Microsoft's Steve Ballmer Reportedly Didn't Plan to Retire So Soon
August 26, 2013 9:52 AM
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Sources say he wanted to stay through some of the restructuring process
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.
All Things D
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RE: No kidding really?
8/26/2013 2:55:02 PM
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?
8/26/2013 3:38:42 PM
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?
8/26/2013 4:23:15 PM
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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