Government // Enterprise Architecture
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8/26/2013
02:44 PM
Michael Endler
Michael Endler
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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?

But unless Ballmer's recent bets pan out, it's unlikely Microsoft will adhere so closely to "one Microsoft" as it is currently defined. Julie Larson-Green's prospects, for instance, will surely be informed by how the Xbox One fares against the PlayStation 4 this fall, how well the next round of Surface devices sell, and whether Windows 8.1 gains traction.

Indeed, Microsoft's board appears to be apprehensive about the company's direction. All Things D, citing numerous insiders, reported over the weekend that Ballmer's exit might not be as amicable as the CEO has implied and that board members evidently felt Ballmer's exit should come sooner rather than later.

There's also buzz around hedge fund ValueAct's alleged interest in gaining a seat on Microsoft's board and asserting more control over strategies it disapproves of, including, reportedly, Microsoft's decision to make its own hardware. Ballmer has denied that his decision was informed by the rumor, which has been touted loudest by Nomua analyst Rick Sherlund but is nonetheless reinforced by several sources. But whether or not ValueAct moves, Microsoft's board is surely aware that investor discontent has risen. Even if the company wants to follow through on Ballmer's plan, influential shareholders might not have the patience or faith to allow it.

And if Windows 8.1 flops not only among consumers but also among enterprises migrating off of Windows XP? One option would be for Microsoft to double down on new enterprise businesses. Satya Nadella, who ran Microsoft's successful Servers and Tools business and now oversees its Cloud and Enterprise group, could be in the running in this sort of scenario.

But if Microsoft wants to become an innovative company that spans the consumer-enterprise spectrum, it might ultimately look outside. A cultural overhaul would likely bring an end to the "stack ranking" system, for example, wherein a certain percentage of employees within a division have to be rated as sub-standard, even if all of the employees are producing excellent work. The result has often been company-wide dysfunction, with silos acting more like warring tribes than complementary assets. Despite calling for more collaboration, Ballmer has indicated the system might stay. If the company continues to flounder under that system as his tenure winds down, a change in blood might be necessary.

According to a research note by Wells Fargo Securities analyst Jason Maynard, if Microsoft maintains its "devices and services" goals, Nokia CEO Stephen Elop, whose company makes almost all Windows Phone hardware, might be the most likely outside candidate. Maynard noted, however, that Wells Fargo believes Microsoft should abandon this plan. Commentators have also suggested outside candidates ranging from Yahoo CEO Marissa Mayer to Oracle President Mark Herd to Tesla Motors and SpaceX founder Elon Musk.

But it's all speculation for now. Ballmer will make his case on Sept. 19, when Microsoft hosts its annual meeting for financial analysts. He'll also oversee a number of important events before leaving: the launch of Windows 8.1; at least a few new Surface devices; new enterprise products, such as Windows Server 2012 R2; the debut of the Xbox One; to name a few. The company will also continue trying to sell Windows 8 to companies that need to upgrade before Windows XP loses service in April.

Ballmer's execution in these tasks will determine whether his fingerprints are on the company's future successes, or just the things that the next CEO has to fix. They'll also likely dictate what kind of CEO Microsoft decides to hire.

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cbabcock
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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
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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
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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
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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
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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
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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
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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.
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