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Analysis Those who upgraded to Windows 8 aren't the only ones unhappy with the new touch-driven operating system - Wall Street is too. Just don't expect any of the criticism hurled at Steve "Teflon" Ballmer, Microsoft's shy and retiring boss, to stick.

The chief executive is under fire from money men who responded to tech reporters trolling the markets for blistering opinions on Microsoft's leadership, given that: PC sales are crashing; Windows Phone 8 smartmobes are in fourth place in the US mobile OS market; and Windows 8 Surface gadgets are barely on the worldwide tablet sales charts. The new touchscreen-friendly Windows has not been that well received, resulting the software giant undoing decisions made at the highest levels.

"Certainly investors think Ballmer's the wrong guy," Ed Maguire, an analyst at investment biz CLSA Asia-Pacific Markets, told The Telegraph. "You could make the argument that he missed tablets and he missed smartphones, and that these are the two areas of technology that really count."

And Fort Pitt Capital Group analyst and former programmer Caughey Forrest hankered for a Bill Gates-like geek in the seat. "That's what is missing - a charismatic technology leader," she told the broadsheet.

Ironically, as we shall see, a certain charismatic tech leader is keeping Ballmer firmly on the throne, for now.

But first, who exactly is taking the heat for the Windows 8 defeat?

Last week, Windows group chief marketing and financial officer Tami Reller was finally handed the white flag and given the job of walking out into no man's land: she had a mea culpa to deliver from Microsoft and confirmed the company will shift from "no compromises" on Windows' new Metro design to reinstating the familiar desktop Start menu.

By any measure, heads should roll: Windows 8 was Microsoft's big bet on the future, a supposedly seamless segue from keyboard and mouse to a world of touchscreen tablets and laptops. That bet has gone horribly wrong for Redmond's executives, to the point where the software giant is being blamed for knackering PC sales the world over.

Windows group chief Steven Sinofsky, the process king who made Microsoft's Office train run on time before bulldozing aside any and all objections to Windows 8, left the company suddenly and without explanation mid-way through the Windows 8 launch cycle in November 2012.

Nobody officially knows the reason for Sinofsky's sudden exit; perhaps the man tipped as a future Microsoft CEO was involved in a power struggle at the very summit of the corporation. My theory is that it was obvious before Windows 8 launched that the software wasn't working well enough, but the countdown to liftoff could not be stopped - and Sinofsky wouldn't or couldn't brook any changes.

It's easy and standard practice in corporate and military circles to blame a lieutenant and let them take the fall; but what about the chief who allowed the lieutenant to rise? What does this say about his judgement?

Windows 8 joins a growing list of Microsoft's failures and missed opportunities - instances where the software giant was either caught out, or where Ballmer pooh-poohed the competition and later had to eat his words and burn billions of dollars playing catch up.

A gargantuan share of the technology sector, and accompanying revenue, that could have gone to Microsoft has been lost to Google, Apple and Samsung - a trio that snapped up the online ads and search, and phone and tablet markets.

Yes, these are relatively brand new areas so Microsoft may be forgiven for being slow off the mark. That's the baggage that comes with being a hulking great big multinational, unlike Google and Apple which focussed on one or two specific areas at a time. But remember, it was Steve Ballmer who laughed at the iPhone and who U-turned in 2010, promising no sleep at Redmond until his engineers had an answer to the super-soaraway iPhone and iPad.

It's only money, but money is everything

Then there was last year's spectacular $6.2bn write-down of Microsoft subsidiary aQuantive - the online ads publisher and network Ballmer bought in 2007 for $6.3bn to transform his company into a web advertising biz serving ads to Xbox Live, Windows Live, Office Live and MSN. aQuantive was one of Microsoft's "big bets", according to Ballmer using a phrase he likes to repeat. He claimed the US giant was "intensely committed" to maximising the "digital advertising opportunity for all". Said power of aQuantive was never realised.

But all roads leads to Windows, and version 8 of the operating system is actually Microsoft's second major disaster in something it's supposed to be able to do with its eyes shut: its second "New Coke moment", if you will. The first was Windows Vista, Microsoft's last big bet to reinvent the software industry with a brand new user interface, web communications layer and storage subsystem.

What we got was a clunker that dined on processors and thrashed hard drives like a dominatrix who forgot the safe word.

But Ballmer is tech's Teflon-coated chief: strategic missteps and tactical execution errors that would have felled lesser CEOs do not even break his stride. Wall Street, for all its bellyaching, has a short memory or high tolerance. People report "questions" over Ballmer's future, but there's no sign of a planned exit of the end of the decade.

Why is Ballmer in such a safe seat?

One top reason is the Microsoft board, which backs its CEO more or less to the hilt. And that's because zillionaire Microsoft chairman Bill Gates backs Ballmer. Lose Gates, and Ballmer loses the board. But that's not in the deck let alone on the cards at the moment.

If the board doesn't act under its own steam, shareholders will have to push for a regime change if they so wish - but those investors show no signs of stirring.

ValueAct Asset Management, which owns $2bn in Microsoft shares, caused ripples in April: the hedge fund's founder Jeffrey Ubben said he liked the corporation's strategy for enterprise customers, but wasn't so hot on the company's consumer stuff, a statement that prompted speculation he'd try to exercise some leverage on Microsoft's management. The problem is that Ubben's a minnow in the share pool, thought to have a mere one-percent holding in Microsoft so his leverage is next to zero.

In 2011, the respected fund manager David Einhorn, of Microsoft stockholder Greenlight Capital, reckoned it was time for Ballmer to go; the money man said the share price had been flat and Microsoft had failed to attack new growth areas.

Einhorn is one Time's 100 most influential people on Earth, but with less than one percent of Microsoft stock Einhorn ain't loosening Ballmer's grip.

Which leads us to another reason why shareholders aren't revolting, at least for now.

The company still makes plenty-o-money: tens of billions of dollars still pour in annually from sales of Windows, despite Windows 8, and from sales of Server and Tools products. It's the kind of money that allows Ballmer to shunt a $6.2bn aQuantive write off into a quiet quarter.

Revenue for Microsoft's first three months of 2013, officially the worst period for PC sales since Gartner records began, grew - and by double digits: 18 by per cent year-on-year to $20.4bn. Revenue from the Windows division increased 23 per cent to $5.703bn - although this included Windows 8 promotions outside the quarter.

Ballmer once called Windows 8 Microsoft's riskiest bet. So far, however, all the risk has been loaded on the PC makers trying to flog the new OS to punters and business owners. While Microsoft has prospered, the manufacturers have sunk.

Arguably, Ballmer's pain has been postponed. Microsoft's Windows growth isn't coming from new Windows 8 PCs sold to consumers. Instead, it's sales of Windows 8 licences to distribution channel partners and volume customers. Actual Windows 8 machines haven't moved in any significant numbers. The PCs that are selling run Windows 7.

Until Microsoft registers an actual official drop in sales, never mind the kind of drop hitting (say) Dell, or the decade-long losses that dragged Sun into a forced marriage with Oracle, I'd argue Ballmer is pretty safe. ®

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