Microsoft Reorg: Should Ballmer Remain CEO?

Microsoft Reorg: Should Ballmer Remain CEO?

Microsoft (MSFT) CEO Steve Ballmer seems set to unveil a reorg on Thursday. But it begs the question: Does Ballmer himself deserve to survive the reorganization? 

Microsoft (MSFT) CEO Steve Ballmer appears set to announce a company reorg on Thursday. The big focus will be on devices and services. But perhaps the focus should be on Ballmer himself. Does he deserve to wear Microsoft's CEO crown going forward?

The VAR Guy's answer: Yes indeed. While Ballmer's commitment to channel partners has been hit and miss over the past three years, he has successfully pushed Microsoft into a range of new markets -- either through acquisition or organic R&D.

  • Servers and Business Software: Windows Server 2012 and Hyper-V have been well-received by partners and customers.
  • Business Applications: Lync, Exchange and SharePoint remain dominant -- on-premises, in Microsoft's cloud and in third-party clouds. Ballmer doesn't get enough credit for that performance.
  • Desktop: OK, so Windows 8 was not a home run. But it's not a Windows Vista train wreck either (is it?). Instead of ignoring critics, Microsoft is getting Windows 8.1 out the door to PC makers in August 2013. Good move. And the new Office seesto be holding its own -- though most of the free world continues to wonder why Office for iOS and Android are not shipping products.
  • Tablets and Smart Phones: Surface Pro was a solid base hit. Surface RT was a stike out. The next round of Surface devices will only improve, while also gaining some channel partners on board. Smart Phones remain bleak. But at least Microsoft has a horse in the race (right?).
  • Duds: Bing remains a financial drain. During Worldwide Partner Conference 2013, Ballmer insisted that Bing taught Microsoft how to build reliable cloud services atop Windows Server and Hyper-V. But is that enough to justify roughly 17 percent market share in the search industry?
  • Cloud: Microsoft deserves big kudos here. Office 365 and Windows Azure each essentially are $1 billion businesses now. Ballmer noted that only Amazon, Google and Microsoft have experience building public clouds on such a massive scale, followed by Facebook and Yahoo. 
  • Biggest Miss -- Partner Engagement At Product Launches: Windows 8, Surface and Office 365 each were launched with lousy, limited or no channel partner programs in place. For a company that historically drove 90 percent or more of its revenues through partners, Microsoft's failures to have partners ON BOARD AT PRODUCT LAUNCH is a big cause for concern. 

Bottom line: Annual revenue has grown from $60.4 billion in 2008 to $73.7 billion in 2012. Those can't match "Apple" or "Google" growth rates over the past five years. But how many technology companies actually can match Apple or Google performance since 2008? It's far more logical to compare Microsoft to IBM, HP, Dell and Oracle performance in the past five years. And The VAR Guy would argue: Microsoft has a far more compelling product and cloud portfolio than many of those rivals.

The VAR Guy votes for Ballmer to stay. Now, if only Ballmer would empower Channel Chief Jon Roskill more fully to offer partner programs each time a new product or service emerges from Microsoft R&D. 

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