Since Bill Gates left Microsoft to Steve Ballmer - his college buddy from Harvard - back in 2000, it hasn't done so well. Missteps include Vista, the Windows Phone, Zune, and now Windows 8 and the Tablet: the list of failures is far longer than successes. The greatest hit has been the XBOX (a classic Microsoft business play by re-purposing Windows in a locked-down PC format and adding the Halo - originally Marathon franchise - content from their Bungie acquisition) and, hmm, I can't think of much else truly great. Oh yes, parts of the Dynamics suite seems to be doing well! And XP was good. So what's next for the company?
Since CEOs are always measured against stock performance - here's how some big firms have performed over the past 10 years (between 8/18 2003 and 8/19 2013). Stacked against other big software and internet names, here's what the numbers look like:
- MSFT + 23.5%
- AAPL +4,718% (yes, that's up over four thousand percent!)
- ADBE +144%
- GOOG +707% (since Aug 19, 2004, their IPO)
- IBM + 123%
- ORCL +163%
- S&P 500 +67%
- SAP +165%
- YHOO +75%
Even little old Yahoo performed 3X better than MSFT… ouch.
The article mentions that "Since Ballmer owns some 333 million shares, news of his retirement actually boosted his own net worth by about $1 billion." Nice retirement bonus!
The article also mentions that "Steve Jobs nailed it a few years ago in an interview - when he called Microsoft increasingly irrelevant. "When the sales guys run the company, the product guys don't matter so much, and a lot of them just turn off," Jobs said. "It happened…when Ballmer took over at Microsoft." Then he noted, presciently, "I don't think anything will change at Microsoft as long as Ballmer is running it.”
It's unfortunately all too easy to make fun of Microsoft's products in general these days - and it is always hard to be a leader. It's far easier to copy (ahem, acquire) and add incrementally. Witness Toyota. In their defense, MSFT has so many agendas and strategies - front office (MS Office) - back office (.NET) - consumer (XBOX and games) - phones etc. How can you maintain any team direction across all that? Look at their competitors on the list above - many of them are far more fairly narrowly focused - by comparison. (Excluding IBM of course...)
So what might happen? Maybe a new CEO will be able to do something really creative with their "ERP Light" offering - Dynamics - I've heard good feedback about parts of it (AX) and negative comments about other areas (the Great Plains derived portion).
In closing, remember that we all do need a powerful Microsoft - powerful because of creative solutions delivering outstanding value to users, not just powerful as in monopolistic and competing via feature overload.
So, here's wishing Mr. Ballmer a most enjoyable retirement and best of luck to Microsoft. We hope you find an insanely great innovator to lead and inspire the company.