Forbes Names Microsoft's Steve Ballmer Worst CEO

New submitter _0x783czar writes "Microsoft haters gleefully have latched on to the latest scoop that a Forbes columnist has named Steve Ballmer the worst CEO. It seems that the article has leveled some strong accusations of irresponsible and ineffective business practices; claiming that Microsoft has not progressed over the last 12 years of Ballmer's leadership. (Full disclosure: I'm not a Microsoft fan myself and tend to agree with this piece.)"

Comments

Worse?

[jimmerz28]

Really? Even worse than RIM?

Re:Worse?

[ZeroSumHappiness]

Yeah, why are we ignoring the many companies that have failed either because they failed to adapt or underwent gross negligence. I have a feeling that the CEOs of the major banks in the US have actively harmed every human on Earth. Ballmer has merely failed to maintain a near-monopoly status in a highly transient industry.

Re:Worse?

[Anonymous Coward]

TFA is about CEOs currently holding that position today. The RIM CEOs are gone already.

Re:Worse?

[Gideon Wells]

Maybe they are looking at what Microsoft is capable of vs their leader. RIM at times sounds like a complete implosion. Microsoft produces outbursts of good ideas inspite of their leadership implying some good thinkers/workers are left.

Re:Worse?

[Anonymous Coward]

I think the mayor point isn't that he's failed to keep a monopolitic position, but rather that he has failed at all to capitalise on it. Like it or not, the CEO's of the banks who bankrupted the world made bundles of money in the rise, and are now making bundles of money in the fall. They managed to capitalise on a crisis, where Balmer has failed to capitalize on the position of Microsoft. Look at Apple, all it took was a small investment in R&D and suddenly they turned their computer buisness into one of the most sucessful MP3 companies, and then Phone companies. Microsoft tried to throw it's weight after these areas but failed. They even failed to win large in the console market after spending quite a bit of money in an attempt to kill Play-station (But Nintendo won that one).

Really Microsoft has been one huge investment in one field after the other, always waiting for others to be the first movers, and this has left them failing again and again.

Re:Worse?

[marcello_dl]

As much as my comment history shows a clear anti-MS stance, I agree. Possibly Ballmer wasn't evil enough.

And definitely, his chairs missed too many targets.

Re:Worse?

[ZeroSumHappiness]

I guess that actually makes quite a bit of sense. But even given that many of the banks would have imploded if not for the bail out, GM would be gone if not for the bail out and plenty of marginally successful companies have gone through quite a bit of economic turmoil that MS has avoided, IBM, for example, is laying of a ton of people and has been for some time now.

Even in money-making-game, I think coming up red or having to be bailed out is worse than not being black enough.

Re:Worse?

[fooslacker]

I'm not a fan of M$ these days but still I agree. There are a ton of companies that have outright failed, lost a huge lead, or even gone down in a blazing inferno due to incompetence or outright corruption. There have to be worse CEOs. Microsoft is still massively profitable.

FTA..."Without a doubt, Mr. Ballmer is the worst CEO of a large publicly traded American company today."

Clearly the author is engaging in hyperbole and histrionics to gain attention for his piece. The article is about CEOs who should have been fired already which is probably a fair assessment of Ballmer but the over the top "worst CEO" stuff is silly.

Re:Worse?

[crazyjj]

Maybe he should have asked for a government bailout, since Forbes apparently thinks that CEO's who run their companies into bankruptcy and go running to Uncle Sam to save them are still somehow better than the CEO of a very profitable company.

Re:Worse?

[Jawnn]

I'm not a fan of M$ these days but still I agree. There are a ton of companies that have outright failed, lost a huge lead,

I don't know... I can't think of any company that has blown a lead as huge as Microsoft's in as short a time, or has missed so thoroughly a major trend (mobile computing) in the consumer portion of it's market. Actually, that's not fair. Microsoft was way ahead of the curve in spotting the trend, but virtually every version of mobile OS or app they've delivered has been so bad it was dead on arrival. With resources like Microsoft's, that's almost inconceivable, let alone inexcusable.

Re:Worse?

[gorzek]

CEOs are also easy targets because they seem to get paid handsomely whether they succeed or fail. If Joe Worker screws up his job, at best he gets let go and can collect unemployment, and maybe he gets a tiny bit of severance; worst case, he's fired for cause and doesn't get a damn thing. But when Joe CEO drives a company into the ground? Not to worry, he's still gonna get his multi-million dollar golden parachute, which he'll ride right over to the next company. It's no wonder people get pissed about that disparity.

Re:Worse?

[h4rr4r]

RIM. Hell even Nokia.

Re:Worse?

[Sarten-X]

That's exactly what I get from this, too. Microsoft's stock price - while fairly high - has remained constant for ten years, while many of its competitors have seen enormous growth (even excluding Apple). Ten years ago, Apple was struggling, and Microsoft had the cash reserves and market share to sell any quality product they wanted. That would have been an ideal time to dump money into meaningful R&D (more meaningful than a fancy coffee table) and produce the next product that would end up in every home - but Microsoft, under Ballmer's guidance, didn't. Microsoft hasn't really moved forward at all, releasing only newer versions of the same old products, and only making half-hearted attempts to establish new markets.

That risk is important. Apple risked everything on the iPod, and risked a major stake on the iPhone. As the entire company's future was on the line, the entire company was committed to making the risk work. The software team made good software, and the hardware team made good hardware. At Microsoft, there is so much internal conflict that only minimal progress can get the support of the whole company. As I've heard, project managers will actively attack other projects, so they all look equally bad. That's not the kind of environment that fosters innovation, and when you're already at the top, innovation is the only way to grow.

Re:Worse?

[phantomfive]

GM would be gone if not for the bail out

Strictly speaking, it wouldn't be gone, it would have gone through bankruptcy and been reorganized.

Re:Worse?

[mcgrew]

But still, we had the "too big to fail" banks needing bailouts to preven another Great Depression, we had GM needing to be bailed out, there's Carly Fiona, there's the latest thing with that bank that just misplaced two billion dollars, there's Rupert Murdoch and the phone hacking, there's Sony (biggest loss in their history for the fourth year in a row). I'm no fan of Ballmer's; in fact I detest and ridicule him, but to call him the worst CEO is pretty much a stretch. It's not like MS is in the red year after year like Sony or RIM.

Re:Worse?

[phantomfive]

Forbes is like the "People Magazine" of the business world. Professionalism really isn't the goal.

Re:Worse?

[poopdeville]

Microsoft's stock price - while fairly high - has remained constant for ten years, while many of its competitors have seen enormous growth

It has dropped, in real terms. You forgot about inflation. 100$ was worth more 10 years ago than today.

Re:Worse?

[sarysa]

I'm not inclined to agree with your console market assertions. The fact remains they are #2 in sales and may very well be #1 in profits, thanks to the cash cow that is xbox live. Kinect was a blowout hit as well.

They can't seem to beat Apple at its own game, though. I don't see that as a corporate failing, rather the inability to work with an unstable element. (Image, the perception of cool)

Re:Worse?

[Lumpy]

Nokia is an intentional destruction. That is different from incompetent leadership. What you see happening at Nokia is a very calculated and though out plan to completely destroy that company.

Re:Worse?

[gbjbaanb]

but it probably would - people would not stop buying cars, but who'd set up a factory in a ex-GM factory when they could set one up in China or Germany?

What would happen is that existing factories would ramp up their production, not that the ex-GM factories would suddenly reopen and continue making cars as if nothing had happened. Look to the UK for an example of what happens when the car plants shut. Best you can hope for if government-supported foreign investment.

Re:Worse?

[CrimsonAvenger]

Note the use of the word "today" in your quote from TFA.

The CEO of a company that outright failed last year is clearly not "CEO of a large publicly traded American company today". Yesterday, perhaps, but not today.

Looks to me like TFA is arguing that Ballmer SHOULD be fired, not that he's the worst in history.

Re:Worse?

[Bogtha]

I can't think of any company that has blown a lead as huge as Microsoft's in as short a time, or has missed so thoroughly a major trend (mobile computing) in the consumer portion of it's market.

I can think of a company that's done a lot worse than Microsoft missing the boat on mobile. Microsoft missing the boat on the Internet. They thought they could compete by providing their own network instead. Except it wasn't Ballmer in charge back then, it was Bill Gates. Was he a terrible CEO too?

Re:Worse?

[Sir_Sri]

How had that been working out for the car companies prior to 2008? If you build a new car factory you don't build it in michigan or ontario if you could avoid it. You build it in the south or another country and leave detroit a wreck of a city.

GM's biggest value would have been its patent portfolio, and probably a handful of engineers. Everyone else would have been on the unemployment rolls because if you have to build in the US, you would rather build in the south, if you don't have to build in the US you build in mexico, japan, china, germany etc.

As it was GM did go bankrupt, the government managing it meant it was a relatively orderly transition, workers took huge pay cuts, without hugely long periods of unemployment, and the factories were kept where they were rather than being abandoned so people didn't have to move to try and find jobs etc.

Re:Worse?

[squiggleslash]

GM would have gone bust. During this time they'd have had to shut down a significant number of operations, possibly all significant operations.

Their creditors would have been paid off pennies on the pound. Those creditors include major manufacturing concerns. Concerns that also supply Ford and Chrysler. Chrysler would also have defaulted on their debts as they were suffering the same problem.

Ford, who were completely blameless in this affair, would suddenly find their costs skyrocketing, as suppliers go back to them and say "With only your business coming in, and with our now massive debts thanks to 2/3 of our customers defaulting, we need to put up prices or shut down." Realistically, Ford isn't able to make progress and starts shutting down significant parts of its Detroit based operation.

Result:

- Millions laid off

- GM and Chrysler unable to reorganize because even if they come back in some form, the Detroit infrastructure now has massive holes in it.

Leaving...

OK. "So what?" you argue (yes, you did!) Honda and Toyota can pick up the slack. They'll just make more cars, while hiring lots of people to do the making of cars thing.

No.

You see, that's not how it works. For that to happen, it would have to take a few months and no money at all to:

- Build new factories, and expand the capacity of existing ones

- Have suppliers also build new factories, or expand the capacity of existing factories.

- Recruit new dealerships across the nation to cover the expected increase in sales volume.

So here's what actually happens:

1. Honda, Toyota, Kia, et al, have a temporary spike in demand. They increase prices to dampen demand.

2. The millions of unemployed workers in Detroit don't gain jobs because no industry moves to Detroit, and it's not easy for a million people to suddenly move hundreds of miles south.

3. As people do attempt to move, property prices around auto-plants in the south increase, exacerbating the expansion cost problem of Honda, Toyota, et al.

4. Demand slows, as the effects of the massive increase in unemployment take hold. This includes the effect on the remains of the automotive industry.

5. The remaining manufacturers find themselves finding it harder to sell more vehicles. It's quite possible that the increases in unemployment might kill some of those that remain if their target market included the income levels disproportionately hit by the types of jobs lost.

Basically, there's no way the unmanaged bankruptcy of Chrysler and GM would have been anything other than disastrous for everyone concerned. Which is a major reason why Ford was fully in favor of the government stepping in to provide the bridging loans necessary to make a managed restructuring work.

Re:Worse?

[NeutronCowboy]

1) The main problem was people were NOT buying cars. Because few people can afford to buy a new car cash, the auto industry is highly reliant on loans. Those loans were basically unavailable. I could see it directly in my area: the day that they postponed the initial bailout of the banks, three major auto dealers closed shop. Over the course of that year, the major auto shopping areas lost about 1/3 of their dealers, most of which still have not returned.
2) Bankruptcy still requires operating capital to allow a company to work. That was done also mostly via overnight loans. Those loans were also drying up fast.
3) Reorganization implies reorganization of loans. No bank was willing to do that if there was not some sort of guarantee that GM was going to make it, and be able to repay whatever was left. Otherwise, they were willing to test their luck in liquidation.
4) The biggest headache wasn't GM - it was the supplier networks. With JIT fabrication and supply lines, there is no slack in the supply line, and it is very difficult to suddenly go serve a completely different car maker. If GM had stopped making cars, the entire GM supply line would have been handed a death sentence. Yes, bankruptcy there was more feasible, but still - you don't retool your entire distribution network from one week to the next, or even over the course of a month.
5) Finally, even if we assume that other carmakers would at some point pick up the slack, that would not be instantaneous. At the very least, it would take a few months to ramp up and hire the GM workers (and that's assuming completely unrealistically ideal situations). In the meantime, you'd have a ton of GM workers not contributing to the economy at large, dealer networks not contributing to the economy, and supplier networks not contributing. In other words, just when you'd need demand to stay stable, it would drop even more.

Common sense is vastly overrated. If you don't have data, your common sense is just a guess supported by prejudice.

Re:Worse?

[Penguinisto]

BS. Ballmer took over in 2000.. the XBox was released in 2001.

No 1 console worldwide.. 49% marketshare

If that doesn't count, then what would?

Two things:

1) The XBox still has yet to realize ROI - Twelve Years Later, and pulled in no profits at all until 2009 or so. The XBox program may finally reach ROI in 2015, but there's the fact that they'll have to start sinking even more money into R&D for the next gen console before then, so even that date is an iffy proposition. Most tech companies would have called that a miserable failure by now, if they had managed to survive such a massive loss. Nintendo had OTOH made a pure profit off of their line and usually reach ROI for any given console line within a few months of release. Sony is a bit tougher to see because their primary goal was not just selling consoles, but selling Blu-Ray players.

2) Ballmer was officially CEO in 2000, but Gates held the Chairman of the Board slot for quite some time after that - and if you don't think Gates called the shots during that time with Ballmer as a figurehead-in-transition, you're either naive or lying.

Re:Worse?

[Tharsman]

The Xbox division is indeed doing great, but Ballmer seems to undermine it every time he can. There were some big losses last year due to some acquisitions (Skype? not sure...) and they "balanced the books" by punishing a lot of divisions, the Xbox division I understand was hit hard and would had shined had they not done that.

It's like Ballmer is ashamed of anything that does not have a big Windows brand in the box, when perhaps he should be doing the opposite.

Can you imagine how well Apple would had fared had they called their iPhone a MacPhone instead? I bet it would have been a flop just due to the horrible unmarketable name.

It’s time Microsoft realizes their future is in the Metro/Xbox brands, not in the Windows/Office ones. Ballmer's resistance is slowly going to kill Microsoft.

Re:Worse?

[rgbrenner]

Gates is still the Chairman.
http://www.microsoft.com/en-us/news/exec/billg/

Re:Worse?

[jonbryce]

If you are looking for the worst managed company, Kodak must surely get a mention. They are being driven out of business by a new technology, digital cameras, that they actually invented.

Re:Worse?

[Solandri]

You're making the same mistake most people who were for the GM bailout made. To increase the urgency of a bailout, you're exaggerating the direness of GM's (and Chrysler's) situation.

That's not how economics works. A bankruptcy doesn't mean game over, go home. A bankruptcy means the parts get sold off to the highest bidder. And bidders don't buy parts of bankrupt companies because they think it'll be cool to own a piece of memorabilia. They buy them because they want to use them to make money. The closer to being salvageable a company was, the more its parts sell for in a bankruptcy.

If, as you claim, in bankruptcy sale GM's creditors would've been paid pennies on the dollar, that points to GM being a grossly inefficient company. The best thing to do in that case would've been to let GM go bankrupt. A bailout would just be throwing good money after bad. If instead the creditors would've been paid 80-90 cents on the dollar, then that points to GM being a sound company which is just having some cashflow problems. A prime candidate for a bailout.

Likewise, if, as you claim, GM's manufacturing facilities around Detroit would've been idled with massive job losses, that points to gross inefficiency in GM's operations and they should've been forced into bankruptcy. But if instead their facilities would've been snapped up by competing manufacturers to add to their existing capacity (meaning little loss of jobs), then a bailout was more appropriate.

The truth is GM and Chrysler were probably not the best-run companies. But their dire economic situation was more the result of the credit crisis and economic downturn, not so much unsound operations. They were in good enough shape that their bankruptcies would not have been devastating to the economy, which is what made them worth bailing out. The issue just became a political hot potato because the unions had forgotten to demand the pension funds be spun off into a separate (and untouchable in a bankruptcy) pension management company. Faced with the prospect of becoming creditors lower on the totem pole than secured creditors (i.e. banks), they started a massive fear campaign about why bankruptcy would be bad, economics be damned.

But I like MIcrosoft more now

[bondsbw]

I can now stand the thought of using Windows and Internet Explorer. Not that I do use IE, mind you... just that I wouldn't Hulk up and fling my captor through 3 or 4 cement brick walls to create an escape route.

No need to say, "full disclosure".

[justin12345]

You don't need to say full disclosure just because you hold an opinion. That phrase is used if you have a vested interest in something. For instance "Full disclosure: I own Microsoft's competitor's stock" or "Full disclosure: I have an ongoing lawsuit with Steve Ballmer, because he allegedly once threw a chair at me".

Re:No need to say, "full disclosure".

[sootman]

Full disclosure: I like repeating things that I think sound cool, even if I'm not 100% clear on what they mean.

Bad?

[Savage-Rabbit]

Without a doubt, Mr. Ballmer is the worst CEO of a large publicly traded American company today. Not only has he singlehandedly steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets) but in the process he has sacrificed the growth and profits of not only his company but âoeecosystemâ companies such as Dell, Hewlett Packard and even Nokia. The reach of his bad leadership has extended far beyond Microsoft when it comes to destroying shareholder value â" and jobs.

And that is bad how? What I mean by that is that I sympathize with Microsoft share holders but I also regularly thank a long list of deities that Microsoft does not dominate the mobile music, handset, and tablet markets as well as desktop computing.

Re:Bad?

[IRWolfie-]

While no fan of Microsoft or their products, in recent years Microsoft has enjoyed record profits and I don't think "Windows 7 and Office 2010 did nothing to excite tech user" from the article is exactly true either.

Who's Going to Remove Him?

[geoffrobinson]

I've always felt that they've wasted a lot of money trying to expand into new lines of businesses. Money that would have been well spent either giving it back to stockholders as dividends. But even new lines of business that are doing well (not considering the massive investment in them so the ROI may still stink) like Bing and XBox would probably benefit the stockholders as a spinoff.

If it was up to me, I would break the company apart into 3 or 4 companies and allow the non-Windows companies to develop for all sorts of platforms. But what do I know?

That said, who's going to remove him? Bill Gates? Does Paul Allen still hold a significant stake in the company? Who owns what share of the voting stock? And who makes up the board?

I don't see Ballmer leaving anytime soon unless the investors start getting upset. And if 30% of the company (and I'm pulling that number out of thin air) is held by Gates and Ballmer, that doesn't seem likely.

More!

[AntEater]

Personally, I hope Ballmer has a very long tenure at Microsoft and that the past twelve years or so are only the beginning of his impact on that company.

Ineffective

[Anonymous Coward]

I am a Microsoft fan and I agree with this piece. I dont really know what he adds as CEO as I hate to listen to him speak. I'm embarrassed for him when I watch him give speeches.

I disagree...

[Lumpy]

I think he is the best thing ever for the company, and they need to keep him on for the next 50 years. Windows Phone is flying off the shelves and outselling iPhone and Android phones combined!

As a FOSS guy, I think Microsoft is doing a stellar job and needs to continue under this mans direction.

Where's Elop?

[hydrofix]

I can't believe Stephen Elop of Nokia is not on that list. During his stint as the CEO of the former world leader in mobile phones, the company has lost 70% of its market valuation – mostly down to Elop's borderline insane strategic choices. Maybe the list is only for US companies?

Re:Where's Elop?

[c]

> I can't believe Stephen Elop of Nokia is not on that list.

TFA "credits" Ballmer for the destruction of Nokia and others in the Microsoft ecosystem. Since Nokia is now a Microsoft subsidiary in all but name, I'm not sure it's much of a stretch.

Re:Frist!

[Anonymous Coward]

Forbes Names Slashdot's Anonymous Coward Worst First Poster.

OK... and?

[lorenlal]

Well, he was the first business manager for the company. I guess Forbes is saying that he didn't learn much about the business in his 32 years there. Funny enough, this isn't a bunch of Linux/Apply fanbois throwing this out there... It's Forbes.

I do take issue them using the share value being used as his barometer. Yes, MS was $60 a share in 2000. Every share of anything that was remotely tech related was horrendously overinflated in 2000. The fact that the share is still worth $30 is impressive despite the other detriments listed in this article. It's a nitpick, and otherwise, I think the article is fair.

Last 12 years were tough

[Gothmolly]

Dot-com flameout, 9/11, housing and banking collapse in the US, combined with market saturation in the PC space and getting trounced by Apple on the high end ... I'm not sure what he could have done. Contrast Gates, who rode the Windows95 wave to fame and bailed at the right time. Maybe Ballmer's winning move was not to play.

Re:Last 12 years were tough

[thoth]

Times were tough, but somehow Google prospered, Apple prospered, etc. Read the article, it points out the under his leadership, Microsoft has avoided all current growth markets. Yes they are still profitable, but a decade of no visible vision of the future isn't a good sign. They've been basically chasing other companies this whole time.

Re:Last 12 years were tough

[Anubis IV]

Sure, he had it tough, but every CEO faces challenges, and there are plenty of CEOs that surmounted them during that same time. He didn't.

And the point of the CEO is to lead his company in making those "waves" so that they can ride them. If Windows 95 was Gates' wave, where's Ballmer's? The Xbox is likely the biggest new thing to come out under his leadership, but even it has only become net profitable in the last year or two, and if we imagine their company as a stool with legs holding it up, it's hardly a third leg for them to stand on, alongside their Windows and Office legs. The adoption of C# and .NET may be a bigger success for him, but good developers can pick up new languages and frameworks rather easily, so they aren't locked in and may not be there tomorrow. Where the good developers go, there the money goes.

I'm having a hard time thinking of any other successes under his leadership. Windows 7 was a recovery after Vista, to be sure, but a load of people are still back on XP. The Zune and its marketplace ended up being a colossal failure. Everything in the Internet space has ended up failing them, whether it be Live search, err...Bing, or the ever-declining market share of Internet Explorer. They lost their hold in the smartphone market. They had nearly a decade head start on the iPad in terms of trying to get into the tablet space, and they failed to make anything happen there in that time. Whatever happened to the Courier tablet that Ballmer showed off at his CES keynote a few years back. Or their Origami project, which was rather heavily virally marketed?

When you look at Ballmer's quotes on up-and-coming technology, you really don't get the impression that he's a guy who "gets" it. He's a businessman. He looks at devices and sees a checklist of features (in particular, which ones are missing), where everyday consumers see something new and different that does what they want. You can easily find quotes from him dismissing Google, iPod, iPhone, Android, and iPad. And I'll grant that some of that is just him playing the part of salesman for his company, but it makes him look the buffoon when he makes promises of how Microsoft will trounce X_DISRUPTIVE_TECHNOLOGY and then fails to deliver in the timeline he specified.

And I find that to be a real shame, because every time I see images or ideas coming out of Microsoft R&D, I'm impressed. It's clear they have some great minds in there putting together some great ideas, but it's also clear that their management has no clue how to execute on all of the great things they're being given by R&D. Every once in awhile you'll see a product coming out that looks like it may have some promise for changing things up (e.g. Surface, Photosynth, etc.), but more often than not it fails to deliver.

Re:Finally!

[timeOday]

It shouldn't need to be pointed out that Microsoft still rakes in a handsome profit year after year. They're not the first company to grow into middle age and slow down. If anything it would be a miracle if they hadn't. Ballmer may not be special, maybe even lousy, but worst EVAR!!!? I would pick some of the CEOs around the world that lead us into this global recession - who not only did so but (distinguishing them from their counterparts in government) personally took home millions of tens of millions of dollars for doing so and are living lavishly to this day.

Microsoft haters

[lwriemen]

Actually Microsoft haters should view this as bad news, because it might lead to Ballmer being replaced by someone competent. What Microsoft needs is someone who turns the company away from the anti-compete, monopoly stances; this is what most of the haters are really against. Of course, Microsoft has the Windows albatross around their neck, and it has lock-in built into it. How long would it take for Microsoft to make Windows a good choice to compete in an open market? Could they survive embracing ODF in Office, releasing their licenses on OS/2, dropping Direct for open hardware interface standards, porting their application software to Linux ...?

blah blah profit blah share price blah

[DogDude]

What a load of garbage. Forbes is all about share price. That's a moronic litmus test of a CEO. Share price has no direct connection, and often not even an indirect connection to a CEO's abilities.

Re:blah blah profit blah share price blah

[Penguinisto]

Has the company lost market share?

Slowly but certainly, yes it is losing market share - and badly.

Once you factor in the mobile devices, Apple is the largest personal computer maker going right now. Claim what you will otherwise, but if the iPad is so inconsequential, then why is Microsoft desperately trying to make one? Because they see that drop happening as well.

Is it profitable?

Is what profitable? Overall, yes Microsoft is still cashing in on their eroding OS/Office monopoly, but they have yet to realize significant profit on anything else. Even XBox, which many Microsofties gleefully point to, just barely began making any profit at all, and has not yet cleared ROI. Whether they manage to before next-gen shoves them back into the red is unclear.

Is there any major threat to the company in the future?

Hell yes there is. The whole mobile computing thing for starters. The fact that the enterprise at large has turned their noses up at automatically upgrading with every new version is another significant threat to income. The continually sliding loss in market share for both the browsers and smartphones are other major threats.

I mentioned the web because if folks get cozy with the idea of using non-IE browsers, and with using web-based email (hint: half the population already is), then it's not much of a stretch to sell them something cheaper (Android tablets) or of better reputation (iOS/Macs) in which to do that. Where does that leave Microsoft in the consumer space?

Article is delusional

[dnaumov]

Now, I don't like Steve Ballmer, but to say that he is an incompetent CEO is absurd. Under his watch, company revenues and profits have increased VERY significantly and that's what the CEO is responcible for. I can sympathize with the shareholder gripes that MSFT stock price hasn't really gone anywhere over the past decade, but that's because the starting point (10-12 years ago) was a completely ridiculous overvaluation of the tech boom. I can easily name several other major companies whose stock has gone nowhere for a long time despite company earnings growing consistently and their future looking as bright as ever.

I disagree

[Toreo asesino]

10 years ago Windows was cesspool of malware on unmanaged PCs (home users) - yes there's always room to improve here, but Windows 7/8 is markedly more hardened to attack than XP RTM was, MSFT profits came from 100% Windows & Office, Windows Servers were a joke, and the XBox was laughed at like Windows Phone is by some today.

I'm happy with the direction MSFT is going; Windows Servers especially now are serious contenders in the enterprise (and bring in serious cash now), Office is moving in many directions at once (Office 365, iOS, Metro), the online services are growing too (Bing, albeit slowly, SkyDrive - making Google look out of date), and the XBox has come into its' own. Not everything's perfect of course; WP7 has the most room here, but the reviews of people using it are generally very positive and the Nokia effect has yet to be fully realised. Not to mention Windows 8 will unify 1 OS across many many device-types & form-factors (although again, to what extent this will be successful is as yet unclear - the direction is a good one IMO). There're some real assets in MSFT, despite what you might hear on slashdot.

Anyway, I know this is a unpopular opinion here and I fully expect to be patronised with snarky replies because of it, but honestly I think Ballmer has done some good things for MSFT. Not perfect, and he'll never have the cult-like status Jobs or even Gates did but people underestimate him IMO. That's just my 2cents.

Ballmer has a monopoly mentality

[23940823908235908]

Ballmer's concept of business is stuck in the Windows XP days, when competitors feared Microsoft's entry into a market. Back in those days, Microsoft could get away with releasing half-baked products, and competitors would run off, knowing that MS's resources would demolish them. Microsoft's mindset was to prevent competitors from entering markets.

The problem now is that it's not 2001 and Microsoft is no longer in a monopoly position. Instead of leveraging their Office and OS market share, they have to enter new markets and win new customers. And they're really struggling at doing this. To win from the ground up Microsoft products would need to have compelling advantage over their competitors, whether it be price, features, or relationship with customers.

How Microsoft went about Windows Phone 7 is an example of their old, "monopoly" playbook failing to work in a new market. Microsoft saw that a market existed, and went to enter the market using the old approach: build a 'good enough' product and hope that competitors give up in fear. The results (which Microsoft refuse to publish out of embarrassment) speak for themselves. Microsoft didn't compete on price - their phones were at mid-level prices, their features were lacking compared to the competition, and any relationship with customers (e.g. enterprise customers using Exchange and Active Directory, etc) failed to materialise because MS didn't implement critical security 'lock down' features on the phone. Microsoft technical staff have the know-how to do these things - but they just don't seem to happen. Is it the management structures? the reward mechanisms? or the corporate strategy? internal politics? .. certainly it's a combination of factors. Thigns are systemically wrong with the whole organisation.

In short, Microsoft is failing at a strategic level. No-one is excited about Microsoft products anymore. No-one thinks their products will be better value or cheaper than the competitors. No-one feels that Microsoft is listening especially closely to anyone except themselves. Microsoft's actions are decidedly tactical, rather than strategic: a new user interface here, some more features there. But without a strategic - CEO - level change, I can't see their situation improving. Having diversified so much, Microsoft will not collapse overnight, but it will continue to slide into irrelevance.

Wait, What?

[Greyfox]

I'm no fan of Ballmer, but Yahoo Guy who lied on his resume, his seat isn't even cold yet. And a lot of companies (Best Buy *cough*) are doing a flaming crash into the ground right now! Ballmer may not have driven massive innovation or exhibited the technical and financial genius seen at Apple or Google, but at least he hasn't driven the company into the ground! And what about Rupert Murdoch? His performance since they caught his cronies hacking everyone's voice mail has hardly been stellar! If I had to pick a company that I thought would be a steaming pile of wreckage in the next year or two, I'd guess News Corp.

Nope, I'm going to have to say Forbes is off base here. There are too many other CEOs driving their companies or our economy into the ground. Even if you stipulate that they must still be employed so that you can fire them, Ballmer might be in the top 10, but I don't think he'd make the top 5 much less number 1.

It's gotten hard to hate on Microsoft.

[Apuleius]

16 years ago, the mere mention of Gates or Ballmer would be enough to get me foaming at the mouth.

Today?

Gates is on track to wipe out polio. And Ballmer? What's to hate? Anti-competitive practices? Apple's a far bigger concern.

What else?

Pollution? Political corruption? Financial malfeasance? Mistreatment of employees? Microsoft does none of this.

And to boot, their product line continues to improve. Can't get the hate going anymore.

Re:It's gotten hard to hate on Microsoft.

[hackula]

I agree. I am baffled by a lot of the MS hate today. I think a lot of it must be residual, because the MS I know today is not that bad. Nobody is in love with them, but there is not a whole lot to complain about either. As a developer, I could not be more pleased dealing with the Windows platforms. From MS, you really do get the sense that they care about developers, as opposed to Apple where they seem to actively thwart developers more often that not.

Re:It's gotten hard to hate on Microsoft.

[xororand]

Mistreatment of employees? Microsoft does none of this.

"The last incidence of a threatened jump over labor conditions was at a plant producing Microsoft's Xbox 360."
http://www.electronista.com/articles/12/04/27/foxconn.central.china.plant.sees.protest/
http://www.examiner.com/article/brazilian-foxconn-workers-threaten-strike-over-poor-working-conditions

Forbes is smoking crack - S&P500 is flat

[tekrat]

If Forbes is using STOCK PRICE as a barometer of how good the CEO is, well, then every company on the S&P500 is the worst CEO of all time.

For the last decade, the S&P500 has remained essentially flat, while CEO compensation has gone up 500% -- Companies may be getting more profitable, but that value is going right into someone's pocket, it's not going to share value, it's not going to re-investment, and it's not going to jobs.

Forbes is drinking the kool-aid, and is missing the big picture. In fact, this article is probably fluff to distract us from the *REAL* story, that the market itself is failing.

Take Friday's big relevation that a certain big bank lost $2 billion is a bad trade. Do any of you actually believe that hogwash? We're talking about a company big enough to manipulate the market in their favor, every time. We're talking a bank, an organization that can't lose money because of the way the entire game is rigged -- only an idiot could lose money at a bank.

No, that money's not lost, it's in someone's pocket.We're just being told it's lost so no one goes looking for it because we're the ones who were robbed.

Steal $100 and go to jail. Steal a billion and cover it up properly, and you retire in Bolivia.

Are you kidding me?

[crazyjj]

Look Ballmer is a douche, no doubt. But worst CEO, compared to the putzes who ran almost every bank, Chrystler, and GM into bankruptcy? Compared to Scott Thompson? Jerry Yang?

He may be a dick, but I don't see MS going bankrupt or asking for government bailouts.

Re:Finally!

[RKThoadan]

Keep in mind this is Forbes we're talking about. Leading the world into a massive global recession is fine if your company is able to profit from it. It's just business.

Stock Price?

[jdev]

The author criticizes Balmer for the stock not getting back to it's high of $60/share. You can dismiss this article just based on that criticism. Microsoft's stock price skyrocketed to that during the 2000 tech craze and was seriously overvalued at that point. Balmer had nothing to do with the stock price tanking at that point. Reality did.

Stock price is also an incomplete measure of a company's performance. The article fails to mention that Microsoft has steadily paid out dividends or made a special distribution of $3/share in the fall of 2004. That kind of activity isn't reflected in stock price.

I'll be fine with criticizing Microsoft for underperforming. Sure, they haven't found ways to capitalize on their monopoly power in the OS market. The sensationalistic opinions here don't mean much though.

Indeed

[Kupfernigk]

And we tend to forget that herdthink (yes, market traders are sheep, just very aggressive sheep) determines share price and is often clueless. At one time all the traders thought that companies that actually made stuff were worthless and you could barely give away shares in Rolls-Royce. At that time the MD remarked "They seem not to realise that if we stopped making things tomorrow we would still be in business profitably servicing our products 70 years later". But (with exceptions like Warren Buffet) the idea is not to invest to make money; it is to fool other people into doing what you want, manipulating prices to your advantage: not only is modern investment a casino, but the actual objective is to tilt the roulette table without others noticing.

From that point of view Microsoft will always be badly run because it is quite hard to distort its share price owing to the very public visibility of its products. Google, Apple and other companies whose value is hard to work out are wonderful because traders can profit going down as well as up.

Re:Hmmm

[ozmanjusri]

Close.

It turns out the Ballmer Peak isn't real, but the Ballmer Droop is.

$60 to $20-30 is constant?

[Anonymous Coward]

Microsoft's share price hasn't remained constant. The article points out he's lost 2/3rd of its value with MS rarely in the $30s.

It's sort of a slow motion train wreck, IMHO Metro will fail, Ballmer will present desktop licenses of Windows 8 as Metro sales and pretend its a success. It appears to me he's a saleman, and the biggest sales job he's doing, is himself to Microsoft shareholders so they don't fire him.

Re:Hmmm

[Jeremiah Cornelius]

I was a POM for 6 of the Ballmer years.

It was like being in the bowels of the Politburo.

Many are worse ...

[redelm]

Just look at the current bete-noir -- Jaime Dimon of JPMorgan/Chase who was too puffed up with himself to see the London Whale lose 2B$. And he's not even taking the fall ...

Look, I despise MSFT just as much as the next /.r , but fair-is-fair: Ballmer is not _quite_that_ bad; the whole MSFT business model is terrible, just like the RIAA -- you can milk the back-catalog forever, but it will not give you anything resembling growth.

Ballmer is getting a bad rap mostly in comparison to Steve Jobs (RIP) who revitalized an Apple suffering the same rot with new (for them) and attractive products.

That, or Forbes editors cannot pull a filler back-story when real news makes it laughable. Slow@$$es

Haven't they *always* failed, though?

[swb]

The only place I can think of where MS has become successful where it initially had no market presence has been the Xbox gaming console, and even there MS leveraged their experience with desktop PC technology and in some ways co-opt existing developers who developed for the PC platform, as well as subsidizing the platform for years before they began to make any money.

In every other case MS has been merely building on existing platforms while failing to create any new areas of market dominance -- Windows OS, Exchange, SQL, MS Office.

Phones? WinMo had some traction when ActiveSync became established, then was in some ways abandoned, leaving the market to BlackBerry and ultimately Apple and Android. Windows Phone doesn't look like it will be more than a niche player. Bing? Fail. Zune? Fail. Etc.Etc.

I wonder if the real reason for this is actually the success of their core products -- anyone who's actually talented, especially at the management level, wants the easy money of the core products and also resists any innovative products in other areas that might threaten them.

I sometimes wonder if MS might have actually been more successful if HAD been broken up by the DOJ and forced to actually innovate vs. just collecting rent from their monopoly positions.

Re:I don't blame Ballmer

[PPH]

More so now than in the past. There have been some good people at Microsoft. They were either seduced in by the idea that the biggest s/w company must somehow be the best. Or they went in with their eyes open, hoping to put up with the culture for as long as it took for options to mature to build their nest egg for their own idea.

With MSFT stalled at around $30 (for years), the nest egg idea is dead. People that actually want to do something with their lives are getting out now (or already have). The time will come when having Microsoft on one's resume (CV) will be a negative (there are a few other companies around here like this). Then, the stampede for the door will commence.

Hilarious and predictable

[degeneratemonkey]

I grew up on Slashdot. I remember sitting in my freshman dorm room over a decade ago, cackling in agreement with all the MICRO$OFT hate. Yearning for the Linux desktop. I was a part of that culture. I believed in it. We were real nerds, and we understood real technology, and we were going to win eventually.

Well I have some news for you guys. Microsoft is not the piece of shit company it once was. The article is spot on with its analysis of Ballmer's failure to lead MS into the forefront of relatively new markets, yes. But I cannot comprehend all of the continued and abundant dislike for this company among nerds (and even more staggering is the compulsive fawning over Apple, a company that is for all intents and purposes exactly what MS was in the hay day of their uncoolness). Just about every mainstream product MS has released in the past 3-4 years has been incredible. Namely though, Windows 7, Windows phone, and all of their developer tools are just absolutely top notch pieces of software.

If you're a real nerd and you're really paying attention and you're really using your brain and you're really thinking for yourself, you might see that they deserve a lot more credit than what they are getting here. Of course I can't speak for Ballmer. I don't think his leadership necessarily has any bearing on the quality of the company's work within their existing markets.

Disclaimer: Not an MS shill, just a modern-day sympathizer.

Re:Hilarious and predictable

[rastoboy29]

How about them suing/legally extorting money from Android phone makers due to their nebulous "Linux patents"?

They are still a bad actor.

Re:Hmmm

[Jeremiah Cornelius]

Prisoner of Microsoft.

not

Project Object Model. :-)

Ballmer ignored competitive intelligence

[SethJohnson]

They can't seem to beat Apple at its own game, though. I don't see that as a corporate failing, rather the inability to work with an unstable element. (Image, the perception of cool)

There is a largely-held perception that Apple's success is due to slick advertising. Where Apple has excelled is in product management as a function of marketing. They have powerfully identified the feature set and price points people will pay for their products. They have accurately forecast demand so that they can leverage volume purchasing of components to keep the price at those acceptable points while building in a healthy profit margin. They are firing on all cylinders, and even a few cylinders nobody thought existed.

Meanwhile, Ballmer has ignored the trends and innovations of other companies until success in the marketplace forces him to mount a too-late response (Zune, Windows Store, Windows Phone 7, et. al.). Consider this 2007 interview where Ballmer mocked the iPhone's prospects. For him to do that means that he was ignoring competitive intelligence studies that he should have been taking seriously. Even then, his marketing department should have been focus-grouping on the iPhone to determine what the demand was and projecting out where it could go. Had he read what the competitive intelligence studies would have told him, his response would have been to acknowledge the vacuum in existing smartphone technology and hint about forthcoming Microsoft innovations to come in that space.

In years to come, the wikipedia definition for the word "hubris" will contain a link to that video clip.

Seth

Re:Ballmer ignored competitive intelligence

[Eponymous Coward]

> Ballmer has ignored the trends and innovations of other companies until success in the marketplace forces him to mount a too-late response

I hope one day Ballmer writes a book and talks about what he was thinking.

To me, it seems like Microsoft tried to predict where Apple was heading with iOS and I think they predicted a merging of their desktop and mobile operating systems. I really think that's how Microsoft ended up developing the dog that is Windows 8 / Windows RT. Their near future strategy seems totally bizarre to me and I can't figure out what it is they think they are going to accomplish.

In my day job, I work on a large Windows desktop application and we every change we've made lately has been to decouple us from Microsoft. I've always advocated choosing the cross-platform solution to a problem even if it is the more difficult path. Up until about a year ago, I've usually lost those arguments.

That's ONE possible scenario ....

[King_TJ]

But I'd argue that I believe it's not really accurate. It sounds like exactly what the pro-bailout folks want you to believe....

For starters, when you speak of Ford as the "uninvolved party" and the good guy? That's not quite reality. Ford's CEO petitioned Congress in 2008 to authorize a credit line of up to $9 billion for Ford in case the economy got worse and the company needed it. Ford also received $5.9 billion in government loans in 2009 to retool its manufacturing plants to produce more fuel-efficient cars, and the company lobbied for and benefited from the cash-for-clunkers program. Ford was also entwined in the situation because almost 25 percent of Ford’s top dealers also owned GM and Chrysler franchises.

All of the "Big 3" were to blame for mismanagement and a "we're too big to fail" attitude. Ford was just lucky to be in a little bit better place, financially, at the time everything really came apart at the seams.

Meanwhile? We're in a situation today where an "American car" is often American in name-plate only. "Foreign cars" are often assembled 100% right here in the U.S.A. as well. Hyundai's plant in Alabama is one of the only non-union auto plants in the nation, and is doing incredibly well. They hire a lot of people who only had low-paying jobs in the restaurant industry and the like, before starting there. They receive training for an actual career job and pay that's at least 80% or so of what their unionized counterparts receive ... and Hyundai claims they get employees with more positive attitudes and more willingness to do the job well. Sounds like win-win to me.

Meanwhile, what has GM done with those bailout funds lately? I see Cadillac is going to build their new hybrid electric vehicle and their flagship XTS over in new assembly plants in China. Is that what you were hoping those tax dollars would be spent on?