Was Steve Ballmer Good or Bad for Microsoft?

Articles | Online Master of Business Administration

Steve Ballmer has been criticized in the press and by outsiders for focusing too much on Microsoft’s core PC software, Windows and Office, at the expense of taking the company into new territory. After all, PCs are becoming a less relevant part of the tech industry. On the other hand, he’s also been criticized for trying to turn a successful software company into a device manufacturer.

Ballmer himself admits that not all of his decisions were good ones. But both he and some observers feel that he will leave the company in an overall good place.

A Missed Opportunity

Before Apple released the iPad, Microsoft was reportedly developing a tablet device called the Courier. Ballmer killed the project because it required a modified version of Windows, and so was a threat to the company’s own flagship product.

Since then, it appears to many that Microsoft missed the mobile boat and is now trying to play catchup, working on improving the not-so-well-received Surface tablet and purchasing phone maker Nokia. But none of these attempts would be feasible if Microsoft had not entered the device market to begin with, by investing in Xbox.

A Hit Product

One early decision of Ballmer’s was to build the Xbox. Former CEO Bill gates wanted to build the gaming console, while others in the company complained that it was inappropriate
for the software giant to build a hardware device.

Ballmer stood by his decision to back the Xbox, and his support for the Xbox development team never wavered through early financial losses and technical glitches. The Xbox has grown to a strong asset for Microsoft, with the Xbox One selling over 2 million units the first 18 days after its release.

Betting on Enterprise

Ballmer gave Microsoft a firm push toward providing software and services to enterprise customers. At first, there was resistance to Microsoft’s offerings from those who saw the company as traditionally consumer oriented. Now its Dynamics CRM customer relations software and Sharepoint collaboration service have been widely adopted by corporations, and Ballmer’s skill at deal-making has even lead to a joint venture with Oracle in the form of the Azure cloud service.

Enterprise customers now supply more than half of Microsoft’s revenue.

Clearing the Legal Slate

When Steve Ballmer took over as CEO in 2000, it was a rocky time legally for the company. Those suing Microsoft included the US federal government, 40 US states, 30 other countries, and a number of the company’s tech competitors, for various anti-trust and patent-related allegations.

Bill Gates had been of a mind to keep fighting all these suits. Ballmer felt the need to settle and move on from these legal problems, even though it cost the company billions of dollars. Though he disagreed that Microsoft had done truly terrible things, the public perception of the many lingering suits was bad for Microsoft’s image and distracting from its mission.

The Bottom Line

When all is said and done, it is hard to argue with the numbers. Between 2000 when Ballmer took the reins of the company and 2013, Microsoft’s revenues tripled and profits doubled. Revenues climbed to a record $18.53 billion in the first quarter of 2013, making it appear that the outgoing leader did something right.

Steve Ballmer has said that Microsoft may now be able to move more quickly in the proper direction without him aboard. But his legacy holds many positives regardless.