company recover? For more analysis, read Ballmer Is Off The Matrix. ]

In an interview Friday with ZDNet, Ballmer argued that Microsoft needs to continue cultivating a collaborative culture, claiming that it's less important to focus on Microsoft's Surface tablets than on the larger business model: "to deliver… high-value experiences that will span hardware innovation, operating system, consumer experience and enterprise experience."

Ballmer also asserted that Microsoft will have to pursue consumers. "If you're going to be in e-mail, you're going to be in e-mail. You can't say, okay, I only want to be enterprise email," he said, adding that the alternative is to "be like Oracle and not participate in certain high-value activities." Ballmer claimed that the Microsoft board supports him on this stance, and board member John Thompson, who also participated in the interview, confirmed as much.

This kind of rhetoric suggests Microsoft believes in Ballmer's long-term vision. If Ballmer's decision to leave really was his own, as he's claimed, this could well be the case. In discussing Microsoft's next CEO, some commentators have evoked Apple and IBM, companies that successfully redefined themselves after narrowly averting disaster. Microsoft is different from these companies, though, in that it is not on the brink of financial ruin. If the board believes in the company's current direction, it has the money to weather any storm.

In this scenario, the company could go with an insider who can steer the plan through short-term challenges. Julie Larson-Green, who oversees Microsoft's Xbox and Surface products, has been widely mentioned as a contender for the job, and she would make a great story, rising from failed Microsoft applicant to the company's eventual CEO.

Previous
1 of 2
Next
Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
cbabcock
50%
50%
cbabcock,
User Rank: Strategist
9/4/2013 | 9:59:19 PM
re: Ballmer's Legacy Still Incomplete
Microsoft evolved into a highly successful enterprise data center vendor during the Ballmer years. But that seems almost outside the company's range of vision. It wants to be big in the consumer market again and doesn't quite understand how much current revenues are dependent on data center products, data center effectiveness. Sometimes it's wise to do business with the bird in hand instead of chasing flashes of gold in the bush.
IT-security-gladiator
50%
50%
IT-security-gladiator,
User Rank: Strategist
8/31/2013 | 12:27:46 AM
re: Ballmer's Legacy Still Incomplete
What pressure?

Mafiasoft has 1 digit market share iin all the categories you mentioned.
That is hardly pressure.

By the way it is "Sky Dive" and no longer Sky Drive due to the incompetent lawyers at MicroKlunk who failed to do their job on trademark searches, resulting in a loss of the name already owned by Murdoch.

Read more and gain some knowledge before you rant innacurate statements.
IT-security-gladiator
50%
50%
IT-security-gladiator,
User Rank: Strategist
8/31/2013 | 12:21:51 AM
re: Ballmer's Legacy Still Incomplete
The real question is this: "What flavor of crack are you smoking" when you say that the epic Reboot-A-Phone Flop and MicroKlunk Shablets will...

"will be market leader"

If I were you, I'd check into the Bettty Ford clinic immediately for help!
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
8/28/2013 | 4:22:49 PM
re: Ballmer's Legacy Still Incomplete
One Ballmer asset that Microsoft should be rid of: stack ranking.
Michael Endler
50%
50%
Michael Endler,
User Rank: Author
8/28/2013 | 3:54:38 PM
re: Ballmer's Legacy Still Incomplete
Yeah, much as I'd be curious what on earth (or in space) Musk might do with Microsoft, I included him mostly to show how extreme some of the suggestions were. People seem to be settling down around Elop, Nadella and a few other candidates. But with the first rush of successor suggestions, it was like some people were pulling names from a hat.

As for iPad functionality... yeah, in a traditional sense, it's not nearly as functional as a computer, and it still can't do many of the things a Windows tablet - let alone a traditional PC - can do.

But here's the thing: users like the device so much, they've found new ways to be productive, and new ways to create functionality out of the device and the UI. The Surface Pro has more built-in functionality from a traditional standpoint. But even among many users who've actually given Windows 8 a chance, the hybrid tablets present their functionality in a compromised way, which has largely nullified the advantage. There's also market research to suggest a lot of people are happy to view laptops and tablets as separate devices, raising the question of whether Surface-like functionality has mass market appeal in the first place.

If Windows 8.1 and the next round of devices can refine the experience such that the functionality (rather than the compromise) stands out, then maybe things will turn around. If Microsoft doesn't make progress, it will be interesting to see if the next CEO deviates from the trajectory Ballmer has established. Either way, I think "eventual market leader" is possible for Surface-like Windows tablets, but I wouldn't call it likely, let alone certain, either inside the enterprise or in general.
ANON1242905689517
50%
50%
ANON1242905689517,
User Rank: Apprentice
8/28/2013 | 3:21:16 PM
re: Ballmer's Legacy Still Incomplete
"Tesla Motors and SpaceX founder Elon Musk" this suggestion must be from the those smoking too much!

Ballmer was a salesman, he increased sales of proven product streams but like the horse and buggy Microsoft has had its day if it doesn't at least start at least incremental innovation.

The Surface suffered because a lot of people bought iPads because they were "cool" not because they were exceptionally functional. The Surface sales reflected the true functionality market. And as a functional tool it is superior. Eventually it will be market leader, just as Nokia is going to be market leader again. Nokia's focus on the camera first then phone is brilliant and as they expand their line will eventually overtake all others. It will also drag Microsoft with it with 365, outlook.com and Skydrive.

Elop is the man!
Lorna Garey
50%
50%
Lorna Garey,
User Rank: Author
8/27/2013 | 8:37:25 PM
re: Ballmer's Legacy Still Incomplete
Why is "he increased Microsoft's revenues" a throwaway phrase here? Let's be realistic - the world is such that the days of monolithic tech monopolies is over, but there's room in most markets for only so many leaders, and first mover counts a lot. Windows Phone could have been the best thing since sliced bread and it still would have had hard going. And, let's not casually dismiss Phone and Bing and SkyDrive and [insert product here] and the counter-pressure they and MS -- as a very profitable and deep-pocketed company -- continue to put on Google and Apple. That pressure is good for IT and consumers alike.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest - June 10, 2014
When selecting servers to support analytics, consider data center capacity, storage, and computational intensity.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join InformationWeek’s Lorna Garey and Mike Healey, president of Yeoman Technology Group, an engineering and research firm focused on maximizing technology investments, to discuss the right way to go digital.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.