Where do you go after your company has achieved a 95% market share and a stock price at an historical peak? Add to this the departure of a visionary founder (see "The Legacy of Bill Gates," Communications, January 2009). Bill Gates stepped down as Microsoft's CEO in 2000, just when critical changes were about to disrupt Microsoft's economics: continuing growth of the Internet as a new applications and communications platform, handheld computers and cellphones starting to converge, growing popularity of free open-source software, and the beginning of software as a service and cloud computing. The most likely place to go is down, and that is what happened to Microsoft after Steve Ballmer took over as CEO.
The Gates-Ballmer relationship began when they were undergraduates at Harvard University during the mid-1970s. Ballmer graduated and then went to work for Proctor & Gamble, before attending Stanford's MBA program. He left after a year to join Microsoft in 1981 and help his old college dorm-mate grow the business. Ballmer went on to become enormously successful (and wealthy) himself. He was Gates' most trusted lieutenant for the next two decades, exhibiting great skills in marketing products, motivating the sales team, and building relationships with enterprise customers. The announcement in August 2013 that Ballmer will step down as CEO within 12 months makes this a good time to reflect on his legacy and how he has positioned Microsoft for the future.
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