Ballmer is leaving at the right time as the whole IT landscape shifts

Steve Ballmer's Xbox avatar at CES 2011 Credit: Simon Bisson

Steve Ballmer’s retirement announcement came from out of the blue. Most Microsoft watchers were expecting him to announce his departure in 2018, when his third son had left home for college. So this morning’s announcement of his imminent departure, hot on the heels of a major corporate reorganization, was a surprise.

Microsoft is very much in flux, with Windows 8 just the face Microsoft is putting on its transition from a pure software business to one focused on devices and services. This isn’t a change that’s going to happen overnight; it’s one that’s going to take the best part of a decade, as Microsoft seeks to realign its sixteen different $1 billion businesses with the massive trends that are reshaping enterprise IT, and keep its revenue flowing at the same time.

Microsoft has often been described by pundits as a supertanker, nearly impossible to stop and incredibly hard to turn. But that’s not really the case; it’s actually much more complicated. Those sixteen massive businesses that make up Microsoft are sixteen different supertankers, all traveling different directions, all needing to turn on to the same course – and to start sailing alongside each other in one enormous flotilla. That’s an enormous task, and one that’s embedded in the complex framework of Microsoft’s recent reorganization, with its move to a functional organization rather than business units.

So perhaps we shouldn’t have been surprised that Ballmer has decided to leave at the start of the transition, and not in the middle. Change this massive in an organization this big is a dangerous thing, as we’ve seen time and time again. If Ballmer was focused on a 2018 retirement, he’d have been leaving Microsoft halfway through its metamorphosis – precisely the time when the organization will need leadership the most. As he says in his retirement email to Microsoft staff, “My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company.”

As an industry we’re at the top of the Colorado River, in the relatively calm waters before we get into the rapids at the bottom of the Grand Canyon we know are four or five years away. It’s always easier to change the hands at the helm in calm waters; changing in those rapids would only lead to disaster.

Five years from now the enterprise IT world is going to be a very different place. “Bring your own whatever” trends will have changed the role of the user as a consumer of IT services, with devices acting as smart endpoints in a web of services and APIs. We’ll have seen a change in the way software is built, in the way applications are architected, and in the way everything is managed. With internal and external services at the heart of everything, the familiar enterprise world will be very different – a world where work and the personal are blending, and where tools like context shape user interfaces and the devices we use.

Looking at the new generation of Microsoft’s tools and services, it’s clear that it has begun to build the tooling needed to deliver that next generation of enterprise services – both helping businesses build their own internal services, and delivering its own cloud-hosted business services. Azure is at the heart of that shift, providing a framework that supports consumer services like Bing, business productivity platforms like Office 365, and supporting development of both business and consumer apps on a fabric of cloud platforms and services. That change is paralleled by the birth of its own devices business, where Surface and Windows Phone are designed to be clients for those new services.

But a shift of this magnitude in the way we deliver IT means much more than just new tools and platforms. It means that we need to change the way businesses pay for services, and the way they’re audited and regulated. That’s why this is a decade-long wave of change, as those changes have ramifications far beyond the server room. It demands changes in the ways we do accounting, to the ways we understand capital and operational expenditure, to the legal and regulatory frameworks that wrap our businesses, and to how we understand the processes that make up our organizations. It also means changes to security, to user interfaces, to design, to development tools – to the entire suite of applications, tools and services that make up the modern IT department, and the modern Microsoft.

What then for the future of Microsoft? It’s clear that any new leadership will need to be focused on that long-term change, and will need to understand the way that a services model fundamentally changes Microsoft’s core enterprise market. A business built for one-stop-shop IT departments, with a side dish of consumers, needs to change for that consumer-centric, decentralized future. It needs to change the way it sells, the way it delivers products. It also needs to be leading that change, not following. Those changes are going to be fundamental, much more than how businesses reorganized for client-server and for n-tier and web, instead helping bring together work life and personal life, wrapping them all in context.

That new work-life blend is why tomorrow’s Microsoft – and its new leadership - will be a very different company from today. It can’t throw away consumer and concentrate on the enterprise, as the two blend along with devices and services. There won’t be an enterprise IT or consumer products, just one seamless world of computing. That’s a brave new world indeed, and one that’s going to provide plenty of challenges for any new Microsoft CEO.

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