Monday Note has a nasty indictment of Microsoft CEO Steve Ballmer’s ability to deal with reality. In post, “Ballmer just opened the second envelope,” Jean-Louis Gassée writes about a different kind of Reality Distortion Field. The concept is normally applied to Apple CEO Steve Jobs and his ability to get just about anyone to believe anything. Gassée applies the Reality Distortion Field to Ballmer as a form of denial. He doesn’t accept the reality of Microsoft or its failure to truly innovate under his decade-long leadership.
“Microsoft shareholders ought to worry about Steve Ballmer’s own distortion, and about the self-inflicted effects of such a strong field,” Gassée writes today. “We all remember Vista, it was a godsend for Apple. Did Ballmer acknowledge that there were problems? What about the Xbox 360 reliability nightmare? The apologies were left to underlings.
“Then Google comes out of nowhere to take 65 percent of the Search market, leaving Microsoft with an Apple-like market share (I’m referring to Macs, not iPods). In MP3 players, Microsoft failed again and again in its attempts to unseat the dominant (65 percent market share) iPod/iTunes combo. Social networks? A tiny investment (1.6 percent) in Facebook. And where is Microsoft in the Microblogging world, a.k.a Twitter? Nowhere, the old Microsoft Messenger is fading away.”
Gassée is a former Apple executive and founder of Be, which produced the ill-fated BeOS. He is now a venture capitalist. He later asserted in today’s post: “Ballmer’s Reality Distortion Field is overheating.”
Yesterday, I asserted that “Steve Ballmer IS the right man to turnaround Microsoft mobile.” In view of Gassée caustic analysis, one reader asked by e-mail: “How can you counter this guy’s arguments?” I won’t. Gassée’s points are all valid, and I made some of them yesterday, too.
To the reader, I responded:
Ballmer’s the right man or he’s finished at Microsoft. He fails at entertainment and mobile and it’s game over. But I still contend it will take a master salesman with a CEO’s stature to get Microsoft the partnerships necessary to give Windows Phone 7 the slightest chance. Microsoft has already lost the mindshare war, which means those deals will be tough getting. Microsoft needs Ballmer to get them.
I wrote “The Windows is era is over” for a reason. Microsoft already is too far behind in mobile and cloud services now. I’ve been meaning to write about Ray Ozzie [Microsoft’s Chief Software Architect] for some time. He was Bill Gates’ boy. Notice how you don’t hear too much from Ozzie anymore or the cloud services vision he espoused? The Office and Windows hawks won. Microsoft’s services strategy is now reduced to being Office and Windows extensions. Microsoft can only go the way of IBM now.
Ballmer deserves the chance to fail at Microsoft mobile, or succeed if he can get beyond the denial. In Ballmer’s defense, he inherited a mature rather than a growth company. Gates’ aggressive competitive style suited growth Microsoft, but not really the more mature company. Growth companies look for new customers, while mature companies seek to keep them. The marketing approach is different. Microsoft needed a salesman, someone attuned to customers, to keep reselling the same products to the same people over and over.
He succeeded. Do the math. For 90 days. Microsoft reported .5 billion revenue and .01 billion net profit for first calendar quarter. But the majority of that profit comes from Office and Windows. They were cash cows when Ballmer took over as CEO in 2000, and they’re bigger cash cows today. First calendar quarter 2000, Microsoft reported .56 billion revenue.
Another CEO might have failed. Ballmer was the right man to take over Microsoft in 2000. He kept the same customers buying over and over again. Granted, Microsoft’s stock is pretty much nowheresville over the decade. The question: Is he the right man to lead Microsoft in the 2010s? I predict that Ballmer’s managing of Microsoft’s mobile crisis will give the answer.
I get lots of e-mail or read plenty of Betanews reader comments demanding Ballmer’s head. Oh yeah? Then answer me this: Who would you have run Microsoft? Please answer in comments.