Steve Ballmer has stepped down from Microsoft's board

Steve Ballmer has stepped down from the board of Microsoft, just six months after stepping down as its CEO. He says that because of his new commitments, he does not feel that he has enough time to devote to serving on the board. More significantly, though, Ballmer also clearly states that he is fully behind Satya Nadella in his new strategy and he believes in the 'Mobile First, Cloud First' strategy. 

This is a big move for Ballmer who is now fully separated from the company's management but you can bet that he still has Nadella's personal phone number. Ballmer remains the largest shareholder of the company, topping that of even Bill Gates, so he is still fully invested financially in the success of Microsoft.

It was only a few days ago that Ballmer become the rightful owner of the LA Clippers and as you can imagine, that is going to keep him plenty busy. For Nadella, this is likely a good move for him too as he won't have one of the former CEOs on the board of Microsoft who could, theoretically, move to undermine him. Bill Gates has taken on a new role too, and is no longer the Chairman of the company, but does still sit on its board.

You can read the full letter from Ballmer to Nadella, as well as the current CEO's response, below:  

Dear Satya,

As I approach the six month mark of my retirement and your appointment as CEO, I have been reflecting on my life, my ongoing ownership of Microsoft stock, and my involvement with the company. I have reached some conclusions and wanted to share them with you. I know August is the key month during which the company starts to prepare the proxy statement for the next shareholders’ meeting, and so these thoughts are probably timely for that too. 

First, Microsoft has been my life’s work and I am proud of that and excited by what I see in front of the company and this leadership team. There are challenges ahead but the opportunities are even larger. No company in the world has the mix of software skills, cloud skills, and hardware skills we have assembled. We draw talent as well as any company in the world. We have the profitability to invest in long-term opportunities and still deliver superior shorter term performance. You’re off to a bold and exciting start. 

Microsoft will need to be bold and make big bets to succeed in this new environment. Writing great software is a tremendous accomplishment and selling software has been a fabulous business. In the mobile-first, cloud-first world, software development is a key skill, but success requires moving to monetization through enterprise subscriptions, hardware gross margins, and advertising revenues. Making that change while also managing the existing software business well requires a boldness and fearlessness that I believe the management team has. Our board must also support and encourage that fearlessness for shareholders to get the best performance from Microsoft. You must drive that. 

I had not spent any time really contemplating my post-Microsoft life until my last day with the company. In the six months since leaving, I have become very busy. I see a combination of the Clippers, civic contribution, teaching and study taking a lot of time. I have confidence in our approach of mobile-first, cloud-first, and in our primary innovation emphasis on platforms and productivity and the building of capability in devices and services as core business drivers. I hold more Microsoft shares than anyone other than index funds and love the mix of profits, investments and dividends returned in our stock. I expect to continue holding that position for the foreseeable future. 

Given my confidence and the multitude of new commitments I am taking on now, I think it would be impractical for me to continue to serve on the board, and it is best for me to move off. The fall will be hectic between teaching a new class and the start of the NBA season so my departure from the board is effective immediately. 

I bleed Microsoft —have for 34 years and I always will. I continue to love discussing the company’s future. I love trying new products and sending feedback. I love reading about what is going on at the company. Count on me to keep ideas and inputs flowing. The company will move to higher heights. I will be proud, and I will benefit through my share ownership. I promise to support and encourage boldness by management in my role as a shareholder in any way I can. 

All the best, 

Steve

 

Satya Nadella's response to Steve Ballmer

Steve,

First, thank you for all of your support during my transition this year and for the past 34 years. It’s been a great privilege to have worked with you and learned from you. Under your leadership, we created an incredible foundation that we continue to build on — and Microsoft will thrive in the mobile-first, cloud-first world.

While your insights and leadership will be greatly missed as part of the board, I understand and support your decision. 

As you embark on your new journey, I am sure that you will bring the same boldness, passion and impact to your new endeavors that you brought to Microsoft, and we wish you incredible success. I also look forward to partnering with you as a shareholder. 

On behalf of all of Microsoft and the Board of Directors, thank you.

Satya

Source and Image Credit: Microsoft

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41 Comments

Commenting is disabled on this article.

At this point in his life, and at his age, he is now ready to move on to a different chapter of life. Sometimes that involves discharging elements of the past, leaving it behind cleanly and in a graceful manner. He seems to be doing that. Good for him.

Good riddance. Now, Microsoft has the difficult task of repairing the extensive damage he caused. It will be interesting to see if he does better as owner of a sports team.

Ballmer totally missed mobile, he let Windows Mobile stagnate then laughed at the iPhone. Now Windows Phone is going backwards. Of course there is the Windows 8 mess and the Nokia purchase which will be proved to have been a huge mistake.

best wishes to Mr Ballmer. No CEO is perfect and he was no exception but he took MSFT from a client PC company to a cloud enterprise powerhouse. Satya has big shoes to fill and now that the novelty is wearing off we'll see if he can really do better.

Oh, lets not forget the screws ups as well...Vista, ME, Windows 8, RT, and X1 to name a few. And look at the back tracking. Oh, and how can I forget WP which hasnt done much of anything since it first was conceived 4yrs ago. Common sense would have prevented a lot of these screw ups.

Change was needed and hopefully Nadella can do something. So far a lot of changes are being made under his reign that is making lots happy and getting much better acceptance than what Ballmer was doing

techbeck said,
Oh, lets not forget the screws ups as well...

Ok, but lets not forget the massive successes aswell… XP, 7, O2003-2013, Xbox + X360 to name a few.

Yes, he had his successes but was no Gates or Jobs. Those are what I call great CEO. . Last few years or so when mobile and other areas was taking off, he just sat by and laughed at Apple. Huge mistake. . He was worn out and needed to go. He lost touch with the consumers and I am glad he is gone.

DClark said,
When the company was making record profits. Mmmmmyeah. Okay sunshine.

Profits do not make a good CEO. Other things attribute to that. Leadership, being able to act and take chances, innovative, and so on.

MFH said,

"Prophet" would be a better word in the case of Jobs…

Yea, never liked how he did business but respected him for taking risks and knowing how to market and sell a product.

MFH said,

Ok, but lets not forget the massive successes aswell… XP, O2013, Xbox + X360 to name a few.

Was Ballmer in charge during these times?
Also, I don't remember the Xbox division being terribly profit making...

Would probably still be available for consultation. I guess part of the reason for leaving is managing the team that he bought recently.

Great message lingering in the context; though I no longer need to be a board member, please beware of my ever present shareholder power to act when necessary. :-)

Reading between the lines (and I may be wrong) it sounds a bit like "I'll be holding you to account for any profit related problems.... oh, and as the largest shareholder, I'm still going to be around".
In that context, Satay's response is appropriate.

sphbecker said,

IE 8 didn't have spell check. It was added in IE 10 if I recall.

Lmaooo it was probably the spell check ruining his comment again! That really sucks.

ir0nw0lf said,
Am I like the only one not overly shocked at this? I figured with him buying up the Clippers, he might do this.

I am not shocked but a bit surprised. He said he bleeds Microsoft and his bank account has a lot of Microsoft in it. I think he is very comfortable with where MS is headed and is confident in the team they have now. So, he can spend more time with his new team and pursuing a championship =).

He is pretty much required to say things like that in the position he was in. Maybe he wants to be able to start selling more MS stock than would have been appropriate as a board member.

sphbecker said,
He is pretty much required to say things like that in the position he was in. Maybe he wants to be able to start selling more MS stock than would have been appropriate as a board member.

I dont think so. If he was worried about MS future he would stay on the board. Him leaving implies he isnt worried and he can leave and not have his fortune decrease =).