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.