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Posted by JP Gownder on August 23, 2013
Microsoft CEO Steve Ballmer announced today that he will be retiring within 12 months. My Forrester colleague Ted Schadler laid out some of the strategic challenges his successor will face in coming years. Here, I add to Ted's analysis.
Microsoft remains one of the great global technology companies, a solid member of the Fortune 50. Although it no longer enjoys the reputation for innovation it did in the 1990s, it’s a critical player in every aspect of end user computing (including devices, software, browsers, development platforms, and services) and of other technology product and service markets.
As CEO, Steve Ballmer solidified Microsoft’s stronghold in enterprise solutions. Microsoft built and maintained — or built and made itself into a key challenger — in several enterprise markets. Microsoft Office remains a titanic success, even as it faces lower-cost competition from Google and others. Windows Azure has been cultivated into a full-fledged contender in the cloud services market. Exchange remains entrenched in enterprises, as do many of Microsoft’s Server and Tools offerings. Microsoft remains the company to beat in some of these markets, and has become a formidable challenger (e.g. as Azure takes on Amazon Web Services) in others.
On the consumer side, Xbox and its Xbox Live services stand out as a major success of Ballmer’s tenure. And overall, revenues have grown considerably during his tenure, even if not at the rate investors might have liked to see.
At the same time, it’s important to point out some of the unresolved challenges that Microsoft has faced during the Ballmer era:
All three of these battles still loom ahead, as the next Microsoft CEO will put his or her strategic imprint on how the company chooses to contend with mobility, the platform wars, and consumerization. The company has resources and talent on its side, but needs a faster-moving strategy to address these challenges.
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