
Why Steve Ballmer will resign from Microsoft in 2010 - mgcreed
http://thenextweb.com/2009/10/06/steve-ballmer/
======
hapless
Microsoft's value has been falling because it is obvious that software
commoditization threatens their revenues. Windows and Office isn't packed with
growth potential. No amount of "vision" or "leadership" will defy fate.

Many products launched during Ballmer's tenure have been successful. More
importantly, Microsoft has been able to move away from their core business.

* Sharepoint (A billion dollar product and a multi-billion dollar industry.)

* Axapta (purchased)

* Great Plains (purchased)

* Solomon (purchased)

* Xbox/Xbox 360

* BizTalk

* .NET (An application stack to compete with J2EE, unthinkable in 1999.)

\----

During the same period, a number of Microsoft products went from minor items
to major contenders in their industries.

* MS SQL was a Sybase clone in 1999; in 2009 it's a price/performance champ.

* Exchange was only used in "Microsoft shops" in 1999. Today it's the de facto standard.

~~~
protomyth
Is the the Xbox 360 profitable by itself, or are they still using the Mac BU
to cover the losses?

~~~
btilly
The Xbox 360 never had to make profit to be successful. The reason the product
was introduced is that Microsoft saw itself going head to head with Sony in a
number of markets, and so they wanted to undercut Sony's big cash cow, the
playstation.

As long as Microsoft reduced Sony's profits more than Microsoft lost money,
the mission was accomplished.

~~~
protomyth
Ok, you pretty much stated my big problem with Microsoft. They don't have a
great idea for a new product, but their competitor of the week has a product
that they want to stomp.

What business does Microsoft have going after Sony?

~~~
btilly
They were head to head in a lot of places. Both wanted to create the next DRM
standard, Sony was pushing Blu-ray so Microsoft pushed back, Microsoft wanted
to push its software into portable devices, and Sony didn't want them there,
and Microsoft was afraid that the Playstation would grow up into a general
purpose computer in every household and undermine the PC market.

So Microsoft saw a company going head to head with them in a lot of key areas,
and they decided to weaken the threat.

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kakooljay
Ballmer's not exactly a visionary:

In a post from June [<http://thenextweb.com/2009/06/02/web-death-google>]
Boris relates a famous story about a meeting between Yahoo and Microsoft which
took place when Yahoo was still a small start-up:

"Yahoo was growing at neck-breaking speed and David Filo and Jerry Yang were
invited to Redmond to talk about working together.

"The meeting turned into a disappointment when Steve Ballmer joined the
conversation and gave his opinion on the future of search engines. According
to Ballmer Search Engines were a temporary solution to a temporary problem.
Ballmer claimed that 'within a few years there will only be a handful of
websites left. People will use their Favorites to navigate to those
destination sites and nobody will need a Search engine except for a few
students and professors.'"

Oops.

~~~
trafficlight
Amazing. He really missed the entire point of the internet.

~~~
vorador
Well, I think this is becoming more and more right. I mean, how many people
only use Facebook, Youtube and Wikipedia only ?

The internet, after an incredible growth phase, has just begun to shrink.

~~~
trafficlight
You must have some numbers to back up such a bold statement. Otherwise that's
a ridiculous assumption.

~~~
vorador
I don't have numbers - actually nobody has them, but the growth of web 2.0
websites had a consequence : less and less people host themselves their
websites.

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SamAtt
This is a situation where numbers can mislead. Microsoft may very well be down
53% since Ballmer took over in January 2000 but do they mention that the
Nasdaq, a tech industry bell weather, is down 50% overall for that same time
period?

(ref:
[http://finance.yahoo.com/q/hp?s=%5EIXIC&a=00&b=1&...](http://finance.yahoo.com/q/hp?s=%5EIXIC&a=00&b=1&c=2000&d=09&e=6&f=2009&g=d&z=66&y=2442))

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protomyth
My biggest problem with Ballmer is that he seems defined by what he hates as
opposed to what he loves.

Also, his tendency to enter markets for no other reason then to have a product
in every market is painful. The Zune is a great example. What the heck did it
bring to Microsoft?

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tspiteri
Dismissing the tripling of Microsoft's net income just because PC sales almost
tripled as well seems a bit, for want of a better word, simplistic.

~~~
codexon
Well its not too far off the mark since Windows is preinstalled on about 90%
of pcs.

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jakarta
If Microsoft were smart, they'd use the free cash flow that they throw off to
outright buy businesses in areas outside of tech that are run by really bright
people. Imagine Microsoft going conglomerate. With the right capital
allocation they could be an awesome company.

Unfortunately, they probably lack such visionary ideas and will end up
throwing good money after bad while their FCF gradually declines as they're
made irrelevant. A slow and sad death.

Look at Henry Singleton as a bright leader of a tech company who allocated
capital well enough to grow shareholder value by expanding into non-tech areas
like insurance.

~~~
protomyth
General Electric 2.0 -- the market may not like that

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edw519
2 ways to have $1 billion:

1\. Start with a game changing idea in a rapidly evolving market. Assemble a
great team. Execute flawlessly. Take advantage of every opportunity. Minimize
mistakes. Get a little lucky.

2\. Be Steve Ballmer and start out with $2 billion.

~~~
crystalis
Have you even tried to contribute to the discussion?

~~~
RyanMcGreal
Sometimes a negative object lesson is helpful.

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bpyne
It sounds like Yahoo was still in its infancy. Just to play Devil's Advocate,
could Ballmer have talked down the role of search engines to get the Jerry et
al. to concede Yahoo or its technology at a cheaper price?

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brg
My personal reasons why he will resign or be forced out:

He has significantly underperformed compared to the market.

Stephen Sinofsky has shown how valuable he is to the company during the Win7
reorg, and will be elevated to CEO by popular demand.

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Dilpil
Comparisons of stock prices circa 1999 to stock prices 2009 are pretty
ridiculous.

