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Steve Ballmer steps down as board member at Microsoft (microsoft.com)
343 points by jtoeman on Aug 19, 2014 | hide | past | web | favorite | 138 comments



Thank you for all your cloud first, mobile first. I think that cloud first, mobile first, but that cloud first, mobile first. If only cloud first, mobile first,then cloud first, mobile first. But I digress, because what is really important here is our cloud first, mobile first strategy, which will require much cloud first, mobile first along with cloud first, mobile first.

I reckon Ballmer's PR drone won this one though. More words.


Can't understand the snarkiness and silly jokes. I mean, I get it, this is Steve Ballmer, the guy everyone loves to hate. But we can be better than that.

Of course the letter was carefully worded to sound like a press release; it is a press release.

But the entire memo strikes me as a thoughtful summary of what Microsoft will face over the next 10 years. The company is transitioning from the cash cow of software business to a much, much more complex environment. One driven by platforms and ecosystems, built on top of open source stacks, where hardware is key to the experience, frequently monetized by ad revenue.

The shareholders - who typically don't read HN - don't fully understand the shift, and won't like the thinner margins. They want results, now. But some of the bets - mobile, cloud, hardware - will take years to pay off, just like the battle for home entertainment took 10+ years, and the judge is still out.

"Making that change while also managing the existing [cash cow] software business..."

This. The next 10 years won't be easy for Microsoft, and that's why Ballmer mentioned - four times - that Nadella should be bold and not fear the shareholders.

Also I don't understand why people are nitpicking with mobile first, cloud first wording. They're not mutually exclusive. It's about empowering companies developing mobile experiences for their workforce, using cloud-based systems. And figuring out how to make money.


The only comment at this level which is constructive and thoughtful gets the downvote?

My thoughts were there is nothing wrong with saying mobile-first and cloud-first. They are complementary to each other. i.e. You build your mobile apps using a cloud backend.


This post is just phenomenal with the cloud to butt extension.


I was thinking the exact same thing.


I'm lost. Which one is first and which one is first? Cloud is important and has to be first. But if cloud is first then mobile is first. And vice versa.


Mobile + cloud to me just infers "thin client + central server".

Ironic; The very thing that MS helped the world move away from.

Anyway, they were late to both parties, now it's full steam ahead to catch up with the rest, whatever the cost (Windows). Shame, I once liked their desktop until they turned it into a phone/tablet.


Yep. Of course, thin client models are even worse in these days of PRISM than they were back in the day. The truth is, anyone who flogs it doesn't care about privacy, only their shareholders.


You forgot about: cloud first, mobile first, and that I hold more Microsoft shares than anyone other than index funds and love the mix of profits, investments and dividends returned in our stock. It's right after cloud first and mobile first.


Someone should make a word cloud out of cloud first and mobile first.


cloud FIRST mobile


That was wide open for 3 hours. Well done sir.


I think the recursive transition network was also meant to include 'social-first' and 'local-first', but they forgot to proofread the output before hitting publish. Rookie mistake.


The level of snark and juvenile responses in this thread is amazing. Technically, all Ballmer had to write was "I resign my board position effective immediately" and Nadella could have responded with "Acknowledged". But the letters aren't meant for us. They are meant for investors who may cast doubt onto Microsoft's future with such a key member of the board stepping down. They also serve to reinforce the company's new direction of mobile and cloud. Perhaps the letters are worded awkwardly, but let's not devolve HN into a Reddit joke thread.


We are among the audience (technologists, some investors, some mindshare influencers). And we're responding.


> They are meant for investors who may cast doubt onto Microsoft's future with such a key member of the board stepping down

Any investor worth his/her portfolio can easily see through this.


"They are meant for investors who may cast doubt onto Microsoft's future with such a key member of the board stepping down."

Yeah, because Ballmer contributed so much to Microsoft. Just look at the stock price http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=l&q=l&c=

Ballmer was the CEO from January 2000 to February 2014


And that matters how? Any big decision like a board member stepping down or a CEO resigning will cause investors to be in a panic. Having a carefully drafted press release is the best way to go about the situation.


His point is that investors won't be panicking after 14 years of stock performance like this. Almost any change will be an improvement.


>> I bleed Microsoft — have for 34 years and I always will.

No matter what you think about Ballmer you have to admit his passion for Microsoft is unrivalled.


Steve Keen on sincerity (a close proxy for passion):

Class was largely open discussion, the instructor rarely engaged. Except for one session, where students were discussing a politician, and said, "Well, at least he's sincere." And the class sort of murmurs, "Oh, yeah, nobody can deny the guy's sincere." The teacher, who normally kept quiet, piped up from the back of the room, "Don't overrate sincerity. The most sincere person you'll meet in your life is the maniac chasing you down the road with an ax trying to chop your head off."

Renegade Economist interview http://fixyt.com/watch?v=7F2FKxxN_IE


I... love... this... company YEAAAAAHAHH


The Ballmer impersonator free runner a few years back at the company meeting was good.


Having been at Microsoft in the past, I always remember this infamous video: https://www.youtube.com/watch?v=wvsboPUjrGc


Sure. I would argue that that "passion" led him to make some poor decisions, though.


Anytime you care desperately about a cause or entity you branded as "yours", a certain irrationality has to go hand in hand with that. Without that emotional attachment to something that leads you to make those decisions, you wouldn't get some of the best gut decisions either. Give and take.


What I mean is that the company would be in a better position now if he had left five or more years ago, because he is not a very good leader.


How are you measuring leadership ability? If it's just stock price then I think there are far more appropriate words to use.


I'd argue that he'd likely make a poor decision regardless of the passion involved.


His spelling needs a bit of work, though. There's only one 'e' in 'bled.'


"Bleed" is fine. He's referring to both the past and present. You can replace "bleed" with "ooze", if that helps.


Or "squirt". (Do MS still do that, or did it stop with the demise of Zune?)


whoosh


Why are you past tensing him though?


It's a joke (I think).

In the old days Doctors used to bleed a patient who was ill to let out the poison "I bled him but unfortunately he died".

That or he is implying that he did nothing but suck the blood for 30 years while others did the actual important work.


Good point. Opaque but that does make snarky humor sense.


My first thought too - had to re-read to see that he wasn't saying he'd bled it dry.


You mean, like in: “I bled MS to death”?


He's just an inherently passionate person. His energy levels are just off the charts. One day we will map the Ballmer genome and see where exactly all this energy comes from.


Potentially rivaled.

I submit: Howard Dean's "BYAHHHH"[1]

[1] https://www.youtube.com/watch?v=D5FzCeV0ZFc


TL;DR

Steve Ballmer

    Bye. I'm outta here. 
    People to teach. Basketball to watch. You know.
    I'll write postcards and stuff.
    Love you. SB
    
    P.S - I've got all the shares.     
    
Satya Nadella

    Whatever. I've also got loads of shares too. 
    Keep your postcards. 
    L8r amigo.


*Basketball to watch


Thanks. Corrected. The perils of being in the UK.


It was "cricket" originally, wasn't it?


    More Superbowls to win, NBA championships to win and yachts that need attention.


Here here. You couldn't fault that thinking.


two pr teams talking to each other.

I would have written:

Steve to Satya: I love Microsoft, and I feel like I can trust you to take on the world for me. Microsoft must live. Here, take some seasons tickets for the Clippers.

Satya to Steve: Hey dude, I need to make Microsoft faster, leaner, and stronger. I'm glad I passed the 1st date test with you and the rest of the board. I'll take those seasons tickets now.


Honestly, quite possibly the same PR team drafted both letters.


>quite possibly the same PR team drafted both letters.

How cynical are you people that you don't think long-time corporate executives can sit down and write a professional, "safe" sounding, 500 word resignation letter?


Why do you think that we think that's what happened because the two executives "can't"?

I think it happened because both had lawyers looking it over due to the fact both are operating in the heavily regulated space of high-level officers in one of the world's largest publicly traded companies, and it would be suicidally stupid to not have lawyers looking over your every official utterance... and while the words are in the lawyers hands, the PR department might as well have a go too, since it's not a hard guess to think this could go mobile-first, cloud-first... er... public.


It's not whether or not he can, it's whether or not he did.


I think they can. I also think it's not a good use of their time.


Why do that when they can pay someone else to?


[deleted]


Poorly written? 'then him'? 'bolness'? Funny.


This comment thread should be in the HN hall of fame. Classic :)


Reading this, "No company in the world has the mix of software skills, cloud skills, and hardware skills we have assembled", only got me thinking of this:

https://www.youtube.com/watch?v=4gosFtO6504


Possibly, written by the same person.


This is such a ridiculous scenario that I hope it's how it actually happened.


Somebody at MS PR is having a good laugh with friends over beers now.


> Honestly, ...

I see what you did there!


Exactly true.


[deleted]


I think Satya is known for doing that.


Nobody actually communicates like that, in terms of company slogans like cloud-first mobile-first and describing each other as having boldness and innovation. Not even CEOs.

This is a crafted communication targeting information to Microsoft employees and investors. It is not a 'leaked memo'.

I've heard it said that Ballmer's retirement had much more to do with strategic board shuffling to prevent predatory dividend dumping from the vulture capitol firm ValueAct Capitol.


>This is a crafted communication targeting information to Microsoft employees and investors. It is not a 'leaked memo'.

Leaked memo? Who made that claim? It's posted on Microsoft's own website.

Carefully crafted? Uh, yeah, it's a resignation letter from a major corporate executive that is publicly posted. Should it have some LOLs and emojis?


It has not been claimed that it was a leaked memo. I must apologize for the imprecision of the word 'leaked'. 'Published' is a better word than 'leaked' and should have used it instead.

To reiterate the point without the confusion regarding 'leaked': The media is the message. The form of the news/announcement of the resignation came in shape of a memoized email exchange, as if these actual words between Ballmer and Satya were exchanged in this actual format.

I submit that they were not.

I submit that the substantial majority of the content was not written by or for Satya nor by or for Ballmer, but that this announcement is for employees and investors to read. I submit that it is also a method for Microsoft to contextualize a complicated decision for the tech media and for the digestion of the broader interested public.


It's very difficult for the new CEO and old CEO to be on the board together for 100+ reasons. As stated this comes at the 6 month mark. I'm sure this was all part of a carefully crafted calendar going back to the transition.


Bill and Steve were together on the board for a long time, but I think the pair is the exception rather than the norm.


Eric Schmidt is still on Google's board.

Pierre Omidyar is still on EBay's board.

Reid Hoffman is still on LinkedIn's board.

It does seem to be more of an exception when the ex-CEO is not also a founder (or someone very close to the founders, like Schmidt). Carly Fiorina is not on HP's board, Meg Whitman is not on EBay's board (although, ironically, she is on HP's). Lou Gerstner is not on IBM's board.


Also besides just the pairing the circumstances were pretty different.

It seemed pretty clear that Bill wanted out for a while before he left (as CEO) but I don't think Steve did, regardless of what the official story is.


It's amazing to see what Ballmer stepping down from Microsoft has done. Microsoft's stock has outperformed Google's in the past year: https://www.google.com/finance?chdnp=1&chfdeh=0&chdet=140847..., msft&ntsp=0&ei=qJbzU7D4JvLLiQLNuYCACg


I think you'd be interested in reading Thinking Fast and Slow by Daniel Kahneman.

Specifically, he addresses CEO's as well as the stock market. I think equating Ballmer's leaving of Microsoft to the stock market success is coincidental at best.


Five years ago I joined Microsoft. I have been neutral to pro-Ballmer the whole time, but this chart explains why many people were unhappy with him.

https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...


True, this is a big part of it. However to calculate return people should also consider the dividends that Microsoft has been paying out as well (for longer than many competitors).

Starting on Jan 23rd 2009 (which is when the chart you linked to starts for me) an investment of just under $10K (with reinvested dividends) would leave you with just over $30k today [1] which is honestly not a bad return.

[1] http://www.microsoft.com/investor/Stock/StockSplit/stockcalc...


Sure that makes it outperform the S&P 500 over this arbitrary period, but still falls short from the other companies. It makes more sense though to look at it since he became CEO[1] in January of 2000. Now we see a huge difference with MSFT the only one in negative territory and the other companies having massive returns. Reinvesting dividends over this period would push this into positive territory, but it still wouldn't even outperform the S%P 500 (22.57% vs 34.99%).

[1] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...


The stock only increased by ~125%. Microsoft only started paying 3% dividends a few years ago. This does not add up to over 30k. It's barely 24k.

Anyway, I do agree it's not a bad return. It's only bad relative to the other tech giants.


I am not a big fan of Microsoft. But how many companies do I know which have grown revenue year after year for FORTY* years? Must give this man (and Bill) credit, for that is a near impossible task.

* Except a couple of near misses.


Yes, the stock price reflect poor performance, but be aware that going forward, focusing on the near-term stock price is precisely the wrong thing to do. The investments the company needs to make will take many years to play out, and the shareholders will need to be patient.


How did you make that chart please? Specifically, the percentage on the y-axis -- how does one get that? Thanks.


If you add more than one stock to a Google Finance chart, it should automatically change the y-axis to %.


Merci.


Very interesting chart. MS matches Dow Jones almost exactly in recent years. NASDAQ did usefully better. On that evidence there's not much reason to invest directly in MS.


> On that evidence there's not much reason to invest directly in MS.

That's a sign of a mature company. There are reasons to invest in companies like that (safety and dividends, for example), but they don't include high growth potential.


Microsoft is part of the DJIA so it should not be too surprising that their movements are pretty well correlated


For those who don't speak corporate: " Under your leadership, we created an incredible foundation that we continue to build on — and Microsoft will thrive in the mobile-first, cloud-first world. " = your plan failed and here is what we are going to do now instead


Just change the and ("— and Microsoft") to "but Microsoft", and you get the true meaning.


Anybody struck by the number of times the word "bold" was used? What do you suppose is the hidden meaning behind that?


An attempt to highlight how much gambling they will be doing going forward as opposed to simply riding some (much easier) opportunity.

"Microsoft will need to be bold and make big bets to succeed in this new environment. Writing great software is a tremendous accomplishment and selling software has been a fabulous business. In the mobile-first, cloud-first world, software development is a key skill, but success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues. Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has."

"Big bets" - we won't win everything we try or even come close. Some of the things we do will make us look foolish.

"software development is a key skill, but success" (it's not the olden days when we had a lock on things)

"moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues" (I'm not sticking around for this one, best of luck!)

"well requires a boldness and fearlessness that I believe the management team has" (but I"m not certain after all I didn't say "I'm sure" I said "I believe".

Ballmer want's to leave the party before the end or at least when all the good food and booze is gone.


Maybe they misspelled "bald"


very bold! and mobile-first too!


Boldness aside, this sentence struck me:

> I have confidence in our approach of mobile-first, cloud- > first, and in our primary innovation emphasis on platforms > and productivity and the building of capability in devices > and services as core business drivers.

That's a lot to have confidence in. Is this tangled web of nested lists Microsoft's idea of "focus"? cf. Apple, Google, and Amazon's mission statements.


Mission statements are usually pure BS. Microsoft is too big to have a single focus. Google has discovered that recently. Apple is still having some focus, but just made a joint PR with IBM about enterprise-y stuff.. so where's the focus?

I'm trying to think of a huge company with a specifc focus and I can't. Perhaps others can weight in here.


I'm quite certain Intel is pretty focused on making faster, smaller and more efficient processors.


They certainly have their fingers in more pies than just processors.


Telecoms companies still seem pretty focused (Cisco, Ericsson). Does Nintendo count as huge?


Cisco is selling servers and "cloud automation" services these days. Ericsson is even selling smart power meters (although it does seem more focused than others).

Nintendo is a good example! 16B mkt cap, all on games.


Did Microsoft declare that their mission statement or is it just a few things a very large organization considers important?


Healthy thing for him to do. People should have two or three distinct careers, in my opinion, in their lives. I hope he has a blast owning the Clippers and teaching.

Off topic, but: I have been a bit negative on Microsoft since NT, which I liked and helped me get work done. However, I like their direction with Office 365 for all devices and their high end Surface Pro 3.


I'm surprised how short and to the point Satya's letter is to Steve. You would think in the 20+ years they worked together he would relate some kind of interesting or personal story. Instead it's pretty terse and reads like a termination letter. I wonder if it was really Steve's choice to step down off the board.


For all I know, in the twenty plus years they worked together, they both related lots of interesting and personal stories. Obviously Microsoft's PR department decided the official announcement of change in leadership wasn't the place for those, though. Remember the thing actually being communicated here is "yes, this is all part of the plan - so there is no need to panic sell Microsoft shares".


Dear Satya,

Sorry I forgot to give you the three envelopes.

Sincerely,

Steve


Dear Satya,

As we discussed, this paves the way for you to use the first envelope.

Best wishes,

Steve


"success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues"

That's a big step for Microsoft. My opinion is that they are late on subscriptions and ad revenues.


They were too busy building real value instead of chasing ad revenue for a long time--I'm okay with that.


You mean churning by creating frameworks and brands and then dropping them within a year or two?

Quick, what's their free email service called today?


outlook.com?

Also, note that Google/Apple can be quite gnarly about frameworks and brands, right? How's that Wave thing going? Groups? Reader?


Most of us who have been developing with the Microsoft stack have been burnt at least twice with key frameworks/technologies that have been artificially end-of-lifed while at their peak, leaving our projects based on obsolete technologies at v1.

I suspect that is what the parent comment is about, and not immature projects that were discontinued (with ample warning and exit) due mostly to lack of interest, as mentioned in your counter-bicker.


Exactly. Linq2SQL, launched in .NET 3.5, superceded by EF in .NET 3.5SP1. Silverlight, which was launched into a state of immediate torpor. XNA, first release in 2006, last release 2010, incompatible with Windows 8 which was launched in 2012. That's a pretty short lifespan for an entire development environment, especially considering that most folks don't touch these things on a first release.

And MS tools aren't just little libs. They're things that take a heavy time investment to learn - they're practically languages and even IDEs in their own right.

Almost every .NET release has completely changed the data layer, RPC, serialization. The only thing that hung on for a respectably long time was the abominable trainwreck that was ASP.Net WebForms. Did anybody out there suffer through WCF? Ouch.

This was Ballmer's microsoft.

The new MS has nothing anywhere close to that kind of churn, and the platforms are developed out in the open.


And Google in particular is rightfully pilloried for it.


If they were early Steve probably would still be running the ship.


"I continue to love discussing the company’s future. I love trying new products and sending feedback. I love reading about what is going on at the company. Count on me to keep ideas and inputs flowing."

This describes Ballmer's 34 years at the company. I used to think highly (or high-er) of him but it can't be clearer to me that him being appointed CEO was the worst decision in the history of msft, leading to the lost decade. I don't think he has any idea what he was doing - listen to his recent interview on Bloomberg.


This sounds a lot like a pro athlete that realizes its time to really retire and stop chasing his dreams from 10 years ago when he was able to play a really high level.


A lot of people here are calling most of the letter marketing speak, that may be true, but Satya has been talking about mobile-first cloud-based since he became CEO, like I haven't seen him do a single interview or public appearance where he doesn't mention at least one of the two things.


New CEO's - or even existing ones - only have so many things they can openly talk about. Listen to Marissa's interviews over the past year - I had to since I was preparing for an interview and the repetition in her talk was almost maddening!


Has any other corporate CEO generated more profits during his watch than Steve Ballmer? Not sure if this true but I suspect it might be.


What is with this trend of e-mail correspondence between high-level people at big companies being available to the general public?


So funny Cloud first, Mobile first... Henry Mintzberg would say that this is an inward focus statement telling and reminding MS employees what their focus should be. Bottom line : no many great mobile apps on MS devices...


He's got bigger things to do: http://instagram.com/p/r2jjTdhQFx/


Am I the only person who started shouting "Developers! Developers! Developers!" at the screen while watching this?


Yes.


Watch as MSFT's stock jumps.


boldness bold boldness bold boldd bold.. ness.


Yeah, it read like a BBQ sauce commercial.

Sweet Baby Rays - big bold taste.


Clippers! Clippers! Clippers!


I think Clippys is now a more suitable name.


"I see that you're trying to post up. Would you like me to set a screen?"


I love how that matches Clippy's standard incompetence, since generally speaking screens are for creating openings to drive or take jumpers. Sometimes you see a screen designed to get a guy into good post position, but usually not.


This is the funniest post I have read on HN in months - pure genius.


Ballmer's weirdly suited to be owner of the Clippers. Coming in to Eminiem's 'Lose Yourself', practically hysterical with excitement is kind of cool. Much, much better than Sterling.

If the owner couldn't be Magic Johnson, I'm glad it's a superfan like Ballmer.


Bla, bla, bal... How about showing us some great products instead?


Microsoft is a spent force these days. Yes, they missed the opportunity to jump onto phones, but destroying their entire business and alienating all their customers is a complete overreaction.

Shame though, I liked Windows before they tried to slap the UI from a mobile phone onto it.


some people are born without the ability to walk.

others, are born without the gift of hearing.

i was born with an incredibly low "cringe" threshold.

reading this "exchange" almost put me in a coma.


How out of touch does a corporation have to be to announce the resignation of a board member in this manner?


I'm hoping the target audience is 50 year old millionare shareholders and not us peasant folks.


"Mobile-first, cloud-first"... I've used their cloud and even our .NET fanboys voted it off the island at our shop.

And mobile first? Do they even have a mobile offering? I mean, sure, the Slate is kind of cool. But doesn't your company need marketshare to say that you're "mobile-first"?


What they mean is that in the face of criticism exactly such as yours, that Microsoft will not revert to server-closet, workstation first in order to keep the easy flow of cash coming. Think AOL at the start of the broadband era. Microsoft doesn't want to become a mindless machine with ever dwindling returns.


Funny thing.

Has the cloud market already become larger than the server market? And has the mobile market already become larger than the desktop/laptop market?

I ask because there are always lots of markets that appear, grow like crazy, stealing money from another related market, and then saturate, without ever getting bigger than the original one. The trend we saw in computers - where every new generation brings a cheaper incumbent that plainly wins is an exception, not the rule.

I'd be quite open about a new generation of computers being an exception again, I even tought they'd be for a while. But there is no way the mobile (phones + tablet) market will grow a lot anymore. How many phones does a person need? The cloud (IaS) market has space to grow, but so do servers, and each has its own set of advantajes, thus there's no reason to imagine that the cloud will "win" while servers "lose".


I think that the cloud will win, if only because it's the logical first step for any small customer (which you can later up-sell). And large customers will be won over when you tell them they never have to upgrade again and that uptime/security is guaranteed by an SLA. Businesses love eliminating liability and risk, and theoretically the cloud can win on both counts.

Also, I think mobile-first will win via the web and because mobile is the lowest common denominator (you can put a qwerty keyboard and browser on any full computer).

My $.02 though, it's a huge gamble for Microsoft to beat others in this space. If I were Microsoft I'd be buying Pandora, Redbox, Sirius XM, expanding MSNBC, and putting more into Xbox. That space is all about negotiating with parties and exploiting your dominance, which they've proved to be masters at over the years. For Microsoft to win in the cloud and mobile, I think they need to embrace open source and common platforms similar to IBM and Oracle, and I think they can never summon that desire.


You know those extensions that replace 'cloud' with 'butt'? It might be worthwhile to replace the entire phrase 'mobile-first, cloud-first world' with 'butt':

>In the butt, software development is a key skill...

>Under your leadership, we created an incredible foundation that we continue to build on — and Microsoft will thrive in the butt.




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