Ballmer to Retire: What Challenges Lie Ahead for Microsoft?

Steve Ballmer is retiring as CEO of Microsoft, leaving many to question what the next CEO will need to do in order to invigorate the company, boost morale and emphasize innovation. Ballmer is said to have focused more on sales and revenue, rather than experimentation, and did not fully develop many technologies the company began, some of which competitors would later turn into blockbusters. However, innovation under Ballmer is evidenced by departures such as the Kinect motion sensor and the interface of Windows 8.

Currently, Microsoft is less of a corporation, than it is a collection of various vaguely related businesses, such as gaming (Xbox, Kinect), software (Office, Windows), hardware, and Web services (Bing, cloud versions of Office), reports Quartz. This is mainly due to Ballmer, who typically acquired companies and attempted to integrate them, while he focused heavily on sales.

Many have characterized Ballmer as more business-oriented, rather than a tech genius like Bill Gates, Microsoft’s founder. Ballmer’s focus on sales was enough to increase revenue during the time when Microsoft had a near-monopoly on PCs through Windows.

“When we first did the Internet work in ’95 to ’97, incredibly talented people unleashed did amazing things,” said Brad Silverberg, a technology investor and former Microsoft executive who led Windows 95 development. Currently, “so much energy is expended on repressing good things to play defense and protect the castle.”

Ballmer was inclined to disregard emerging technologies such as NetDocs, an early Web-based word-processing software, that was eventually discontinued for fear that is would hurt Office sales, said former executives. Other technologies were also disregarded or abandoned, including an early tablet prototype called Courier, and software to read emails and play music in the car.

Protecting established interests is ingrained in the culture at Microsoft, and collaboration with other groups or departments is sometimes discouraged, resulting in employees not trying, according to current and former employees and outsiders. A new CEO may be a better choice to help encourage technologists that think outside the box.

“But Craig Mundie, a senior adviser to Mr. Ballmer, said in some cases Microsoft didn’t capitalize on new ideas because its structure didn’t make it easy for divisions to work together,” reports The Wall Street Journal. “Last month, Mr. Ballmer reorganized the company, and Mr. Mundie said the next CEO will ‘inherit a better structure to take all these new ideas to market.'”

WSJ notes: “Whoever succeeds Mr. Ballmer at Microsoft will face the challenge of rebooting its corporate culture, in which charting the safe but profitable course — at least for the short term — too often wins out over innovation, say current and former Microsoft employees and other industry executives.”