Steve Ballmer’s Final Years of Strategic Missteps as Microsoft CEO

Steve Ballmer and Satya Nadella, Microsoft CEOs

As the computing world changed over the last decade, Microsoft gradually evolved into two distinct entities: a lagging consumer and devices firm that missed the latest trends that the internet ushered, and a firm whose dominance in the enterprise world is growing. In the enterprise world, Microsoft continues to strengthen, even as computing moves from the PC server to the cloud device model.

Outside of the enterprise world, as the technology industry has shifted from software run on PCs to a focus on mobile devices and cloud computing, Microsoft missed the trend. Consumers moving away from PCs and laptops and became accusomed to computing with devices from tablets to smartphones and everything in between.

In Steve Ballmer’s final years as CEO, Microsoft’s fast-follower attempts stumbled in category after category of consumer computing and technology: Windows phones, Zune music players, and Surface tablets. During his 14 years as CEO, Microsoft tried various strategies to expand its share of the lucrative online search business, and failed there too. Google, Facebook, Apple soared ahead, transmuting the social-media-tech experience, whilst a bumbling Microsoft relied mostly on pumping out Old Faithfuls such as Windows, Office, and servers for its financial performance.

In retirement, despite being closely associated with Microsoft’s most awkward missteps—Bing Search, the Windows phone, the Zune MP3 player, among others—is celebrated for the company’s biggest successes—the Windows and Office franchises—and tripling Microsoft’s profits.

Historically, Microsoft was famous for once-invincible strategy of being a “fast follower”. In the 1990s it didn’t matter if little rivals pioneered spreadsheets, browsers or word processors. Microsoft could storm those markets with alternatives that fit into a suite of easy-to-use tools.

Microsoft needed new blood to compete in new markets. Whether Satya Nadella’s strategy will pay off may take years to tell.

Posted in Business and Strategy Leaders and Innovators

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