Steve Ballmer's Departure From Microsoft Isn't News, But Timing Is
Microsoft observers knew CEO Steve Ballmer was due to step down soon, but announcing his impending retirement weeks after an executive reorganization seems odd. With that in mind, CIO.com contributor Jonathan Hassell examines the triumphs and missteps of Ballmer's 13-year tenure in Microsoft's corner office.
Fri, August 23, 2013
CIO — The fact that CEO Steve Ballmer will depart Microsoft within 12 months is news, but that he would depart in the short to medium term is not news.
Ballmer has often maintained that he would retire from Microsoft as employee No. 30 and CEO when his children went on to the next stage in their education. Ballmer was never going to be around for another decade.
But it is curious that the man in charge would decide to retire just weeks after announcing a huge senior leadership team reorganization designed to take the company's transformation into a so-called "devices and services" enterprise forward. That's why the news struck me suddenly as I was sitting at my desk, coffee in hand, ready to begin what I thought was going to be a peaceful Friday morning.
Much will be written about Ballmer's tenure. In fact, a lot already has been written. But as this news becomes official, and I reflect over the years that Ballmer and Bill Gates worked closely together and, then, over the years where Ballmer himself was in charge and Gates retired to focus on his nonprofit work, I come away with one conclusion: The leadership of Steve Ballmer was full of unrealized potential.
This analysis comes from two angles: The financial component of Microsoft's performance — which is absolutely important, given that the company exists to serve shareholders, generate a return for those owners and in general profitably serve their interests — and the visionary and innovative component of Microsoft's performance—also important because Microsoft essentially birthed the personal computing revolution. This company has, or at least had, the power to lead industries, affect change and generally drive actions around the planet as far as technology evolution goes.
Microsoft's Financial Performance: It's Hard Not to Be Impressed
Financially, Microsoft's performance has been excellent. Under Ballmer, Microsoft has started and grown more than 16 individual businesses that generate more than $1 billion of annual revenue. Its server and tools business has grown in double-digit percentages year-over-year for more than a decade now. Its portfolio of patents has it collecting money from every single Android phone sold, even without being involved in the manufacture of sale of those devices.
Microsoft Office, including Word, Excel, PowerPoint and Outlook, is the de facto corporate standard. As much as Google would like to try to get large companies to move to Google Apps for Business en masse, it simply isn't going to happen — and Microsoft will continue collecting handsomely for the privilege of running Office on millions of corporate desktops and laptops.
The company is solidly profitable, owns more than $100 billion of net assets and possesses more than $70 billion in free cash. Put under a lens that excludes anything but financial performance, this company is rocking, and as CEO, Ballmer deserves much of the credit for this admirable set of results.
Ballmer was executive vice president of sales and support before taking on the CEO reigns from Gates, so it makes sense that he is a numbers guy and would place a priority on delivering good-looking financial results to shareholders. It would be difficult to argue that he did not deliver on this important responsibility.