The Shareholders React To Microsoft’s Steve Ballmer’s Retirement Plans

I saw the tweet first from Paul Thurrott and Mary Jo Foley was next.  According to a Microsoft press release:

Microsoft Corp. today announced that Chief Executive Officer Steve Ballmer has decided to retire as CEO within the next 12 months, upon the completion of a process to choose his successor.


Let’s give Ballmer some credit before I stick a stake in him.  He managed Microsoft through a very difficult post-Gates era.  It’s never easy to play Steve Young to Joe Montana (to follow a legend), as Tim Cook is finding out.  Add on top of that the DOJ trying to force your company to split up and the EU suing you over everything your predecessor decided.  Then there was Vista … and the excellent Windows 7 was produced.  Microsoft’s cloud services have, after a ropey start on BPOS/Office 365 (the licensing model was changed to suit the partners that sell/implement this stuff) and Azure (they finally gave us the infrastructure services people want instead of PaaS), started to take off, joined hand-in-hand with on-premises infrastructure.  In the enterprise, SQL now fights fair against Oracle.  Hyper-V squares up against VMware.  And an enterprise management/cloud solution was grown to a mature and scalable level from nothing.  And we cannot forget that the company has diversified to have over a dozen $1 billion businesses.

But then the devices debacle happened (or didn’t).  Surfaces that no one wanted were produced, shelved, and discounted for nearly $1 billion.  The Windows 8 GUI remained unchanged for nearly a year despite overwhelmingly negative criticism, while Ballmer pulled a 3 wise monkeys.  And I have mentioned some quality issues, which need some correction from the top-down.

This retirement is a very good thing in my opinion.  Certain things have been worrying me about Microsoft in the last few years.  Several years ago I blogged that Ballmer needed to take heat over the lack of a Windows tablet – I was even on the “put Windows Phone on a tablet” band wagon.

The share holders agree: Business Insider reported (at the time of writing) that:

And the stock is surging, up over 8% pre-market.

A camp of shareholders have been quite vocal about trying to get rid of Steve Ballmer.

Timing-wise: Windows 8.1, System Center 2012 R2, and Windows Server 2012 R2 are as much as done with the release date on Oct 17th/18th, depending on product and your time zone.  Microsoft should have held off on the announcement for another few days (maybe there was a leak that accelerated things?) because they could have completely stolen the thunder of VMworld next week.  My prediction is that Steve Ballmer will step down at WPC 2014, handing over the mic to his successor.

Speaking of which

The Board of Directors has appointed a special committee to direct the process. This committee is chaired by John Thompson, the board’s lead independent director, and includes Chairman of the Board Bill Gates, Chairman of the Audit Committee Chuck Noski and Chairman of the Compensation Committee Steve Luczo. The special committee is working with Heidrick & Struggles International Inc., a leading executive recruiting firm, and will consider both external and internal candidates.

“The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.”

“As a member of the succession planning committee, I’ll work closely with the other members of the board to identify a great new CEO,” said Gates. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

My preference would be someone who spans marketing and technology.  It’s time to polish the rough edges from consumer products.  I’m not talking a MSFT marketing person who plans bad advertising campaigns.  A person who understands the desires of the customer is required.  The heart and the genius of Microsoft are the technologists that drive product.  That must be continued to be nurtured and wrapped in the fine veneer that a consumer expects, and partnered with quality control.  I really really home that we’re not going to see Julie Larson Green in job in a years time.

And that’s the news from a damp Friday afternoon in Dublin, which is probably the same in Redmond Smile


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