Agony And Ecstasy: Steve Ballmer's Years At Microsoft

Microsoft stocks surged Friday as CEO Steve Ballmer announced his retirement with no planned successor yet. You could almost get the idea that investors are happy to see him go.

However, the reality is a bit more complicated than that. Ballmer’s long history at Microsoft has been marked both by roaring successes and equally dramatic failures. 

Ballmer has served as CEO of Microsoft since 2000, but usually deferred to founder Bill Gates’ decisions until Gates left the company in 2008. In the five long years between then and now, Ballmer has manned the helm solo. Here are the best and the worst moments in his legacy.

Success: Restructured To Put Technical People In Charge

Unlike his predecessor Gates, Ballmer’s major skill is management, not technology. When he no longer had Gates’ technological know-how to rely on, Ballmer restructured the company to put technical people in management systems. 

During Gates’ time, most project managers came from the sales department. But ever since 2009, each Microsoft product group has had a techie in charge. Some of them were brought to the company, like Qi Lu, Microsoft’s Executive Vice President of Applications and Services, formerly a Yahoo! executive. Others, like Steven Sinofsky, former president of the Windows Division, worked at Microsoft for decades.

As a result, Microsoft is especially known for coordination between project groups. Rather than a hydra with many heads, Microsoft works like a merit system. For example, while Metro (Microsoft Design Language) was initially developed for the Windows Phone, its success led to it being standardized for a variety of Microsoft products.

Success: No Patience For Failure

Remember SPOT watches? The unwanted technology, which used FM transmission to deliver data to a user’s wrist watch, was an economic failure ever since Gates unveiled it in 2002. But Gates’ interest in the project kept it alive up until his departure in 2008.

It was Ballmer who finally killed sales and then killed the project altogether in 2012. Unaffected by Gates’ sentimentality, Ballmer has no scruples about cutting a project that isn’t performing. 

When the Microsoft Kin phone didn’t sell as expected, Ballmer sunset the project just a few short weeks after putting it on the market. Earlier this year, Microsoft dumped Windows 8 phones just 16 months after they came out. Ballmer isn’t afraid to retire projects quickly and ensure that Microsoft can focus its energy on what is working.  

Failure: The Xbox Is A Joke

If this article had been written a few years earlier, it might have been extolling the virtues of the Xbox 360. But ever since the Electronic Entertainment Expo in June, it’s become clear that with the advent of the Xbox One, gamers are choosing other options. 

As soon as Microsoft introduced the Xbox One to gamers, it was universally panned. The original system meant all game discs came with serial numbers, which meant gamers didn’t truly own their games, and could never sell games that were used. Gamers would have to log in to the Internet every 24 hours or render the Xbox One unusable. The Kinect, another unpopular piece of Microsoft hardware, would be a required accessory. Finally, the system wouldn’t support indie game publishing. 

Today, the Xbox One’s biggest selling point is that Microsoft has promised to undo every single promise it initially made. But it won’t be so easy to regain gamers’ trust. 

Failure: The Surface Tanked Under Ballmer’s Watch

Forget about the teetering Windows 8 for a second, which might still make it out of sheer market dominance. Ballmer’s biggest mistake as CEO has been failing to even make the Surface a marketplace contender.

The Surface ought to have been Microsoft’s answer to the success of the iPad. With a sleek interface and bright colors, it should have attracted a young audience… if not for its hefty price tag. Microsoft continues to slash prices just to empty out its inventory. In Q4, the company took a $900 million write-down loss, exclusively because of Surface.  

Microsoft may still have the desktop market cornered, but what Ballmer is failing to act on is the fact that mobile and cloud trends could soon overtake desktop altogether. Being at the top of the desktop computer market will no longer be enough.