7 ms·

Ballmer Departure From Microsoft Was More Sudden Than Portrayed

64 points by kjhughes 13y ago

wslh 13y ago
I think every member of the board with kids don't need to think too much to search for a new CEO. It must be difficult for Bill Gates to see iPads and Macs on his house and I can't imagine dinner discussions around using Google Spreadsheet instead of Excel! I remember this article "No iPhone, iPad, iPod for Bill Gates Kids, Says Melinda Gates" but don't know how real it was. See http://au.ibtimes.com/articles/419359/20121231/iphone-ipad-ipod-bill-gates-kids-melinda.htm http://au.ibtimes.com/articles/419359/20121231/iphone-ipad-i...
- speeder 13y ago
  I clicked that link, and the webpage started with a woman voice speaking too much like a whiny entitled gal wanting something when you arrive home, and I don't figured how to shut it down, and closed the tab :/ Why people leave these whatever with automatic sound that cannot be shut off?
leaffig 13y ago
>As AllThingsD‘s John Paczkowski wrote on Friday: “Here’s one metric by which Ballmer will be judged harshly. On the last day of 1999, the day before he took over as CEO, Microsoft’s market capitalization was $600 billion That fails to take into account, the crazy dotcom valuation days and the subsequent big crash in 2000. Not to say that Ballmer did great as a CEO but that's just poor reporting. Microsoft did have its great growth days, like Apple recently did before petering out, but it was back in the 80s.
- sytelus 13y ago
  Even when you compare post-bubble market cap, say from 2002 to now, it's shockingly bad performance for Microsoft: AAPL: $5 billion -> $465 billion GOOG: $16 billion -> $288 billion MSFT: $217 billion -> $291 billion I know now you might nitpick that AAPL and GOOG were very small in 2002 and not comparable to saturated markets Microsoft operates in. In that case, take example of even non-tech well established companies: AT&T: $72 billion -> $203 billion StarBucks: $7 billion -> $53 billion However you can still argue that Microsoft increased its revenue 3 folds and profit 2 folds under Ballmer. That might be good metric to measure Ballmer's performance but this does not discount for inflation (36%) and auto-accumulating multi-year enterprise contracts that have been pilling up since Gates era (unknown value).
  - deleted 13y ago
    [deleted]
  - shalmanese 13y ago
    This is largely an artifact of survivorship bias. If you compare MS to it's peers: GE: $372B -> $239B MS: $326B -> $239B Exxon: $299B -> $403B Wal-Mart: $273B -> $247B Citigroup: $255B -> $134B Pfizer: $249B -> $207B Intel: $203B -> $108B BP: $200B -> $130B Source: http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalization#2002 http://en.wikipedia.org/wiki/List_of_corporations_by_market_... http://www.ft.com/intl/indepth/ft500 http://www.ft.com/intl/indepth/ft500
  - smackfu 13y ago
    So the revenue went up 3x and profit 2x, and the valuation stayed flat, and that is a failure of the company? What crazy world are we living in?
- joshuaheard 13y ago
  Agreed, it fails to take into account the Clinton DOJ anti-trust lawsuit against Microsoft which basically popped the dotcom stock bubble. The stock has remained flat then grown steadily since. The article also fails to mention the growth of annual revenue which has raised steadily and has tripled under Balmer's watch. At the moment, Microsoft stock pays a 3% stock dividend which is a pretty good investment return, so it's less important for the stock to appreciate.
randomfool 13y ago
"recent pressure from activist investor ValueAct — which has a large stake in the company — had a good chance of succeeding in its efforts to obtain a seat on the board of Microsoft, especially if Ballmer stayed in place. ... In talks, said sources, it has asked for an aggressive stock buyback and also a dividend increase, which might assuage its efforts to garner a board seat." I agree that Microsoft has too much money, but would much rather see them investing much more heavily into bolstering their devices strategy. But then again, Microsoft was never good at acquisitions. edit- Appears that ValueAct is against the entire devices strategy, but I see no way for Microsoft to compete on the level it needs to without a strong devices play- From: http://www.reuters.com/article/2013/07/19/net-us-microsoft-valueact-idUSBRE96I14920130719 http://www.reuters.com/article/2013/07/19/net-us-microsoft-v... "ValueAct is thought to oppose Microsoft's recent foray into making its own devices."
- joe_the_user 13y ago
  A while back, someone in response to my critique of Windows 8, said something like "Microsoft can never be destroyed!Their monopoly give them free money". Funny how little people understand capitalism. No, that's not free money to play your BS "Metro interface" games with. It's the stock holder's money and they'll be wanting it back if it looks like you're flushing it down the toilet. Microsoft's "device strategy" (Window 8) was the most crassly opportunistic and generally despicable hi-tech corporate maneuver we've seen in a while (and that's saying something). It's infinitely satisfying to see it go down in flames. If we could toss more careers and people on this pyre, it would be even coolers. While I'm sorry for people for pursue poor strategies as dictated by the market, this was like the final spraying of Microsoft's true evil poison. Yes, we are intended to destroy the whole platform we created just for a chance to steal someone else's platform. Yeah, but that chance came and went. The organizers of Windows 8 are just left with the poison.
  - yuhong 13y ago
    I agree, not an excuse. But note that restoring the start menu is not that easy: http://www.neowin.net/forum/topic/1081755-do-you-like-or-hate-windows-8/?view=findpost&p=595048551 http://www.neowin.net/forum/topic/1081755-do-you-like-or-hat... IMO restoring the start button is not bad for a minor release, and it helps things like RDP (particularly important for server versions).
jeswin 13y ago
I hate articles like this. "According to sources close to the situation..." "_dozens of people_ inside and outside the company..." "_many_ close to the situation" "sources said..." "_the persistent rumor_ that Gates had dropped the bomb..." "Other sources cautioned that it was not..." "....said one source with knowledge of the situation" Garbage like this shouldn't be on any forum, forget HN.
- meowface 13y ago
  In my first journalism class, one of the very first things drilled into our heads is to always be explicit in who or what your sources are. Even if they're confidential, how many there are and rough details about them should always be given. Weasel words are the bane of decent journalism. It's a shame so many major news agencies don't seem to realize this, though.
- cremnob 13y ago
  You might not like how it was written, but Kara Swisher has credibility and I don't doubt it's true.
- jacquesm 13y ago
  Swisher consistently called a lot of industry moves right ahead of time. She's like the wikileaks of the tech world. See the unauthorized bio of Marissa Mayer the other day for some nice samples of how she gets her info.
devx 13y ago
I thought this was common knowledge. Ballmer said a few years ago that he would be retiring in 2018. To announce that he's quitting, even "within a year", is very out of the ordinary, and it's obvious something went down, and the board got very frustrated with Ballmer.
nnq 13y ago
> our transformation to a devices and services company This is what I find the most worrying. Are there no more "software companies" anymore? That you know, sell software as a product and only as a side-business they sell related services? Like the kind of companies that can "shaft their customers from time to time" because they know they make enough money from their great software not to care? Will they stop making great developer tools and will they start to not give a fuck about developers just like everybody else? Will they stop funding the cool research they currently do, like in the programming languages field? This is the saddest news imho, because it will fuel up the current trend in industry. An in "services" or "devices" companies programmers are seen more and more as just "code monkeys". And developing tools for developers or "power users" becomes less of a priority. Catering to "the needs of many" is nice and fluffy and all but we still need techno-elites somewhere, and they're not gonna truly exist outside of companies that make enough money and have the privilege of occasionally showing the finger to both the customers and the minority shareholders because they know that in the end they have real products they can leverage to milk enough money from the customers and poor into the shareholders' pockets... "service" companies can't really do this because they always need to be perceived as "good" and "devices" companies will have a hell of a time competing in the new "so-cheap-they-are-almost-disposable devices" economy. Winter is coming here. But there is hope for more summery weather for companies in the fields of AI/ML/BigData.
- einhverfr 13y ago
  One of Microsoft's big problems is that software and hardware lifecycles are slowly extending to the point where Windows' primary competitor is Windows. In other words, older versions are good enough, people don't upgrade until they get new computers and they do that less often. Microsoft has been trying to transform themselves into a services business since at least 1999. I am not holding my breath.
- deleted 13y ago
  [deleted]
- yuhong 13y ago
  Well, I think a lot of open source business models involves selling services relating to the software instead.
einhverfr 13y ago
A lot of the criticism of Ballmer seems to miss the point. Did Microsoft miss key trends? Maybe a few but who doesn't. Microsoft saw and got involved in most of those trends they "missed" and even often got there well ahead of the parties that own the markets today. In 2000 I was hired by Microsoft. One of the big initiatives was to make tablet PCs a reality. Microsoft spent years working on marketing consumer smartphones before the iPhone. That Microsoft lost a leading position in the market for computing devices is surprising given how much effort they put into devices eventually popularized by other companies, particularly Google and Apple. Why doesn't Microsoft own the tablet and consumer smart phone market right now? The answer must be in execution rather than understanding of where the market was headed. Why couldn't they develop (and why can't they still develop) products folks like in these areas? When I was there the mentality was that Microsoft would be first to market, would fail for a few major releases but still beat everyone else with a quality product. Yet they spent time producing products nobody wanted while first Apple and later Google ended up walking away with the tablet and consumer smartphone markets. What went wrong? That's the real question.
- bcantrill 13y ago
  As it apparently needs to be explained: Microsoft's predatory behavior in 1990s resulted in an incalculable and unrecoverable loss of trust among technologists -- which was bound to ultimately catch up to the company. You can get away with predatory behavior when you're dominant, but when you miss new markets -- as Microsoft did repeatedly in the lost decade of the 2000s -- you can be damned sure no one is going to be foolish enough to open those markets to a known monopolist. Microsoft is left with two choices: invent new markets or try to earn back the public's trust. They have no track record in either department; as the Magic 8-ball says, "outlook not so good"...
  - tomphoolery 13y ago
    What about Apple and Google? They have repeatedly violated the trust of hackers, yet only a small minority have fully divorced themselves from these companies' products. As much as I'd love to believe in the morality of our market, I don't really think that's the case. Not that I believe MS's predatory behavior helped their cause at all, but I still think the primary reason why people don't use, or don't want to use, Microsoft products anymore is because they are inferior to others' products. There was definitely a time where, for most people, that was not the case. Edit: Just a little example...I don't remember continuously hearing about Microsoft employees going to fucked-up countries and running clandestine rescue missions http://pastebin.com/CuUcHM6m http://pastebin.com/CuUcHM6m
x0x0 13y ago
the big question, then, is what happens to bing? I remember it still not being profitable; if the next ceo cuts it, then who competes with google or does G just get handed the US and European search engine markets?
- engrenage 13y ago
  If Bing closes, Google will find it much harder to fight anti-trust suits.
JoachimS 13y ago
The really interesting thing is not really Ballmers demise and who will replace him. The really interesting thing to watch is what will happen when the new CEO has taken the helms and present the restructuring that will inevitably follow. The board obviously want to see some pretty dramatic changes and Ballmer is deemed not fit for handling it.
mos6502 13y ago
With the recent PRISM info leak, I can't help but think Ballmer is instituting damage control for himself, as well as distancing himself from the negativity. Most likely the smartest move he could make.

64 points by kjhughes 13y ago

wslh 13y ago

I think every member of the board with kids don't need to think too much to search for a new CEO. It must be difficult for Bill Gates to see iPads and Macs on his house and I can't imagine dinner discussions around using Google Spreadsheet instead of Excel! I remember this article "No iPhone, iPad, iPod for Bill Gates Kids, Says Melinda Gates" but don't know how real it was. See http://au.ibtimes.com/articles/419359/20121231/iphone-ipad-ipod-bill-gates-kids-melinda.htm http://au.ibtimes.com/articles/419359/20121231/iphone-ipad-i...

speeder 13y ago
I clicked that link, and the webpage started with a woman voice speaking too much like a whiny entitled gal wanting something when you arrive home, and I don't figured how to shut it down, and closed the tab :/ Why people leave these whatever with automatic sound that cannot be shut off?

leaffig 13y ago

>As AllThingsD‘s John Paczkowski wrote on Friday: “Here’s one metric by which Ballmer will be judged harshly. On the last day of 1999, the day before he took over as CEO, Microsoft’s market capitalization was $600 billion That fails to take into account, the crazy dotcom valuation days and the subsequent big crash in 2000. Not to say that Ballmer did great as a CEO but that's just poor reporting. Microsoft did have its great growth days, like Apple recently did before petering out, but it was back in the 80s.

sytelus 13y ago
Even when you compare post-bubble market cap, say from 2002 to now, it's shockingly bad performance for Microsoft: AAPL: $5 billion -> $465 billion GOOG: $16 billion -> $288 billion MSFT: $217 billion -> $291 billion I know now you might nitpick that AAPL and GOOG were very small in 2002 and not comparable to saturated markets Microsoft operates in. In that case, take example of even non-tech well established companies: AT&T: $72 billion -> $203 billion StarBucks: $7 billion -> $53 billion However you can still argue that Microsoft increased its revenue 3 folds and profit 2 folds under Ballmer. That might be good metric to measure Ballmer's performance but this does not discount for inflation (36%) and auto-accumulating multi-year enterprise contracts that have been pilling up since Gates era (unknown value).
- deleted 13y ago
  [deleted]
- shalmanese 13y ago
  This is largely an artifact of survivorship bias. If you compare MS to it's peers: GE: $372B -> $239B MS: $326B -> $239B Exxon: $299B -> $403B Wal-Mart: $273B -> $247B Citigroup: $255B -> $134B Pfizer: $249B -> $207B Intel: $203B -> $108B BP: $200B -> $130B Source: http://en.wikipedia.org/wiki/List_of_corporations_by_market_capitalization#2002 http://en.wikipedia.org/wiki/List_of_corporations_by_market_... http://www.ft.com/intl/indepth/ft500 http://www.ft.com/intl/indepth/ft500
- smackfu 13y ago
  So the revenue went up 3x and profit 2x, and the valuation stayed flat, and that is a failure of the company? What crazy world are we living in?
joshuaheard 13y ago
Agreed, it fails to take into account the Clinton DOJ anti-trust lawsuit against Microsoft which basically popped the dotcom stock bubble. The stock has remained flat then grown steadily since. The article also fails to mention the growth of annual revenue which has raised steadily and has tripled under Balmer's watch. At the moment, Microsoft stock pays a 3% stock dividend which is a pretty good investment return, so it's less important for the stock to appreciate.

randomfool 13y ago

"recent pressure from activist investor ValueAct — which has a large stake in the company — had a good chance of succeeding in its efforts to obtain a seat on the board of Microsoft, especially if Ballmer stayed in place. ... In talks, said sources, it has asked for an aggressive stock buyback and also a dividend increase, which might assuage its efforts to garner a board seat." I agree that Microsoft has too much money, but would much rather see them investing much more heavily into bolstering their devices strategy. But then again, Microsoft was never good at acquisitions. edit- Appears that ValueAct is against the entire devices strategy, but I see no way for Microsoft to compete on the level it needs to without a strong devices play- From: http://www.reuters.com/article/2013/07/19/net-us-microsoft-valueact-idUSBRE96I14920130719 http://www.reuters.com/article/2013/07/19/net-us-microsoft-v... "ValueAct is thought to oppose Microsoft's recent foray into making its own devices."

joe_the_user 13y ago
A while back, someone in response to my critique of Windows 8, said something like "Microsoft can never be destroyed!Their monopoly give them free money". Funny how little people understand capitalism. No, that's not free money to play your BS "Metro interface" games with. It's the stock holder's money and they'll be wanting it back if it looks like you're flushing it down the toilet. Microsoft's "device strategy" (Window 8) was the most crassly opportunistic and generally despicable hi-tech corporate maneuver we've seen in a while (and that's saying something). It's infinitely satisfying to see it go down in flames. If we could toss more careers and people on this pyre, it would be even coolers. While I'm sorry for people for pursue poor strategies as dictated by the market, this was like the final spraying of Microsoft's true evil poison. Yes, we are intended to destroy the whole platform we created just for a chance to steal someone else's platform. Yeah, but that chance came and went. The organizers of Windows 8 are just left with the poison.
- yuhong 13y ago
  I agree, not an excuse. But note that restoring the start menu is not that easy: http://www.neowin.net/forum/topic/1081755-do-you-like-or-hate-windows-8/?view=findpost&p=595048551 http://www.neowin.net/forum/topic/1081755-do-you-like-or-hat... IMO restoring the start button is not bad for a minor release, and it helps things like RDP (particularly important for server versions).

jeswin 13y ago

I hate articles like this. "According to sources close to the situation..." "_dozens of people_ inside and outside the company..." "_many_ close to the situation" "sources said..." "_the persistent rumor_ that Gates had dropped the bomb..." "Other sources cautioned that it was not..." "....said one source with knowledge of the situation" Garbage like this shouldn't be on any forum, forget HN.

meowface 13y ago
In my first journalism class, one of the very first things drilled into our heads is to always be explicit in who or what your sources are. Even if they're confidential, how many there are and rough details about them should always be given. Weasel words are the bane of decent journalism. It's a shame so many major news agencies don't seem to realize this, though.
cremnob 13y ago
You might not like how it was written, but Kara Swisher has credibility and I don't doubt it's true.
jacquesm 13y ago
Swisher consistently called a lot of industry moves right ahead of time. She's like the wikileaks of the tech world. See the unauthorized bio of Marissa Mayer the other day for some nice samples of how she gets her info.

devx 13y ago

I thought this was common knowledge. Ballmer said a few years ago that he would be retiring in 2018. To announce that he's quitting, even "within a year", is very out of the ordinary, and it's obvious something went down, and the board got very frustrated with Ballmer.

nnq 13y ago

> our transformation to a devices and services company This is what I find the most worrying. Are there no more "software companies" anymore? That you know, sell software as a product and only as a side-business they sell related services? Like the kind of companies that can "shaft their customers from time to time" because they know they make enough money from their great software not to care? Will they stop making great developer tools and will they start to not give a fuck about developers just like everybody else? Will they stop funding the cool research they currently do, like in the programming languages field? This is the saddest news imho, because it will fuel up the current trend in industry. An in "services" or "devices" companies programmers are seen more and more as just "code monkeys". And developing tools for developers or "power users" becomes less of a priority. Catering to "the needs of many" is nice and fluffy and all but we still need techno-elites somewhere, and they're not gonna truly exist outside of companies that make enough money and have the privilege of occasionally showing the finger to both the customers and the minority shareholders because they know that in the end they have real products they can leverage to milk enough money from the customers and poor into the shareholders' pockets... "service" companies can't really do this because they always need to be perceived as "good" and "devices" companies will have a hell of a time competing in the new "so-cheap-they-are-almost-disposable devices" economy. Winter is coming here. But there is hope for more summery weather for companies in the fields of AI/ML/BigData.

einhverfr 13y ago
One of Microsoft's big problems is that software and hardware lifecycles are slowly extending to the point where Windows' primary competitor is Windows. In other words, older versions are good enough, people don't upgrade until they get new computers and they do that less often. Microsoft has been trying to transform themselves into a services business since at least 1999. I am not holding my breath.
deleted 13y ago
[deleted]
yuhong 13y ago
Well, I think a lot of open source business models involves selling services relating to the software instead.

einhverfr 13y ago

A lot of the criticism of Ballmer seems to miss the point. Did Microsoft miss key trends? Maybe a few but who doesn't. Microsoft saw and got involved in most of those trends they "missed" and even often got there well ahead of the parties that own the markets today. In 2000 I was hired by Microsoft. One of the big initiatives was to make tablet PCs a reality. Microsoft spent years working on marketing consumer smartphones before the iPhone. That Microsoft lost a leading position in the market for computing devices is surprising given how much effort they put into devices eventually popularized by other companies, particularly Google and Apple. Why doesn't Microsoft own the tablet and consumer smart phone market right now? The answer must be in execution rather than understanding of where the market was headed. Why couldn't they develop (and why can't they still develop) products folks like in these areas? When I was there the mentality was that Microsoft would be first to market, would fail for a few major releases but still beat everyone else with a quality product. Yet they spent time producing products nobody wanted while first Apple and later Google ended up walking away with the tablet and consumer smartphone markets. What went wrong? That's the real question.

bcantrill 13y ago
As it apparently needs to be explained: Microsoft's predatory behavior in 1990s resulted in an incalculable and unrecoverable loss of trust among technologists -- which was bound to ultimately catch up to the company. You can get away with predatory behavior when you're dominant, but when you miss new markets -- as Microsoft did repeatedly in the lost decade of the 2000s -- you can be damned sure no one is going to be foolish enough to open those markets to a known monopolist. Microsoft is left with two choices: invent new markets or try to earn back the public's trust. They have no track record in either department; as the Magic 8-ball says, "outlook not so good"...
- tomphoolery 13y ago
  What about Apple and Google? They have repeatedly violated the trust of hackers, yet only a small minority have fully divorced themselves from these companies' products. As much as I'd love to believe in the morality of our market, I don't really think that's the case. Not that I believe MS's predatory behavior helped their cause at all, but I still think the primary reason why people don't use, or don't want to use, Microsoft products anymore is because they are inferior to others' products. There was definitely a time where, for most people, that was not the case. Edit: Just a little example...I don't remember continuously hearing about Microsoft employees going to fucked-up countries and running clandestine rescue missions http://pastebin.com/CuUcHM6m http://pastebin.com/CuUcHM6m

x0x0 13y ago

the big question, then, is what happens to bing? I remember it still not being profitable; if the next ceo cuts it, then who competes with google or does G just get handed the US and European search engine markets?

engrenage 13y ago
If Bing closes, Google will find it much harder to fight anti-trust suits.

JoachimS 13y ago

The really interesting thing is not really Ballmers demise and who will replace him. The really interesting thing to watch is what will happen when the new CEO has taken the helms and present the restructuring that will inevitably follow. The board obviously want to see some pretty dramatic changes and Ballmer is deemed not fit for handling it.

mos6502 13y ago

With the recent PRISM info leak, I can't help but think Ballmer is instituting damage control for himself, as well as distancing himself from the negativity. Most likely the smartest move he could make.