| Reading the reactions to Steve Ballmer's announcement that he will step down as CEO of Microsoft sometime in the next 12 months, I was struck by the amount of vitriol directed at the man and at Microsoft. While I won't dispute that Microsoft has stumbled badly in mobile and online, you can't ignore the fact that the company has grown significantly with Ballmer at the helm. You can argue that the roots of Microsoft's missteps in those areas go back to decisions made years ago. Ballmer became CEO some 13 years ago, and although the stock price has remained relatively flat, Microsoft's revenues have nearly quadrupled and its profits have more than doubled. Yes, Apple is bigger on both of those measures but in the technology world, that's about it. Microsoft continues to have 40 percent more revenue than Google and about twice the revenue Oracle, perhaps its closest competitor in pure software. And its profits are almost as much as those two companies combined. Where Ballmer has really succeeded—and where he has gotten relatively little attention—has been in making Microsoft more of a core player in enterprise IT departments. Sure, Windows and Office were dominant on client PCs when he took over as CEO, but under his leadership, the breadth and depth of Microsoft's IT offerings have grown amazingly. Yes, open-source standards have become de facto requirements for startups and Web-based companies, but in more traditional businesses Windows Server, .NET, and C# are the standard building blocks for internal enterprise applications. SQL Server went from being an also-ran to the main competitor to Oracle in enterprise relational database management systems. Exchange took over the top spot in enterprise messaging. Dynamics has become a much larger player in accounting and ERP systems. SharePoint and Lync have become prominent businesses is their own right. And Azure, though far from the leader, has gotten a lot of attention in Web services. Microsoft's biggest botch in the Ballmer era has been its failure to gain much market share in the emerging mobile world. You can argue about how well or how poor Windows Phone 8 works on smartphones, or whether Windows 8 really works on tablets, but the market share numbers are just abysmal. To me, the tablet area is by far the bigger problem. As Ballmer himself said, tablets are PCs, not a completely separate category. Microsoft was certainly early in promoting the concept of the "tablet PC" stretching back a dozen years, well before the iPad was conceived. The problem remains that the user interface you want for a tablet is not the one you want for a desktop, no matter how much Microsoft continues to think that one size fits all. "Nothing is more important at Microsoft than Windows," Ballmer said during his final CES keynote and that single-mindedness may have blinded the company toward the changes going on into the market. Of course, you can argue the real reason Microsoft doesn't have much share in tablets is that it doesn't have much share in smartphones. Ballmer has been rightly criticized for his far-too-quick dismissal of the iPhone, but here's what he really said: "There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60 percent or 70 percent or 80 percent of them, than I would to have two percent or three percent, which is what Apple might get." Now he seriously underestimated Apple's market share but the concept wasn't wrong: Apple continues to target the top, most profitable part of the market, not the broader market. What he missed was what Google was doing with Android, which has now gone on to take the lion's share of the phone market—80 percent according to some surveys. And that strikes me as emblematic of where's Microsoft has really stumbled: online. For years, the companies has been playing catch-up online, first to companies such as AOL, then to the emerging Internet companies of the mid-90s such as Netscape, and most recently to Google. There have been some successes along the way like Hotmail and Office 365 but Microsoft has tried hard to make MSN and then Bing a real online destination. Still, Google accounts for two-thirds of Internet searches in the United States and its lead over Microsoft is even greater worldwide. Just as importantly, Google has been much more successful in selling ads online, while Microsoft's purchase of Internet advertising company aQuantive fell way short. Google's advertising success has given it a business model with which Microsoft hasn't been able to compete. Google can afford to give away Android (or for that matter, Maps or Gmail) and make its money on advertising from people searching online. Microsoft's struggles with online didn't begin in the Ballmer era, but I think that competing with this new business model is the real key. To me, this has been, and remains, Microsoft's largest weakness. When Ballmer says Microsoft wants to become a "devices and services" company, he's clearly talking about adopting parts of the business models of both Apple and Google. That's a huge challenge and you can argue this goal should have been set years earlier, except for the problem that Microsoft's existing business model of licensing software as widely as possible has been so successful. In many ways, what the various SaaS businesses and Google have done to Microsoft what the younger Microsoft did to the mainframe and minicomputer companies that came earlier. No company has ever been successful at everything, and Ballmer should at least get more credit for its recent successes and a recognition that the challenges stem from the very things that have made the company so successful. Ballmer was never a product visionary like Bill Gates, Steve Jobs, Larry Page, or Larry Ellison, but he never claimed to be. You can argue that Microsoft needs a bit more of that. No matter what you think of his tenure as CEO, he played a crucial part in helping Gates build Microsoft up in the 80s and 90s. When I look at the successes the company has had, he deserves more respect than he seems to be getting.  via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHEPq_tKsj9q4cYe61AC_2iw3ibyQ&url=http://forwardthinking.pcmag.com/none/315163-why-we-should-give-ballmer-some-more-credit | |||
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