Two major figures from Microsoft’s glory days have “drifted apart.”
Steve Ballmer said his decision to push Microsoft Corp. into the hardware business contributed to the breakdown of his relationship with longtime friend and company co-founder Bill Gates. Ballmer’s only regret: not doing it sooner.
Ballmer, who was chief executive officer of Microsoft for 14 years, told Bloomberg Television this week that if he could do it all again, he would have entered the mobile device market years earlier. When he finally did, Gates and other members of the board disagreed, he said.
Ballmer, now owner of the NBA’s Los Angeles Clippers, said he and Gates have “drifted apart” partly due to a disagreement over whether Microsoft should make its own handsets and tablets.
“Towards the end, that was a bit more difficult than not, particularly with the strategic direction change and you know, the stock price isn’t going anywhere, so the rest of the board felt pressure — despite the fact that profits were going up — so I think you had kind of a combustible situation,” Ballmer recalled.
“There was a fundamental disagreement about how important it was to be in the hardware business. I had pushed Surface. The board had been a … little reluctant in supporting it. And then things came to a climax around what to do about the phone business.”
Microsoft entered the market in 2012 with the Surface RT, a tablet that sold poorly. Now, under CEO Satya Nadella, the Surface business is profitable.
Ballmer said the mistake was getting into handsets and tablets too late.
“I would have moved into the hardware business faster and recognized that what we had in the PC, where there was a separation of chips, systems and software, wasn’t largely gonna reproduce itself in the mobile world,” he said.
What about Ballmer’s quote in which he said Apple’s iPhone would never sell because of its price? He wishes he’d realized how Apple was going to make it work — through mobile carrier subsidies.
“I wish I’d thought about the model of subsidizing phones through the operators,” he said. “You know, people like to point to this quote where I said iPhones will never sell, because the price at $600 or $700 was too high. And there was business model innovation by Apple to get it essentially built into the monthly cellphone bill.”