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Why Teflon Ballmer had to go: He couldn't shift crud from Windows 8, Surface

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Analysis Microsoft chief exec Steve Ballmer has gone sooner than anyone, even he himself, had expected.

On Friday he announced he will give up the reins following a 12-month transition.

A one-year exit is proper given Ballmer’s position: the CEO of a major listed company. What’s strange, however, is the timing - that Ballmer should be going now.

The shy and retiring boss announced his exit just weeks after signing off on Microsoft's biggest reorganisation in its history, ripping up product groups for a structure to foster engineering collaboration and innovation and to turn Microsoft into a successful internet and devices company.

Further, the software giant is on the home straight to releasing the second instalment of Windows 8, the operating system that was supposed to have turned PCs into touch-driven machines. The party line from Redmond is that Windows 8.1 “continues the vision we began with Windows 8”.

Forget what you might read about the CEO transition plan starting years ago: Ballmer had no immediate plans to step down. In June 2008, the grand fromage told a technology conference he was planning on staying for another 10 years.

And Ballmer’s announcement to employees last week revealed that – had he had his own way – he’d have stuck to that timetable:

My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most.

So why, as a CEO with a startling force of will and unmitigated determination, has he decided to leave sooner than planned and at a critical juncture? One report suggests Microsoft’s board helped advance the timetable. (That panel of directors includes Ballmer’s longtime friend Bill Gates - a Microsoft co-founder and the board chairman.)

Based on his past performance, Ballmer would not have allowed something as trivial as a reorganisation or new product cycle to loosen his grip on Microsoft’s wheel.

And that’s probably why Ballmer’s gone now.

Since the start of his reign in 2000, he has increased revenue and profit, and showered billions of dollars on shareholders; but at the same time Microsoft has failed to anticipate crucial emerging technologies and tackle its next wave of competitors.

As a result, his company has blown tens of billions of dollars on R&D and marketing just to catch up in the worlds of online search and ads, and smartphones and tablets – always racing to close the gap on Google, Apple and Samsung. Below is a video of Ballmer dismissing the Apple iPhone and defending the Windows Phone operating system in 2007:

Ballmer also spent billions of dollars for no gain: $6.3bn on online ads publishing house aQuantive, written down by $6.2bn; $8.5bn on a loss-making VoIP biz called Skype; and nearly $1bn on parts for unsold Surface RT tablets, which are powered by an ARM port of Windows that can't run the gigantic library of x86 Windows apps.

Twice under Ballmer Microsoft has messed up on what was supposed to be its core competency, Windows, with the disasters of Vista and the touchscreen-driven Windows 8. It's a period of time less charitable members of Wall St are now calling Microsoft's lost decade.

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