If Ballmer bolts, who will lead Microsoft?
"Hey! Ho! Time for Ballmer to go," a Wired.com headline proclaimed on April 29.
My rejoinder: "Hell, no. There are no Softies ready for a promo."
Wired's story attempts to make a case for CEO Steve Ballmer taking the hits for Vista's less-than-stellar market reception, as well as the so-far-unconsummated
There's just one problem, as Wired notes in an aside. No one's ready to step up within the company and fill Ballmer's big shoes.
In my new book on Microsoft's future, entitled Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era, I make a similar argument.
When Chairman Bill Gates hangs up his day-to-day hat on June 30, it will be an all-Ballmer, all-the-time show. And there's no heir apparent inside the company to Steve B. Given this void, Microsoft needs Ballmer to stay at the top, at least for the foreseeable future, for continuity and leadership reasons, if nothing else.
Up until now, Microsoft has been a company where science mattered more than sales. Specifically, Gates valued technology more than marketing and built Microsoft to reflect his priorities. Gates' tech vision was evident through the people Microsoft hired and promoted, the projects that got funding, and the amount of commitment the company put behind various initiatives.
The balance of power is set to change drastically, come this summer. And while Ballmer is no technical slouch, he admits that "one of the biggest mistakes I've made over time is not wanting to nurture innovations where I either didn't get the business model or we didn't have it."
In the brave, new post-Gatesian world, who's poised to lead the company? Who is on the fast track at Microsoft these days? Who are the up-and-coming superstars likely to take charge during Microsoft's next 10-plus years? I've asked various Microsoft watchers, partners, customers, and employees these questions, and the fact that few could come up with any immediate suggestions says volumes.
Five years ago, back in 2003, Business 2.0 magazine compiled a list of the 10 most promising rising stars at Microsoft, a group the publication dubbed "The Baby Bills."
Indicative of how quickly things change, that list looks obsolete today. Some of Gates' potential heirs-apparent have left (or been forced out of) the company; several others have been pushed into less visible jobs at Microsoft. The Softie who many thought would be a shoe-in successor to Gates--Eric Rudder--has retreated from a visible position running Microsoft's Server and Tools business, to working in a research incubator while plotting his next move.
Here's a snapshot of the Business 2.0 Baby Bill Class of 2003 and what each of these execs is doing today:
Eric Rudder--Then: senior vice president, Servers and Tools. Now: Allegedly working on a secret distributed operating-system project under Chief Research Officer Craig Mundie.
Chris Jones--Then: corporate vice president, Windows Client Group. Now: corporate vice president of Windows Live Experience Program Management.
J Allard--Then: corporate vice president, Xbox Platform. Now: corporate vice president, Design and Development, Entertainment and Devices Division.
Yusuf Mehdi--Then: corporate vice president, MSN Personal Services and Business Division; and later, chief advertising strategist. Edged out of advertising management as a result of the aQuantive purchase and subsequent Microsoft realignment. Now: senior vice president of Strategic Partnerships.
Steven Sinofsky--Then: senior vice president, Office. Now: senior vice president of Windows and Windows Live Engineering.
Martin Taylor--Then: platform strategist (and Ballmer's chief of staff). Fired by Microsoft allegedly for a company policy violation. Now: operating principal, Vista Equity Partners.
Tami Reller--Then: corporate vice president, marketing and strategy, Business Solutions. Passed over for job running Microsoft Business Solutions unit. Now: chief financial officer, Platforms & Services Division.
From the original "Baby Bills" short list, Allard, Jones, and Sinofsky remain among the core group of influencers at Microsoft (and of these, Allard's current role is rather sketchy, as Rick Thompson, not Allard, is the Zune king at the company).
Along with the three Microsoft presidents--Kevin Johnson, head of Platforms & Services; Jeff Raikes (who will be replaced this fall by Stephen Elop--the head of Business Systems); and Robbie Bach, head of Entertainment & Devices--along with Chief Software Architect Ray Ozzie, there are a handful of Microsoft managers whose strategies and thinking will help Microsoft make--or miss--a transition into its next phase as more of a software and service provider.
Are any of these individuals next in line to succeed Ballmer? Many Microsoft watchers are doubtful that Ballmer and the board will go inside to find the next Microsoft leader. I tend to agree. Next time Microsoft needs a CEO--which could be at any time the 52-year-old Ballmer decides he's finally had enough--the company might look outside, rather than inside, for fresh top management blood. (For the record, Ballmer has said he plans to stick around at Microsoft for close to a decade or longer--at least until his youngest son is in college.)
What about Ozzie? My gut is Ozzie wants to retreat even further behind the scenes than he is already. The last thing he wants is an OzzieSoft with him anointed as the "next Bill Gates."
Not everyone at Microsoft is quite as shy and retiring, however. Here are some of the young (and not so young) Turks bucking to influence Microsoft's near-term, post-Gates directions:
J Allard: The closest thing that Microsoft has at the executive level to a hip exec able to appeal to the all-important 16-to-34-year-old mountain-bikeriding, gaming-savvy geek demographic. Allard is a 15-year Microsoft veteran. But what's Allard's job these days? In spite of his lofty-sounding title of corporate vice president, Design and Development, Entertainment and Devices Division, no one really seems to know what Allard is up to these days. Plus, Allard is much more of a "Bill guy" than a "Steve guy."
Craig Mundie: Chief Research and Strategy Officer Mundie is seen as the No. 2 technology guy at Microsoft. But according to recent rumors, Mundie is none too happy about living in Chief Software Architect Ozzie's shadow and is looking for a way to climb his way up the corporate ladder. Mundie's been way more visible than Ozzie lately on the speaking circuit and is championing Microsoft's move to multicore, among other strategic hot spots.
Satya Nadella: Sixteen-year Microsoft veteran Nadella has trod a long and winding road inside Microsoft. Nadella currently is corporate vice president in charge of Microsoft's engineering team for Web search, advertising, and commerce--aka, the Windows Live Search, Microsoft adCenter, and subscriptions/points/billing platforms. What will Nadella's role be if MicroHoo comes to pass? Unclear.
Steven Sinofsky: Steven Sinofsky runs engineering for two key teams at Microsoft: Windows Client and Windows Live. He was moved into this role in 2006 for a reason--Microsoft's top brass were tired of being hurt and embarrassed by Microsoft's ongoing failure to release products on a timely basis. So far, Sinofsky's been able to maintain radio silence on most of the projects (Windows 7, IE 8, etc.) he's spearheading.
Kevin Turner: The former Walmart CIO currently runs field sales and marketing, product support, customer support, branding, advertising, public relations, marketing research, corporate operations, and internal IT at Microsoft. In short, he's one of Microsoft's chief ambassadors to the outside customer world, as well as the uber-boss of nearly 40,000 of Microsoft's 80,000 or so employees.
Even though some shareholders (including some of Microsoft's own employees) believe a change in leadership is what's needed to keep the company relevant in the next five-plus years, it doesn't seem as though Ballmer or the bulk of his inner circle"--aka the "Senior Leadership Team"--is going anywhere. Sometimes, no move just might be the best move.
I think someone less business oriented would be better. Would Ballmer be a good head of a company? Sure.... Would he be good as the head of Microsoft? I doubt it. I'm just going by the guys track record and some of the outrageous thing's i've heard him say in the past...
1. Revenue in 2000 (Before Steve Ballmer) was $22 Billion, in 2007 (Last fiscal year with Steve Ballmer) was $51 Billion. That's approximately an 11-12% compounded annual interest rate, which considering the economic conditions of the past 4-6 years, that?s not too bad. It?s not in the same range as Google, but that?s comparing apples to oranges, as Google is a fraction of the size of Microsoft and when Microsoft was a similar size, it too grew at a rapid rate. That?s not taking anything away from Google, which is a great company, but you can?t compare growth rates of smaller cap companies to larger cap companies, because larger cap are harder to grow at astronomic rates, but also generally carry less systematic risk.
2. Revenue increased in every year that Steve Ballmer was CEO, something that can?t be said for a lot of companies, particularly technology companies in the post 2000 bubble burst.
3. Steve Ballmer made some large and needed acquisitions (i.e. Great Plains, Fast, Aquantive, Navision, Tellme, and probably Yahoo! ) to diversify and expand Microsoft revenue mix. Ballmer recognized the need for Microsoft to diversify and took bold steps to do so. This shows leadership and the ability to take calculated risk. He was willing to pay a premium, but not exorbitant, to close a deal. He had the patience and fortitude not to overpay.
4. Changed the company culture to make it more competitive, more nimble, and business focused
5. Hired key industry players, but wasn?t afraid or too stubborn to admit when he made mistakes
6. Demonstrated willingness and leadership to restructure the company - to refocus the company and move talent where it could be better utilized or more effective
7. Implemented the quarterly dividends, something Microsoft was historically against, but was needed for shareholders
8. Returned significant excessive capital back to the shareholders in the special one-time dividend
9. Launched SharePoint in 2003, which has grown to over $1 Billion, making it the fastest growing product in Microsoft ?s history.
10. Launched XBox which has been a success in the market place
I agree the stock performance has been lackluster (until the past year), but let's not forget the P/E was 53-55 in 2000, which was grossly out of proportion. The market cap needed to catch up to the earnings and revenue to more accurately reflect fair value. The profit margins were also hurt by the huge sums of money that were paid out for patent infringements, legal fees, and anti-trust violations. Most, if not all, of which predated his reign at Microsoft.
With that said, I wouldn?t say Steve Ballmer performance has been perfect. He has made more than his share of mistakes (i.e. product delays, emotional outbursts), but to call his performance terrible or to say he hasn't been the right person for Microsoft, is simply factually inaccurate. He still has a job because he has the board?s confidence and probably is the right person for Microsoft. Sure it?s fun to bash Microsoft and Steve Ballmer, but let?s keep in somewhat rational and objective.
refuses, the Board should fire him:
Consumer markets: Time for Microsoft to exit?
http://counternotions.com/2007/10/12/microsoft-vs-
consumers/
Unless we're discussing the Science of Antitrust Violation, or the Science of Idea Theft, we simply aren't discussing the same Microsoft.
Maybe you can try that line with folks who either don't know any better, or whose careers are too invested in Microsoft to even think of saying anything else.
/P
He's really technical.
He picked netbui over tcp/ip.
He picked collaborative multi tasking over SMP.
No overlapping windows.
Blackbird over the Web.
...
Vista
Every time there was a decision to make, which required technical guts or deep understanding. He picked the right one.
We in the technical community were just wrong.
What do we know. Maybe to pick technology but surely not how to market it. Uuups wrong again, since Bill is the technical guy we must be marketing.
But it is your opinion and that's all it is. We have to respect your right to have one.
(BTW: your comment fits the classic definition of a troll posting. You might want to consider that next time.)
continue to wear her Spandex outfit!
It's finding someone to fill his Big Pants what'd be difficult
;-)
They are a 90s paradigm with admittedly heaps of momentum and support from people who have no vision.
"In my new book on Microsoft's future, entitled Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era, I make a similar argument."
This seems to make it pretty clear to me that the entry was meant to advertise their new book, not actually offer a debate or news information.
Regardless of the content provided, advertising belongs over in the advertising frame of the screen and not in the news content side.
Just my opinion for CNET.
/P
I am confident that there will be a growing of the company all the while he keeps spending like Paris Hilton with dad's credit cards......
Most others listed in the article have been considered and dismissed; some were never really considered internally, more so by the 'Microsoft watchers'.
SteveB, love him or hate him, understands Microsoft better than anyone; including BillG, who has taken a back-seat role for the past 10-years.
The issue to me was never Steve, but the general level of talent in the 2 layers of management below him. This became a huge exposure from 2001 as Steve could no longer manage everything in the company quite so closely.
Microsoft is in for a very bad hair day!
Just because there are no "suitable" candidates by whatever standard of measure they are using doesn't mean that there isn't a great candidate already working at MS who can do the job, do it well, but isn't in the right spot to be recognized as the talent they are.
Pedigrees don't run companies. People do. Find the people, not the laurels.
Besides, the janitor could do at least as well as monkey boy, who was never qualified in the first place.
Jim Alchin might have been a good CEO since he could actually see the disaster MS was heading into with Vista and their general attitude.
Ballmer said if they got enough feedback from customers about XP they would keep selling it. Hmm - class action suit, nearly 200,000 people taking the time to sign an online petition, tremendous drop in OS sales in the last fiscal year, vendors wanting to keep selling XP, people using the Vista license to upgrade to XP, bad press reviews, bad acceptance by the IT community, vendors wanting to get out of the Vista only contract when Vista was first released - Ballmer it is a good thing you aren't responsible for being a 911 operator - I don't think you could hear a request if someone had a bullhorn to your fat head.
We recognize his hand in Vista only sales with many hardware manufacturers (which they later revolted against as saled dropped), his vista compatable nonsense (only MS OS to have a major class action law suit to the best of my knowledge), his eroneous sales numbers that don't include people who opted to upgrade to XP if they had a Vista license, etc. etc.
Now he's getting his cake with Dell and others reporting Vista sales numbers even when supplying a system with the far superior XP OS.
Bill listened - something ballmer is too thick to accomplish. I'm not saying Bill was a saint but I think he was a very good leader for MS. Ballmer is an angel (complete with leather wings and a pitch fork though).
Frankly a bag of fertilizer although having many things in common with Ballmer would be a nice step up - why not someone who is about the technology.
Sadly if Ballmer had listened, he could just offer Windows 2008 workstation based on Windows 2008 server which is based on Vista SP1 to consumers and people would be much happier. 2008 is much zippier and I'm not sure why since it shares much code with Vista, it actually performs like XP but with some updated code.
Creeps in this petty pace from day to day,
To the last syllable of recorded time;
And all our yesterdays have lighted fools
The way to dusty death. Out, out, brief candle!
Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury
Signifying nothing.
Clearly when I think full of sound and fury but signifying nothing - Ballmer comes to mind.
He is a bully with a giant playground full of people to pick on. His ginormous ego will hurt MS in the long run. He's probably delighted that Dell and others will sell XP on their systems but report it as a Vista sale. He now gets more eroneous numbers to boost his claimed sales of Vista and Dell isn't hurt by the overwhelming preference for XP as an OS. I'm sure Bill has quite and ego but he kind of deserves it but even Bill stepped away from things like Bob, Windows ME, Clippy and moved forward.
Ballmer's ego prevents him from being a good leader - ego and confidence are NOT the same.
It certainly is irrelevant whether I like the fact that MS was convicted of Anti-Trust. I never said I did or didn?t ?like? it.
The post I replied to was saying Microsoft does not innovate. I disagree. I cited a few products I think are cool...you may disagree. Live Mesh is another one I like.
- Balmer will never leave, too much money to be lost
- by Kainchild May 3, 2008 3:19 AM PDT
- He'll never leave. Instead expect to see more watered down versions of Windows with their features being spread throughout dozens of different versions while forcing the consumer to buy each one or face punishment of not getting updates for that version of Windows. I bet we won't even see a new filing system until maybe three versions into the future.
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- Perhaps not
- by The_Decider May 3, 2008 10:16 AM PDT
- His insane desire to compete with a company in a totally different market than MS(Google) has pushed him to the brink of destruction: going into debt for the huge, slow and pointless Yahoo.
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(41 Comments)At least with Gates, you got the whole package when you bought one windows operating system. I think he should change his name to Ballsmer. It fits.
I think he wants out soon, but doesn't want to leave MS while it is still standing. So in one insane deal he can walk away from the ashes.