Why Steve Ballmer Is Out

Steve Ballmer’s announcement that he will retire as CEO of Microsoft is truly shocking.

He’s a Microsoft-lifer who knows the business cold. He’s shown no signs of being burnt out, or sick of the job.

One source familiar with Microsoft’s thinking on the announcement tells us Ballmer recently decided that it made sense to leave now. Our source says Ballmer “wasn’t forced out.” He made a “personal decision” to step down.

In the press release, Ballmer said, “There is never a perfect time for this type of transition, but now is the right time … We have embarked on a new strategy with a new organisation and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

We expect to hear more about his departure, but this really sounds like the most logical reason for him to leave now–that the transition will take much longer than he was planning to stay around.

The last year has been very busy for Ballmer.

He’s been starting to try to transform Microsoft from a software company to a “devices and services” business. This means services like Office, Cloud, Windows, supporting devices like the Surface tablet, and PCs from partners like HP, Acer, and Dell.

In addition, he reorganized the company to fit that vision. He restructured the company to be more collaborative. He has an operating systems group, an applications group, a cloud and enterprise group, a devices group, a marketing group, and so on. Those groups are all supposed to work together to create “One Microsoft” as Ballmer put it.

At the same time, Microsoft released Windows 8, and the Surface tablet.

With all that work done, a natural transition point emerged for Ballmer. He had enough runway to spend the next twelve months working with the board to find a replacement.

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