Microsoft’s outgoing CEO deserves credit
INVESTORS cheered Steve Ballmer’s decision to step down as CEO of Microsoft. The share price leapt by more than 7% on the day of the announcement that he would leave within the next 12 months, once a successor had been identified.
Most critics said that, at best, Ballmer had a chequered record running the world’s largest software company, whereas others said the board should have given him his marching orders years ago over missteps such as the Zune MP3 player and the company’s inability to make much headway in smartphones next to Apple and Google.
Others are even more biting in their criticism, pointing to a “lost decade” under Ballmer. That is really overstating things. Since the Harvard University graduate took the reins from his pal Bill Gates in 2000, he has overseen a spectacular expansion in Microsoft’s fortunes.
Between 2000 and 2012, revenues climbed by 220%, from $23-billion (R237.4-billion) to $73.7-billion. Net in-
He wanted to take on everything, even when that was not the wisest course
come in 2012, excluding a one-off goodwill impairment, was $23.2-billion, up by 147% from 2000’s $9.4billion.
The share price has not followed suit, but most people who criticise Ballmer for this forget that the company has paid more than $64-billion in dividends in the 10 years since 2003, when it declared its maiden distribution to shareholders.
Also, when Ballmer took over, the share was hugely overvalued as a result of the internet bubble.
Microsoft’s market capitalisation peaked at $616-billion in December 1999. The only other company to surpass that number — and only briefly — was Apple in 2012.
Ballmer is easy to dislike. He is brash, loud, volatile and in-your-face.
He once threw a chair across his office and launched into a profanitylaced tirade when a top Microsoft engineer announced that he was resigning to join Google.
Ballmer bellowed about Eric Schmidt, the search engine’s CEO at the time: “I’m going to f*****g bury that guy. I have done it before and I will do it again. I’m going to f*****g kill Google.”
I interviewed a (thankfully) much calmer Ballmer in the mid-2000s. He was in South Africa to talk to cus- tomers and meet Microsoft’s partners here. He did not lob any chairs around, but he was still intimidating.
I had done my homework and was armed with a list of carefully crafted questions. The interview lasted almost an hour.
Ballmer did not take his gaze from me once. And he was ready for every curve ball I could throw at him.
“Who said it’s a mature product?” he barked at me when I asked how he had convinced business customers to keep upgrading Microsoft Office.
“Office isn’t mature,” he insisted repeatedly, refusing to entertain my suggestion that it was.
I left that interview convinced that I had just spent time with the world’s ultimate salesman, someone driven by a burning passion to close the deal, to win big.
And that is certainly the way Ballmer has run Microsoft. Most CEOs facing a thoroughly dominant competitor like Google might choose to give up the fight and find something easier to chase.
Not Ballmer. Microsoft continues to pump cash into its loss-making Bing search engine with little or nothing to show for it. To what end? Why not sell Bing and concentrate on areas in which Microsoft has real advantages, such as in home entertainment with its Xbox console?
Perhaps that has been the fundamental problem with Ballmer’s tenure — not his tactlessness and abrasiveness, but rather the fact that he is a salesman first, not a technologist or innovator like Google’s Larry Page or Apple’s Steve Jobs.
He wanted to take on everyone at everything, even when that arguably was not the wisest course.
It led to some big hits — Xbox comes to mind, but there have been others — along with some ugly misses like the Zune.
To suggest that Ballmer was a failure is to do the man a disservice. He did not always make the right decisions, but whoever succeeds him is certainly not inheriting a turkey.
McLeod is editor of TechCentral.co.za. Follow him on Twitter at @mcleodd