From the get-go Steve Ballmer had an impossible job to do. Long the number two man at Microsoft behind iconic founder and chief geek, Bill Gates, Ballmer got to take over when the Gates bubble was beginning to wear out. Gates built the company he founded with Paul Allen from zero into the powerhouse of the high-tech revolution to the point where it straddled the industry like the colossus it was.
How do you top that?
Perhaps you don’t, at least not initially, and it was Ballmer’s job, increasingly of late, to be the guy who kept the wheels on as PC sales began to dip, cloud computing became the next big thing, and Microsoft had to scramble to be relevant. Ditto with mobile devices. Its phone has small market share, its tablet, despite an attractive UI and a real keypad, lags the iPad in sales. Bing, the search engine positioned to rival Google is facing an uphill climb.
The reason for all of these is the same — being late to the market with a similar product. Microsoft was so busy being successful that it couldn’t see a time when it wouldn’t be. It happens all the time and Clay Christenson documented it so well it’s not worth discussing further. Yet, to see Microsoft in this predicament is disheartening. Microsoft is the company that, along with Intel, Lotus, and Apple, is most closely associated with America’s rise to prominence in all things high-tech and it’s hard to see what looks like a sun setting on what has been a great three decades.
But, of course, that’s the wrong way to look at it. You can’t do anything about yesterday so, as they do rightly in baseball, you put it out of your mind and only focus on what you can do today.
Ballmer’s headed for the exits and he has already been very well compensated. According to Wikipedia, he is only the second person in history to have become a billionaire without being the founder of a company, simply through various forms of compensation. His successor will likely not be compensated as handsomely no matter what the company’s results. The new person will need to figure out how to address a market that has become much more fragmented, one which has, if not eliminated the need for, at least has reduced its dependence on Microsoft’s core cash cow offerings.
The new CEO will need to go back to the well, to think deeply about what Microsoft can be and I hope the newbie decides to put more wood behind the enterprise computing arrow than behind the games. Microsoft became great by imagining (or at least borrowing) things that didn’t exist and commercializing them. CRM, ERP, Windows, Office, content management, the browser and lots of other things were perfected by its developers for an audience that wanted standardized applications that worked. There were notable exceptions like Vista, but largely, it did all work, and those standards fueled the industry’s growth.
The rivalry for most of the company’s existence was with Apple and most of that was inspired by Steve Jobs, Gates was serenely above the fray. But I think the next rivalry ought to be with a company like Salesforce.com whose charismatic leader, Marc Benioff, has a knack for Blue Ocean Strategy consistently finding new places to play, away from significant competition while he tinkers with a new business process that his company can uniquely support.
As Microsoft looks to be more of a services company it would do well to emulate some parts of Salesforce, the company that, more than any other, brought Software as a Service to the world. I think that should be a useful target for the search committee now starting up and it provides a rough outline of who to look for. On the other hand, if the committee finds a soulless bean counter, it will be time to put out the fire and call in the dogs. There is a lot riding on this, as if you needed to be told.
(Cross-posted @ Beagle Research, LLC)