Over the weekend, Microsoft announced that CEO Steve Ballmer would be retiring from the struggling tech giant within the next 12 months. The announcement follows a disastrous performance by Microsoft’s Surface RT tablet – Microsoft’s first entry into the crowded tablet market – which forced the company to write down $900 million in losses.
“[The write-down] caught the attention of the board, and based on Ballmer's over-enthusiastic public commentary on Windows RT and Surface RT, they lost a lot of credibility. So did Ballmer,” said Patrick Moorhead, principal analyst with Moor Insights and Strategy, in an interview with ComputerWorld. “[The board] either drove him out, or put him in a situation where he felt he had to leave to save face.”
Ballmer took over as CEO in 2000, the first person to don the title since founder Bill Gates decided to step down. In the 13 years since Gates’ departure, the tech landscape has shifted drastically. Many view Microsoft’s recent troubles as an inability to adapt to the changing technology market – amplified by pressure from increasingly popular rivals.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
“Microsoft had been criticized by investors recently for not reacting quickly enough to the way Apple and Google have led the way in mobile devices,” said BBC. “The company struggled as consumers began to shun desktops and laptops in favor of tablets and mobile devices.”
When Ballmer was appointed as company chief, Microsoft was worth $604 billion. Today, Microsoft has a market value of $269 billion – less than half of its pre-Ballmer worth. Microsoft stock was up as much as nine percent following the announcement that Ballmer would retire from his post.
“An investment of $1,000 [in Microsoft stock] in January 2000 would now be worth just $767 after reinvesting dividends,” reported the Associated Press. “The same investment in Apple would be worth $20,120.”
While Microsoft may have experienced bad luck with hardware, the company remains very popular on the software side. The Windows operating system, as well as the Microsoft Office range of productivity programs like Word and Excel, remain widely popular with businesses. Approximately 70 percent of all business emails are sent using Microsoft applications.
“I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most,” Ballmer wrote in a message to company employees.
The Microsoft Board of Directors, with Gates at the helm, has appointed a special committee to find Ballmer’s successor. Internal and external candidates will be considered.
“As a member of the succession planning committee, I’ll work closely with the other members of the board to identify a great new CEO,” said Gates, in the official announcement from Microsoft. “We’re fortunate to have [Ballmer] in his role until the new CEO assumes these duties.”