Bill Gates would take songs by David Bowie, Willie Nelson and Jimi Hendrix to his desert island. What tracks would you take?
Steve Ballmer's Mixed Legacy
Gates's Successor Helped Build Behemoth, but Missteps Leave Microsoft Vulnerable
Getty Images
Under CEO Steve Ballmer,
Microsoft has endured years of investor criticism as the rise of mobile
devices and Internet services eroded the influence of the personal
computer-era kingpin.
Microsoft said CEO Steve Ballmer will retire
after the naming of a successor within the next 12 months. But who will
fill the shoes of the longtime chief of the software giant? Marcelo
Prince has details. Photo: AP.
PC sales—the lifeblood of Microsoft's business—are on a steady decline. Business and casual users alike are switching to devices and services offered by Apple Inc. AAPL -0.39% and Google Inc. GOOG -0.40%
Investors cheered the news, pushing Microsoft shares up 7%, or $2.36, to $34.75, in 4 p.m. trading Friday on the Nasdaq Stock Market.
Microsoft's offerings to customers "are downright confusing," said Daniel Gasparro, an IT consultant who recently managed Microsoft software purchases for clients including Washington, D.C. law firm Patton Boggs LLP. "When you're spread too thin, you're not good at anything."
Mr. Ballmer, who took the reins from Chairman Bill Gates in January 2000, has responded to the changes by recently overhauling the company's Windows software to be used with touch commands and introducing a Microsoft-designed tablet computer called Surface.
CEO's Memo: 'Moving Forward'
"This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most." Read the full memo.Related Articles
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But the shifts haven't yet helped reignite the company's growth, though its longtime businesses continue to produce healthy profits. Its stock hasn't shown significant gains since the crash following the Internet bubble, which had taken its share price to a high of $58.03.
In July, Microsoft booked a $900 million quarterly write-off for unsold Surface units, and reported revenue and net income that missed analyst expectations.
"There is never a perfect time for this type of transition, but now is the right time," said Mr. Ballmer said in a memo to Microsoft employees. Mr. Ballmer held about 4% of Microsoft as of its last proxy statement in October. That stake is worth more than $11.5 billion at the current share price.
He added that his "original thoughts on timing would have had my retirement happen in the middle of our company's transformation," but said the company now needs a CEO who "will be here longer term for this new direction."
Microsoft employees were floored by the news, according to people familiar with internal conversations. The announcement set off speculation akin to Kremlinology, as Microsoft employees read and reread Mr. Ballmer's internal memo for clues about why he is retiring and who might be next.
One person familiar with Microsoft's board deliberations said directors and Mr. Ballmer have been discussing for months when to reveal a succession plan. The decision was completed on Wednesday during a board conference call with Mr. Ballmer, the person close to the board said.
Some former Microsoft executives said the latest move appeared abrupt in view of the recent reorganization—since such a new corporate structure would ordinarily be dictated by a new CEO rather than the outgoing one.
Rick Sherlund, an analyst at Nomura Securities, said Microsoft directors may have felt pressure from ValueAct Capital Management LP, a hedge fund that in April said it had accumulated a stake in the company worth $2 billion. The fund has been known for seeking board seats or asking for other changes at companies to try to raise stock prices.
Steve Ballmer's Hits and Misses
![[SB10001424127887324165204579031190061351748]](http://s.wsj.net/public/resources/images/OB-YQ726_0823hi_D_20130823164144.jpg)
Microsoft's CEO search committee will be chaired by lead independent board director John Thompson, a longtime International Business Machines Corp. IBM +0.12% In prepared remarks, he said the board is committed to the transformation of Microsoft into a successful "devices and services" company.
Mr. Ballmer, a sales specialist with a booming voice, met Mr. Gates when they were students at Harvard University. He earned a bachelor's degree in mathematics and economics and worked for two years at Procter & Gamble Co. PG +0.30% before joining Microsoft in 1980.
Microsoft CEO Steve Ballmer announced he
would be stepping. WSJ’s Spencer Ante discusses the Ballmer legacy and
what could be next for Microsoft. Photo: AP.
Mr. Ballmer noted that Microsoft has grown from a $7.5 million company to nearly $78 billion in annual revenue since he joined, with its workforce expanding from just over 30 people to almost 100,000.
Along the way, Mr. Ballmer led several Microsoft divisions, including operations, operating systems development, and sales and support. In July 1998, he was promoted to president, a role that gave him day-to-day responsibility for running Microsoft.
Mr. Ballmer had some successes during his tenure, including the building of Microsoft's Xbox videogame business, and such major acquisitions as its $8.5 billion acquisition of the Web communications service Skype. He failed in a hostile bid to acquire Yahoo Inc. YHOO +0.32% for $44.6 billion, a defeat now widely regarded as a good thing; Yahoo's market value currently stands at about $28 billion.
One optimist about Microsoft's future is George Colony, a longtime observer of the tech scene who is chairman and chief executive of Forrester Research. He argued that winning in the coming era of technology will require deep knowledge about software running on user devices, not just online services—which plays to Microsoft's strengths.
The company's next leader can't shy away from angering old partners and risking longtime sources of profits, Mr. Colony said, such as by continuing to make tablets in competition with companies that buy its software. "It needs someone who is not afraid to break connections with their old business model," Mr. Colony said.
Mr. Ballmer's missteps loom large. One of the biggest and costliest was a Windows version called Vista that Mr. Ballmer in a trade press interview Friday called his biggest regret. The successor Windows 7 version proved popular, but the touch-oriented version Windows 8 so far has failed to propel Microsoft into a major position in tablets.
In mobile phones, the story is similar. Mr. Ballmer, who in 2007 famously told USA Today that Apple's iPhone had "no chance" to get significant market share, hitched Microsoft's fortunes largely to onetime market leader Nokia Corp. NOK1V.HE +1.24% But its smartphone software has a minimal share of a market now largely dominated by Google's Android.
—Saabira Chaudhuri, Ian Sherr and Joann S. Lublin contributed to this article.
Aug 23, 2013
Microsoft
Ballmer on His Departure, Success, Failure and the Future
- Bloomberg
The Seattle Times snagged an interview with Ballmer and with John Thompson, who is heading the board’s search for the next CEO. ZDNet’s Mary Jo Foley, who has covered Microsoft for years, also spoke with Ballmer (after what she called a “20-year dry spell”).
Ballmer told the Seattle Times that he is retiring now because if waited until his youngest son went to college, as he had considered, that would put his departure smack in the middle of a big company transition. That echoes what he said in his memo to employees Friday. Ballmer told the Times his decision wasn’t prompted by pressure from shareholders, and he told ZDNet that it had nothing to do with the short term.
While Ballmer wasn’t named to the special committee that will look for the next CEO, he told the Times he will “have a voice” in the decision and that he isn’t shy. Thompson backed that up, saying he didn’t know how you find Microsoft’s CEO without getting his input.
The board does have a profile of what it wants in its next CEO, Thompson told the Times, though he didn’t provide any details or say whether there were any leading candidates — internal or external. He told ZDNet that Microsoft is “well down the path in the search.”
Ballmer told the Times he was proudest of his longevity with Microsoft, and the company’s growth over that period. He shrugged off the company’s stagnant stock price — “I’m not a stock price focused guy” — saying he cared more about products. On that front, he said the entire episode of the loathed Windows Vista operating system was his biggest disappointment.
Microsoft’s future, Ballmer told ZDNet, is about in delivering a great experience for the consumer spanning hardware and software. The company doesn’t want to just be an enterprise or business-customer company like IBMIBM +0.12%. His example was email. “If you’re going to be in e-mail, you’re going to be in e-mail. You can’t say, okay, I only want to be in enterprise e-mail,” he told ZDNet. (He used devices as an example, too. So, yes, Microsoft is sticking with hardware.) Thompson chimed in: the “consumerization” of IT is happening, and Microsoft is going to be involved in that.
Ballmer plans to stay in Seattle after his retires, he told the Times, but otherwise hasn’t made any plans yet.
******2008.6.27
讀者中可能不像我還記得Gates先生某次到台灣來
沒坐專機
"你以為我是誰? 英國女王嗎?"
之後 他身邊滿是保鑣
很少來台灣了...
The meaning of Bill Gates
Jun 26th 2008
From The Economist print edition
From The Economist print edition
As his reign at Microsoft comes to an end, so does the era he dominated
Landov
WHEN Bill Gates helped to found Microsoft 33 years ago there was a company rule that no employees should work for a boss who wrote worse computer code than they did. Just five years later, with Microsoft choking on its own growth, Mr Gates hired a business manager, Steve Ballmer, who had cut his teeth at Procter & Gamble, which sells soap. The founder had chucked his coding rule out of the window.In becoming the world’s richest man, Mr Gates’s unswerving self-belief has repeatedly been punctuated by that sort of pragmatism. But those qualities have never been on such public display as they were this week, when the outstanding businessman of his age stepped back from a life’s work.
As Microsoft’s non-executive chairman, Mr Gates will devote most of his efforts to his charitable foundation, where he will pit himself against malaria and poverty, rather than Google and the Department of Justice. To choose such formidable new foes in the middle of your life takes bags of self-belief, but it is also pragmatic—and a little poignant. Mr Gates has revelled in the day-to-day details of running his firm. To let it all go is to acknowledge that his best work at Microsoft is behind him. It is to accept that the innovator’s curse is to be transitory.
MS DOS and don’ts
As with many great innovations, Mr Gates’s vision has come to seem so obvious that it is hard to imagine the world any other way. Yet, early on, he grasped two things that were far from obvious at the time, and he grasped them more clearly and pursued them more fiercely than his rivals did at Commodore, MITS or even Apple.The first was that computing could be a high-volume, low-margin business. Until Microsoft came along, the big money was in maintaining a select family of very grand mainframes. Mr Gates realised that falling hardware costs, combined with the negligible expense of making extra copies of standard software, would turn the computer business on its head. Personal computers could be “on every desk and in every home”. Profit would come from selling a lot of them cheaply, not servicing a few at a great price. And the company that won a large market share at the start would prevail later on.
Mr Gates also realised that making hardware and writing software could be stronger as separate businesses. Even as firms like Apple clung on to both the computer operating system and the hardware—just as mainframe companies had—Microsoft and Intel, which designed the PC’s microprocessors, blew computing’s business model apart. Hardware and software companies innovated in an ecosystem that the Wintel duopoly tightly controlled and—in spite of the bugs and crashes—used to reap vast economies of scale and profits. When mighty IBM unwittingly granted Microsoft the right to sell its PC operating system to other hardware firms, it did not see that it was creating legions of rivals for itself. Mr Gates did.
The technology industry likes to sneer at Microsoft as a follower. And it is true that the company has time and again bought in or imitated the technology of others. That very first PC operating system was based on someone else’s code. But Mr Gates’s invention was as a businessman. His genius was to understand what he needed and work out how to obtain it, however long it took. In an industry in which visionaries are often sniffy about anyone else’s ideas, the readiness to go elsewhere proved a devastating advantage.
And look at what happened when Mr Gates’s pragmatism failed him. Within Microsoft, they feared Bill for his relentless intellect, his grasp of detail and his brutal intolerance of anyone whom he thought “dumb”. But the legal system doesn’t do fear, and in a filmed deposition, when Microsoft was had up for being anti-competitive, the hectoring, irascible Mr Gates, rocking slightly in his chair, came across as spoilt and arrogant. It was a rare public airing of the sense of brainy entitlement that emboldened Mr Gates to get the world to yield to his will. On those rare occasions when Microsoft’s fortunes depended upon Mr Gates yielding to the world instead, the pragmatic circuit-breaker would kick in. In the antitrust case it did not, and, as this newspaper argued at the time (see article), he was lucky that it did not lead to the break-up of his company.
Inevitability and temperament are two hallmarks of Gates the innovator. The third is the transience of all pioneers. The argument was brilliantly laid out by Clayton Christensen, of Harvard Business School. The perfecting of a technology by a well managed company catering to its best customers leaves it vulnerable to “disruption” by a cheaper, scrappier alternative that is good enough for everyone else. That could be a description of Microsoft’s Office, which now does more than almost anybody could wish for—even as Google and others are offering free basic word-processors and spreadsheets online.
Mr Gates was haunted by Mr Christensen’s insight—he even asked for his help to keep back the tide. Microsoft successfully extended Windows as an operating system for servers; it has moved into new areas, such as mobile devices and video games; and it has lavished billions of dollars on all sorts of research—without much to show for it. Despite all those efforts, the PC, Mr Gates’s obsession, has ended up as an internet terminal. The company still has everything to prove online (see article). Watching Microsoft in the company of Google and Facebook is a bit like watching your dad trying to be cool.
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