Former Microsoft CEO Steve Ballmer - My Biggest Regret

Mar 4 2014, 1:58pm CST | by

Microsoft’s biggest mistake in the 14 years of Steve Ballmer’s leadership was not making the transition from software to hardware quickly enough. Who says so? Ballmer himself, that’s who.  Facing an audience of students at Oxford University’s Said Business School in his first public appearance since retiring as chief executive in February, Ballmer was asked to outline his biggest regret and, with characteristic bluntness, he did not hesitate.

‘If I look back with 20-20 hindsight, the thing I regret is that we didn’t put the hardware and software together soon enough,” he said. It was almost magical the way the PC came about with an operating system from us and hardware from IBM. There was a little bit of magic too for Android and Samsung coming together. But if you really want to bring a vision to market, it’s helpful to be able to conceive and deliver the hardware and software.”

Ballmer believes Microsoft is in the process of fixing this problem, with Surface tablets and Windows phones now in its portfolio and the $7.2bn acquisition of Nokia’s mobile phone business adding serious weight in hardware.

“Our company is in the process of building new muscle so that we’re not just thinking about things like tablets in advance and letting Apple commercialise them,” he said. “We have the innovation muscle and the marketing muscle and you see it in what we’re doing today with Surface and what we’re doing now with Windows phones and Nokia. Does that mean for sure that we will lead the next generation? No, but we’re there working hard to make sure that in that next wave, we’re there, we’re catching it, we’re driving.”

Ballmer, who met Bill Gates at Harvard and was Microsoft’s 30th employee when he joined in 1980, said he is extremely proud of the company’s record of innovation in his 34 years at the company.

“Most technology companies fail,” he said. “They’re zero trick ponies. They never do anything well and go away. You’re pretty much a genius in our business if you’re a one trick pony and even companies that get to be public companies generally have one trick; something that they get right and fix and then spin it really fast.

“At our company, I’m very proud of the fact that we’ve done at least two tricks. We really invented the modern PC by building Office. Then the second thing we did was really bring microprocessor technology into the data centre.”

He added: “I’d say we’ve done more tricks than anybody else. Apple has done two. I’d say we’ve done two and a half as I’d like a half-credit for X-Box. Most companies only do one. Google has got one to its credit. Oracle is still running the same play book. The fact that we’ve done two and a half is something I’m really, really proud of. And the fact that we’ve built muscle that lets us do new tricks in the future will distinguish us from all other technology companies on the planet.”

So what happened to make Microsoft miss out on much of the mobile phones revolution, not to mention the market for computer tablets that the company showcased years before Apple launched the iPad but never brought to development? Ballmer was uncharacteristically penitent on the matter.

“At the front edge of what’s called the ‘mobile trick’, we got a little bit behind,” he admitted. “The question is: what do you do when you get behind. Do you give up and go home… or do you say ‘what did we do wrong and how do we make sure we’re building assets that let us seize on things going forward?’ We stayed going forward. We came out with Surface, we came out with our phones, we have our proposed acquisition of Nokia, which is very important to us, and we prepare for the next generation.”

Ballmer believes the Nokia transaction was one of the most difficult strategic decisions for Microsoft in recent years but also one of the most significant. “It’s important because the name of the company is Micro-soft,” he said. “As a fundamental part of the founding principles, we were a software company and yet with X-Box, then Surface and now the phones, essentially we have a profile that will wind up being far more mixed in the future. That’s a pretty fundamental change in the way that we self-identify, think about and express the value we add and our innovation.”

The issue is that others are innovating too, though it is tricky to measure their potential for genuine long-term success. Should tech companies be measured on eyeballs on websites, even if they have yet to be monetised via subscriptions or advertising?

Ballmer believes such measurement remains tricky and needs refinement. On the subject of Facebook’s $19bn acquisition of messaging service WhatsApp, for example, he commented:  “Obviously if your goal is to sell the company, they had the right goal-set: low cost, 450m users and sell for $19bn. Does this imply that everything that gets 450m users would sell for $19bn? No it does not. Is it a fad? Well, probably not. I don’t know whether they’ll be successful or not but you do have to really sit there and say ‘what’s my goal?’ Will that asset ever be worth anything? Will those 450m people ever generate enough revenue for it to pay off? {Facebook chief executive} Mark Zuckerberg believes so and {there’s} no reason to doubt it. But you really have to look at it and say: ‘; what is the measure of success?’ In the long run, the measure of success is: do I make a lot of money for my shareholders, relative to their expectations? That’s the long term? The question is: how you get there?… And do I think there are still a lot of things to be figured out? Yes, I do.”

There’s plenty to play for still. Ballmer asked how many of his audience really expect the devices they love to look remotely like their present form in ten years’ time. He certainly doesn’t. He also sees enormous opportunity, with globalisation and the development of technology both in what he regards as their early years. “Globalisation, we could say is in the rear-view mirror but I don’t believe that,” he said. “The fact that is world markets are going to continue to grow in an unprecedented way for the next 25-30 years. There are 7bn people on the planet and maybe 2bn of them have much in the way of resources. Let’s say that grows to 3bn. That’s a fundamental opportunity for innovation, growth and improvements in world prosperity.”

Has Microsoft missed the trick for good or is it on the way back? Let me know what you think. Follow me here and  on Twitter at @Andycave

Source: Forbes Apple

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Apple’s New SIM Card Is Great For Travelers
Apple’s New SIM Card Is Great For Travelers
The latest iPad comes with SIM cards perfect for people on the go
 
 
Tim Cook Met With Chinese Officials On Privacy
Tim Cook Met With Chinese Officials On Privacy
The Chinese government has taken an interest in Apple’s security and privacy
 
 
Why Is Apple Pay The Most Secure Option Available?
Why Is Apple Pay The Most Secure Option Available?
Is Apple Pay really worth the hype?
 
 
Apple Planning to Open 25 New Stores in China within Two Years
Apple Planning to Open 25 New Stores in China within Two Years
Tim Cook reveals that Apple is thinking to build 25 additional stores in the massive Chinese market
 
 
 

Latest from the Network

Second MERS case reported in Qatar
Doha, Oct 23 (IANS) A 43-year-old man in Qatar has tested positive for Middle East Respiratory Syndrome (MERS) in the second confirmed case of the deadly virus in 10 days, media reported Thursday. The patient had...
Read more on Business Balla
 
Two people die in Pakistan bomb blast
Islamabad, Oct 23 (IANS) At least two people were killed and 12 others injured in an explosion that took place in Pakistan's Balochistan province Thursday, media reported. The bomb was planted on a motorcycle, Dawn...
Read more on Politics Balla
 
Trott extends contract with Warwickshire till 2017
London, Oct 23 (IANS) England batsman Jonathan Trott, whose mental issues led to his abrupt departure from last winter's Ashes tour, has confirmed his successful comeback to competitive cricket by signing a new three-...
Read more on Sport Balla
 
Srikanth, Kashyap big movers in BWF rankings
Kuala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest Badminton World Federation (BWF) rankings released Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Alvin Stardust dead
London, Oct 23 (IANS) English singer Alvin Stardust died after a short illness. He was 72. Stardust's manager confirmed the news about his demise Thursday, reports mirror.co.uk. He was recently diagnosed with...
Read more on Celebrity Balla
 
Indian man reunited with family after 40 years
Dubai, Oct 23 (IANS) An Indian man, who had disappeared from his hometown in Kerala nearly 40 years ago, has been found by his family at a hospital in Dubai in the UAE, a newspaper report said. Now in his 60s, Abdulla...
Read more on Politics Balla
 
Srikanth, Kashyap, Saina rise in world rankings
Kala Lumpur, Oct 23 (IANS) Indian men shuttlers Kidambi Srikanth and Parupalli Kashyap jumped seven places each in the latest released Badminton World Federation (BWF) rankings Thursday while Olympic bronze medallist...
Read more on Sport Balla
 
Flintoff signs for Big Bash side Brisbane Heat
Brisbane, Oct 23 (IANS) Former England captain and all-rounder Andrew Flintoff, who retired from international cricket in 2009, Wednesday confirmed that he will play for Brisbane Heat in the Big Bash League (BBL) this...
Read more on Sport Balla
 
OPEC daily basket price falls again
Vienna, Oct 23 (IANS/WAM) The basket of 12 crude oils of the Organization of Petroleum Exporting Countries (OPEC) closed at $81.94 a barrel Wednesday compared to $82.09 Tuesday, the OPEC Secretariat said. The new OPEC...
Read more on Business Balla
 
Lopez to sign multi-million dollar deal?
Los Angeles, Oct 23 (IANS) Singer-actress Jennifer Lopez is reportedly in the final stages of securing a multi-million dollar deal to perform in Las Vegas. The 45-year-old is being offered $350,000 per show at The...
Read more on Celebrity Balla