Why Steve Ballmer Failed
Steve Ballmer, the C.E.O. of Microsoft, announced this morning that he will retire within the next twelve months. In response, the company’s stock surged. That is not what you want to happen when you leave a large publicly traded company.
As I wrote this morning on newyorker.com, Ballmer has presided over a dramatic decline. When he took control, in 2000, Microsoft was one of the most powerful and feared companies in the world. It had a market capitalization of around $500 billion, the highest of any company on earth. Developers referred to it as an “evil empire.”
As he leaves, it’s a sprawling shadow. Look at a chart of its since then. Some of the decline is due, of course, to the tech bubble. But it still looks like a staircase heading downstairs.
Ballmer missed the big trends in technology. Microsoft's tablets haven't sold well, and they have done very little in social networking. Many of his most prominent products alienated people. Think of Windows Vista. In 2000, Microsoft made most of its money selling Microsoft Office and Microsoft Windows. Everything in technology seems to have been turned upside since then. But Microsoft still makes money the same way.
At its core, the problem is that the company suffered from the classic innovator’s dilemma. It built extraordinary software that you run on your desktop. And as we moved away from our desktops and into the cloud and onto mobile devices, Microsoft trundled slowly and tentatively. It hesitated to embrace the cloud, and it hesitated to build anything that didn’t work with Windows. The company has built a technically brilliant gaming system, the recently launched Xbox One, which is fully cloud-based—and rather separate from the parts of the company that bring in cash.
What comes next for Microsoft — an American company, founded by a skinny nerd, that provides software used around the world? One positive thing from Ballmer's reign, is that the company has, in ways, become a upstart that adds competition in consolidated markets, like search, or gaming, on mobile phones. There are still many, many brilliant people who work there. Microsoft just needs a visionary who can bring in talent, change the culture, and reverse decline. Now is a good moment for a fresh start, after thirteen years of near stagnation.
Here's the original piece: Why Steve Ballmer failed.
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11 年Every challenge is actually a good chance!
Full Time Assistant Professor of Marketing/Management at Touro University Lander College For Men and Documentary Filmmaker at “How I got a leg up: Embracing Above Knee Leg Amputation”
11 年Just maybe Microsoft's new CEO will get it--it's not about you, it's about your customers. A novel idea, especially for the Company that everyone loves to hate!
Full Time Assistant Professor of Marketing/Management at Touro University Lander College For Men and Documentary Filmmaker at “How I got a leg up: Embracing Above Knee Leg Amputation”
11 年Just maybe Microsoft's new CEO will get it--it's not about you, it's about your customers. A novel idea, especially for the Company that everyone loves to hate!
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11 年For someone to date Jerry Hall, Mick Jagger ex, I don't exactly call it a failure. ;-)