Leaving Microsoft: Ballmer's exit interview talks lawsuits and Xbox

Steve Ballmer is about to make his grand exit from Microsoft and has been helping the company prepare for the future with a new business model. But, before he does leave the company, and from behind the bulletproof glass windows in his office, he has given one last interview that provides a bit of insight into Ballmer’s legacy.

The entire interview can be read here but we wanted to highlight a few key points that Ballmer stated during his interview, including that he wanted to settle anti-trust lawsuits as quickly as possible and he feels that the Xbox brand is one of his biggest successes as CEO.

When Ballmer took over the role of CEO, the company was facing hundreds of lawsuits and it was Ballmer who wanted to settle them as quickly as possible to remove the distraction. Gates, reportedly felt the need to fight all of the lawsuits to protect his empire for nefarious claims, but it was Ballmer who helped get Microsoft out of the prosecuting limelight.

But for Ballmer, his pride and joy is the Xbox console. The decision to move into the console market was not made overnight, and he dwelled over the decision for months before giving the orders to proceed. While the road has not been smooth, with the initial Xbox taking a loss and the Xbox 360 having the RROD issue mar its reputation early on forcing a billion dollar write-down, the brand has been a success. The Xbox One appears to be doing quite well and the living room has a serious Microsoft presence, thanks to Ballmer.

The remainder of the interview talks quite a bit about the company’s good acquisitions such as FAST, the bad aQuantive/Danger and where they dodged the bullet by not buying Yahoo! for $45 billion. Microsoft has bought many companies during Ballmer’s time as CEO and with Skype and Yammer joining the fold recently, it would suggest they had many more positive acquisitions than negative ones.

Sure, Ballmer may have slipped-up along the way with Longhorn and missed the boat in the tablet and mobile phone space, but he has also helped the company grow its enterprise business into a $20 billion dollar operation.

The interview provides an in-depth look at Ballmer’s many tough decisions along the way and is worth a read. While it’s hard to know if this is Ballmer’s last in-office interview, we do know that the company is quickly searching for a new CEO.

Source: Fortune

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16 Comments

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It's strange that Ballmer's "pride and job" is a division that has lost Microsoft money, one which both analysts and investors have suggested should be spun-off to improve the value of the company. Then again, Office is in tick-over, Windows 8 has received a lot of negative press, Surface tanked, Zune tanked, Kin was DOA, Windows Phone isn't even up to where Windows Mobile was and Bing has cost the company billions.

I think Microsoft needs to get back to basics and focus on its core strengths.

Spicoli said,
They seem to be doing quite well as is. The beat Apple's net profit margin by quite a bit last quarter.

Mostly due to the Enterprise and business market.. As for consumers, they could be a lot stronger..

Jarrichvdv said,
Why? I am enjoying their hardware a lot. I have a Windows Phone, Surface, mouse 1 keyboard + Xbox. They make high quality products.

do you miss the /s ?

Spicoli said,
They seem to be doing quite well as is. The beat Apple's net profit margin by quite a bit last quarter.

Apple's net income ($37bn) is significantly higher than Microsoft's ($22bn), as is its revenue. It's clear that Microsoft has missed a lot of the major technology trends and has failed to capitalise on its market position.

Microsoft's move into console gaming has come at the expense of PC gaming, while its move into tablet computing has hurt its desktop operating system. Neither of these ventures has proved successful for Microsoft, while undermining one of its primary brands.

PC gaming doesn't make as much money as console gaming, has a smaller audience and limited in scope (ie: pc gaming allows for pc gaming, console gaming allows for gaming, media consumption, and now communication). I think you're grasping at straws for that one.

Also, $22b in profit has not come at the expense of anything. Apples profits are significantly less diversified than Microsofts, therefore MS is in a better position to weather any changes in the industry (as they have already demonstrated). I'm curious to hear how their move into tablets has hurt their PC business (that's already in decline). Tablets is where personal computing is moving to/has moved to and MS rightfully positioned themselves to capitalize on the change. Actually in a way that no other OS has accomplished thusfar.

Here, let me summarize your feelings about MS and your posts in 2 words: Microsoft sucks.

theyarecomingforyou said,
I think Microsoft needs to get back to basics and focus on its core strengths.

I don't think you're looking at the big picture.

- Windows 8 is selling well even with the negative press. Windows XP had huge negative press on initial release and even more negative press when it was hit was viruses. Now look how people think it was successful. Only time will tell.

- Surface hasn't tanked, but I agree it hasn't sold well. "Tanked" is overselling your point. The problem is MS started too late and has to play catch up, but still needs to be in this market.

- Zune DID tank, but it led to Metro, which is a big part of MS's strategy so that R&D wasn't wasted.

- I agree about KIN, terrible idea.

- Windows Phone is heads and shoulders above Windows Mobile, don't kid yourself. Whatever business app you're missing, there's tons of new functionality that mobile never had.

- Bing is the 2nd most popular search engine in the U.S. and it's needed for MS's ecosystem.

I would argue that most of the areas MS is in at the moment is needed for future growth and without them, they'd be dead in the water like IBM. IBM makes money but they are not industry leaders.

theyarecomingforyou said,

Apple's net income ($37bn) is significantly higher than Microsoft's ($22bn), as is its revenue. It's clear that Microsoft has missed a lot of the major technology trends and has failed to capitalise on its market position.

I think that'd of been true, had MS been a hardware manufacturer - it's only recently been making phones or tablets itself. MS is still primarily a software company even today - it's only just in the formative steps of producing it's own phones.

I also don't agree that PC gaming has suffered due to xbox - the console market was already there and apart from the (mostly avoided) Windows Live rubbish MS haven't really done anything to my mind to stop the market growing. You could argue they could of done more to support it but it seems to have done very well nonetheless.
As for the desktop - the main revenue stream for OS' is from business and MS can (and have) taken hits on a version of an OS (Vista) without any long term effect. Business was very unlikely to take up 8 in droves even if it had been the second coming considering most are still struggling to standardise on 7 and those that have aren't looking to suddenly move to a faster upgrade cycle (you'll be lucky if a large corp will look at upgrades in less that a 3 year cycle and more likely longer). In the consumer market people will get Windows the same way as ever (with a new PC) and that market has been hit by recession and diversification (i.e. tablet/smartphone). That latter point is exactly why MS needs to take risks and innovate towards longer term goals - the journey there is rarely an easy one though.

theyarecomingforyou said,

Apple's net income ($37bn) is significantly higher than Microsoft's ($22bn), as is its revenue. It's clear that Microsoft has missed a lot of the major technology trends and has failed to capitalise on its market position.

Microsoft's move into console gaming has come at the expense of PC gaming, while its move into tablet computing has hurt its desktop operating system. Neither of these ventures has proved successful for Microsoft, while undermining one of its primary brands.

there is zero evidence that consoles and PC gaming are intertwined and that consoles killed pc gaming. consoles co-existed with pc gaming. pc gaming just isn't that big. stop making up stuff man. also their move to tablet hasn't hurt windows at all which reports record revenues. there is no challenger desktop OS. chromeOS stalled (again) and android/iOS aren't interested in the desktop as they lack enterprise chops. windows biggest competitor is windows. it's a win win for Microsoft.

theyarecomingforyou said,
It's strange that Ballmer's "pride and job" is a division that has lost Microsoft money, one which both analysts and investors have suggested should be spun-off to improve the value of the company. Then again, Office is in tick-over, Windows 8 has received a lot of negative press, Surface tanked, Zune tanked, Kin was DOA, Windows Phone isn't even up to where Windows Mobile was and Bing has cost the company billions.

I think Microsoft needs to get back to basics and focus on its core strengths.

people that don't understand the future think like you. The first step toward irrelevance in their "core strengths" lies in giving up the consumer market (thankfully they aren't). If consumers abandon windows, they will soon abandon office, then out goes the enterprise, which will soon leave SQL server, azure, and all the other enterprise pillars.

you see MSFT core strength isn't enterprise software. that is a house of cards. this is why windows should be free, widely available and there to ensure all the other paid for services ride on the penetration of windows.

to kill bing is to kill any chance it's windows platform has to be a decent mobile platform. even apple is scrambling to get what MSFT has for in bing maps and knowledge graph. that is because without a knowledge graph, you just don't exist as apple is realizing.

to kill xbox is a silly mistake. after spending billions, it is finally making money and it is actually the only consumer brand that has a cult like following. if xbox was going to get killed it was before the 360. at this point it is a money making business, and MSFT likes money as do shareholders.

to even suggest MSFT needs to turn into lotus is to ignore what happened to lotus is to ignore lessons from history. it shows not only ignorance about MSFT but a complete lack of understanding that consumers drive the enterprise in the long haul. look at all the iOS and Android enterprise apps. they only exist because of the consumer space. Business are noticing consumers can do without windows, is office next? MSFT has to capture a significant chunk of the consumer space to remain viable. Surely they will never own a monopoly again, nor will any company, but they cannot afford to be zero.

There is no such thing as a successful "core strengths" Microsoft that is enterprise only that can last. not today, not tomorrow, not this decade, not ever.

Apple's net income ($37bn) is significantly higher than Microsoft's ($22bn), as is its revenue. It's clear that Microsoft has missed a lot of the major technology trends and has failed to capitalise on its market position.

One could say the same thing about Apple and the enterprise. Each company has it's strength in a different market, and the challenge is to break into the other. Just look at how poor Apple's cloud offerings are compared to Google, Microsoft, and Amazon.

Microsoft's move into console gaming has come at the expense of PC gaming, while its move into tablet computing has hurt its desktop operating system. Neither of these ventures has proved successful for Microsoft, while undermining one of its primary brands.

Again, you miss the point. Xbox brings all of Microsoft's IPs face first into the living room. Skype, Skydrive, Windows's Modern UI, Movies/TV/Games stores. It shows off the technology of the Kinect and the futuristic features it's brought.

I don't think you appreciate how valuable that is from a business perspective. It's a brilliant investment.