Microsoft CEO Steve Ballmer to retire within 12 months

BY Gautam Prabhu

Published 23 Aug 2013

Business Leaders Gather In Detroit For The National Business Summit

In case you haven’t heard, Steve Ballmer, Microsoft CEO has decided to retire within the next 12 months. He will remain as the CEO until his successor is found.

Ballmer dropped out of Stanford Graduate School of Business to join Microsoft in 1980, and was the company’s 30th employee. He became the CEO of Microsoft in 2000.

I didn’t see Steve Ballmer as a visionary, and found him quite obnoxious at times, but admired his passion and enthusiasm for Microsoft.

Here’s just one such example of his enthusiasm or craziness:

He also had the habit of putting his foot in his mouth. Like the interview Microsoft CEO Steve Ballmer gave in January 2007, just after Apple and Steve Jobs unveiled the iPhone at Macworld. When he was asked for his “first reaction” after seeing the iPhone, Ballmer replied with laughter:

“Five hundred dollars fully subsidized with a plan! I said that is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine …. I like our strategy. I like it a lot….Right now we’re selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they’ll have the most expensive phone by far ever in the marketplace and let’s see … let’s see how the competition goes.”

He also made a scene when he saw an employee use an iPhone during one of Microsoft’s company meeting back in 2009. Here’s TechFlash description of the incident:

“As the story goes, it happened when Ballmer was making his big entrance—slapping hands, running around, and generally whooping things up, as is his tradition at these events. That was when he spotted someone at field level, allegedly a member of the Windows group, using an iPhone to take his picture. Ballmer grabbed the Apple device from the employee and made some funny remarks as everyone booed. Then he put it on the ground and pretended to stomp on it, before walking away. The scene was visible on the big screen, so even people in the upper deck could see what was happening. Later, during his presentation on stage, Ballmer referred to the episode again, teasing the person and making it clear that he hadn’t forgotten what [had] happened.” 

It looks like Wall Street is pleased with Steve Ballmer’s plan to retire as Microsoft’s stock was up as much as 8% after the markets opened today (up 5.74% at the time of writing this post), and ironically as AllThingsD points out, he made over $500 million for announcing his retirement. He owns 333,252,990 shares of the company, which is worth over $10 billion.

It was quite evident that Microsoft needed someone who could lead them with a fresh perspective into the post-PC world. It will be interesting to see who becomes the next CEO of Microsoft.

Microsoft issued the following press release to announce Ballmer’s retirement:

REDMOND, Wash. — Aug. 23, 2013 — Microsoft Corp. today announced that Chief Executive Officer Steve Ballmer has decided to retire as CEO within the next 12 months, upon the completion of a process to choose his successor. In the meantime, Ballmer will continue as CEO and will lead Microsoft through the next steps of its transformation to a devices and services company that empowers people for the activities they value most.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

The Board of Directors has appointed a special committee to direct the process. This committee is chaired by John Thompson, the board’s lead independent director, and includes Chairman of the Board Bill Gates, Chairman of the Audit Committee Chuck Noski and Chairman of the Compensation Committee Steve Luczo. The special committee is working with Heidrick & Struggles International Inc., a leading executive recruiting firm, and will consider both external and internal candidates.

“The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.”

“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. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

Steve Ballmer sent this email to Microsoft employees regarding this plan to retire (via SAI), which I thought was quite classy:

I am writing to let you know that I will retire as CEO of Microsoft within the next 12 months, after a successor is chosen. There is never a perfect time for this type of transition, but now is the right time. My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction. You can read the press release on Microsoft News Center.

This is a time of important transformation for Microsoft. Our new Senior Leadership team is amazing. The strategy we have generated is first class. Our new organization, which is centered on functions and engineering areas, is right for the opportunities and challenges ahead.

Microsoft is an amazing place. I love this company. I love the way we helped invent and popularize computing and the PC. I love the bigness and boldness of our bets. I love our people and their talent and our willingness to accept and embrace their range of capabilities, including their quirks. I love the way we embrace and work with other companies to change the world and succeed together. I love the breadth and diversity of our customers, from consumer to enterprise, across industries, countries, and people of all backgrounds and age groups.

I am proud of what we have achieved. We have grown from $7.5 million to nearly $78 billion since I joined Microsoft, and we have grown from employing just over 30 people to almost 100,000. I feel good about playing a role in that success and having committed 100 percent emotionally all the way. We have more than 1 billion users and earn a great profit for our shareholders. We have delivered more profit and cash return to shareholders than virtually any other company in history.

I am excited by our mission of empowering the world and believe in our future success. I cherish my Microsoft ownership, and look forward to continuing as one of Microsoft’s largest owners.

This is an emotional and difficult thing for me to do. 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.

Microsoft has all its best days ahead. Know you are part of the best team in the industry and have the right technology assets. We cannot and will not miss a beat in these transitions. I am focused and driving hard and know I can count on all of you to do the same. Let’s do ourselves proud.

Steve