5 big tech mistakes during Steve Ballmer's reign

by Sohini Bagchi    Aug 26, 2013

Steve Ballmer1

Even a decade and a half ago, Microsoft was the undisputed leader of technology, dominating about 90 percent of the market for operating systems. But as the tech world shifted from desktops to laptops and then to tablets and smartphones, Microsoft lost its market reign to its rivals Google, Apple and Samsung, who transformed with the changes in the technology landscape and surged ahead in the race. Unfortunately the man who ruled the scene for the last 13 years in Microsoft – Steve Ballmer – as the CEO had to bear all the brunt for the lack of transformation, vision and those failures that haunted investors, analysts, customers and partners for the past couple of years.

Gartner for example forecasts that by 2017 shipments of devices using Google’s Android operating system will dwarf shipments of Windows PCs and phones. Shipments of Apple iPhones and iPads will be almost at parity with devices powered by Microsoft. A senior analyst was quoted as saying, “Microsoft could be completely irrelevant in three or four years if they can’t make headway in the smartphone or tablet market, where they’ve been struggling.”

Steve Ballmer resigned … but left room for criticism, discussions and annoyance among certain sections in the industry. but it needs to be seen what are the key areas the company could have been a game changer in tech world but it failed, and the challenges before Ballmer’s successors.

Mobile: there was a time when everyone was looking for a personal computer and Microsoft achieved dominance in that area – that’s innovation! The same cannot be said about its mobile initiatives. The biggest threat started to come from the evolution of mobile devices, especially smartphones. Although Windows Mobile was on the market, it failed to create a strong impression. “If you are not equipped to transform yourself adequate in the era of mobility to cater to the needs of customers, your future is doomed,” says Roopen Roy, Managing Director, Deloitte and Touche Consulting at a mobility event. Although the partnership with Nokia gave the tech-giant some edge, it was not just sufficient when compared to its competitors who were going out of their way to

Search: Search has become a billion dollar business. Microsoft was aware that the internet is a huge space and winning the browser war was not an easy task. When Microsoft had to spend years fighting off antitrust suits in its Internet Explorer, it missed out on the internet’s actual money-spinner, search. It was much later that Microsoft started delving into this space. By then, Google already had a monopoly is search and that its success was coming from search-based ad sales.  Microsoft’s Bing launched in 2009 was undoubtedly an effort to compete with the Google, but the latter continue to rule the search world with a much greater share. According to a recent report by comScore, while Google grabbed 66.7 percent of the marketshare, Bing managed to get less than 18 percent of the pie.

Tablets: Another interesting area of focus was Windows 8 operating system and the Microsoft surface in October 2012, when both got lukewarm response from the industry. it was always confusing for customers and also partners, say a source anonymous. In a few months, the tech giant said it is making fixes to the OS. Only last month, Ballmer revealed its mistake, stating, “We built more devices than we could sell,” he told The Verge. The company made $853 million on Surface tablets since its launch. However, Microsoft debuted e-book software in 2000, long before Amazon and Apple did. Anshuman Das, an independent IT analyst said that it failed to take off because a product needs a great hardware configuration, alongside software, for greater user experience. In Microsoft’s case, hardware was not a strong area, except for Xbox, which is an exceptional product since Ballmer’s entry. Moreover, he observes the new Surface RT did not work well with traditional Windows applications and was expensive.

Music: iTunes and iPod saved a drowning Apple raise its head and become undisputed leaders in the music tech industry. Microsoft faltered here. While the latter started making software for the portable music market long before many in this space, it did not have a good backing from manufacturers. Zune, which came into being in 2006, and also released several versions of the model, the product line the Zune Marketplace phased out, and was replaced by Xbox Music and Xbox Video.

Succession planning: Microsoft doesn’t have a succession plan, at least that’s not known to the world at present. Although executives are not ‘fretting’ according to news sources, Michael A. Cusumano, a professor of business and engineering at the Massachusetts Institute of Technology told NDTV Profit: “All the really interesting people who were in the company over the last dozen years who might have been have left. I also find it hard to imagine they could bring an outsider in. Microsoft is known for having quite a lot of powerful groups within the company and they make life very difficult for anyone who tries to oversee them.” experts believe succession planning plays a huge role in the success and transformation of any company, especially those in the IT industry and is one of a board’s chief responsibilities, but less than 50 percent companies actively groom executives, according to a 2010 study by Stanford University, which also mentioned boards spend only an average two hours a year on succession planning.

Although there are many contenders for the role of the next CEO, experts believe whether he/she is internal or from another company, Microsoft needs an innovator, with a track record of turning around big, and perhaps unwieldy companies with a sharp focus. This massive transformation will help Microsoft too lead the pack again!