In an entirely unexpected move, Steve Ballmer just announced that he will retire at some point in the following 12 months. Until the process of choosing the successor ends, he will continue to work and operate as a CEO continuing the plan with the transformation of Microsoft Corp. (NASDAQ:MSFT
) to a “devices and services”
Many believed Steve Ballmer will stick with the company all the way until 2018, and that did not sit particularly well with analysts and, more importantly, with the Wall Street. As Ballmer himself admitted, “My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company.”
He knew what was at stake, and it becomes apparent where the decision to step down came from. “There is never a perfect time for this type of transition, but now is the right time,”
Ballmer said in his email to all employees of the company. “We need a CEO who will be here longer term for this new direction,”
he continued the message with subject line saying “Moving Forward”
Company has appointed a special committee to seek out possible candidates for the position, both external and internal. Some people are making an argument that Microsoft is in need of an external to get inside and lead the restructuring process so the perception of the “slow moving giant”
could be broken. On the other hand, chances are someone from within the company could have a more clear vision of what needs to be done for the Microsoft to continue forward and step into something of a critical era in the IT world. Whatever the decision of the committee turns out to be – one thing is certain - there is no chance that the transformation process Ballmer began actually breaks with a new CEO. Microsoft Board accepted the plan, and it will be pushed forward no matter what.
With Ballmer being involved at the very core level and/or at least having knowledge about it all, according to Mary Jo Foley (she interviewed him quite a few times), it makes him a very hard figure to replace. What is even more surprising than his decision is that the company started the succession plans years ago (3 years, according to Mary Jo Foley). “I told Bill my decision, and he supported my decision,”
Ballmer said to Foley during a phone call. She noted that Ballmer was very emotional about the whole situation, but he thought he was doing what was right for the company. He also said the same thing in the letter to all employees, “This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most.”
Ballmer joined Microsoft in 1980, when he dropped out of the Stanford University's MBA program to help out his friend Bill Gates. The company at that point had 30 employees, and Ballmer was the company’s first business manager.
Though consumer and overly critical eyes might see the situation differently, Steve Ballmer did a great job
at Microsoft. He accepted the position after the antitrust barrage came in knocking at the company’s door, and when he assumed the position of the CEO in 2000, company was in a very bad shape. Regardless, the giant from Redmond truly managed to reach entirely new levels with Ballmer, having revenue growth from $25 billion to $77 billion in the past ten years or so. Over the past decade Microsoft also returned more than $100 billion to shareholders in stock buybacks and dividends.
Still, being a slow moving giant didn’t do well for Microsoft when the era of smartphones and tablet devices started to chow down on the sales of PCs, among other things. Another stain on the overall operations is certainly a list of good products Microsoft couldn’t find a way of selling somehow.
This could very well end as something healthy for the Redmond-based company, provided they manage to find a capable CEO. Capable, as in someone with the skill to move all the giant businesses company owns into one single spot without ruining any of them - just as Ballmer and the Board intended to do. Particular focus will likely be keeping the enterprise sector as powerful as it is, while trying to breach the mobile consumer segment – in both tablets and smartphones. Merely moments after the announcement, stock went up by 7% hitting nearly 36. Wall Street was certainly enamored with the idea that the company would march forward if he was not leading it anymore. What happens next remains to be seen.
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