As the dust begins to settle on Steve Ballmer’s 13 year rein as CEO of Microsoft, we analysed his 5 biggest mistakes. From vetoing the purchase of Overture – leading to the $3 billion Bing.com black hole – to personally killing the Microsoft tablet that may have beaten the iPad to market, its fair to say that Ballmer made some big mistakes. Below ate his five biggest clangers:
1) the Zune music player: when Apple caught Microsoft cold with the launch of their iPod in the early noughties, Ballmer eventually hatched a plan. Whilst his first attempts to play catchup were uncoordinated and bundled, he eventually came up with the Zune Music player. He undercut Microsoft’s licencees – causing bad blood – to launch the Zune in 2006. The problem was, this product launched right as smartphones took over, rendering the Zune music player a huge flop. This would not be the first time that Microsoft got stung by smartphones. Nor would it be the last time that Ballmer got his timing all out.
2) The Bing debacle: in 2008, Microsoft decided they were going to take on Google in the search engine game. To accomplish this bold ambition, senior executives lined up a bid for Overture, a component search engine company with a stellar set of patents. Ballmer personally vetoed the purchase, claiming Microsoft could build a better service. The company lost $3 billion on Bing, and its never dented Google. Microsoft also ran into patent problems, a number of which – surprise surprise – were owned by Overture.
3) Courier – the tablet that could have beat the iPad: in 2009, Allard, the inventor of the Xbox had designed and prototyped a tablet computer which was going to be called Courier. The Courier would have entered the market at roughly the same time as the iPad, and could even have beaten it to market. However, Ballmer personally killed the project and the ipad ended up going to market completely unopposed. Three years on, Apple have sold over 10 million iPads in the UK alone. Microsoft have recently announced big price cuts on their also-ran tablet, the Microsoft Surface, in a last ditch attempt to spark some interest in another consumer flop
4) Ballmer dismissed Amazon as ‘just a retailer’, only for the retailer to beat them at their own game: Ballmer was dismissive of amazon, pegging them as just a retailer. Amazon would go on to sensationally bust that myth, most painfully for Ballmer by becoming the dominant cloud computing offering. Bill Gates had espoused the importance of the cloud as long ago as 2001, but Ballmer’s dithering meant Microsoft are years behind. Cloud computing sits in the business technology services space that should be dominated by Microsoft, but Ballmer meant his company missed that boat.
5) Product building: Ballmer spent billions of dollars trying to build consumer technology, yet in thirteen years of trying, he failed to land one hit product. This isn’t to say all of the Microsoft products in the Ballmer era sucked – because they clearly didn’t – but Ballmer wasn’t able to create a home run hit for his company’s bottom line. Ballmer’s mistake? Diversified focus led to no specialisation, and his disinclination to buy when it would make more commercial sense than building cost Microsoft billions. This lack of success meant that Ballmer had no product to build a personal legacy around, and will leave the co,pant as an expensive footnote in their history.
Whilst some of these points could be construed as harsh, especially considering the Ballmer era spanned difficult times for the industry. He oversaw the wreckage caused by the dot-com crash, and he was able to maintain high levels of profitability for the company.
He leaves an expensive legacy if some huge mistakes though. Which do you think was his biggest? Share your thoughts in the comments below