Will Microsoft (NASDAQ:MSFT) continue with its "One Microsoft" strategy that outgoing CEO Steve Ballmer announced just six weeks ago? Or will the company use Ballmer's departure to radically overhaul its business focus, potentially shedding efforts including tablets, smartphones and search? Ballmer's announcement Friday that he will step down from the company's CEO position within the next 12 months has sparked significant discussion about the future of the tech giant, and whoever is selected as Ballmer's replacement could dramatically alter both the company's business as well as Microsoft's position in the mobile market.
Although Ballmer's tenure at Microsoft was largely successful, the company in recent years has been battered by concerns over its wide-ranging business focus and its failure to immediately respond to the rise of smartphones and tablets running iOS and Android.
And, according to AllThingsD, Ballmer's departure from Microsoft was not something the company or Ballmer had initially planned on. AllThingsD, citing sources familiar with the company's business, reported that Ballmer had been planning to retire from Microsoft, but that the timeline of that departure was moved up drastically due to the increasingly complex problems Microsoft currently faces. Indeed, in his Friday letter announcing the news, Ballmer essentially admitted that he was leaving earlier than he had planned to: "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."
The timing of Ballmer's departure is notable since just six weeks ago he announced Microsoft's new "One Microsoft" strategy, which includes a major overhaul of the company's corporate structure and a focus on "creating a family of devices and services for individuals and businesses." The restructuring included putting Windows Phone head Terry Myerson in charge of operating systems at Microsoft, including its flagship Windows software as well as its Xbox software and systems.
Although Microsoft executives have said the company will continue with its "One Microsoft" restructuring as laid out by Ballmer, Ballmer's exit from Microsoft casts a question mark over the entire effort.
As Reuters points out, Ballmer's exit from Microsoft now clears a path for discussions about whether the company should refocus on its profitable businesses, including its Windows, Office and server operations--and that as a result the company should sell off peripheral businesses including its Xbox gaming division, its Bing search service, its Windows Phone smartphone operating system and Windows RT tablet operating system.
If Microsoft's incoming CEO does decide to drop the company's suffering Windows Phone and tablet businesses, the action would have a dramatic effect on the mobile market: Sales of smartphones running Windows Phone operating system outpaced BlackBerry (NASDAQ:BBRY) device sales for the first time ever during the second quarter of 2013, research firm Gartner recently reported. Windows Phone is now the third-largest smartphone operating system in the world, behind Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS. However, Microsoft's global smartphone market share is still paltry, at 3.3. percent in the second quarter, according to Gartner, up from 2.6 percent in the year-ago quarter. The company that would be most directly affected is Nokia (NYSE:NOK), which has bet its future on sales of Windows Phone Lumia devices.
According to reports from Reuters, the Wall Street Journal and others, Microsoft is considering both internal and external candidates for Microsoft's CEO position. And whoever is selected as Microsoft's new CEO will have a growing number of peers: Intel, Apple and IBM are all major tech companies that are being led by relatively new CEOs.
For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this AllThingsD article
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