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Posted by Ted Schadler on August 23, 2013
I don't know Steve Ballmer. I've only met him once. (I've met with Bill Gates more often than that.) But let's face it, he had tremendous impact as a leader. And it's now a good time for him to step aside.
When Steve took over from Bill as CEO of Microsoft in 2000, the company's revenues were $21B and the business was led by desktop software. Under Steve's guidance, Microsoft made massive inroads into enterprise server software and tools while investing but not really winning in consumer services and certainly not in mobile devices. And in recent years, Steve listened to lieutenants like Ray Ozzie and Bob Muglia to turn the Redmond juggernaut towards cloud computing, mobile devices, and software+services.
At the same time, the world has moved faster than Microsoft's licensed software business model could respond. Apple, Google, and Amazon have become enterprise suppliers. Salesforce.com and Amazon are accelerating the shift to cloud computing. Dropbox has grown from zero to 175 million users in five years. So even as Microsoft's revenue more than tripled to $73B in 2012, things didn't feel good.
I think it's a good decision for Steve to step down and pass control to someone else, probably an outsider. Microsoft will then face its IBM or GE moment: Keep the company together or break it apart? Lou Gerstner kept IBM together and that decision had paid off handsomely. Then again, IBM relentlessly focused on a single enterprise market, shedding its PC and other low-margin businesses.
So what's next for Microsoft? I see three forces colliding to drive that decision:
Tough decisions for Steve's successor.
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