In a startling and unexpected announcement, Microsoft revealed today that CEO Steve Ballmer would retire sometime in the next 12 months. During the intervening time, the company will begin a search for his successor.
"There is never a perfect time for this type of transition, but now is the right time," Mr. Ballmer said in a prepared statement. "We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer-term for this new direction."
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Microsoft's board of directors has appointed a special committee to direct the process of finding the firm's next CEO. Led by John Thompson, Bill Gates, Chuck Noski, and Steve Luczo, the board will look for a suitable replacement both internally and outside the company.
"The board is committed to the effective transformation of Microsoft to a successful devices and services company," Mr. Thompson, who serves as the board's lead independent director, said. “As this work continues, we are focused on selecting a new CEO to work with the company's senior leadership team to chart the company's course and execute on it in a highly competitive industry."
A close confidant and friend to Microsoft cofounder Bill Gates, Mr. Ballmer assumed the CEO role in January 2000 after Gates stepped aside. Now 57 years old, Mr. Ballmer has worked at Microsoft since June 1980, when he became the firm's 30th employee.
Ballmer's Microsoft legacy is mixed. His stewardship of the company saw annual revenues jump from $25 billion a decade ago to over $77 billion this past year. But Microsoft has stumbled in its transition to the mobile computing era, and the company ceded major markets to quicker-moving competitors such as Apple and Google. He has staked his reputation on Microsoft's recent restructuring as a devices and services company, which today's announcement makes clear will continue after his departure.
In a letter to employees, Mr. Ballmer didn't explain his decision to leave.
"Microsoft is an amazing place. I love this company," he writes. "I feel good about playing a role in [Microsoft's] success and having committed 100 percent emotionally all the way. We ... earn a great profit for our shareholders. We have delivered more profit and cash return to shareholders than virtually any other company in history."
On a personal note, I'll just add that Ballmer was one of the good guys. Though he was relentlessly mocked for his over-the-top public appearances in years past, Ballmer was also relentlessly pro-Microsoft and it's very clear that the troubles of the past decade were at least in part not of his making: Ballmer inherited a Microsoft that had been driven into an antitrust quagmire by Mr. Gates, handicapping its ability to compete effectively or respond to new trends quickly. While many called for his ouster for many years, I never saw a single leader emerge at Microsoft who could fill his shoes or the needs of this lofty position. Looking at the available options today, I still don't.
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