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Why Ballmer should leave Microsoft
With Gates stepping down from his day-to-day role, there are reasons his long-time partner should head out the door.
(Business 2.0) - Now that Microsoft cofounder Bill Gates has started his two-year goodbye from a day-to-day role at the company, it's time for CEO Steve Ballmer to set a resignation date, too. Since Gates stepped down as CEO in 2000 in favor of Ballmer, the company has floundered technically and strategically. As the company's chairman, chief software architect and supposed visionary, Gates deserves blame for missing the wave of Web-based software that has propelled Google and Yahoo.
But Ballmer has made gaffes of his own in his longtime role as head of the company's business side. They include an undistinguished push into business applications to compete with Oracle, financial maneuvers that have failed to stir the stock - which has slumped 16 percent so far this year - and continuing antitrust problems in the United States and Europe. (Special Report: Goodbye, Mr. Gates) It's not likely that Ballmer will stay on as CEO after Gates steps down as the company's chief software architect, says Rob Enderle, principal analyst at the Enderle Group, who has watched Microsoft (Charts) for almost 20 years. "When you get into a cycle like this, the founders go reasonably soon after each other," says Enderle. Ballmer, while not technically a founder, was an early employee and has long run the company's sales and operations. Enderle believes Ballmer will step down as CEO in two to five years. While Gates named Microsoft executives Ray Ozzie and Craig Mundie as his successors, Ballmer hasn't made his replacement as clear. There are three main contenders, however: The heir apparent. Chief Operating Officer Kevin Turner, a recent hire from Wal-Mart Stores where he ran the Sam's Club division and previously served as the retailer's chief information officer, is the most likely replacement for Ballmer. He has one big strike against him: his short tenure at Microsoft, which translates into a lack of familiarity with the company's culture. He's believed to be behind a recent cost-cutting move to force the company's substantial contractor workforce to take an unpaid week off. Since contractors at Microsoft contribute to important projects and are often hired on as full-time employees, the move hurt morale. But as Wal-Mart's CIO, he bought a lot of software from Microsoft, giving him a valuable perspective as a customer that most executives who rose through the ranks at Microsoft lack. The sales expert. Kevin Johnson, co-president of Microsoft's Platform and Services division, which includes Microsoft Windows and the MSN Web portal, has a resume that closely resembles Ballmer's. Before his current position, he ran Microsoft's sales, marketing and services operations. He's now overseeing one of Microsoft's most important product lines - a position that could broaden his experience and make him a more suitable CEO candidate. The dark horse. Robbie Bach oversaw the launch of the Xbox, one of Microsoft's few recent hits. He's now in charge of Microsoft's consumer and home entertainment products. While he's the least likely candidate right now, if the Xbox continues to challenge Sony's PlayStation successfully and he figures out a digital-music strategy to compete with Apple's iPod and iTunes software, he may win enough clout within Microsoft to demand the job. Who's not in the running? Ray Ozzie and Craig Mundie will have their hands full overseeing Microsoft's technology strategy and research and development efforts and aren't seen as operationally minded. Jim Allchin, once seen as Gates' heir apparent, bore the blame for delays in the release of Microsoft's Windows Vista operating system and is retiring at the end of the year. Losing both Gates and Ballmer will spell a big change for Microsoft. But it's likely to be a positive one. At this point, Ballmer's associated more with the hard-charging business tactics that led to Microsoft's antitrust woes and a low stock price that's sapping employee morale. Whoever replaces him will have a host of problems to solve - but unlike Ballmer will be able to start with a clean slate. ________________________ RELATED: Gates to leave day-to-day role at Microsoft
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