Steven Anthony "Steve" Ballmer (born March 24, 1956)[4] is an American businessman who has been serving as the CEO of Microsoft since January 2000.[4] As of 2013, his personal wealth is estimated at $18 billion, ranking number 21 on the Forbes 400.[2] It was announced on August 23, 2013 that he will step down as Microsoft CEO within 12 months.[5]
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[show]Early life[edit]
Ballmer was born in Detroit, the son of Beatrice Dworkin and Frederic Henry Ballmer, a manager at the Ford Motor Company.[6] His father was a Swiss immigrant and his American mother was Jewish, her family traces its origins to Iran.[7] Ballmer grew up in the affluent community of Farmington Hills, Michigan. In 1973, he attended college prep and engineering classes atLawrence Technological University and graduated from Detroit Country Day School, a private college preparatory school in Beverly Hills, Michigan, with a perfect score of 800 on the mathematical section of the SAT.[8][9] He now sits on the school's board of directors. In 1977, he graduated magna cum laude from Harvard University with an A.B. in applied mathematicsand economics.[10]
At college, Ballmer managed the football team, worked on The Harvard Crimson newspaper as well as the Harvard Advocate, and lived down the hall from fellow sophomore Bill Gates. He scored highly in the prestigious William Lowell Putnam Mathematical Competition, an exam sponsored by the Mathematical Association of America, scoring higher than Bill Gates.[11] He then worked for two years as an assistant product manager at Procter & Gamble, where he shared an office with Jeffrey R. Immelt, who later became CEO of General Electric.[12] In 1980, he dropped out of the Stanford Graduate School of Business to join Microsoft.[13]
Microsoft[edit]
Steve Ballmer joined Microsoft on June 11, 1980, and became Microsoft's 30th employee, the first business manager hired by Gates.[14]
Ballmer was initially offered a salary of $50,000 as well as a percentage of ownership of the company. When Microsoft was incorporated in 1981, Ballmer owned 8 percent of the company. In 2003, Ballmer sold 8.3% of his shareholdings, leaving him with a 4% stake in the company.[15] The same year, Ballmer replaced Microsoft's employee stock options program.
In the 20 years following his hire, Ballmer headed several Microsoft divisions, including operations, operating systems development, and sales and support. From February 1992 onwards he was Executive Vice President, Sales and Support. Ballmer led Microsoft's development of the .NET Framework. Ballmer was then promoted to President of Microsoft, a title that he held from July 1998 to February 2001, making him the de facto number two in the company to the Chairman and CEO, Bill Gates.[16]
Chief Executive Officer[edit]
In January 2000, Ballmer was officially named Chief Executive Officer.[4] As CEO, Ballmer handled company finances and daily operations, but Gates remained chairman of the board and still retained control of the "technological vision" as chief software architect.[17] Gates relinquished day-to-day activities when he stepped down as chief software architect in 2006, while staying on as chairman, and that gave Ballmer the autonomy needed to make major management changes at Microsoft.[18]
When Ballmer took over as CEO, the company was fighting an antitrust lawsuit brought on by the U.S. government and 20 states, plus class-action lawsuits and complaints from rival companies. While it was said that Gates would have continued fighting the suit, Ballmer made it his priority to settle these cases, saying "Being the object of a lawsuit, effectively, or a complaint from your government is a very awkward, uncomfortable position to be in. It just has all downside. People assume if the government brought a complaint that there's really a problem, and your ability to say we're a good, proper, moral place is tough. It's actually tough, even though you feel that way about yourselves."[19]
Upon becoming CEO, Ballmer required detailed business justification in order to approve of new products, rather than allowing hundreds of products that sounded potentially interesting or trendy. In 2005, he recruited B. Kevin Turner from Wal-Mart Stores, where he was executive vice president, to become Microsoft's chief operating officer to add "scorecards" for measuring customer satisfaction and other key sales metrics.[19]
Since Bill Gates' retirement, Ballmer oversaw a "dramatic shift away from the company's PC-first heritage", replacing most major division heads in order to break down the "talent-hoarding fiefdoms", and Businessweek said that the company "arguably now has the best product lineup in its history". Ballmer has been instrumental in driving Microsoft's cloud computing strategy, with acquisitions such as Skype.[18]
Under Ballmer's tenure as CEO, Microsoft's annual revenue has surged from $25 billion to $70 billion, while its net income has increased 215 percent to $23 billion, and its gross profit of 75 cents on every dollar in sales is double that ofGoogle or International Business Machines Corp.[20] In terms of leading the company's total annual profit growth, Ballmer's tenure at Microsoft (16.4 percent) has surpassed the performances of other well-known CEOs such as General Electric's Jack Welch (11.2 percent) and IBM's Louis V. Gerstner, Jr. (2 percent).[18] These gains have come from the existing Windows and Office franchises, with Ballmer maintaining their profitability, fending off threats from cheaper competitors such as Linux and other open-source operating systems and Google Docs.[1] Ballmer also built half-a-dozen new businesses [2] such as the data centers division ($6.6 billion in profit for 2011) and the Xbox entertainment and devices division ($8.9 billion) (which has prevented the Sony PlayStation and other gaming consoles from undermining Windows)[3], and oversaw the acquisition of Skype. Ballmer also constructed the company's $20 billion Enterprise Business, consisting of new products and services such as Exchange, Windows Server, SQL Server, SharePoint, System Center, and Dynamics CRM, each of which initially faced an uphill battle for acceptance but have emerged as leading or dominant in each category.[4] This diversified product mix has helped to offset the company's reliance on PCs and mobile computing devices as the company entered the Post-PC era; in reporting quarterly results during April 2013, while Windows Phone 8 and Windows 8 have not managed to increase their market share above single digits, the company increased its profit 19 percent over the previous quarter in 2012, as the Microsoft Business Division (including Office 365) and Server and Tools division (cloud services) are each larger than the Windows division.[21][22]
Ballmer has attracted criticism for failing to capitalize on several new consumer technologies, several of which Microsoft originally invented but Apple Inc. turned into commercially successful products (the iPod, iPhone smartphone, andiPad tablet computer), forcing Microsoft to play catch-up in these areas with mixed results.[18][22] Under Ballmer's watch, "In many cases, Microsoft latched onto technologies like smartphones, touchscreens, 'smart' cars and wristwatches that read sports scores aloud long before Apple or Google did. But it repeatedly killed promising projects if they threatened its cash cows [Windows and Office].")[5] Microsoft's share price has been stagnant during Ballmer's tenure. As a result, in May 2012, hedge fund manager David Einhorn called on Ballmer to step down as CEO of Microsoft. "His continued presence is the biggest overhang on Microsoft's stock," Einhorn said in reference to Ballmer.[23] In a May 2012 column in Forbes magazine, Adam Hartung described Ballmer as "the worst CEO of a large publicly traded American company", saying he had "steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets)".[24]
In 2009, and for the first time since Bill Gates resigned from day-to-day management at Microsoft, Ballmer delivered the opening keynote at CES.
On June 19, 2012, Ballmer revealed Microsoft's new tablet device called Microsoft Surface at an event held in Hollywood, Los Angeles.[25]
On August 23, 2013, Microsoft announced that Ballmer would retire within the next 12 months. A special committee that includes Bill Gates will decide on the next CEO.[26]
There has been a list of potential successors to Ballmer as Microsoft CEO, but all have departed the company: Jim Allchin, Brad Silverberg, Paul Maritz, Nathan Myhrvold, Greg Maffei, Pete Higgins, Jeff Raikes, J. Allard, Robbie Bach,Bill Veghte, Ray Ozzie, Bob Muglia and Steven Sinofsky. [6][27] B. Kevin Turner, Microsoft's Chief Operating Officer (COO), is considered by some to be a de facto number two to Ballmer, with Turner having a strong grasp of business and operations but lacking technological vision.[28]
Ballmer has also served as director of Accenture Ltd. and a general partner of Accenture SCA since October 2001.
Persona[edit]
Ballmer is known for his energetic and exuberant persona, which is meant to motivate employees and partners.[29] His flamboyant stage appearances at Microsoft events are widely circulated on the Internet as viral videos.[30][31][32]
A widely circulated video, captured at a developers' conference, features a perspiring Ballmer chanting the word "developers".[33][34] At the MIX 08 event on March 6, 2008, during a question and answer interview with Guy Kawasaki, one person from the public requested Ballmer to do a "web developers" chant, mirroring the "developers" chant he had done around eight years before. Ballmer screamed "I've been in PR mode the whole time, and you want to hear web developers, web developers, web developers!", receiving a round of applause from the audience.[35][36]
Bill Gates steps down[edit]
The Wall Street Journal has reported that there was tension surrounding the 2000 transition of authority from Bill Gates to Ballmer. Things became so bitter that, on one occasion, Gates stormed out of a meeting in a huff after a shouting match in which Ballmer jumped to the defense of several colleagues, according to an individual present at the time. After the exchange, Ballmer seemed "remorseful", the person said. Once Gates leaves, "I'm not going to need him for anything. That's the principle," Ballmer said. "Use him, yes, need him, no."[37]
Retirement[edit]
After saying in 2008 that he intended to remain CEO for another decade, Ballmer announced his retirement in 2013, after losing billions of dollars in acquisitions and the Surface tablet. Microsoft's stock price rebounded on the news.[38]
Ballmer says that he regretted the lack of focus on Windows Mobile in the early 2000s, leaving Microsoft a distant third in the current smart phone market.[39]
Ballmer hosted his last company meeting in September 2013.[40]
On competing companies and software[edit]
Apple[edit]
In 2007 Ballmer said "There's no chance that the iPhone is going to get any significant market share. No chance."[41]
Speaking at a conference in NYC in 2009, Microsoft CEO Steve Ballmer criticized Apple's pricing, saying, "Now I think the tide has turned back the other direction (against Apple). The economy is helpful. Paying an extra $500 for a computer in this environment—same piece of hardware—paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be."[42]
Free and open source software[edit]
He has referred to the free software Linux kernel as a "cancer that attaches itself in an intellectual property sense to everything it touches".[43] Ballmer used the notion of "viral" licensing terms to express his concern over the fact that the GNU General Public License (GPL) employed by such software requires that all derivative software be under the GPL or a compatible license.
Google[edit]
In 2005, Mark Lucovsky alleged in a sworn statement to a Washington state court that Ballmer became enraged upon hearing that Lucovsky was about to leave Microsoft for Google, picked up his chair, and threw it across his office, and that, referring to Google CEO Eric Schmidt (who previously worked for competitors Sun and Novell), Ballmer vowed to "kill Google" in an expletive-laden tirade[44] then resumed trying to persuade Lucovsky to stay at Microsoft. Ballmer has described Lucovsky's account of the incident as a "gross exaggeration of what actually took place".
During the 2011 Web 2.0 Summit in San Francisco, he said: "You don't need to be a computer scientist to use a Windows Phone and you do to use an Android phone ... It is hard for me to be excited about the Android phones." [45][46]
Sports[edit]
On March 6, 2008, Seattle's mayor announced that a local ownership group involving Ballmer made a "game changing" commitment to invest $150 million in cash toward a $300 million renovation of KeyArena and were ready to purchase the Seattle SuperSonics in order to keep them in the City of Seattle. However, this initiative failed, and the Sonics have since relocated to Oklahoma City, now performing as Oklahoma City Thunder.[47]
In June 2012, it was announced that Ballmer was an investor in Chris Hansen's proposal to build a new arena in the SoDo neighborhood of Seattle and bring the Sonics back to Seattle.[48]
On January 9, 2013, it was announced that Ballmer and Hansen were leading a group of investors in an attempt to purchase the Sacramento Kings from the Maloof family and relocate them to Seattle for an estimated $500 million. However, this attempt also fell through.
Media portrayals[edit]
- Bad Boy Ballmer: The Man Who Rules Microsoft (2002), Fredric Alan Maxwell, ISBN 0-06-621014-3 (unauthorized biography)
- The 1999 docudrama Pirates of Silicon Valley features Ballmer as a major character; he is played by actor John DiMaggio.
- Killed by Bill Gates on the TV comedy South Park episode 245 "A Song of Ass and Fire".
Wealth[edit]
Ballmer was the second person after Roberto Goizueta to become a billionaire in U.S. dollars based on stock options received as an employee of a corporation in which he was neither a founder nor a relative of a founder. Ballmer is the 51st richest person in the world according to Forbes, with an estimated wealth of $18 billion.[2] While CEO of Microsoft in 2009, Ballmer earned a total compensation of $1,276,627, which included a base salary of $665,833, a cash bonus of $600,000, no stock or options, and other compensation of $10,794.[49]
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