As a fan of Apple, and most everything they do (yes, I disagree with some things), I’ve always liked that company’s arch-nemesis- Microsoft CEO Steve Ballmer. He’s loud, boisterous, and at times obnoxious, but for some reason he seems likable.
Now, that doesn’t necessarily make him a good CEO. During the 2000s he ran the company fine. Microsoft, sitting pretty from the 90s, was able to sail on through the past decade, milking profits from two products- Windows, and Office. And that was fine. Apple was still trying to get a foothold in the PC market, and began to diversify(read: iPod, iPhone). This is where Microsoft got into trouble.
Ballmer, and for that matter the whole executive team at Microsoft, were stuck in their ways, and couldn’t get out. They attempted to dip into the music player market several times. First with the PlayforSure initiative, and then with the Zune. Both duds. For whatever reason, Microsoft can’t do hardware. (They sunk billions into the Xbox to make it a viable product, a success most companies can’t afford.)
That leads me back to Ballmer, and Microsoft. They’re still hugely profitable, but in an aging market. In new areas such as mobile phone and tablet operating systems, they have little and nothing to offer. Yes, Windows Phone 7 is very nice, but it’s not catching on in the market. They’re scrambling to make something happen.
It appears Microsoft, with Ballmer at the helm, doesn’t know what to do next. Just like Apple of the early 90s, they’re stuck in their ways, and the industry is passing them by, in a technical sense at least.
So, there have been rumblings in the past few years, that Ballmer needs to go. He doesn’t know how to compete when Microsoft isn’t dominant. The company and their investors are panicked. One big investor has even suggested that Microsoft should boot Ballmer. Expect to hear more outcries like this. Especially since Microsoft stock has remained stagnant for a decade.
So, Microsoft is still in good shape, and they will be for some time. They need to act, but with competitors like Android, which is free for any mobile maker to adopt, and iOS which owns the majority of mindshare these days, Microsoft has a tough battle ahead, and I’m not sure backward-thinking Ballmer is the man to fix the problem.
The thing is, Ballmer and Microsoft seem to be spinning their wheels, and trying to get the proverbial toothpaste back in the Windows-based tube. Microsoft needs to decide if they are a software company or a “Windows” company. And they need to do it in a hurry. Shoehorning a mouse-driven OS on a tablet, as Microsoft did in the early 2000s with their disastrous tablet initiative, isn’t a winning strategy.
Besides, with Ballmer making premature announcements regarding Windows 8, he’s on thin Ice. But, to remove Ballmer would be an admission of failure, and since Bill Gates still controls the board, it would be an admission that he failed as well. Besides, they are friends, and to remove Ballmer would be a hard thing to do. That’s not to say it wouldn’t be a smart business decision however.
On the flip side, as Apple and Google begin to eat Microsoft’s lunch, Ballmer only knows how to compete with a like-minded company-Google. That’s why he bought Skype, so Google couldn’t. It wasn’t an acquisition that they needed, or one that adds much value, but they were afraid that Google was going to grab them, swallow up their user base and integrate them into their own user-base. Something that Microsoft couldn’t afford to let happen. It would kill Microsoft’s Live Messenger and other offerings in one acquisition.
In short, Microsoft isn’t in trouble now, but the writing is on the wall. They need to do something to future proof the company. It’s always easy to fix someone else’s problem looking from the outside in, but it’s apparent there are problems in the company. Plus, their company culture, that was built up over their heyday in the 90s and 00s, won’t allow them to admit a mistake, and they may be riding it to the bottom.