Out of Office
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Steve Ballmer will step down as the CEO of Microsoft in the next 12 months, as the company said today that it was making a transition from software “to a devices and services” company. In a letter to employees Ballmer, who joined the company in 1980, wrote, “we have delivered more profit and cash return to shareholders than virtually any other company in history.” Gates, who remains chairman of the board, will help find a new CEO; Ballmer says Microsoft is “well down the path” in that search.
Revenue tripled under Ballmer, but the stock has underwhelmed; it shot up 7% today on the news that he was leaving. Ballmer’s tenure was marked by very public swings at consumer and tech relevance that missed. Microsoft and Intel, Derek Thompson writes, saw “their global market share of operating systems fall from 96% around 2000 to 35% in 2012.” And unlike Apple and Google, Microsoft botched the transition from desktop to mobile and tablets. Take the Kin phone, for example, which Microsoft spent two years developing; it was pulled in 2010 after just two months, with fewer than 10,000 phones sold. Ballmer’s various exuberant conference-freak outs, meanwhile, have millions of views.
Anil Dash tweeted that Ballmer’s “biggest flaw was not realizing Microsoft needed to exist in pop culture, with an iconic leader and clear story for non-techies.” Ballmer famously said in 2007 that “there’s no chance that the iPhone is going to get any significant market share. No chance.” Nicholas Thompson sees Ballmer’s mistakes as even more glaring:
He missed every major trend in technology. His innovations alienated people. When he tried something new, like Windows Vista, the public lined up around the block to trade it in. Microsoft missed social networking. It completely misjudged the iPhone and the iPad. It embraced complexity in product design just as everyone was turning toward simplicity.
Timothy Lee is more sympathetic: while Ballmer wasn’t one of history’s great tech execs, Microsoft was a victim of its own enormous profits. Microsoft couldn’t just give its OS away for free, as Google and Apple did, Lee adds, if it made billions charging for it.
Ballmer’s management has also been the object of scorn — particularly the practice of “employee stacking.” Matthew Klein wonders why Microsoft’s stock price hasn’t budged, even as the company’s paid out billions in dividends, and chalks it up to management. Microsoft is run like it’s “a very profitable utility,” he writes, “not a company that is a groundbreaking innovator.” — Ryan McCarthy
On to today’s links: