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Summary:

Outgoing Microsoft CEO Steve Ballmer is too loud, too bombastic, too sales-y, blah blah blah. He also built one of the world’s most profitable and efficient sales and channel organizations. So there.

Bill Gates and Steve Ballmer
photo: Microsoft

Bashing Steve Ballmer, the outgoing Microsoft CEO has been a parlor sport for years now. Critics blast Ballmer for not sustaining a bull market stock price for Microsoft, for “missing” mobile, for thwarting creativity and driving talented people out of the company. But chiefly, if you read between the lines, one of the biggest knocks on Ballmer is that he isn’t Bill Gates. Microsoft Way Sign

Frankly, the idea that Microsoft co-founder, chairman and former CEO Bill Gates could have done better than Ballmer in the post-PC era, is a stretch. (And by the way, anyone who holds out hope that Gates will return Steve Jobs-like to rescue Microsoft, has another think coming.)

A lot of the Gates worship is based on revisionist history. Let’s go to the video tape. Gates was still firmly ensconced as CEO of Microsoft when the company missed the internet. His 1995 book The Road Ahead barely mentioned the web. The visionary’s vision was off that time. One of Gates most endearing moments came a trade show video years later when he claimed to have discovered the internet (full pause) years after everyone else did.

Ballmer critics slam him for being boisterous (who cares?), for discounting the iPhone (ok they’re right on that) but when Gates ceded the CEO slot in 2000, he left Ballmer with a raft of serious problems, said several former Microsoft executives who spoke on condition of anonymity. None of these alums are particularly enamored of Ballmer, but all feel he’s gotten a bum rap.

Exhibit A:  Antitrust issues

Gates left Ballmer with a “huge mess on his hands with the DOJ,” said one former Microsoft VP, referring to the long-running U.S. Department of Justice anti-trust case against Microsoft. In the end, Microsoft was found to be a monopolist but the judgement was reversed when the sitting judge gave pre-judgement interviews to reporters that showed his bias. Still, the case was a huge PR black eye and drained resources.

“It took Steve to settle with the DOJ and the EU. Bill never admitted how damaging his own testimony was,” said one former VP.

Exhibit B:  The Longhorn-Vista debacle.

Much of the blame for the painful Vista episode which affected Microsoft years after the fact, is on Gates. It was he who kept demanding changes and more features as the project bloated, came in late, and to put it kindly — was badly executed. Vista was announced in 2005 and launched worldwide in 2007 to near universal derision.

“Bill’s Vista obsession hurt Microsoft on the mobile side. It lost sight of this huge opportunity and was blindsided by the iPhone in 2007,” said a second former Microsoft exec. Vista also damaged the company’s ecosystem — particularly the hardware OEMs who tried to sell PCs running it. And, not least of all, it caused Microsoft to turn inward to “fix” its bread-and-butter Windows business while the rest of the world moved on without it, said the former Microsoft VP.

Exhibit C: Deadwood employees

One famous quote about Ballmer is that “he’s like a pine tree. nothing can grow under him … everybody leaves.” The exodus of talent like Steven Sinovsky, Bob Muglia, Bill Veghte, Kevin Johnson, seems to bear that out. The flip side is that inside Gates-led Microsoft there was a cadre of “friends of Bill” who were expensive executives  and engineers allowed to stay on long after their useful shelf life ended. That deadwood was demotivating, to say the least.

Exhibit D:  Microsoft’s sales machine

People slam Ballmer for being a sales guy, but hey, sales is the life blood of any company. Ballmer should get props for assembling and running the company’s well-oiled sales machine and its massive partner network.

“Steve is the one who built the field [sales force], the distribution channels, the $72 billion in annual revenue and he was with Bill from the beginning to build that franchise,” said the another former executive.  As he pointed out,  Microsoft rarely had the very best product and yet it sold a whole bunch of stuff for massive profits.

The former VP summed it up: “Steve has his flaws and created his own problems [but] he inherited an unbelievable mess from Bill that people in general do not appreciate, and I’m not sure anyone could have done a better job than Steve under the circumstances.”

  1. Another… Leo Apotheker… (?!)

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  2. Finally a fair article about gates and ballmer. I have always been thinking that baller has been better than gates.

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  3. I agree that much of the responsibility for Microsoft’s failures is in the hands of Bill Gates, who was always better at setting up illegal monopolies, instilling FUD, and outright theft, than creation or invention. Still, the problem with Ballmer and the causes of his failures consists of his false impression that Gates was a visionary and that it was his job to fulfill Gates’ dreams. The architect of the failures was Gates. The engineer who built on those architectural plans was Ballmer.

    I’ve nothing against Ballmer’s over-the-top salesmanship. The problem was that he didn’t have the great products he needed to sell.

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    1. @don108 all fair points — pretty much what i was trying to convey. thanks for the note.

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    2. true

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  4. What nonsense! Taking the CEO seat puts you in charge – to put in place your own vision and direction for a company – and at that Balmer was a huge failure. Stop making excuses for him! Look what jobs inherited when he came back to Apple. A total mess and a nearly bankrupt company. Meanwhile MSFT has failed on so many levels.

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    1. No one needs to make excuses for Ballmer and I didn’t do that here. What i did do is point out that those who assume Bill Gates would have done better have no basis for that belief based on gates’ past actions. Ballmer gets a lot of blame, including some that he did not deserve.

      thanks for your note.

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  5. Ballmer has had 10 + years to prove, and I think that he has failed miserably. A CEO of the scale and power like msft needs to have vision, lead innovations, inspire ranks and increase shareholder value…dont think ballmer suceeded in any….he has had a long list of failures, few successes, and the problem is….he still doesn’t get it…yes, if there is one thing that he received as a legacy from Gates, it was a lethargic and complacent company culture of which btw, Ballmer was part of.

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    1. It takes generations to change a culture. I don’t think 10 years does justice to the plurality of “generations”.

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  6. Microsoft is still in the tech industry, where things change dramatically every few years. Ballmer has now gone thru three cycles (internet/services; mobile tech; “trifurcation” of the PC market into servers, enterprise and consumer.

    Ballmer has been aware of each, even emphasized the importance of say, Microsoft being an attractive consumer brand. But while the knocks on how well the ship sails on autopilot are mostly weak beer, the real question is why/how Microsoft has been so close to each of these major sea changes, and blown such huge amounts of money for so little success.

    Since Zune has run the full cycle, it’s a fine place to start, even though the costs were relatively modest. Zune sprang up after Microsoft stabbed the Plays-for-sure consortium project in the cradle. Existing customers received no upgrade path, no way to transfer their music to Zune and no way to buy new music on their old devices. If Microsoft had anything besides utter contempt for customers’ trust, it is hard to see what it motivated.

    In Apple’s case, Jobs spent years testing out retail concepts (store-within-stores in Japan and then the US); hired the CEO of Gap to be on the Board; acquihired the jukebox software; opened its own retail shops; arm-twisted the music labels into Apple-friendly licensing terms; started major brand advertising. Revenues from the iPod itself was obviously the end goal of all this work, but it wasn’t introduced until well into the multi-year plan.

    The Zune had Microsoft’s characteristically solid engineering and software, but it never achieved any consumer mindshare because Microsoft never built out the whole ecosystem, brand identification and reputation. As Apple’s effort shows, you can succeed in the space through focus, hard work and smart thinking of where you want to go. Approximately none of that happened with Zune.

    I’ve not seen any honest accounting for the fact that Zune was a strategic failure, not just a financial and market failure. Nor did Zune seemingly inform how Microsoft tackled the Kin, Windows Phone6/7/8, the Surface, Office365, … In every case, the projects seemingly attempted to serve an ill-defined market (in Kin’s, a vanished market) that Microsoft hasn’t put much energy into understanding, with technically OK, if a step or two behind the leader’s, and a hope that somehow the Microsoft halo would be the reason a customer would buy the product/service. And the farther Microsoft has gotten away from the business world desktop, the less successful their forays have been.

    Ultimately, if the CEO can’t paint a clear vision (“Windows on every PC” is just a bit irrelevant in 2013), and then spell out clear strategies for achieving the vision (hard to do when the vision was more-or-less achieved but nobody knows what the real one is), then the CEO has failed. I don’t think these are easy times — many proud tech firms have shrunk or failed — but Microsoft needs to find a way to succeed, and that way will be without Ballmer or his caretaker leadership.

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