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Sources say he wanted to stay through some of the restructuring process

While Microsoft CEO Steve Ballmer said retiring was entirely his decision, others say he was pushed to go sooner than expected. 

A new report from All Things D said that interviews with sources close to Ballmer and Microsoft revealed that the retirement was planned, but wasn't supposed to happen so soon. Sources said that Ballmer had hoped to stay through at least some of the restructuring that he was planning. 

In Ballmer's letter of departure, he said: “My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most.” 

Also, when the restructuring was announced in July, Ballmer said: “Lots of change. But in all of this, many key things remains the same. Our incredible people, our spirit, our commitment, our belief in the transformative power of technology — our Microsoft technology — to make the world a better place for billions of people and millions of businesses around the world. It’s why I come to work inspired every day. It’s why we’ve evolved before, and why we’re evolving now. Because we’re not done. Let’s go.”

In addition, many suspect that Microsoft Chairman and Co-Founder Bill Gates was in favor of moving Ballmer's retirement to a sooner date. While one source said Gates didn't "instigate" it, he wasn't exactly as supportive of Ballmer as usual.

Ballmer's departure letter didn't make any mention of longtime colleague and friend Gates, which sparked a lot of questions. Gates' statement wasn't exactly a heart-warming goodbye either, leading some to believe that Gates didn't stand up for Ballmer -- and maybe even helped push him out the door along with the rest of Microsoft's board. 

Ballmer's attitude even reportedly changed after the retirement announcement. An anonymous source said that Ballmer was jumping into meetings with the same confident attitude as always before the announced retirement, but afterward, he sat uncharacteristically quiet in such meetings. 


Microsoft CEO Steve Ballmer

There are a few reasons why Ballmer would be pushed out early. For starters, Microsoft is facing an ugly proxy fight with investor ValueAct, which has a large stake in Microsoft and is looking to grab a seat on the company's board. Microsoft is trying to prevent this, but ValueAct has made some demands: Ballmer's retirement, stock buyback and a dividend increase. 

Aside from this sort of pressure, Ballmer also faces criticism for decreased performance. Microsoft has had a difficult time stirring up enthusiasm for Windows Phone against competitors like Apple and Samsung, and the Windows maker was late to the tablet game -- releasing its Surface tablet in October 2012 after the iPad had already been out for over two years. To make matters worse, Microsoft's Surface was initially released with the Windows RT operating system (the full Windows 8 Pro-powered Surface wasn't released until February 2013) and it was a major flop. Many say RT isn't a full Windows 8 experience, lacking the ability to run legacy apps.

Windows 8 hasn't exactly had the best reception either, with many complaining that the operating system and its completely revamped Metro UI with live tiles is a better mobile OS rather than desktop. Many want the old desktop and Start menu seen in Windows 7 and previous. 

Microsoft also slipped up recently with its Xbox One announcement. The new console, which is expected to be released this fall, initially had a used games ban and a new "always-on" digital rights management (DRM) system, which posed a problem for many people who are either in rural areas with slow Internet connections, travelling or tend to experience Internet issues with providers. Microsoft later retracted these features after major complaints, but the fiasco still didn't sit well with gamers.

All Things D added some figures that surely hurt Ballmer's case. The day before Ballmer took over as CEO in 1999, Microsoft’s market capitalization was $600 billion USD. On the day before he announced his retirement, it was under $270 billion USD.

Pushing Ballmer out was likely a decision to meet ValueAct's demands, boost Microsoft's performance and give the company a new leader through the restructuring process. It just seems Ballmer wasn't entirely in on that plan -- at least not this soon. 

Source: All Things D



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No kidding really?
By retrospooty on 8/26/2013 10:13:48 AM , Rating: 5
What part of horrible decision making and completely missing the point (and boat) on the mobile side made anyone think otherwise?




RE: No kidding really?
By Motoman on 8/26/2013 10:48:17 AM , Rating: 3
quote:
transformation to a devices and services company


...am I the only one who thinks that maybe this isn't the greatest idea? What does this say about their Windows platform, Office, SQL Server, dev tools, etc.?

Are we really supposed to believe that MS is going to put all of that on a 2nd tier in favor of making gadgets and selling consulting?


RE: No kidding really?
By retrospooty on 8/26/2013 10:52:02 AM , Rating: 2
I don't see it that way... I see the enterprise stuff you mentioned as the part of the business that is stable and the devices and services "consumer" stuff as where they were lacking. The enterprise stuff isn't going anywhere. It's highly profitable and there aren't any competitors. There are a few companies that do a small peice here and there, but no-one at all that does the whole package like MS. That stuff is stable.


RE: No kidding really?
By Motoman on 8/26/2013 10:58:15 AM , Rating: 2
Yes...so why are they talking about "transforming into a devices and services company?"

Any rational person would designate platform, office and dev tools as the primary MS business, and anything else is an additional BU.


RE: No kidding really?
By inighthawki on 8/26/2013 11:07:21 AM , Rating: 2
I'm pretty sure that their software is being considered as part of their 'services'


RE: No kidding really?
By Motoman on 8/26/2013 11:18:23 AM , Rating: 2
"Services" never contains software or R&D. Services is consulting and training, and maybe support packages.


RE: No kidding really?
By Treckin on 8/26/2013 11:36:51 AM , Rating: 1
I just want to ask what the fuck makes you think that? Just a hunch?


RE: No kidding really?
By Motoman on 8/26/2013 12:05:41 PM , Rating: 3
No. About 20 years working in the software industry, including for IBM as noted below.


RE: No kidding really?
By kleinma on 8/26/13, Rating: 0
RE: No kidding really?
By slunkius on 8/27/2013 1:04:51 AM , Rating: 1
this begs question what was motoman's job at IBM. something related to coffee machine resupply services maybe? :)


RE: No kidding really?
By Motoman on 8/27/2013 10:40:47 AM , Rating: 3
That's very funny...and completely demonstrates that neither of you have the slightest idea what you're talking about.

I spent more time in the data centers of the world's largest companies than either of you could count - installing and configuring servers, software, and troubleshooting pretty much anything - hardware or software. As well as architecting enterprise deployments, development, and project management.

You can pretend that you're somehow "smarter" than I am if you like...but be advised that you're doing so in your own little reality.


RE: No kidding really?
By inighthawki on 8/28/2013 9:38:06 PM , Rating: 2
You should take your own advice and not "assume" that you are also smarter than everyone you speak to.


RE: No kidding really?
By Motoman on 8/27/2013 10:43:42 AM , Rating: 3
quote:
If you worked for IBM, then you should know all about turning products into services.


If you had any familiarity with the software industry at all, you'd realize that product and service are always separate concepts, if not business units, with completely separate personnel and management structures.

Of course you sell services to go with your products. Sometimes, if you do a good job with services, that can help sell more products.

But they're separate. In every company. ESPECIALLY companies like Oracle and IBM.

If you don't believe that to be true, try asking someone who works for IBM or Oracle. Then get back to us. We'll wait.


RE: No kidding really?
By polishvendetta on 8/26/2013 11:40:00 AM , Rating: 2
Tell that to IBM.

Services can be anything, and with Xbox Live and Office 365 they are already moving in this direction.

Rather then making a software package for 300$ they can collect a monthly fee and give you access to it. Reduces changes of piracy, and in the case of Office 365, I actually prefer it.

Same thing with Xbox live. They have continue to add services to that as well like the Xbox Music pass. Xbox One is adding the NFL package and this will likely expand.


RE: No kidding really?
By Motoman on 8/26/2013 12:05:16 PM , Rating: 2
I've worked for IBM, and right now am working with an IBM partner.

Aside from that, I've spent the last ~20 years in the software industry.

Services doesn't include software products.

XBox Live is a service.

Microsoft Windows/Office/dev tools/etc. are software.


RE: No kidding really?
By Motoman on 8/26/2013 12:09:52 PM , Rating: 2
Also, just look at the IBM pages to see the differences:

http://www.ibm.com/technologyservices/us/en/

http://www-01.ibm.com/software/?lnk=mprSO-1-usen

Software is all about selling the product itself. In the case of MS, it's Windows, Office, etc.

Services generally relate to those products - implementation and support for example, help setting up your system security, so on and so forth.


RE: No kidding really?
By inighthawki on 8/28/2013 9:40:41 PM , Rating: 2
http://en.wikipedia.org/wiki/Software_as_a_service

quote:

Notable service providers:
...
Microsoft Office 365
...


RE: No kidding really?
By retrospooty on 8/26/2013 12:51:14 PM , Rating: 1
"Tell that to IBM."

Isn't that the company that once dominated the entire industry? Isn't that also the company that couldn't remain competitive in the "IBM PC" market so it dropped out?

Ya, what a goal, and great target... It's like saying, "when I grow up, I want to be a waiter".


RE: No kidding really?
By NellyFromMA on 8/27/2013 4:32:51 PM , Rating: 3
You're equating IBM to a waiter?

WTF? Do you have any idea how important IBM was and IS not only to the PC / Server space, but really the electronics arena as a whole. IBM continues to revolutionize the industry, particularly in its research efforts.

Who even disses IBM? That's like an electronics enthusiast sin.


RE: No kidding really?
By nikon133 on 8/26/2013 5:16:30 PM , Rating: 3
Definitions change.

http://en.wikipedia.org/wiki/Microsoft_Online_Serv...

Office 365 is (one of) Microsoft Online Services. Pretty software-y.


RE: No kidding really?
By Motoman on 8/27/2013 12:10:57 PM , Rating: 2
SAAS/Cloud stuff is treated by IBM/MS/Oracle/et al as part of their software/products division. It's a product.

It's not part of their Services division. Call them up and ask.


RE: No kidding really?
By Motoman on 8/27/2013 5:10:21 PM , Rating: 2
Love the dipsh1ts rating him up and me down.

Apparently just putting the word "service" in a product name makes it Services to people who are stupid.

That kind of "service" has *nothing* to do with what a software company regards as Services.

This I guarantee...and if you doubt me, firstly you're wrong, but secondly, as noted, call up MS, Oracle, SAP, Adobe, or whoever, and ask. Or for that matter, Gartner or Forrester.

It's pathetically clear that none of you idiots have had any experience with enterprise software companies *at all*.


RE: No kidding really?
By inighthawki on 8/28/2013 9:42:17 PM , Rating: 2
quote:
Love the dipsh1ts rating him up and me down.

It's probably because you refuse to redefine what you consider a service because you're so stone-headed you refuse to admit you are wrong or that things change over time.


RE: No kidding really?
By Helbore on 8/27/2013 8:28:15 AM , Rating: 2
Its fairly obvious that when Microsoft say "services," they mean online services like Office 365, Skydrive, Azure, Dynamics Online, etc.

They're not talking about becoming a consulting and training company. ITs about Microsoft controlling the front-end (Devices) and the back-end (Services).


RE: No kidding really?
By ilt24 on 8/27/2013 12:25:05 PM , Rating: 2
Motoman, I suggest you google "SaaS".


RE: No kidding really?
By Motoman on 8/27/2013 5:16:13 PM , Rating: 2
Google it? I've sold and implemented it.

From the standpoint of the software vendor, it's a product.

"Services" categorically does not have any bearing on "Software as a Service." The fact that the word "Service" is in the title is apparently enough for people with 0 experience in the enterprise software space to not be able to figure that out though.

You'll buy SaaS products/licenses from a sales rep, who reports to a sales manager, who reports to a regional sales director, who reports to a national sales VP, who reports to EVP of global sales. Then you'll get services from a services sales rep, who reports to a services manager, who reports to a regional services director, who reports to a national services VP, who reports to an EVP of global sales.

The number of personnel that exist on both sides of that house is generally 0. And in fact, they frequently compete with each other for resources and control of the account.

And at some places, like specifically Oracle, there's multiple such hierarchies - some for product sales, some for services - that compete against each other within Oracle, because Larry thinks that he's creating a survival-of-the-fittest kind of thing by making multiple sales and/or services organizations within his company compete for the same business is a good idea.


RE: No kidding really?
By retrospooty on 8/26/2013 1:00:50 PM , Rating: 2
"why are they talking about "transforming into a devices and services company?"

That is part of the problem, they have no clear plan and no clear message... But the enterprise stuff is a given. Its a cash cow with virtually no competitors. They aren't giving that up... They would have to be completely mental. Not just One crazy baboon of a CEO mental, it would have to be a mass insanity that infected the entire board. It's too lucrative, they wont give it up.


RE: No kidding really?
By Motoman on 8/26/2013 1:36:42 PM , Rating: 2
I'm not implying that they're "giving it up" - like, they're just going to stop doing Windows and Office.

I'm saying that the statement that they're "transforming into a devices and services company" indicates that Windows, Office, etc. is being pushed to the backburner so they can concentrate on making more Zunes and selling more system architecture consulting and/or cloud services.

I don't see any way that MS can credibly do anything but have their platform, Office, dev tools, server products, etc. as their 1st tier BU. Anything other than that really needs to be a 2nd tier BU.


RE: No kidding really?
By retrospooty on 8/26/2013 2:00:25 PM , Rating: 2
It's possible, but I wouldn't put too much weight on the comment at all. That may just be how Ballmer describes it (poorly) or he was just referring to a specific division and not the whole company... Or maybe it was his plan and what got him pushed out for all we know. One ting is clear, they had no clear direction and were running around fast with no identifiable goals.


RE: No kidding really?
By greenchinesepuck on 8/26/2013 2:02:47 PM , Rating: 2
Problem is the two major MS competitors, Google and Apple, have eclipsed MS money wise a while ago, so no wonder that in the end MS realized that devices and services is the place where the real big money is and hence MS tries to go there and mount up a fight against established competition (Google and Apple). Dunno, looks like a perfectly valid reasoning for me. Your suggestion of dropping the fight and retreating to the old cash cows is suicidal. This is EXACTLY what Ballmer was thinking, he was just like you totally dismissing iPhone, and look what happened now. They got burned by that and lost the chance to own the mobile market because of Ballmer's stupidity and lack of vision. Good thing they have changed and at least they TRY to do something. Motomans and Ballmers of the world are pushed aside, the new mobile vision has won at last. For MS it was too late so they have no chance of winning the mobile war by now, but if they listen to you, they will lose even the tiny possibility of at least establishing some worthwhile presence in the mobile market.


RE: No kidding really?
By Motoman on 8/26/2013 2:52:54 PM , Rating: 3
Um, no. You seem to be implying that I'm saying that MS should not seek to do anything other than software. I said nothing of the sort.

MS's obvious strength and market stranglehold comes from platform and Office. That has to stay #1.

Mobile, devices in general, services, etc. are *in addition to* that core business. Not in replacement of, or set as the top-tier focus and putting the core business on the backburner.


RE: No kidding really?
By greenchinesepuck on 8/26/2013 2:55:02 PM , Rating: 2
What will you do if your core business is generating less money than some device and services business of your competitors? Will you sit still and continue to milk your old cash cow or will you try and reinvent your conpany around the new mobile market that is way more lucrative than your old business like Windows and Office?


RE: No kidding really?
By Motoman on 8/26/2013 3:38:42 PM , Rating: 2
You're really confused.

Saying that platform etc. remains their primary focus is not "sitting around milking a cash cow." It's guaranteeing their continued dominance in that market...probably the continued existence of they company.

You have to stay focused on your primary strength. And build other strengths while keeping the primary strength in the foreground. Some day, if those new strengths are better, then you switch focus. But not before.


RE: No kidding really?
By greenchinesepuck on 8/26/2013 4:23:15 PM , Rating: 2
Depends on how you understand their transition to devices and services. If you understand them as drop Windows and Office, then go for mobile 100% that's not correct. Better understanding of their transformation is to keep old platforms as dominants in their market (Windows and Office) while focusing on the new markets that are crucial for surviving.

If you think they can keep focusing on Windows and Office and survive, while making little modest attempts to push into mobile, you're wrong. They were focused on old platforms like you suggested for the past 10 years, and look what happened. The end result is fiasco because their current cash cow platforms are very old and mature and not as profitable as before. The sales of PCs are constantly falling hence the profit margin will keep slowly shrinking for them.

They were focused on their primary strength, and they paid just a little attention to mobile, and this little attention resulted in a string of failures like Zune, Kin and RT. WP is also a failure albeit it's still being pumped cash into so it may survive, we'll see.

What I'm trying to say is that only after a RADICAL transition to a devices and services, radical I mean like going ARM and opening their retail stores everywhere (things totally unbelievable just three years ago) - only after these kinda drastic chnages they started to get the gist of it, they now begin to understand what the heck the whole mobile revolution is about.

My point is that your suggestion of going into mobile very slowly is going to kill them because the market changes quite faster than MS itself. In fact, you say that MS is not transforming slow enough, and I'm saying they are not transforming fast enough. So far market numbers prove my point, as traditional PC market is shrinking and profits there go down fast, all while the new mobile markets are occupied by Apple and Google. MS was transforming TOO SLOW, because they were following your advice, and look what happened. Look what their decade old focus on just the old platforms resulted in. And you still suggest them to stop and even roll all these minor changes they done so far back? Are you even serious?


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