Why Microsoft CEO Steve Ballmer Had to Go

An excellent post on The New Yorker magazine's website by Nicholas Thompson has done a great job of spelling out Why Steve Ballmer Failed at a high level. The label of "The Anti-Steve Jobs," seems spot on. Given the extraordinary resources we must imagine a man in Steve Ballmer's position must have, it seems incredible that he missed or misunderstood the importance of such innovations as the iPhone and iPad. Microsoft's dedication to riding the money train of the company's number one and two cash cows (Windows and Office) can be traced directly to decisions made by the Microsoft CEO. Now that the money train has started to run into some of the early signs of losing steam, the strategies of Steve Ballmer must be called into question, as they have by many investors and analysts for several years now.

But I would like to dig a bit deeper into the decisions that have left Microsoft making Hail Mary plays, like this weeks announcement to buy Nokia, or last years decision to make their own hardware with the ill conceived Surface RT and slightly better Surface Pro. Because I believe that it is not just the big strategy decisions, but even the little ones where Microsoft has failed. Which may be a cautionary tale as we watch the company go through its changes in the next five to ten years.

Take Windows Phone for instance. Some of us remember that Steve Jobs did not invent the smart phone when he gave us that "One more thing..." speech to introduce iPhone. Many companies had early versions of smart phones years before Apple decided to compete. Microsoft had a sizable share of the market with the older "Windows Mobile" devices. Despite it's popularity with some business users, it was never seen to be a very lucrative marketplace.

After Apple proved that there was a market for such devices, and it was a large and fairly high end market indeed, Microsoft went through classic signs of grief with denial, anger and reluctant admission that they had missed the boat. However, to their credit they did not simply throw in the towel, and they didn't make the mistake of trying to convince a new and hipper generation that the old Windows Mobile devices were the solution.

Instead, they took the time and with great fanfare, they released Windows Phone 7. A remarkably stylish device, with an interface that looked nothing like Apple's or Google's devices. Many critics hailed it as a breakthrough in touch interface design, and the phone won many awards for innovation. It seemed Microsoft still had some magic up their sleeves.

Still many people worried that the software giant could not keep with the number of regular updates that Apple, and even more so Google, were capable of putting out. As with all technology, it wasn't just about the newness, but how fast you can make improvements and keep the experience fresh to get users excited. When the first update to Windows Phone 7 was delayed, and delayed again, there was an uncomfortable feeling going around the tech community that had cheered Microsoft's re-found mojo.

But when Windows Phone 7.5 (Mango) was released, there was a collective sigh of relief and more vendors jumped on the Microsoft wagon. At least for awhile. Microsoft announced that a major upgrade to the software would come in the form of Windows Phone 8.

The bad news was that none of the Windows Phone 7 hardware would be able to run the new mobile OS. That included recently released hardware that consumers had purchased just weeks before the Windows Phone 8 announcement. Microsoft promised a 7.8 release for the older phones. It was supposed to contain some of the new features for the older phones, and was released a few months after the new Windows Phone 8 devices hit the marketplace. Unfortunately, there seem to be some customers that still have not received the 7.8 upgrade. Trouble in the garden?

At the same time, Steve Ballmer announced that Windows 8 would be the new Desktop OS that would also run on a new line of tablet devices featuring a modified version of the Metro UI from Windows Phone 7/8. Microsoft would, finally, be competing with the incredible iPad.

The first of these devices were released in the last quarter of 2012, and featured a version of Windows called simply RT. These devices would only run special apps designed specifically for the new Metro UI style and available exclusively through the new Windows Store, which would complete with Google Play and the AppStore for iOS. While standard windows applications made to run on Windows 7 would not run on RT, Microsoft did include a special version of Microsoft Office for the new tablet computers. If that's seems confusing, it was, and many people were surprised to find that this special version of Windows didn't seem to be Windows at all.

Adding to the confusion was the fact that in early 2013 Microsoft released the Surface Pro which would run a full version of Windows 8 just as on a Desktop or Laptop computer. Meaning that most of the software that had run on Windows 7 would run on the Surface Pro's Desktop while the RT applications would run in the new Metro UI. Well most of the RT apps that is. Some would be incompatible with Pro and some Pro apps would be incompatible with RT.

Making matters worse, the Surface platform was not compatible with the Windows Phone platform. Therefore Apps that users purchased on the Windows Phone store had to be purchased again in the Windows store for Laptops or Surface tablets, if the same app was even available for both platforms. To understand how big of a problem this is, consider that the Apple AppStore features software that runs on both iPhone and iPad. Many applications are made to give the same look and feel but offer more or less features depending on which iOS device was being used. Google's Play store works pretty much the same way for apps purchased for Android phones or tablets.

In other words, the Surface tablet is treated more as a desktop or laptop replacement, and users are expected to buy software made specifically for those devices. However, this completely ignores the fact that many people who are buying smart phones and tablets are leaving the laptop or desktop at the office. In many cases these people are leaving the desktop completely. When they are on the go, they believe that the mobile devices they purchase all work the same, and more importantly they have been taught by Google and Apple to believe that once they purchase an application for one of those mobile operating systems they can use them on any device with the same system. For these types of users the Microsoft Windows Surface and Phone experience end up being different and they must be confused and frustrated to find that they aren't sharing the same store for their purchases.

In fact the problems of the Surface compatibility and performance forced Microsoft to take close to one billion dollars in a write off on their latest quarterly earnings report while they dumped the remaining inventory of the Surface tablets. While they plan to release a second version of both Surface RT and Pro to address some of the performance concerns, it is unclear that Microsoft has understood the other frustrations of its users.

These are just a few of the most recent examples that show how Microsoft and Steve Ballmer in particular have made mistakes both large and small even with their newest and most innovative products. I think it proves beyond doubt that Steve Ballmer just does not get the new technology world in which we live, and that is why he had to leave Microsoft if the company is ever going to have a chance of competing with the new technology titans.

Microsoft's "Modern UI" Failure

What if they created a new User Interface paradigm and nobody cared? What if "they" were Microsoft?

As I've talked about in previous posts, the new Modern UI (formerly called Metro) that Microsoft has made part of their latest operating system has widely been panned by the Tech industry. It's also getting ignored by most consumers and businesses. The general consensus is that the new interface is fixing problems nobody is having. Why has Microsoft insisted on making the new Modern UI such a priority? Because they see it as a bridge to get people to try the interface and if they become comfortable enough, they might also like to try other devices using the same UI. In other words Windows Phone 8 and the new Surface line of tablets.

I've said it before, but analysts seem to agree, the new OS is not selling well. Several of Microsoft's long time partners have poo-pooed the new OS because they believe it has lead to a sharp decline in Personal Computer sales.

There are a lot of reasons that people dislike the new OS, including the fact that they completely eliminated the "Start Menu" and made it nearly impossible for users to avoid using the new UI if they prefer the traditional desktop. I wrote about the problem and rumor's of Microsoft's half-hearted fix to the problem last week.

But there are a lot of other reasons that Microsoft has had a hard time selling the new UI. Chief among them is the new Modern UI applications that Microsoft released when they released Windows 8. If you were one of the few to upgrade to Windows 8 last year, you probably were left wondering if the new applications were bad by design or if they were merely unfinished.

For example, the Mail application didn't allow you to select multiple messages to delete or move. In fact, there were no Folders in the Mail application at all, making it impossible to properly organize your Inbox. For people who had used free email clients from Microsoft in the past (meaning Outlook Express) the new Mail app delivered with Windows 8 felt extremely limited. That was just one example.

Microsoft has since released a set of updates to many of the Modern UI applications through their new Windows Store, but in some cases the "updates" removed functionality. For instance, the Calendar application lost the ability to sync with Google Calendar, leaving thousands of new Windows 8 users with no alternative except to try third party solutions.

And lets face it, the third party applications available from the Windows Store are very hit and miss. Mostly miss. A survey of most of the reviews in the Windows Store leads one to believe that developers aren't convinced that the new Modern UI is going to be viable long term.

Microsoft is the company that has always prided itself for having the best developers and the best catalog of third party and in-house applications for their Operating systems, so the situation with Windows 8 is doubly confounding. It seems amazing that a company with the internal resources and a list of the best ISV's on earth has found itself in such a situation.

Microsoft has placed a big bet on their flagship OS by stating to developers and customers alike that the new UI is the future of the OS. That they have done such a shoddy job of implementing the applications most people will use first after an OS upgrade speaks volumes about the lack of direction the company has had in recent years.