Microsoft needs an anti-Ballmer — but it won't get one

No matter how much we want to see someone shake things up at Microsoft, there’s little chance that would happen.

Microsoft chief executive Steve Ballmer announced this morning that he would be retiring within the year, a move that surprised even the most keen Microsoft watchers.

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After spearheading a massive reorganization last month that unified the company’s products and services (“One Strategy, One Microsoft” was the slogan), it seemed like Ballmer was gearing up to lead Microsoft into a bold new era. Instead, he’s seeking a successor and preparing to leave the role as soon as he can.

Investors responded positively to the news, with Microsoft’s stock jumping 8 percent this morning. That points to some pent-up dissatisfaction with Ballmer’s tenure and the hope that whoever takes over the role will do everything that Ballmer didn’t. Maybe they’ll finally figure out a way to make the Surface tablet and Windows Phone a success. Or maybe they’ll push harder to bring the cool innovations we see at Microsoft Research to consumers.

I don’t deny that Microsoft would benefit from a leader who isn’t afraid to innovate and cherishes creativity as much as the legacy of its platforms. Ballmer was never much of a product visionary. He had talented underlings to deal with the creative stuff — people like Steven Sinofsky (who left the company abruptly last year after the launch of Windows 8, allegedly because he was no longer a replacement CEO candidate),  J Allard (who oversaw the first Xbox home video game system), and Robbie Bach (who both left the company after the Courier tablet project was cancelled).

There’s little chance, however, that Ballmer and Microsoft’s board would choose someone who would rock the boat. With the new reorg, Ballmer set up the company to focus more on having its existing platforms work together: For example, the Xbox One looks a lot like Windows 8 and Windows Phone, and it’s directly tied to the company’s cloud services.

Microsoft desperately needed to communicate better between its many teams, but the reorg also means it’ll be difficult for a new CEO to introduce new products and services that don’t directly tie into legacy systems. It’s that sort of thinking that made Microsoft shoehorn a traditional Windows desktop into Windows RT, even though that platform can’t even run existing Windows applications. That was one of many decisions that made the Surface RT a poor seller, and its excess inventory also led to Microsoft taking a $900 million charge in its most recent earnings report.

Typically, only companies in dire straits are truly willing to shake things up, and Microsoft has been buoyed by its steady earnings for years. That’s been both a blessing and a curse — it means the company has enough money makers in place to dabble in new ideas, but it also can’t risk its existing business too much. For example, a lack of Outlook compatibility in the Courier tablet allegedly gave Bill Gates an “allergic reaction” — Ballmer ultimately killed the project to focus on Windows 8 as the company’s sole tablet strategy.

“It was clear to most that Microsoft needed a new strategy and new focus,” says Jack Gold, the chief analyst at J. Gold Associates. “Ballmer had lost his focus. He was telling people what they wanted rather than listening to the market. It’s clearly time for new leadership and vision at Microsoft … If he gets to pick a clone of himself with the same direction and strategy, Microsoft is in big trouble longer term.”

Judging from Ballmer’s emotional retirement announcement today, it’s clear that he also wants someone who can build on his legacy. “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,” Ballmer wrote. “We need a CEO who will be here longer term for this new direction.”

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While Microsoft says it will be considering both internal and external candidates for the CEO role, I’d wager the company will go with someone who served under Ballmer and who is comfortable with the new structure. That includes people like executive vice president Satya Nadella, who has worked across several departments, and Tony Bates, the former Skype CEO who now leads up business development and evangelism.

“What they need is a leader with a new direction — a visionary who can bring back innovation and provide products people are willing to spend money on,” Gold added. “Unless such a leader is found, Microsoft is in for a continued, albeit slow, decline.”