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After a 33 year stint at Microsoft, Steve Ballmer (57) will leave the company within 12 months. Many in the industry have been saying his time has passed (including us) but the announcement is still a surprise. Although it indicates more turbulence for the company that is still struggling to master the mobile market and is contemplating the lacklustre response to Windows 8, the news was greeted with enthusiasm and shares rose c9%. Watching the share price rise in response to this type of announcement can never be pleasant for the individual but as Ballmer is reported to hold 4% of the company there are compensations.
The timing is particularly surprising because it comes just a month after a major restructuring effort to create a company with ‘one vision’ (see here). What will happen to that if the new CEO doesn’t agree with it? Rolling with pre-existing plans is not generally the preferred approach for new chiefs. There is no apparent succession hierarchy as many of the likely candidates departed during his time as CEO amid rumours that he was removing potential challengers. The most recent high profile leaver was Windows boss Steven Sinofsky (see here). It is never wise to believe all that emerges on the rumour mill but it is clear that discontent was rife within the business. A special committee (which includes Bill Gates) is in place to seek and appoint a new chief.
Microsoft usually appoints from within but with the magnitude of the changes Microsoft is facing (including the demise of the PC platform it was founded on) this could be the perfect opportunity to break the mould and recruit from outside. One of the questions could be whether to recruit someone with business-centric experience or an individual with consumer market credentials to better enable it to compete with Apple, Google and the like. Although Microsoft has a big footprint in the consumer space (and would like it to grow via its devices portfolio) the multi-faceted company is also firmly planted in the enterprise technology space (see here). These interests have been pulling it in two directions, maybe now is a good time to prioritise.
Despite the suddenness of the announcement, immediate changes are unlikely because Ballmer will remain with the company for up to 12 months. That is a long time in this industry – and I don’t think Microsoft can afford 12 months of speculation and uncertainty.
