Ballmer's Legacy: 10 Highlights And Lowlights For Microsoft's CEO4:40 PM EST Fri. Aug. 23, 2013
Steve Ballmer became a household name in January 2000 when he succeeded Bill Gates as the CEO of Microsoft. Ballmer took over at a pivotal time for the software giant, which was embroiled in a major antitrust case with the Department of Justice and heading toward a major stock market drop and resulting recession. Here's a look at five highlights and five lowlights from Ballmer's time at the helm of Microsoft.
Windows XP had its share of detractors when it was first released in fall 2001, but the operating system has aged like a fine wine and is now seen as arguably the best version of Microsoft's flagship product line. The OS became a blockbuster for Microsoft and a mainstay on corporate PCs across the world. In fact, Microsoft says there are still more than 100 million PCs in North America running XP.
Microsoft spent considerable time, effort and money to get into the video game business. The results of that effort were, at first, not great. The original Xbox sold less than 25 million, but the console's successor -- the Xbox 360 -- was a hit with nearly 80 million units sold to date and turned the software giant into a dominant video game player. In fact, the Xbox business has been the lone bright spot for Microsoft's struggling entertainment division.
After the Windows Vista debacle, Microsoft got back to basics with another strong Windows release. Windows 7 made up for a lot of the sins of the past with a stripped-down approach, enhanced stability, and an improved task bar. Oh, and it was much faster than previous Windows versions. To date, Windows 7 has sold more than 630 million copies (and it's still going).
Microsoft has somehow quietly made itself a strong contender in the cloud platform market with Windows Azure, which competes against other enterprise cloud offerings from Amazon, Google and Rackspace. And despite the company's OS legacy, Microsoft has detached popular applications like its Office suite and Outlook email and moved them to the cloud. Microsoft has been accused of being too slow to react to new trends in the past, but the company moved fast on the cloud and has been rewarded with a growing business with Azure and Office 365.
When Ballmer took over as CEO in 2000, Microsoft's Enterprise Software and Services division, which included server platforms and developer tools, posted $4.08 billion in annual revenue. That business, now renamed Server and Tools, quadrupled to reach $18.6 billion in 2012. While some areas of Microsoft's business have struggled over the years, the Server and Tools division has shown steady, double-digit growth behind SQL Server and Windows Server products, among others.
For some reason, Microsoft hasn't been able to replicate its desktop dominance on mobile devices. The company first released Windows Mobile in 2000 for cellphones and pocket PCs, and while later versions captured a significant portion of the mobile OS market, the platform never really caught on. Microsoft's second attempt at a mobile OS -- Windows Phone -- arrived in 2010. While it improved the experience of Windows Mobile, it also struggled in the face of Apple's iOS and Google's Android. Windows Phone currently has single-digit market share for worldwide smartphone platforms.
Windows Vista was so bad that even Microsoft itself acknowledges it was a disappointment (one Microsoft official referred to Vista as "Windows Voldemort" at a recent event). Vista was criticized for having bloated features, a huge footprint, running slow, and frequent crashes, among other problems. Basically, it was everything you didn't want in an operating system.
In Microsoft's history as a public company, it had never reported a quarterly loss -- until last summer, when the software giant took a $6.2 billion charge related to its 2007 acquisition of online advertising company aQuantive. The $6.3 billion aQuantive deal was supposed to thrust Microsoft into the high-stakes world of Web advertising and drive the company's Online Services Division. Instead, the acquisition turned out to be a costly error.
On its own, Windows 8 isn't a bad operating system. But the OS suffered from some poor messaging and some bad timing (too soon on the heels of the successful Windows 7, and too late behind the likes of Google Android and Apple's iOS). While the OS has bright spots, the radical new interface for touch screens proved too much for PC users who longed for the traditional Windows Start button and task menu. The forthcoming Windows 8.1 update is expected to help matters, but VAR and OEM partners agree Windows 8 hasn't had the positive impact on the PC market that previous Windows versions have had.
Microsoft took a huge jump into the hardware space with its Surface tablets, but the company stumbled with a series of odd Surface moves -- from its retail-only sales strategy to the 4-hour battery life for the Surface Pro device. Microsoft recently announced a $900 million charge related to Surface RT "inventory adjustments" and admitted that it overestimated demand for Surface. While the company is readying second-generation versions of its tablets, Surface will be playing catch-up to the likes of Apple and Samsung.