Microsoft CEO Steve Ballmer will retire within the next 12 months, according to the company.
Microsoft has appointed a special committee, which includes company co-founder Bill Gates, to choose a successor. “There is never a perfect time for this type of transition, but now is the right time,” Ballmer wrote in a rather terse statement offered by Microsoft. “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.”
Ballmer was a target of frequent controversy during his tenure at Microsoft, and many outside analysts and pundits blamed him for the company’s inability to fully capitalize on growing trends such as mobile. The relatively new Windows 8, which featured a touch-optimized Start screen, was designed to give Microsoft a toehold in the burgeoning tablet market; but Ballmer reportedly admitted during a recent company event that initial sales of Windows 8 devices were weaker than expected.
As part of its most recent quarterly earnings, Microsoft announced that it would take a $900 million charge against its flagship Surface RT devices, a move that it referred to as “inventory adjustments.” Surface RT tablets run Windows RT, a version of Windows 8 designed for hardware powered by the ARM architecture, which dominates the smartphone and tablet markets. The Surface portfolio was designed to kick-start Microsoft’s transition to the aforementioned “devices and services company,” which makes those low sales problematic for its longer-term strategy.
During Ballmer’s tenure, Microsoft also launched the highly successful Windows 7, and began a shift to the cloud with products such as Office 365 and Windows Azure. It faces quite a bit of competition in the latter arena from Google, which offers a variety of cloud-based consumer and enterprise products; IBM, Oracle, and other tech titans also have no intention of letting Microsoft eat into their respective cloud market-shares.
In July, Ballmer announced that Microsoft would undergo a massive, once-in-a-lifetime reorganization that would allow the company’s massive divisions to interoperate with greater efficiency. “Improving our performance has three big dimensions: focusing the whole company on a single strategy, improving our capability in all disciplines and engineering/technology areas, and working together with more collaboration and agility around our common goals,” Ballmer wrote in an enormous memo detailing the reorganization, posted on Microsoft’s Website.
As part of that reorganization, Ballmer indicated that several executives would leave or change roles. Now the final piece is in place: having adjusted Microsoft in so many seismic ways over the past few years, Ballmer is heading for the door himself.