9 ms·

Ballmer has been a terrible CEO. Time and again he has displayed poor judgement that has cost shareholders billions of dollars. Here's something to ponder: W

• codinghorror 13y ago
  I've historically liked him because of the "developers, developers, developers" thing, but over the last 5-10 years I think history has proven you right. He's a bad CEO who consistently makes bad decisions.
  • snom380 13y ago
    In a stable market with no big changes, he would be an excellent CEO, and he was generally considered a good one until the last few years (some would say after Vista, other after the iPhone).
  • dschiptsov 13y ago
    "developers, developer, developers" could be called a "behavior smell". Something is very wrong when CEOs are jumping that way.))
  • throwawaykf02 13y ago
    Half-agreed. I still like him because he's the only rich and powerful person who would do that ridiculous dance on stage for the whole world to see, only in the name of people like me, me, me! But "bad CEO"? Come on! If you look beyond the HN filter bubble, he has definitively diversified MS beyond its early Windows/Office shackles, increased revenues consistently and made (most of) the new divisions very profitable. And if you think there's no "HN bubble", ask yourself why there's this huge front-page thread about MSFT tanking 10% but little talk about GOOG tanking 14%.
• JonFish85 13y ago
  No Azure? No XBox? I feel like those have made Microsoft a decent chunk of cash since they hit the market...
  • Retric 13y ago
    XBox has made far less money than a stock buy back plan would have therefore it was a bad idea. I don't know the specifics on Azure but it's still in the rounding error stage.
    • throwawaykf02 13y ago
      I thought they're already making a billion a year on Azure? Xbox could be seen as a loss-leader to grab a place in the living room, where they've done better than most other players in the space.
      • Retric 13y ago
        Assure had 1b in revenue but actual proffit is based around internal booking keeping numbers some of which are a little off IMO.
      • mrb 13y ago
        Only 1.3% of Microsoft's revenues ($78B) are from Azure ($1B). Like he said: almost a rounding error.
        • throwawaykf02 13y ago
          Oh for Microsoft, maybe. I'd love to have rounding errors like that! A more salient question for now is, is that a rounding error for Amazon, Rackspace, Heroku, etc. as well?
    • AYBABTME 13y ago
      But then people wouldn't have their XBox. An earlier comment about how better it would have been for Microsoft to just do nothing. Maybe, from a money perspective. But meanwhile they did research, tried out designs, products, services. It's not all loss. There's more to the trip than the destination. There's a whole ride where things happen and have a value in themselves. Unless we only value the shareholders' money.
• guizzy 13y ago
  Ballmer got it wrong regarding the iPhone, but I doubt that doing nothing was an option in that case. Against its rivals in the computer segment, Microsoft didn't have to act, but Apple came at them from a different angle; by leveraging its dominant position in the music player market. Nokia, which had a crushingly dominant place in the smartphone business when Apple joined, tried the "just keep doing what you do" strategy for a long while; their marketshare steadily dropped. Probably not coincidentally, it was an ex-MS exec Elop that changed that strategy, with results comparable to Microsoft's. RIM is still clinging to it, with no success. In comparison, Google had a more measured, deliberate approach, but they did react to Apple. When Apple went into the smartphone business, Google was gearing up to fight against Nokia, RIM and Microsoft. The disruption caused by Apple forced Google to reevaluate. They figured out key places where Apple was unable or unwilling to compete on, and capitalized on those.
  • regularfry 13y ago
    My memory is that MS were ready to go with an actually decent, capable release of Windows Phone (WP6.5? maybe?), which then got clobbered and reworked into a consumer OS when they panicked over how well the iPhone was doing. Apple didn't come at them in an unavoidable way at all - Apple was going for a small sector of the consumer market, where MS could have ripped the business market away from an already-floundering RIM inside a generation. It's just not Apple's way to target enterprise functionality the way MS can.
    • yuhong 13y ago
      At least it wasn't as bad as the MS OS/2 2.0 fiasco: http://yuhongbao.blogspot.ca/2012/12/about-ms-os2-20-fiasco-px00307-and-dr.html http://yuhongbao.blogspot.ca/2012/12/about-ms-os2-20-fiasco-... (notice my reference to the PX00307 anti-trust exhibit which shows some of the decision making back in 1990)
      • twoodfin 13y ago
        Why was this a "fiasco"? The result of the process outlined in that memo was, not to put to fine a point on it, one of the most profitable business decisions in world history. I admire Gordon Letwin as much as the next guy, but OS/2 was never going to be the commercial success that Windows became, for basically the reasons the memo lays out: Windows 3.0/3.1 absolutely dominated the exploding PC market because it was targeted at hardware that anyone could afford. OS/2 was dependent on a level of hardware that wouldn't be commonplace until another generation or two of Moore's Law cycled through. Microsoft simply didn't have that time to waste, and neither did their customers. The choice was between abandoning a phenomenally successful OS and API for the "next generation", or slowly building a bridge from that OS into the future carrying their customers with them. They made the right call, even if it did take roughly 11 years until Windows XP for the transition to truly be complete.
• yulaow 13y ago
  You are right and i'm asking since years: are microsoft investors blind? Why they not make any pressure on the directors board to change the ceo? How much time they need again? Or are they trusting the "reorganize reorganize reorganize" that is now ballmer motto?
• tnuc 13y ago
  Ballmer is ideal material as a COO but he is in no way CEO material. He didn't even join the board until he got made CEO. He has done a pretty good job with maintaining the lines that make Microsoft the bulk of its revenue but in new areas he is very fucking useless. Bill Gates did some masterful work at making Windows the dominant force that it is but Balmer has done nothing but waste money on Windows Phone and Surface. If only Balmer was smart enough to realize he needs someone else to get new shit off the ground, then Microsoft would have half a chance.
  • tluyben2 13y ago
    They have the cash and they have the researchers. Brilliant researchers doing excellent research. Thing is; they don't really use that research. A few things end up in cash cow products (like one of the automated data type detection features of rise4fun.com went into Excel), but that's about it.
• throwawaykf02 13y ago
  Whenever people mention Microsoft as only a "Windows and Office" company, I know they have a very outdated perspective of the company. Look at all the billion dollar divisions they have that are not Windows and Office. Sure, almost all their other products such as SharePoint, AD, Exchange, SQL Server, .NET are based on Windows, but people buy Windows because they want those products, not the other way around. Also: Ballmer was absolutely right when he made that comment about the iPhone. The iPhone did not sell phenomenally well at all when it was introduced. It did alright, but nowhere near what it does now. The average Joe could not afford one at $600. I know, because I had the original one (only because my employer bought it for me, of course), and and I was the envy of people everywhere. Random people on the street and at restaurants and airports would ask me wistfully how I liked it. When it did take off was when AT&T started subsidizing iPhones to the tune of $400 per phone (and then make money off the contracts, because the average Joe is a short-sighted chump). That's when suddenly everyone I knew had a brand new iPhone (and later, Android phones). I would credit that business model for bringing about the smartphone revolution more than the revolutionary design Apple introduced. Did Ballmer absolutely miss the alternative strategy? Of course! But so did Apple / AT&T initially. It was probably born later out of desperation when the iPhone wasn't selling as they hoped.
  • reaperhulk 13y ago
    You hold a rather unusual view of how the iPhone progressed. The subsidy model already existed for numerous other smartphones -- but they sucked. Apple sold ~4 million iPhones from launch to end of 2007. Those were unsubsidized purchases and they captured >20% of smartphone market share (http://arstechnica.com/apple/2008/01/the-truth-about-the-iphones-sales-numbers/ http://arstechnica.com/apple/2008/01/the-truth-about-the-iph...). It seems pretty clear-cut that it wasn't a new carrier sales model that made the iPhone a success.
    • throwawaykf02 13y ago
      That chart shows cumulative sales only until early 2008, before the 3G was introduced. This does not show the most interesting aspects of iPhone growth. The subsidy model existed, but it did not apply to the iPhone. Here's a more revealing chart (from Jan 2012): http://paidcontent.org/2012/01/25/419-chart-apple-iphone-sales-through-the-years/ http://paidcontent.org/2012/01/25/419-chart-apple-iphone-sal... Note how in '08, when the subsidized iPhone 3G was introduced ("New features, new price") it sold almost more in one quarter than the previous original had sold all year. Of course, it also had a number or new features such as an app store, but the one that really made a difference was the subsidy. Also, as mentioned below, it was sold internationally so that certainly helped, but it was the US smartphone market that first saw phenomenal growth. As you say, the original iPhone did do well, but that was compared to the rest of the smartphone market, which in ~2007, was tiny by today's standards, because it was mostly limited to business users. The subsidized iPhone suddenly created a consumer smartphone market. Even as the iPhone was gaining market share, the other players were also selling more and more devices every year, which is why they were complacent. Until they weren't. The rest as they say is history.
• anologwintermut 13y ago
  At the 2010 company meeting, Balmer said "Last time I told you do good things and the stock price will follow [LONG PUASE] Do good things and the stock price will follow." That was when I decided Balmer could say one thing as CEO that would positively impact the stock price and by definition it would be the last thing he could ever say as CEO. (Sometimes I wonder if that pause was him coming to the same conclusion) That line, coupled with the fact that it was preceded by a cheesy line form a TV show about high-school football that most SDE's wouldn't get caught watching let alone bye into the sentiment when applied to a software company, really didn't make me think he was in touch with ... well anything.
• mpg33 13y ago
  Microsoft spends a lot of money on R&D....I think Windows will become primarily a enterprise OS and Microsoft as result will shrink but will still be important.
• b0rsuk 13y ago
  Microsoft got extremely rich thanks to Windows and Office. Windows and Office was pretty much all to profit from back then. It was the whole of it pretty much, they stagnated web browsers with IE6.0 after putting Netscape out of business. Microsoft thrived by being able to control the whole industry. Windows and Office is not the whole story today.
• jiggy2011 13y ago
  If they had said "Windows/Office and nothing else" imagine how much they would be getting slated on HN? Like if Apple announced an "iPhone and nothing else" strategy. Companies with billions of dollars in the bank are in the best position to do risky R&D projects and the rest of the industry is better because of it.
  • rsynnott 13y ago
    Yeah, it isn't that he tried to diversify that's the problem, but that he did it so incredibly clumsily. A company with billions in the bank had no business bringing out WP7, say.
• cnlwsu 13y ago
  I would think the grandiose gestures of billion dollar investments are meant to have pretty press releases to try to inflate the stock values.
• nazgulnarsil 13y ago
  >we must do something >this is something >we must do this
• clarky07 13y ago
  People who say Ballmer is a bad CEO based on the stock price really aren't paying attention. He took over at the height of the tech bubble. Microsoft's PE (and everything else) was a joke. Since he took over revenue and profits have increased by an impressive amount. The only reason the stock has been flat is that it was extremely over inflated when he took over. (Certainly he has made mistakes, but frankly I think he's done just fine. Windows phone 7-8 have been pretty good, just slightly late. Xbox has been pretty successful. Azure has been fine. Bing has been the only real failure/money loser, but at least it might be holding back Google to some extent. That was the whole purpose anyways.)
  • IsThisObvious 13y ago
    I say Ballmer is a bad CEO because of the stack ranking employee evaluations and the rampant smothering of prototype technologies that later turned out to be valuable in favor of "core" technologies - you know, the two behaviors that are absolutely toxic for a tech company.
    • marshray 13y ago
      What's, in your view, an example of such a technology?
    • deleted 13y ago
      [deleted]
    • mynameisvlad 13y ago
      Stack ranking has been used at Microsoft since 2006. Furthermore, he wouldn't be overly involved in deciding performance evaluations. That's more the role of Lisa Brummel, who is the EVP of HR.
    • twright0 13y ago
      "Stack ranking employee evaluations" I agree with a great many criticisms of Microsoft, but this one always strikes me as nonsensical. I was an intern at Microsoft and (while I never participated in stack ranking) it never seemed particularly destructive. I went on a tour of Valve and one question that was asked during the Q&A was what kind of evaluation and ranking system they used - the answer was stack ranking. Companies have to use some form of evaluation and ranking for their employees once they grow past a certain size - it's just an organizational requirement. The alternative is upper management without quantifiable information about the many people under them, which makes it harder to allocate resources and operate efficiently. Or so I imagine, I'm not in upper management at a very large company, but that certainly seems to be the case pretty much everywhere.
• jasonkolb 13y ago
  I think the next Xbox is going to be the thing that finally takes him out. Not one gamer I know wants one, and the 360 works just fine for the family. They managed to derail what was one success story he could actually point to... It's going to be an epic bellyflop. I say he's out after the sales figures come in next year.
  • Maven911 13y ago
    The xbox is such a small percentage of Ms overall sales, id highly doubt it...plus Amazon and other retailers have sold out of pre orders already
    • rsynnott 13y ago
      The XBox was really the only diversification from their core Windows/Office business which has really even slightly worked, though. MSN/Windows Live/Bing/Whatever it's called now was a massive cash sink and market failure, as was Zune and Windows Phone. Azure is looking like it's heading that way too, though no-one's making much profit in that market right now.