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Ballmer forced out after $900M Surface RT debacle

Gregg Keizer | Aug. 26, 2013
Major miscalculation and ensuing financial blow precipitated board's decision to push out the Microsoft CEO, argues analyst.

Other analysts saw a longer process, where Ballmer knew he was on his way out for months, and one in which he was not exactly ousted, but saw the logic of retirement, both for himself — and as Ballmer wrote in his email — for the good of the company.

"He has been looking for the right time to retire for a long time, the right person to hand the reins to," said David Cearley of Gartner. "I think it's very likely that Ballmer's decision [to retire] is part of a broader strategy within Microsoft as expressed by the reorganization in July that is geared toward shifting the corporate culture."

The reorganization Cearley referred to was one announced by Ballmer himself July 11 that eliminated the long-standing product-centric divisions and reshuffled executives and responsibilities along more horizontal lines and with more control shifted to the CEO.

To Cearley, Ballmer's departure was a mutual decision, one based on the realization that the reorganization and the company's earlier pronouncement that it would become a "devices-and-services" vendor required a new CEO near the beginning of the process, not in the middle of the transition.

"They came to the decision that this overall strategy required bringing in a new CEO who can execute from the beginning to put their own imprint on that strategy," said Cearley.

Ballmer spoke of the timing in his email. "My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company," Ballmer wrote. "[But] we need a CEO who will be here longer term for this new direction."

 

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