Steve Ballmer leaving Microsoft in 12 months... and to diminishing relevance and an uncertain future

Steve Ballmer, the marketing- and sales-centric force of nature who took over as Microsoft CEO in 2000, and became the public face of the company following Bill Gate's full retirement in 2008, has just announced that he too will be retiring, in 2014. Bill Gates oversaw the rise of Microsoft to brutal dominance in the late 90s and early 00s, only to face severe anti-trust action from the government that forced them into becoming a more mature, if less effective company. Ballmer was hugely successful in milking Windows and Office profits, but aside from the almost accidental birth of the Xbox, has been completely unable to transform the old giant into a new power. Google owns the internet. Facebook owns social. Apple owns tablets. And Apple and Google jointly own phones. That leaves precious little space for the company that once defined popular technology. Ballmer said, in Microsoft's announcement:

There is never a perfect time for this type of transition, but now is the right time. We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.

Ballmer mistook his products for his business, and that's a fatal mistake in technology. While Apple was busy building iPod on top of Mac, cannibalizing iPod with iPod mini and nano, then iPhone, cannibalizing Mac with iPad, then iPad mini, and always making sure they had a new instantiation of their business ready to rise even before the old began to fall, Ballmer clung to Windows and Office. His fear of hurting the old crippled Microsoft when it came to inventing the new. Contrast this to Google who spun on a dime and pushed out Android and Google+, and has kept annexing greater slices of the internet with YouTube and Maps, and their relative positions in todays market are easily understandable.

Microsoft should have had Xphone and Xslate, with cutting edge Office, Exchange, and Halo, on the market 5 years ago, in a coherent, integrated product that leveraged the best of their OS, gaming, enterprise, and cloud competencies. Instead, they have almost no presence in modern mobile computing or consumer facing services.

Just as Microsoft supplanted IBM, they face the very real possibility of being supplanted. Still in technology, but no longer relevant to the future of technology.

I'll miss Ballmer the showman, the guy who ran, sweaty, on stage and pounded out "Developers! Developers! Developers!", who discounted the iPhone and iPad, and who not only never saw his competition coming, but seldom seemed to notice or care as their tore on by. But not in the way I should. Not in the way I miss Bill Gates.

It's unclear who, if anyone, could step in at this point an enact the changes necessary to avert that destiny. There are few enough product people in the world, and fewer still who could effectively change a culture as big as Microsoft. Even a second coming of Bill Gates is unlikely to be what they really need anymore.

Yet we need someone who can do just that. Who can make the best of Microsoft - Xbox and Windows Phone and Media Center - all of Microsoft. Someone who can make Microsoft a strong, vibrant competitor to Google and Apple and Facebook and Amazon so all of us can enjoy better and more vibrant competition. We need someone who can make Microsoft great again.

Any ideas?

Source: Microsoft via Windows Phone Central

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Steve Ballmer leaving Microsoft in 12 months... and to diminishing relevance and an uncertain future


Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement! Retirement!

"Apple owns tablets?" Aren't their tablet market share and influence plummeting even faster than iPhone's? Is anyone even buying iPads any more outside the US? Android owns tablets and smartphones. Obviously.

This is thick even from the web's biggest Apple fan boy.

Ought to have added that Rene may never have heard of the enterprise segment in IT, since he follows only Apple, which is a consumer electronics company. I guess, using his terminology, MS "owns" the enterprise, and is growing quite happily there, transforming the productivity segment into a cloud service business model. I would also like to hear why Azure is irrelevant, or SQL server, or any of the billion plus dollar businesses MS has, or even Windows, which is more popular than ever before. For an irrelevant company, MS is making surprisingly lot of money in the IT, growing its business surprisingly-well, and selling surprisingly-many products to business customers and consumers that actually pay real hard cold cash, not just click some ads like Google's customers.

Let us contrast this to Apple. The compnay has not brought anything to the table since iPad 1. It is losing market share left and right in both tablets and phones. Worse, my iP5 runs an UI from 2007 and lacks decent Maps, any kind of voice control or dictation, or Passbook-like services, and well, anything else too that would differentiate it from 3GS running iOS 4 except some hardware specs.

Apple seriously looks like the next IBM. Yes, they make money. But at this rate, who consumer will care in 2015?

Don't lie, man.. you don't own an iPhone. Concern trolls always claim ownership of Apple products, but you're not fooling anyone.

Kids go home. This is a place for adults to talk. Thanks.

When you grow up, and start earning, you may realize that the 1000$ I paid for my iP5 bought me indeed an IBM, not a BMW. I expected at least a Honda. But looking back at what state Apple was and is, my expectations were ill-founded and were of course my own fault. And from this vantage point, comments such as those posted by Rene look quite silly, even delusional. Apple is losing the innovation and mind share and market share game globally, big time. It is time for people to wake up to the reality of 2013. 2007 and even 2010 passed long ago.

Yes MS owns enterprise. They're stake in the consumer market is questionable at this point. They're desktop share is muscle memory from the last decade and again their enterprise presence. But with anemic PC sales and no consumer incentive to move back to PCs there is no expectation that MS's momentum will hold them long enough to catch up in the mobile market.

MS missed the smart phone and tablet shifts in technology by several years, with Balmer famously stating they could just buy their way into any new tech. That is not a sign of a company that agile, creative or forward thinking.

Ironically, had the DOJ busted up MS into different business units years ago they might be more relevant in the consumer market. They definitely would be more competitive and creative. And perhaps, just maybe, they would have fixed some the hundreds of unaddressed bugs that have permeated both their enterprise and consumer products for years.

Balmer leaving will hopefully make MS a stronger competitor and force other to be at the top of their game. There recent products and services have been what one expects from a company that doesn't feel it needs to improve or innovate in order to retain its customer base.

And as usual, he is another troll with no figures to refute Rene's claim. My question is this: Apple is known for keeping hardware a secret until they are ready to release it. Operating systems are different, we see them months before release. If @Trappiste was done with the iPhone technically after the 3GS based on his comments, why invest a grand in the iPhone 5 when you already knew what iOS 6 was all about months ahead of it.

re: "Ballmer mistook his products for his business, and that's a fatal mistake in technology."

Microsoft has never been a general "software" company. They've always been a DOS / Windows / Office company, stagnant and inflexible, totally unprepared for the mobile future. Just replacing Ballmer won't change that situation after decades of fossilization.

Microsoft could go out of business tomorrow and it wouldn't bother me at all. Virtually everything they have produced has been mediocre or pure garbage.

Lol, lets not get into their history in consumer tech and some of the brilliant consumer stuff they got today.
Let me just state if Microsoft dies tomorrow ,more than half of the non-Microsoft services you use dies along.

I agree somewhat, but I think that would force a lot of IT departments to catch up with the times a hell of a lot faster. I work for the State of Alabama and they are still using PC's with XP, cloud based programs only work half decently with IE 7 and 8, no Mac support whatsoever even though so many of us are screaming for them not just tech nerds like me.

I nominate Rene Ritchie. I want my Xphone Halo Edition!

Edit - This should not be a reply but a comment alone.

I'm glad to see Ballmer go, but you say Google owns the internet etc. Well most people get to Google and the internet through Windows. Facebooks owns social, but most people get to Facebook through Windows. Apple (and Samsung) owns tablet, and yet most people sync their tablets with Windows, so I think you completely misread the situation and there is a LOT of room for Microsoft to thrive WITH Google, Facebook and Apple as partners, and not competitors.

I also think the PC version of Windows 8 is a step in the wrong direction and Microsoft should do something about it quickly. MS has to embrace the desktop, not pretend that it is a tablet. If Microsoft becames irrelevant it will have no one to blame but itself, not Google, not Facebook and not Apple.

The problem is that Microsoft isn't going to partner with any of them, at least not directly. Bing has less than double digit percentage of usage compared to Google. Now Google has jumped into the computing landscape with Chromebooks and Chrome OS. Microsoft, like Apple and Google all want to stop outsourcing everything they can. The main difference is that Apple doesn't dare try to take on information searching like Google because they know they can't compete. Google hasn't tried to go after gaming and Office because Microsoft and it's partners are so deeply imbedded. However, if Microsoft shows any weakness here, I have no doubt Google will fully attack it because that what Google does and they are damn good at it.

gotta be said, that video is f ing class, this thing has gotta go viral!!! somebodies gotta remaster to a better res, i was in shock when i seen this!!!

I'm with you. I can't believe I haven't seen these before. What a train wreck! This is seriously making me reconsider my team's use of RedHat and Oracle...

Split the company in two. Have Satya Nadella or Terry Myerson run the enterprise/cloud company and bring back J Allard to run the devices company.

Rene, well written article. Again!

As an ex-MS fan ... hmmm ... yep. Just remembered. I gave up on Microsoft the day Bill Gates stepped out .... sad but true.

Never trusted Ballmer. Somewhere deep in my heart (and brain!), I knew this guy would fuck up the company with his idiotic attitude and clueless mind.

I studied the wrong focus in college... I'd gladly get paid his salary to act like a raving lunatic. I'd even do so without nearly hyperventilating and sweating like Beiber at a Black Label Society concert.

Sent from the iMore App

To be fair to Ballmer, he laughed at the original iPhone because of the original cost ($500ish). He also conceded that it "may sell very well with consumers", but thought the price was too high.

Whatever the case, I'm going to miss Ballmer. He was the most entertaining CEO in tech.

He should have left a long time ago. *smh* i have never seen someone single-handedly tank a company like him before. He should just leave now instead of waiting 12 months atleast then Microsoft maybe able to right the wrong before its to late.

Jobs has passed away, Gates on to doing good (and doing well at it), now Ballmer, Ellison being Ellison. I miss all my friends (some of whom I actually knew) from the old days. If the future is Mark Zuckerberg, I'm not so excited.