Microsoft would have you believe that it's created a framework that bridges our work lives and social lives, linking together the PC, phone, tablet and console with a comprehensive suite of software and services. In fact, the company has created this framework--but the bolts and girders connecting everything together are more fragile than you might think, and the departure of Steve Ballmer will stress Microsoft's ecosystem at precisely the wrong time.
Last Friday, Ballmer said he would step down in a year's time, prompting examination of his leadership mistakes, predictions of who might replace him, and, well, silly GIFs. There are also reports that his exit from Microsoft might not have been entirely voluntary.
But all this discussion is just background noise that's drowning out a bigger issue: A company with Microsoft's problems doesn't easily embrace new leadership midstream. Ballmer himself awkwardly addressed the problem, saying in one breath that "now was the right time," then in the next breath suggesting that it wasn't:
"There is never a perfect time for this type of transition, but now is the right time," he told Microsoft employees in a memo. "My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction."
Ballmer's right about the last point. And both Microsoft leadership transition and mission transformation need to be very carefully managed.
In a blog post, Microsoft communications director Frank X. Shaw took aim at critics who either myopically focused on Microsoft's consumer business, or else identified some product area that Microsoft had ignored to its detriment. After dipping his toe into hippy-dippy spiritualism (Microsoft is "unlocking human potential in all its forms"? Really?), Shaw began laying out the fundamental tenets of Microsoft's new vision: bridging work and play; creating as well as watching, playing, and sharing content; and targeting the intersection of hardware, software, and the cloud.
Of course, Microsoft's path toward facillitating work and play began many years ago: Customers could spend their day working on Office, then come home and play Microsoft Flight Simulator or the Xbox. Microsoft learned that by controlling an entire platform--both hardware or software--it could own your entire user experience.
Good ideas applied way too late
But we can also make the argument that Ballmer and Microsoft applied these lessons much later than they should have. For example, Microsoft launched the Zune as Apple was already transitioning from the iPod to the iPhone. And only recently has Microsoft launched a music and movie store for the Xbox. And, of course, Microsoft's Windows and Windows Phone app environment is still woefully poor, as is its Windows 8 store.
Moving forward, the balancing act that Microsoft must walk is perhaps best summed up by this quote from a fund manager quoted by Bloomberg: "Someone starting near the first of the year would be able to make some decisions in time for the next holiday season," Pat Becker Jr. said. "Then again maybe that's too much to expect--expecting someone to turn around a company like this that quickly."
Now that Windows 8, the Xbox One, and new versions of Office and Windows Server have either been released or announced, Microsoft's board of directors obviously feels that the company is steady enough to maintain its balance while a new head is put in place. But I disagree: While Microsoft's enterprise businesses are on stable footing, Windows 8.1 and its follow-ups still need a steady hand guiding them forward (if not fixing their biggest mistakes).
And that's just the tip of Microsoft's problematic iceberg. Windows Phone apps are struggling. Windows 8 apps are struggling. The Xbox One isn't even out yet, but it almost lost the battle of public opinion to Sony's console. And if Microsoft is committed to all of these platforms, the teams working on them need to know they're headed down the right path.
Meanwhile, Ballmer just flattened the entire company's organization, orienting it around technologies, not products. Executives of key, strategic importance have been only been in their new roles on the order of weeks.
Ugh. What a mess. It's hard not to look at how hard Ballmer shoved Microsoft in the direction of a cohesive, unfied experience, and then wonder, "OK, what now?" Either Microsoft continues down its path--and if it does, why isn't Ballmer still running the ship?--or it heads off on a tangent, essentially writing off years of product development.
It's been a rough few months for Wintel: AMD, Intel, and now Microsoft have recently weathered CEO transitions. On the outside, at least, Intel has appeared to have negotiated those seas the smoothest. However, CTO Justin Rattner said he would retire, and processor chief Dadi Perlmutter moved into a specialist role. "They're both gone," one Intel exec commented this week. (Though it must be noted that an Intel spokesman says both are still employed by the company.)
Inevitably, someone at Microsoft who thinks he or she deserves the top job is going to be passed over. So who leaves then?
Microsoft may indeed have a bright future ahead of it, as Shaw opines. But looking back, it certainly seems like Microsoft could have paved the way for an orderly CEO transition during the Windows 7 years. Yeah, hindsight's 20/20 and all that. Let's just hope Microsoft's board sees just as clearly, looking ahead.