Steve Ballmer has announced his intent to retire as CEO from Microsoft, admitting that the company needs new “longer-term” leadership as part of its efforts to restructure as a devices and services company.
Ballmer will step down within the next 12 months, once a successor has been chosen.
“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a statement today. “We have embarked on a new strategy with a new organisation 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.”
In an internal memo to staff, Ballmer was more open: “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.”
The company said it will consider both external and internal candidates. Chairman Bill Gates is to play a role in deciding Ballmer’s successor. Ballmer, 57, succeeded Gates in 2000 as head of the world’s largest software company.
Attention will now turn to likely candidates for the top job. What is certain though is that whoever steps into Ballmer’s shoes has an uphill struggle ahead of them.
Last month’s planned restructuring was designed to get more of its products used on devices other than the waning PC market. But Microsoft has tried to crack the mobile OS space for over ten years and has so far had little success. Since launching its Windows Phone 8 mobile OS in October 2012, as well as entering into a strategic partnership with Nokia – along with agreements from Samsung and HTC to launch Windows Phone 8 devices – the viability of having a third mobile OS ecosystem to seriously challenge Android and iOS has still to be proven.
Analysts believe the choice of next head of Microsoft is crucial to the firm’s fate. “If [Ballmer] gets to pick a clone of himself with the same direction and strategy, MSFT is in big trouble longer term,” wrote Jack Gold in a research note. ”What they need is a leader with a new direction – a visionary who can bring back innovation and provide products people are willing to spend money on. Unless such a leader is found, MSFT is in for a continued, albeit slow, decline. Many people still maintain a good will feeling towards MSFT and want it to succeed. Can MSFT tap into this with new leadership and once again become an innovative leader in the market, or at the very least, give people what they want and are willing to put there money down to obtain? That’s the ultimate question the next leader of MSFT will have to answer, and demonstrate a willingness to address.”
Ballmer himself said he was confident Microsoft could adapt: “Microsoft has all its best days ahead,” he wrote in the staff memo. “Know you are part of the best team in the industry and have the right technology assets,” he told employees. ”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.”