Ballmer retirement 'make or break' for Microsoft

Will Microsoft be better off without its eccentric talisman?

Steve Ballmer's retirement will give Microsoft a much-needed opportunity to reinvent itself, according to channel players reacting to this afternoon's news bombshell.

The software giant's long-standing chief executive announced he was set to stand down from the role within the next 12 months as chairman Bill Gates and other members of a special committee search for his replacement. Ballmer took on the role in 2000 but joined the firm as its 30th employee back in 1980.

At the vendor's Worldwide Partner Conference (WPC) event in Houston last month, Ballmer insisted Microsoft had succeeded in its transition to becoming a devices and services firm, and was no longer just a software firm. He claimed mobility, social enterprise, cloud and big data were the four areas on which his firm was placing its bets in the future.

Last year, the giant dipped its toe into the tablet space for the first time with its Surface devices which followed the previous launch of its Windows Phones products. While Microsoft's presence in the smartphone market has seen it gain modest market share from rivals Apple and Samsung, its recent Surface move has hit a series of bumps in the road, including a $900m (£578m) writedown which it announced in its full-year results in July.

Just last year, Ballmer was voted by Forbes as the worst chief executive (still serving at the time). Forbes claimed Ballmer had failed to move with the times and that – "years late to the market" – he was betting the company on Windows 8, which has met a muted reception among analysts.

Jeremy Davies, co-founder of research house Context, said Ballmer's imminent departure will give the firm the perfect chance to reinvent itself.

"Ballmer is an institution, but the jury is out as to whether he was good or bad for the company," he said. "The fact [he is leaving] has to be good news for the company as it can reinvent itself. He started the reorganisation but I think this gives Microsoft the chance to move into the new era."

Make or break

Ballmer himself admitted in his leaving note to staff that there is "never a perfect time for this type of transition", but Davies added that it is now a make-or-break moment for the firm.

"Microsoft has got a committee [for finding a replacement] and has hired a prestigious headhunting firm, so it will be very interesting to see who they do get. That will tell us immediately what they are trying to do and whether they will be successful. It's make or break for them."

It is not just the bashing Windows 8 received from analysts and the shaky start the Surface has suffered that have acted as thorns in Ballmer's side. In 2011, shareholder David Einhorn called for Ballmer's head, claiming the firm has missed major opportunities under his reign.

Microsoft reseller Bechtle's software manager Richard Gibbons said that a new face at the helm of the company will do the vendor good, as Ballmer often could not do right for doing wrong.

"I quite liked him, but from an industry perspective, it has to be a good move," he said. "A lot of analysts don't seem to like him, and it doesn't matter how much more Microsoft sells, for example, they will say it would be better if he was not there. Going forward, it makes sense to have a new CEO for what is almost a new company.

"Ultimately, it will be good for Microsoft if it can get a decent replacement."

Gibbons mooted current chief operating officer Kevin Turner or executive vice president for devices Julie Larson-Green as potential replacements, and pointed to ex-Microsoft head of business and current Nokia boss Steven Elop as an outside bet if Microsoft lived up to the rumour mill and purchased the phone maker.

Ballmer has been famed for his eccentric personality while in the top job, with his 2006 entrance to a developers' conference sealing his fate as a YouTube sensation – clocking up more than five million hits.