Ballmer marks first year amid Microsoft transition

For some, the moment that says it all about Steve Ballmer came in a cramped conference room near the San Jose airport nearly two years ago, when the sometimes atomic Microsoft executive bellowed, "To heck with Janet Reno."

To others, Ballmer--approaching his first anniversary as president of Microsoft---represents the brains behind the marketing machine that drives the company's wildly successful products and the singular motivational voice spurring the company's internal technology development along.

This combination of schoolyard arrogance and operational savvy has helped catapult Microsoft to its position as the dominant provider of software for PCs and caught the eye of the Justice Department. But is Ballmer, 43, the executive to guide the most successful software company in the industry through one of its most important evolutions?

"[Ballmer's] the right guy for the job. He's got the right mindset, the right motivation," said Rob Enderle, an analyst with industry consultants Giga Information Group. "The question is if he's the right guy for the job after the transition."

The answer to this question is significant for Microsoft, since many view the computing industry as fundamentally changing over the next few years. The combination of a rapidly developing movement toward "open source" software such as Linux, the exponential growth of the Internet, and Microsoft's own dependency on its various versions of the Windows operating system could lead to a far different market in the coming years that may be less reliant on Microsoft's traditional strengths in software.

Since Ballmer's official coronation last July as president, perhaps his most important act has been a re-organization conducted this spring that was intended to align the company around the needs of customers, rather than specific products such as Office or the Exchange messaging software system.

"As an organization grows there is a tendency for the customer to be less central---that is a danger," said Jonathan Murray, head of a recently formed customer and product satisfaction group at the company. "That is not something we want to have happen at Microsoft."

In conjunction with that move, Ballmer placed more product and technology responsibility in the hands of the various managers under him heading specific groups, allowing them to operate in a more independent fashion.

Placing Ballmer in a more direct position to affect the performance of various business units also is intended to allow chief Bill Gates to focus on the so-called vision thing, pondering the changing nature of the PC or the proliferation of alternative computing devices, for example.

But in the short term, Ballmer's remaining tasks may be more daunting than managerial chess moves. Unresolved issues include: Making sure there are no further slips in the delivery of the long-delayed Windows 2000, an upgrade to the company's corporate Windows NT operating system; finding a new chief for the company's online businesses; and making Microsoft's technology more palatable for e-commerce tasks, a booming market in which Microsoft is thought to trail.