Does Microsoft Have the Worst CEO on Earth?
May 17th, 2012I’m sure Apple fans will agree, but consider this statement: “Without a doubt, [Microsoft CEO Steve] Ballmer is the worst CEO of a large publicly traded American company today.” Well, that doesn’t mean ALL CEOs, of course. But it’s not something that came from a Mac fan site, or even a tech commentator for the mainstream media. Instead, this pronouncement originates in a story published in a prestigious business publication, Forbes magazine, entitled “Oops! Five CEOs Who Should Have Already Been Fired (Cisco, GE, WalMart, Sears, Microsoft).” I won’t bother with the other four.
Number one, with a bullet, is Microsoft CEO Steve Ballmer who, over his twelve years on the job, has utterly wrecked the company’s reputation as the dominant player in the technology industry. Yes, Windows still powers 90% of PC desktops. Yes, Office is still the most popular productivity suite on the planet. But Microsoft’s efforts to spread the joy beyond their 1990’s accomplishments have been largely unsuccessful.
One possible exception is the Xbox 360 gaming console. But that product hasn’t received a major upgrade in several years, and only became profitable after Microsoft spent billions of dollars for development and marketing. It will probably take years to recoup that loss, although the company remains highly profitable regardless because of high margins for software. In any case, it’s also true that more and more gamers are moving to mobile platforms, where Apple and the iOS reign supreme.
When it comes to other attempts to expand Microsoft’s product line, the results are highly mixed, and largely unsuccessful. The Zune music player is dead, Windows Phone remains a work in progress that remains way behind the iOS, Android, and even the declining BlackBerry when it comes to market share. Yes, the Windows Phone flagship du jour, the Nokia Lumia 900, has gotten pretty decent reviews, but it doesn’t seem to have advanced the state of the art in smartphones in any meaningful way. It’s not a runaway sales success either.
To be fair, Nokia has promised to send a review sample in the near future, so I’ll have a better opportunity to compare it side by side with my iPhone 4s to see how far Microsoft has come.
Despite the questionable prospects of the Zune/Windows Phone interface, Microsoft is betting the farm on Windows 8, which features a similar theme dubbed Metro. Due this fall, Windows 8 will take an extreme approach in melding desktop and mobile operating systems. Whether you have an ARM-based Windows 8 tablet, or a PC, the basic interface will be essentially the same. That, however, doesn’t mean that the Windows 8 tablet will be capable of running the very same software as a Windows 8 PC. Microsoft still must deal with two dissimilar processor families, which means developers will have to build separate versions of their apps.
Although Metro may fare reasonably well in the consumer market, Microsoft’s key customers are businesses, particularly larger ones, who will no doubt strenuously object to an unfamiliar work environment that will require employee retraining. I suppose Microsoft believes they are just trumping Apple’s moves to add iOS features to OS X. But they fail to realize that both Lion and Mountain Lion work in pretty much the same way as other Mac OS X versions despite the changes. Even such controversial features as reversing the direction of scrolling and hiding scrollbars can be turned off in seconds.
Microsoft’s pathetic efforts to “innovate” by substituting a ribbon for a traditional menu bar, and burying the traditional Windows interface with Metro, which dispenses with the Start menu, will only end up confusing customers. If Windows 8’s failure matches that of Vista, what does Microsoft do for an encore?
When it comes to search, Microsoft has spent billions into developing Bing. At the end of the day, recent comparison tests with market leader Google do not demonstrate any real advantage of one over the other. Sure Bing looks different. Sure, some might prefer the busier look, but at the end of the day, Bing fails to consistently deliver more accurate searches.
Worse, Microsoft’s desperate attempts to make commodity products seem new and different are sheer turn-offs. Take the latest ads for Internet Explorer 9. It’s a browser folks. Yes, MSIE 9 is more standards compliant than previous versions. But when Microsoft’s ad agency wants you to believe it makes the Web more beautiful, you just know they are clueless. A properly constructed site will look nearly the same on any browser that renders the code faithfully. It’s false advertising, but no TV station or network will refuse to carry the ads, unfortunately.
Microsoft has also tried to take common features of Windows 7 and make them seem unique. There is that TV ad that featured a father and son, showing the child taking his father’s spreadsheet and turning it into a flashy chart. But that flashy chart, with pixelated lettering, was something you could do in Office and lots of other apps way back in the 1990s. If the ad was released 15 years earlier, perhaps it would seem relevant.
Maybe if Steve Ballmer realized that it’s 2012 now, he’d make the decisions necessary to fix the company’s problems and move forward. But he’s also rich enough to sit back and enjoy his life. He’s had his day in the sun, and Microsoft’s shareholders have suffered as a result. It’s time for the board to send him home and find a qualified successor with a vision. It may not be too late for Microsoft, but it’ll require a new CEO to repair the damage.
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Well, Gene, I have to hand it to you. You don’t pull any punches. 🙂
Thats a real question?….I thought it was settled factual data.
Microsoft’s stock value has been in flat-lined mode for about a dozen years. The investors got what they wanted, a utility company paying small dividends. Gosh, Steve Ballmer knows best, he’s just coasting along riding the gravy train. Looking at what he has accomplished is that both Windows and Office still make a lot of money. Nice to still have a monopoly position. Not to worry about the plentiful of mistakes, it’s all chump change.
The bottom line is that the WIN-Server division literally prints money – the margins are around 80%. It’s hard to find other businesses with that kinds of margins and yes, you have to try but at some point, you have to throw up your hands and give up (such as Cisco trying to build consumer sales) but MS arrogantlyrefuses and shareholders paid the price – basically, Ms has had zero consumer successes since 1998. ZERO. MSN. MSN search (they dropped out of heavily funding search as a business as google was heating up because MS thought yahoo’s business model was the way to go), MS watches, Bob, WINCE, Plays4sure, home media Pc’s, tablet PC’s (both got keynote speechesfrom Bill G that they’d be billion dollar businesses … well, for Apple), WMA, Live, Zune, etc, etc … and not just small try me businesses – MSn as an AOL knockoff cost Ms $8 BILLION dollars – to lose to AOL! Or Zune – $2 BILLION dollars when an 11-month old could tell you they would lose … and yes, even XBox – $20BILLON in the hole that Ms wrote off so if you don’t include, it’s profitable BUT Xbox might’ve dealt the biggest blow to Windows. By creating a $299 (at launch) PC gaming machine, they basically killed the $5k WIN PC market – why buy a $5k WIN Pc with viruii, malware and constant updates (not to mention crashes) and buy a $299 machine that plays nearly all the games and no hardware upgrades necessary? That’s MS. Steve Ballmer giving a CES keynote is the biggest joke. You can tell he memorized his script but has no idea, confidence or aptitude for shilling a thing he has no use for himself. Ms shareholders have to ask, it’s fine Bill G wants to give him old roommate BILLIONS of dollars but imagine if instead of wasting $20-$30 billion worth of cash flow every year for the past ten years, that $300 billion was distributed to the few hundred million shareholders?
The really weird things are that that Balmer was Gates’ hand-picked successor. Surely Gates had a pretty good idea what he’d be getting, and that there’s no visible evidence that Balmer has subsequently done anything to lose Gates’ confidence ( I assume that Gates still has enough clout that he could engineer a MS management shakeup any time he wanted). Back when he was MS CEO my understanding was that Gates was a pretty hard-nosed businessman and not all that easy to keep happy. And, despite what DaveD say when he very shrewdly compares MS to a “a utility company paying small dividends” (albeit, like those of utilities, dividends that have the advantage of being regular and predictable) it’s more than a little peculiar that at least some MS stockholders haven’t grown more restive. I mean, here’s where DaveD’s utility analogy seems to break down. The managers of utility outfits are pretty conservative people, they don’t throw away perfectly good company money on harebrained schemes to extract sunshine from cucumbers, and the kind of people who buy that kind of safe stock wouldn’t put up with policies like that.