Microsoft CEO Steve Ballmer to depart within a year

27 August 2013

The chief executive officer (CEO) of Microsoft, Steve Ballmer, is to step down after informing staff in an internal email last week that he will be leaving the company within a year and admitting that “there is never a perfect time for this type of transition, but now is the right time”.

Ballmer has been in charge at Microsoft since the turn of the millennium but after 13 years as CEO, and a disappointing share price that has angered some investors who accuse the tech giant of failing to adapt quickly enough to the mobile era, he is leaving. The 57-year-old said in his leaving letter to staff that it was in the “best interests of the company I love”.

The launch of the Windows 8 operating system (OS) and the Surface tablet was intended to try to rectify the mobile oversight and ensure that Microsoft was not left as ‘just’ a PC software manufacturer. Apple, Google and others increasingly dominate the mobile computing era with iPad, iOS and Android garnering more and more customers and ‘fixed’ PC-based computing - Microsoft’s strength - declining.

The Surface tablet was the first hardware device Microsoft had produced for years but sales have been disappointing with a $US900m writedown announced in mid-July amid a poor earnings report. The Windows 8 OS has also attracted criticism from consumers wedded to the traditional OS and especially those pining for the ‘Start’ button, although it has a difficult job to bridge PC-based usage with mobile usage.

News Analysis
It seems that the attempt to restore Microsoft to its former pre-eminence among consumers has failed and cost Ballmer his job. It is not clear yet who will take over as CEO but the company’s founder and guiding light, Bill Gates, will be heavily involved in the decision and have to take time out from his philanthropy to replace the man he has been working with for 33 years in helping to build the company and perhaps refocus it on business, not consumers.

Microsoft is still very strong in its traditional and lucrative PC market and most software in this space still relies on the tech giant, so the firm has considerable existing strengths. The problem is that this is a declining market as mobile computing and on the go devices proliferate, especially among young consumers who scorn a laptop for an iPad. Squaring this circle will be the challenge for Ballmer’s successor.

Some of the possible internal candidates for the CEO position have already left Microsoft with Windows head, Steven Sinofsky, departed and the leading software architect Ray Ozzie going back in 2010. The replacement planning committee will be led by John Thompson, ex-chief of internet security firm Symantec, who’ll work with the recruitment firm Heidrick & Struggles International in identifying Ballmer’s successor.

Whoever comes in a takeover move for Nokia must be considered a strong possibility. Making the handset maker that abandoned its Symbian mobile OS and adopted Microsoft's Windows Phone tile design OS instead, the precursor to Windows 8, a full partner in the dash for a mobile foothold has to be on the cards.

Over the summer Microsoft said it would break up its eight business lines up in favour of four new ones focusing on engineering and encourage collaboration across the company. The divisions are expected to focus on OS’, mobile apps, cloud technology and devices, a move away from Ballmer’s strategy.

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