Ballmer to “Retire” – What’s Next?

Author: Scott Braden

As perhaps the most famous and successful pair of tag-team tech executives in history, Bill Gates and Steve Ballmer built the Microsoft empire by first co-opting the operating system of the new PC devices, then learning from the lessons of their new business partner IBM about how to build and enforce monopolistic “lock-in” over their customers and partners.

As their market position and strength increased, they engineered long term growth and dominance by using aggressive pricing and licensing tactics, combined with a constant churning of the core product bundles (but always relying on Windows first, then Office, then servers).

Microsoft’s history provides many great business lessons: showing that the best products don’t always win; that early market advantages can be leveraged into huge empires, and a series of case studies about how to exploit unregulated monopoly market positions to support gross profit margins of 74% …exceeding almost every other large company.

Microsoft was never truly an innovator; at least, not a very successful innovator. There simply was no need when the cash piled up in huge stacks each quarter and any nascent threat could be purchased while still small.

The experiments that reached the marketplace were almost universally failures; and worse, they were laughingstocks. How could such a rich and brilliant team come up with Microsoft “Bob”? What senior executive thought that eliminating the Start button from Windows 8 would just pass by un-noticed?

So here we arrive at the Kool-Aid question.  The longstanding jibe at the uncanny way that Microsofties all seem to think and speak and view the world in the same way.  Is it something in the water at the Redmond HQ?  Perhaps the true innovation Microsoft has brought to business has not been technology, but new-hire brainwashing?

Whatever “it” is, Microsofties are known for their worldview which, unfortunately, leaves them prone to assuming that their new stuff is automatically better than all the alternatives.  And by extension, that when customers complain, it’s because they simply don’t understand what’s best.

Ballmer, in all his famous ego, personifies this Kool-Aid view of the world. He became the designated extrovert to speak for Gates, the famous introvert.  But no amount of dancing around, yelling, or throwing chairs will stop the world from changing and that’s what Ballmer’s retirement announcement is really about.  The world is changing and the old guard who see the world from in front of a desktop PC, wired to a LAN server, are being replaced by the new kids who have the entire sum of human knowledge in their hand, 24x7x365 and will never pay a license fee to Microsoft to access it.

So what’s the next CEO going to do?  Continue down the path worn by IBM, CA, and the long list of previous tech companies who just continue to extract maintenance revenue from old legacy technologies?  Or is Microsoft actually capable of changing, of innovating, of bringing us the next big thing?  Time will tell.

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