5 ms·

Ballmer on Ballmer: His Exit From Microsoft

71 points by aleem 13y ago

geoka9 13y ago
"Steve was a phenomenal leader who racked up profits and market share in the commercial business, but the new CEO must innovate in areas Steve missed—phone, tablet, Internet services, even wearables." Why does MS insist it has to be everywhere there's any money to be made? Apple is happy being a phone/tablet company, Google is the Internet gig, but MS has to have a finger in every pie, right?
- jiggy2011 13y ago
  I guess because they always have, it's the position they are most comfortable in. A company where everybody uses Windows desktops and Windows tablets and phones is much more likely to buy Office and Windows servers because of the whole vertical integration. Once you start letting non MS technology through the door you start to lose that and people will look more closely at non MS solutions in other areas.
- lostoptimist 13y ago
  "Google is the Internet gig" That's not really true. Google is trying to capture nearly everything, too. Enterprise (docs), phone, tablet, computer, search, advertising, social, ISP, wearable products (Glass), etc.
  - thatthatis 13y ago
    And cars and solar power
Thiz 13y ago
What would Elon Musk do as CEO of microsoft? Just wondering...
- breckinloggins 13y ago
  He would probably be really bored. This is pure speculation, but I don't think Elon would like a "turnaround guy" type of job. He seems to be driven to do really big things that people say can't be done. I don't think Microsoft's shareholders would appreciate the distraction, and to Musk, I'm pretty sure that even "put Windows on top of BSD and open source it" wouldn't be his idea of "big things that people say can't be done".
- libria 13y ago
  Then we'll start having sensational articles about that one person whose PC caught on fire.
auctiontheory 13y ago
The larger the company and its existing revenue streams, the greater the resistance to any significant change. Even with Ballmer out, this law of corporate inertia still holds. As entrepreneurs, the above is actually good news - it's why we have a decent chance of blowing past the incumbent.
redthrowaway 13y ago
It's refreshing to see Ballmer's attitude towards Microsoft: he's willing to do whatever's in the best interests of the company, even if he personally would prefer to stay around longer (and make more money in so doing). How many professional CEOs can you say the same of? How many people who worked their way up the rungs of leadership would voluntarily step aside, thinking they weren't the right person for the job?
- chris_wot 13y ago
  Dude, that's a very one sided article. It looks like he was pushed.
- keithpeter 13y ago
  I take your point, but can making more money possibly mean anything to Ballmer? Isn't it more about what Gates said (basically meaning and Microsoft being Gates' and Ballmer's big project)?
  - mathattack 13y ago
    Yes - for them the share price isn't about the cash, it's about keeping score.
- srj 13y ago
  Considering there was no successor ready to take his place at the time of the announcement I think it's more likely that he was pushed out.
avenger123 13y ago
I got more insight from this article as to the type of person Ballmer is than anything else I have read about him. Good read.
- officemonkey 13y ago
  It certainly is more insightful than a Youtube video of him sweating and yelling "DEVELOPERS" or another rehash of his iPhone-will-never-amount-to-anything quote.
antonius 13y ago
Regardless of what some may say about him, spending 30+ years at a company and serving as CEO of your remaining years shows the trust that Steve had. Similar to when Bill Gates left, it will be a sad day when Ballmer is not around.
- chris_wot 13y ago
  I'm sure that all those people who were screwed by the stack ranking system will be really upset.
  - 3825 13y ago
    I'd imagine being a Microsoft alumni, regardless of the details of exit, means many hiring managers would at least take a look at your resume.
bgirard 13y ago
"The Ballmer Years" stock price graph is extremely misleading because the number of outstanding shares has changed. If they want to track Ballmer' performance they should graph market cap.
- mbennett 13y ago
  Also, since it attempts to show how much the values of the shares change, it should be adjusted with the dividends paid out during that time.
- keithwinstein 13y ago
  It depends on your perspective. If you're one of Microsoft's shareholders (the perspective the WSJ may be writing for), market capitalization is not directly relevant. If Jane owns 100 shares of ABCD that most recently traded at $10 apiece, and then the issuer issues 1,000 new shares to its employees but the shares continue to trade at the same price, the market capitalization has increased but Jane's stake hasn't changed in value. Shareholders do care about price return and dividends. They might also care about total return, subject to some reinvestment strategy and tax regime. Market cap is also problematic because it can't be calculated in real time. Reporting companies generally only publish a share count once a quarter. They publish two numbers: the gross count of shares outstanding on a particular day (which doesn't count in-the-money options and other live claims on a company's equity) and the fully-diluted share count averaged over the quarter (without publishing the strike price distribution of the options). Neither one is exactly what you'd need to calculate an implied whole-company market valuation anyway, so in general any attempt to measure market cap is necessarily going to get an uncertain, out-of-date, imperfect metric. (A useful one, don't get me wrong! But not what principally matters to the shareholders.)
  - bgirard 13y ago
    That's a good point. Thanks!
- Zigurd 13y ago
  If dilution is a significant factor and you are sitting on a cash pile you can't possibly spend fast enough, then that's a problem with an obvious solution going unsolved.
ffrryuu 13y ago
So he finally realized he's fail for the last 5+ years?
brianpgordon 13y ago
I can't believe that the article doesn't contain the slightest mention of any of the numerous disasters that took place under Ballmer's leadership. The writer makes it sound like Ballmer's only fault was that he was only a little too slow to change the company. In reality Microsoft lost billions due to tactical business errors like the Surface, Xbox hardware failures, Windows Phone, and the Zune.
- dragontamer 13y ago
  What the hell? Lost Billions? Microsoft has tripled its revenue in 10 years. Its profits have been tripled as well. As much as people hate on Microsoft, it is at its core... an extremely profitable buisiness.
  - taopao 13y ago
    Very few new lines of business. Most of their new ventures are failures or perpetually in the red.
    - dragontamer 13y ago
      Who were Microsoft's biggest competitors circa 2000? Sun Microsystems? BeOS ? Apple's G4? The big players in Server-space have lost to Linux, but Microsoft has managed to remain big with Azure, Office 365. * Sun Microsystems / Java is basically dying at this point. Oracle screwed the pooch on this one. C#/.NET are big, and the biggest users of Java don't even use Java anymore. (See Android and Dalvik) * Internet Explorer has actually survived past Netscape Communicator, Mozilla (the original), and is making inroads into Firefox. Its a bit weird that Firefox was able to capture IE's marketshare, but IE has remained consistently in the top browsers for far longer than any other web browser right now. * Some products, like Microsoft SQL Server and MS Office, have been repackaged into new forms. Office 365 is price-competitive against Google's line of "cloud" products, and Azure is profitable. New business ventures have also begun * XBox / Gaming has been generally considered successful (despite mostly losing money so far) * Purchases, such as Skype, have brought Microsoft into other markets, like VOIP. ----------------- Most of Microsoft's "business ventures" are very successful. Windows Phone was the dominant Smartphone of 2007, with 42% marketshare. That is hardly a failure by any stretch of the imagination. I'm talking about Windows Mobile platform and older btw. (Future of Windows Phones, such as Windows Phone 8 / Lumia devices seems relatively positive, especially in India) Again, why are businesses... in business? To make money. PERIOD. And Microsoft is by all accounts extremely successful at it.
nostromo 13y ago
The thought of the CEO of Ford taking over Microsoft just seems crazy to me. I'm sure he's a competent manager, as Balmer seemed to be, but is he a tech visionary?
- kosei 13y ago
  I have had the pleasure of seeing Alan Mulally give a couple of talks on leadership, and I can say that he is one of the most inspiring leaders I have ever seen (good video below of a talk he gave). Not because he drives people, but because he empowers them. Microsoft is a company with over 100,000 FTEs and honestly I don't think you need a great tech visionary leading as much as you need someone at the top to empower the tech visionaries running their products, and get out of their way. http://www.youtube.com/watch?v=ZIwz1KlKXP4 http://www.youtube.com/watch?v=ZIwz1KlKXP4
  - digikata 13y ago
    He does seem to be quite the leader, but there are very strong correlations between aircraft development and production (where Mulally came from) and car development and production. For Ford, Mulally is a person with deep background in design and physical manufacturing in addition to having great leadership qualities. Is it enough to just have leadership capabilities and weak roots in the core skills of the company? Even if you say that Microsoft wants a strong future presence in hardware manufacture - building phones and tablets is a very different game than building planes and cars.
    - kosei 13y ago
      I still don't think one has to be the subject matter expert in everything a business does. Mulally should be an expert in building teams to make complex manufactured devices, and he should be hiring (or empowering) experts who understand services or tech functionality better than him. We can't hope that every leader can be a Steve Jobs or an Elon Musk :)
    - hackula1 13y ago
      Perhaps hardware design is exactly what MS needs. They have certainly been fumbling in the area, despite a strong push.
bitwize 13y ago
My question is what's next for Steve? Being Bill's bulldog has been pretty much a lifelong career for him. In his place I don't know that I'd be happy anywhere else; I might decide to enjoy the huge sacks of cash money I'd made and spend more time with my kids.
- antonius 13y ago
  Being employee #30 of Microsoft allowed Steve to enjoy his wealth from day 1. Oh, and working 30+ years helps.
- gnaritas 13y ago
  Retirement I imagine, he's absurdly rich. Maybe he'll join Bill and start giving some of that money away.
jusben1369 13y ago
To me Ballmer = Cook where Bill = Steve. Cook is taking over a company dominant in it's markets. It's raking in huge sums of cash selling legacy products. There's no sign that Cook can ensure Apple makes the leap to the next big thing. Indeed, coming up through Apple he's probably not the right guy just as Ballmer is now realizing his deeply engrained MSFT strains makes him not the right guy for a new environment.
- nirnira 13y ago
  I think people should wait at least five years before bothering to analyse Tim Cook's tenure over Apple, because at this point, it's just stupid to even try.

71 points by aleem 13y ago

"Steve was a phenomenal leader who racked up profits and market share in the commercial business, but the new CEO must innovate in areas Steve missed—phone, tablet, Internet services, even wearables." Why does MS insist it has to be everywhere there's any money to be made? Apple is happy being a phone/tablet company, Google is the Internet gig, but MS has to have a finger in every pie, right?

jiggy2011 13y ago
I guess because they always have, it's the position they are most comfortable in. A company where everybody uses Windows desktops and Windows tablets and phones is much more likely to buy Office and Windows servers because of the whole vertical integration. Once you start letting non MS technology through the door you start to lose that and people will look more closely at non MS solutions in other areas.
lostoptimist 13y ago
"Google is the Internet gig" That's not really true. Google is trying to capture nearly everything, too. Enterprise (docs), phone, tablet, computer, search, advertising, social, ISP, wearable products (Glass), etc.
- thatthatis 13y ago
  And cars and solar power

Thiz 13y ago

What would Elon Musk do as CEO of microsoft? Just wondering...

breckinloggins 13y ago
He would probably be really bored. This is pure speculation, but I don't think Elon would like a "turnaround guy" type of job. He seems to be driven to do really big things that people say can't be done. I don't think Microsoft's shareholders would appreciate the distraction, and to Musk, I'm pretty sure that even "put Windows on top of BSD and open source it" wouldn't be his idea of "big things that people say can't be done".
libria 13y ago
Then we'll start having sensational articles about that one person whose PC caught on fire.

auctiontheory 13y ago

The larger the company and its existing revenue streams, the greater the resistance to any significant change. Even with Ballmer out, this law of corporate inertia still holds. As entrepreneurs, the above is actually good news - it's why we have a decent chance of blowing past the incumbent.

redthrowaway 13y ago

It's refreshing to see Ballmer's attitude towards Microsoft: he's willing to do whatever's in the best interests of the company, even if he personally would prefer to stay around longer (and make more money in so doing). How many professional CEOs can you say the same of? How many people who worked their way up the rungs of leadership would voluntarily step aside, thinking they weren't the right person for the job?

chris_wot 13y ago
Dude, that's a very one sided article. It looks like he was pushed.
keithpeter 13y ago
I take your point, but can making more money possibly mean anything to Ballmer? Isn't it more about what Gates said (basically meaning and Microsoft being Gates' and Ballmer's big project)?
- mathattack 13y ago
  Yes - for them the share price isn't about the cash, it's about keeping score.
srj 13y ago
Considering there was no successor ready to take his place at the time of the announcement I think it's more likely that he was pushed out.

avenger123 13y ago

I got more insight from this article as to the type of person Ballmer is than anything else I have read about him. Good read.

officemonkey 13y ago
It certainly is more insightful than a Youtube video of him sweating and yelling "DEVELOPERS" or another rehash of his iPhone-will-never-amount-to-anything quote.

antonius 13y ago

Regardless of what some may say about him, spending 30+ years at a company and serving as CEO of your remaining years shows the trust that Steve had. Similar to when Bill Gates left, it will be a sad day when Ballmer is not around.

chris_wot 13y ago
I'm sure that all those people who were screwed by the stack ranking system will be really upset.
- 3825 13y ago
  I'd imagine being a Microsoft alumni, regardless of the details of exit, means many hiring managers would at least take a look at your resume.

bgirard 13y ago

"The Ballmer Years" stock price graph is extremely misleading because the number of outstanding shares has changed. If they want to track Ballmer' performance they should graph market cap.

mbennett 13y ago
Also, since it attempts to show how much the values of the shares change, it should be adjusted with the dividends paid out during that time.
keithwinstein 13y ago
It depends on your perspective. If you're one of Microsoft's shareholders (the perspective the WSJ may be writing for), market capitalization is not directly relevant. If Jane owns 100 shares of ABCD that most recently traded at $10 apiece, and then the issuer issues 1,000 new shares to its employees but the shares continue to trade at the same price, the market capitalization has increased but Jane's stake hasn't changed in value. Shareholders do care about price return and dividends. They might also care about total return, subject to some reinvestment strategy and tax regime. Market cap is also problematic because it can't be calculated in real time. Reporting companies generally only publish a share count once a quarter. They publish two numbers: the gross count of shares outstanding on a particular day (which doesn't count in-the-money options and other live claims on a company's equity) and the fully-diluted share count averaged over the quarter (without publishing the strike price distribution of the options). Neither one is exactly what you'd need to calculate an implied whole-company market valuation anyway, so in general any attempt to measure market cap is necessarily going to get an uncertain, out-of-date, imperfect metric. (A useful one, don't get me wrong! But not what principally matters to the shareholders.)
- bgirard 13y ago
  That's a good point. Thanks!
Zigurd 13y ago
If dilution is a significant factor and you are sitting on a cash pile you can't possibly spend fast enough, then that's a problem with an obvious solution going unsolved.

ffrryuu 13y ago

So he finally realized he's fail for the last 5+ years?

brianpgordon 13y ago

I can't believe that the article doesn't contain the slightest mention of any of the numerous disasters that took place under Ballmer's leadership. The writer makes it sound like Ballmer's only fault was that he was only a little too slow to change the company. In reality Microsoft lost billions due to tactical business errors like the Surface, Xbox hardware failures, Windows Phone, and the Zune.

dragontamer 13y ago
What the hell? Lost Billions? Microsoft has tripled its revenue in 10 years. Its profits have been tripled as well. As much as people hate on Microsoft, it is at its core... an extremely profitable buisiness.
- taopao 13y ago
  Very few new lines of business. Most of their new ventures are failures or perpetually in the red.
  - dragontamer 13y ago
    Who were Microsoft's biggest competitors circa 2000? Sun Microsystems? BeOS ? Apple's G4? The big players in Server-space have lost to Linux, but Microsoft has managed to remain big with Azure, Office 365. * Sun Microsystems / Java is basically dying at this point. Oracle screwed the pooch on this one. C#/.NET are big, and the biggest users of Java don't even use Java anymore. (See Android and Dalvik) * Internet Explorer has actually survived past Netscape Communicator, Mozilla (the original), and is making inroads into Firefox. Its a bit weird that Firefox was able to capture IE's marketshare, but IE has remained consistently in the top browsers for far longer than any other web browser right now. * Some products, like Microsoft SQL Server and MS Office, have been repackaged into new forms. Office 365 is price-competitive against Google's line of "cloud" products, and Azure is profitable. New business ventures have also begun * XBox / Gaming has been generally considered successful (despite mostly losing money so far) * Purchases, such as Skype, have brought Microsoft into other markets, like VOIP. ----------------- Most of Microsoft's "business ventures" are very successful. Windows Phone was the dominant Smartphone of 2007, with 42% marketshare. That is hardly a failure by any stretch of the imagination. I'm talking about Windows Mobile platform and older btw. (Future of Windows Phones, such as Windows Phone 8 / Lumia devices seems relatively positive, especially in India) Again, why are businesses... in business? To make money. PERIOD. And Microsoft is by all accounts extremely successful at it.

nostromo 13y ago

The thought of the CEO of Ford taking over Microsoft just seems crazy to me. I'm sure he's a competent manager, as Balmer seemed to be, but is he a tech visionary?

kosei 13y ago
I have had the pleasure of seeing Alan Mulally give a couple of talks on leadership, and I can say that he is one of the most inspiring leaders I have ever seen (good video below of a talk he gave). Not because he drives people, but because he empowers them. Microsoft is a company with over 100,000 FTEs and honestly I don't think you need a great tech visionary leading as much as you need someone at the top to empower the tech visionaries running their products, and get out of their way. http://www.youtube.com/watch?v=ZIwz1KlKXP4 http://www.youtube.com/watch?v=ZIwz1KlKXP4
- digikata 13y ago
  He does seem to be quite the leader, but there are very strong correlations between aircraft development and production (where Mulally came from) and car development and production. For Ford, Mulally is a person with deep background in design and physical manufacturing in addition to having great leadership qualities. Is it enough to just have leadership capabilities and weak roots in the core skills of the company? Even if you say that Microsoft wants a strong future presence in hardware manufacture - building phones and tablets is a very different game than building planes and cars.
  - kosei 13y ago
    I still don't think one has to be the subject matter expert in everything a business does. Mulally should be an expert in building teams to make complex manufactured devices, and he should be hiring (or empowering) experts who understand services or tech functionality better than him. We can't hope that every leader can be a Steve Jobs or an Elon Musk :)
  - hackula1 13y ago
    Perhaps hardware design is exactly what MS needs. They have certainly been fumbling in the area, despite a strong push.

bitwize 13y ago

My question is what's next for Steve? Being Bill's bulldog has been pretty much a lifelong career for him. In his place I don't know that I'd be happy anywhere else; I might decide to enjoy the huge sacks of cash money I'd made and spend more time with my kids.

antonius 13y ago
Being employee #30 of Microsoft allowed Steve to enjoy his wealth from day 1. Oh, and working 30+ years helps.
gnaritas 13y ago
Retirement I imagine, he's absurdly rich. Maybe he'll join Bill and start giving some of that money away.

jusben1369 13y ago

To me Ballmer = Cook where Bill = Steve. Cook is taking over a company dominant in it's markets. It's raking in huge sums of cash selling legacy products. There's no sign that Cook can ensure Apple makes the leap to the next big thing. Indeed, coming up through Apple he's probably not the right guy just as Ballmer is now realizing his deeply engrained MSFT strains makes him not the right guy for a new environment.

nirnira 13y ago
I think people should wait at least five years before bothering to analyse Tim Cook's tenure over Apple, because at this point, it's just stupid to even try.