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Bombshell: Ballmer steps down from Microsoft

I’m sure you’ve heard by now that Steve Ballmer is retiring. It’s time. If anything, I agree with the people who say he would have been better off retiring years ago. But I really didn’t expect it. In spite of the immense pressure to step aside, at least in public he never gave any indication of having any intention of doing so.

To a degree it’s understandable. He’s more than set for life, but he’s 57 years old. He’s only worked two years anyplace else–at Proctor & Gamble–since graduating from college. It would seem he could work 10 more years pretty easily. The company is his life.

And I have to believe that if it weren’t for Ballmer, Microsoft could have just as easily flubbed up the IBM deal for PC DOS 1.0–the deal that put Microsoft on the map–as Digital Research did. Ballmer, after all, was the one who told Bill Gates to buy a suit. Early photographs of Microsoft employees that look like a bunch of hippies and transients that have become popular memes date back to before Ballmer joined the company and brought a bit of his alma mater, Harvard Business School, with him.

That’s not to say I’m fond of the guy. He’s been more tolerant of competition than Gates, for whatever reason, but he has a fondness for raising prices. I’ve long believed that if they cut prices by 50%, they would sell more than twice as much software. If you’re extremely careful and have a few spare parts to work with, you can build a usable PC for $150, but a Windows license to run on that $150 PC will cost about as much as the hardware, and that doesn’t seem right. Sure, Windows is much more capable today than it was when it cost half as much, but back when Windows cost half as much, PC hardware cost 3-4 times as much, and it has increased in capability as much or more in the same timeframe.

It really seems to me that Steve Ballmer rode Bill Gates’ coattails an awful lot. Had he not known Gates, I’m sure he still would have been successful, but I’m pretty sure he wouldn’t have ended up running a technology company, and he probably wouldn’t have risen as far or as fast.

I think Ballmer’s legacy will be defined by Windows Vista, Windows 8, and Office 2007 and later. Latter-day versions of Office have sold OK, but the pattern of every other version of Windows being terrible really solidified under Ballmer.

What Microsoft needs now–and probably is looking for–is a Lou Gerstner type. Gerstner joined IBM at a time when most people referred to it as Big Black & Blue. Gerstner found efficiencies, cooperated more openly with the rest of the industry, lowered prices in some cases, and famously turned the company around. Whether such a person still exists inside the company, I have no way of knowing.

But the IBM of the 1990s and later was and is a much better corporate citizen than the IBM of the 1980s. If IBM could reform, Microsoft probably can too, and probably will be better for it. I don’t expect them to return to the massive profitability of the 1990s–the industry has changed too much since then–but I think the next 10 years can certainly be better than the last 10.

I’m not surprised Microsoft stock jumped on the news. I think that means a lot of people are thinking along the same lines I am.

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