Why Steve Ballmer Failed

On Friday, when Ballmer made public his plans to retire as Microsoft’s CEO, the firm’s stock had its best day in years, rising 9%. Though stockholders should hardly be considered techies, their response sends an obvious message: they didn’t like Steve Ballmer. And it didn’t stop there, almost immediately after, internet erupted with angry messages and articles on blogs and over social media. His famous Youtube video of jumping & shouting on the stage went viral again and the comments – if he gets to read them, could be really disheartening for him.

Gates and Ballmer, the two were close friends at Harvard University, but Ballmer managed to graduate, while Gates became one of the most famous drop-outs. Ballmer was also the best man at Gates’s wedding in 1994, joined Microsoft in 1980 as operations manager, after a stint with consumer products group Procter & Gamble. It was 2000 when he took the responsibility of a CEO.

Even Paul Krugman compared Microsoft under Ballmer to a medieval dynasty that was too corrupt and complacent to fight off the barbarians. He quoted Ibn Khaldun and mentioned that each dynasty (or civilization) has within itself the seeds of its own downfall. He was referring Ballmer.

What’s success?

 

If its the capability of a leader to make money then Ballmer has been successful. In 2000, the firm made a net profit of $5.8 billion, on revenues of $23 billion. In the twelve months that ended in June of this year, it netted $21.9 billion, on revenues of $77.9 billion. Under Ballmer, Microsoft more than tripled its revenues and profits. Aren’t these good numbers? May not be according to some silicon valley analysts, however quite a decent growth according to me.

Fortunately, success isn’t measured that way! The barometer lies with the customers using the products. Success is being in the vanguard of the latest cool technology, changing ahead of time, creating & killing products with time. Microsoft, run by a business graduate (Ballmer), followed the industry & was behind technology by more than a decade – compared to folks like Steve Jobs, Larry Page, Sergey Brin, Mark Zuckerberg, and David Karp who were techies leading from front. Ballmer is also accused of missing the Search, Mobile, Apps & Tablet revolution and adamantly sticking to PCs. And today under Ballmer, Microsoft has shrunk, in that it is no longer the dominant technology company.

What went wrong?

 

This is my perception. Ballmer has been out rightly rejecting the innovations done by his rival companies & not learn from them. He laughed at launch of iPhone (video) quoting it will never be a good email machine and was against the touch screen; years later he followed Apple’s touch screen model.

Steve Jobs understood that PCs market share will soon be on a decline and people will shift over to tabs & mobiles. Ballmer was over confident about people would continue to use PCs (video) with more and more information consumption through a desktop version. Today Windows Surface tablets are stocked in Microsoft’s warehouse with no buyers, he is probably too late to sell. He was over confident with Bing (video) too

He was then in a defending mode (video) when the rivals continue to grow at a much faster pace. Accepting the reality and improving just wasn’t there..

Lack of Vision

 

Google has a history of failing more often than succeeding in their products. They launch, callback & launch again. And the ones which are not called back are the ones that make Google what it is. They are continuously innovating; products like Search, Maps, Earth, Gmail, Apps are breakthrough products; and wave, buzz, orkut is the price they paid. Google reader is a classic example of calling back a much loved product which wasn’t in sync with highest level of quality and innovation they aim at.

Apple has been breaking through its own product market winning more customers each time with millions of pre-bookings and long queues to buy their products.

Facebook is the leader already, however this doesn’t stop them from improving, launching new features and making it easier and more eye grabbing for its users.

Ballmer proved to be the anti-Steve Jobs. He missed all major trends in technology. His innovations alienated people; whenever he tried something new, like Windows Vista, the public lined up around the block. Microsoft missed social networking. It completely misjudged the iPhone and the iPad. It embraced complexity in product design just as everyone was turning toward simplicity. It entered growing markets too late. When was the last time you used Bing?

In 2000, Microsoft made most of its money selling Microsoft Office and Microsoft Windows. Today, it still makes its money that way.

Or am I completely missing how good he was all these years! Make your opinion in the comments section.

Satyam is a Consultant with Infosys Ltd. and editor / founder of marketinomics.com. When he is not talking about Digital Marketing or dreaming of CRM strategies, he can be found on a treadmill. He enjoys travelling, reading and listening to music! Catch up with him on twitter at @xatyam

Comments

comments