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Microsoft Leaves Ballmer Bleeding as It Moves On

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If Steve Ballmer’s decision to step down from the board of Microsoft was sudden, it wasn’t a surprise. 

Once Satya Nadella stepped in as CEO and started changing Microsoft from a devices and services company to one focused on productivity and platforms, Ballmer had to go. "Cloud first, mobile first," became the new mantra.

In an open letter to Nadella, Ballmer explained that he thinks it would be impractical for him to stay on the board. Ballmer's commitment to Microsoft is clear. “I bleed Microsoft — have for 34 years and I always will,” he said in the letter. Microsoft, though, doesn’t really care. It's already ancient history.

He's Got Plans

If Ballmer is sorry to go, it doesn’t really show. He’s going to be busy, but you’d expect that, given that he just took over the Los Angeles Clippers. "I see a combination of the Clippers, civic contribution, teaching and study taking a lot of time,” he wrote.

Neither the company nor the man will be short on bucks. At current market value, his holding in Microsoft is about 4 percent, worth in the region of $15.1 billion.

In fact, since he announced he was stepping down from the position of CEO this time last year, the price of Microsoft shares has jumped 39 percent following almost a decade of stagnation. If Ballmer was ready to go, the markets were clearly ready for him to go, too.

Open Board Seat

The reactions to yesterday’s announcement have been pretty much positive and no one seems concerned about the new leadership. His departure continues the reshaping of Microsoft’s board that included the appointment of technology executive John Thompson as chairman when Bill Gates stepped down in February as well as the appointment of an outside director from ValueAct Capital Management to keep shareholders happy.

The departure of Ballmer, in fact, effectively ends the active role of Microsoft's two most important figures — Gates and Ballmer — and not a minute too soon. The world of technology is changing and Ballmer didn’t seem to be able to push Microsoft into a universe of cloud computing, services, mobile and, in the near future, the Internet of Things.

In fact, earlier this year, Thompson suggested he was moving too slowly to redirect the company in the current climate. During a conference call about mobile, Thompson even  quipped : "Hey, dude, let's get on with it… We're in suspended animation."

Nadella’s Path

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So along came Nadella. During the search for a new CEO, there was talk that, even with Ballmer out of the CEO’s chair, the new leader would work under Ballmer's shadow as long as he was on the board. That was true especially because the road that Nadella chose marked a shift in direction from the old Microsoft.

Nadella has only been in there six months and his daring — daring for Microsoft, that is — is breathtaking. He has released Office for iPad, which rumor has it was developed under Ballmer, but kept in storage for fear that it would impact on Microsoft’s Office business. Nadella also oversaw the release of a free version of Windows for devices that had screens less than nine inches.

On top of this he changed the entire release cycle for Windows by announcing regular upgrades as soon as they are developed, and not as a single major release once a year. Office 365 has also been opened up and he has made its roadmap transparent, enabling enterprises plan where their productivity spending will go.

Less positive, but probably inevitable given the money shelved out for Nokia phones, he announced last month that 18,000 Microsoft employees will be let go over the coming year — about 14 percent of its workforce — which will also include a rethink of the whole Windows division, something that was absolutely unimaginable under Ballmer.

 

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