Retiring Microsoft CEO Ballmer ‘missed a few turning points’

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Posted: Saturday, August 24, 2013 12:00 am

Microsoft’s Steve Ballmer, who announced Friday that he will retire within a year and after more than a decade as CEO, has been at the helm as the world’s largest software maker struggled to adapt to the shift away from personal computers and toward mobile devices,

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer wrote in a memo to employees Friday that was posted on Microsoft’s website. “We need a CEO who will be here longer term for this new direction.”

Ballmer took over the CEO role in 2000 from Gates, one of his schoolmates at Harvard University. While Ballmer had a boisterous style that made him legendary at company presentations, he largely remained in Gates’ shadow. Ballmer wasn’t seen as possessing the same vision for technology or the ability to anticipate changes in the industry, said Richard Williams, an analyst with Cross Research in Millburn, N.J.

“Ballmer was more the executive than the visionary, and he missed a few turning points that visionaries wouldn’t have,” Williams said.

Microsoft has lost almost half its value under Ballmer’s leadership, and the shares haven’t closed above $50 since his first year on the job. The company’s latest computing operating system, Windows 8, also hasn’t spurred the comeback that executives were aiming for.

“He’s become a lightning rod for frustration over Microsoft’s lack of progress in mobile and Windows 8,” Williams said.

Unlike Gates, who dropped out of Harvard to start Microsoft, Ballmer stayed in school and received a degree in applied math and economics. He then joined Microsoft in 1980.

Still, the company’s swift rise to PC software dominance in the 1980s and ’90s made Ballmer a billionaire. His net worth is $16 billion, compared with $71.3 billion for Gates, the richest person in the world.

“This is a time of important transformation for Microsoft,” Ballmer wrote in the memo. “This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love.”

He said he plans to continue as one of the company’s largest owners. Ballmer is the company’s fifth-largest shareholder, with a 4 percent stake, according to data compiled by Bloomberg.

As demand wanes for PCs, the July management shakeup sought to turn away from Microsoft’s original focus on “putting a PC on every desk in every home,” Ballmer wrote in a memo at the time. PC shipments fell about 11 percent in the second quarter, for a record fifth straight quarter of declines, according to market research firms IDC and Gartner Inc.

“Ballmer did a very good job turning Microsoft from a bloated monstrosity into a much leaner and meaner machine over the last few years,” said Microsoft investor Michael Obuchowski, a portfolio manager at North Shore Asset Management LLC in Cold Spring Harbor, N.Y.

“However, despite the improved operations and much better quality of programming, Microsoft was severely lacking a comprehensive vision that would have allowed the company to stay ahead of the trends.”

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