By Joe Wilcox, Betanews
In his 11th year as chief executive and third outside the shadow of Chairman Bill Gates, Steve Ballmer is asserting surprising control over Microsoft. There were signs in 2010, but events over just the last week, particularly the public execution of Bob Muglia, show a different side of Microsoft's CEO. Competitors, you've been warned.
Over the last week, Ballmer did two things that spotlight this change in his leadership style, something already seen in other executive ousters (including Robbie Bach and Ray Ozzie in 2010). The first: Ballmer rightly resisted making tablets a major part of his Consumer Electronics Show keynote last week. The second: Muglia's demotion, and in real substance firing, as Server and Tools Business president.
Tablet To-Do
Gates' debuted Microsoft's Tablet PC concept in November 2000, during Comdex, and announced the first devices two years later with 20 partners. But not until last year's Apple iPad debut did the category get moving. Now, anyone and everyone is blabbering non-stop about tablets' future and iPad's overwhelming dominance (ignoring, by the way, that it's still a nascent market compared to PCs or cell phones).
Rumors going into CES had Ballmer pegged to make a major tablet OS announcement during his CES keynote and to show off a rack of supporting devices in response to iPad. Instead, in an event held hours earlier, Microsoft announced the next Windows version would support ARM processors and System-on-a-Chip technology.
Ballmer was right not to make any major tablet announcement, showing off something that wasn't ready. Any zealous tablet push would have led to bloggers, journalists and Wall Street analysts making iPad comparisons. By staying away from Apple and iPad, Ballmer kept the message pure, which is good marketing. Ballmer set the keynote agenda on his terms rather than taking the position of following a competitor. Surely there was temptation, and pressure, to directly respond to iPad. Ballmer showed leadership by waiting.
Mugging Muglia
Muglia's ouster is Ballmer extraordinaire, and I say that with a big lump in my throat. Muglia is a big huggy bear executive; it's hard not to like his unpretentious manner. But Muglia also is a sacrifice to Microsoft's future, and one Ballmer rightly made. Ballmer's e-mail about Muglia's departure, which was posted on Microsoft's PressPass website, is remarkable for what it states:
Bob Muglia and I have been talking about the overall business and what is needed to accelerate our growth. In this context, I have decided that now is the time to put new leadership in place for STB...In conjunction with this leadership change, Bob has decided to leave Microsoft this summer. He will continue to actively run STB as I conduct an internal and external search for the new leader. Bob will onboard the new leader and will also complete additional projects for me.
Ballmer essentially humiliates Muglia, by asserting the executive who helped build up the very successful Server and Tools business and who now runs it isn't qualified enough to lead future advances. It's an unusually public admonishment of a loyal, long-time Microsoft employee (since 1988). I've read lots of speculation among pundits that Muglia and Ballmer had some personal falling out. I won't speculate but instead focus on what the public ouster communicates: Don't frak with Steve Ballmer.
Captain, My Captain
Ballmer has something to communicate here to other Microsoft executives, employees, partners, Wall Street analysts and investors: He's in charge and will do whatever is necessary to make Microsoft more competitive in the decade 2010. No Microsoft leader is sacred enough; anyone can and will be sacked if they put personal agenda or perceived Microsoft agenda ahead of the company. Nearly all the major executives exiting Microsoft over the last year -- J Allard, Bach, Muglia and Ozzie, among others -- share something in common: They had a following within the company; purposely or not, they had established mini-fiefdoms.
The public nature of Muglia's departure also communicates to Wall Street just how serious Ballmer is about the cloud and transforming the server business to embrace it -- the same way Allard's and Bach's departures showed renewed commitment to transform the mobile business. Nothing is sacred now, not even loyal, long-time executives who succeeded in the past -- there Bach shares something with Muglia. Microsoft will even search outside the company to find the right leader for the responsibility.
Whether or not Wall Street analysts and investors can believe in Ballmer, that he is the right man to continue running Microsoft, is another matter. But there's no question about who is in charge. Many commentaries and punditries treat recent executive departures negatively -- rats fleeing the sinking ship. Just the opposite is true. The captain is taking the helm of the ship and throwing overboard suspect or disloyal officers ("You're walking the plank there, matee!"). There's only one captain on the good ship Microsoft.
Ballmer may have been chief executive since early 2000, but not until Gates' summer 2008 semi-retirement did the CEO escape the Chairman's shadow. The company made plenty of mistakes during the transition years, particularly falling behind in mobile and the horribly botched Windows Vista release.
But there is something different now in Ballmer's leadership style, which started soon after the September 2008 stock market collapse and became more apparent in actions taken in 2010. No one should underestimate Microsoft in 2011. Whether the good ship Microsoft breaks up on a reef or outmaneuvers competitors during the next two years, Ballmer will be at the helm. Accountability starts and ends with him now, like never before in his 11-year tenure. He's communicated that he is absolutely in charge. It's now deliver or die.
Steve Ballmer became Microsoft CEO 11 years ago today.
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