May 24, 2019

In Defense of Steve Ballmer

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It’s been about five years since Steve Ballmer stepped down as Microsoft CEO and Satya Nadella took his place.

Since then, Microsoft has com­pletely rebranded itself from a bor­ing fail­ure, con­tin­u­ally try­ing to charm con­sumers and fail­ing, to a Wall Street dar­ling, win­ning over the cloud and enterprise market.

Before Nadel­la, Ballmer was chas­ing the smart­phone and tablet mar­kets, burn­ing bil­lions of dollars on Win­dows Phone and Nokia. He did­n’t see the signs, crit­ics said, con­sumers don’t like Microsoft, and they never will. It’s time for Microsoft to swal­low its pride and milk its real cash cows: Office, enter­prise, and cloud.

And Nadella did exactly that.

Now, Microsoft’s mar­ket cap is off the charts and the com­pa­ny’s employ­ees have a new­found pur­pose and cul­ture, very much thanks to Nadel­la’s lead­er­ship and vision.

Satya Nadella, media darling.
Satya Nadella, media darling.

But all this has been said by every­one, over and over and over, and it’s bor­ing and unnec­es­sary to restate all that again here. Instead, let’s talk about the unsung suc­cesses of Steve Ballmer.

Ballmer’s stub­born­ness is almost always seen as a flaw. It’s the rea­son Microsoft spent $8.5 billion on Skype, a com­pany that had mediocre tech and could­n’t turn a profit despite uni­ver­sal name recognition.

Belfiore, Ballmer, and Jessica Alba holding Windows Phones.
Belfiore, Ballmer, and Jessica Alba holding Windows Phones.

It’s also the rea­son Ballmer pushed Win­dows Phone so hard. To him, Microsoft is Win­dows, and the com­pany needed Win­dows on every screen, from the desk­top, to the phone, to the TV. And when Nokia, the man­u­fac­turer respon­si­ble for over 90% of Win­dows Phone’s mar­ket­share, was strug­gling finan­cial­ly, Ballmer pushed the board to acquire the com­pany for $7.6 billion.

Yeah, that did­n’t end well. After Ballmer retired, Nadella laid off most of the Nokia team and exited the mobile mar­ket. Bil­lions down the drain.

But here’s where I talk about how Ballmer’s stub­born­ness actu­ally helped the company.

In any mar­ket, there are bar­ri­ers to entry. For soft­ware, the bar­ri­ers aren’t very high. Any­one can start out small, with low costs, using ser­vices like AWS as their infrastruc­ture and later scal­ing up as needed.

How­ev­er, hard­ware is dif­fer­ent. Hard­ware is hard. The bar­ri­ers to entry are incred­i­bly high, new play­ers have to catch up to old play­ers who have inno­vated and spent years doing R&D on materials and man­u­fac­tur­ing process­es. New play­ers sim­ply can’t walk in. There’s no AWS equivalent, if you want to play with the big boys, you need lots of cash and patience.

Ballmer unveiling the original Surface.
Ballmer unveiling the original Surface.

Ballmer, for all his flaws, had both cash and patience. He was so pas­sion­ate about Sur­face, a phys­i­cal man­i­fes­ta­tion of Win­dows, that he fought the board, and fought Bill Gates, so that Surface could hap­pen. He spent bil­lions of dol­lars into man­u­fac­tur­ing R&D and built a hard­ware team from scratch. Any less effort and patience would have resulted in failure.

No rea­son­able per­son would have done this. Nadella would not have. He would­n’t have green-lit the project in the first place if he was in charge.

Surface Studio, featuring crazy hinge.
Surface Studio, featuring crazy hinge.

Fast for­ward a few years, Sur­face is a suc­cess. It has a strong brand and a ridicu­lous amount of R&D and man­u­fac­tur­ing knowhow. It can rival Apple on this front — some­thing even Sam­sung can­not. Sur­face has inno­vated so much with man­u­fac­tur­ing tech (pi­oneer­ing mag­ne­sium), with crazy novel hinges, screen tech­nol­o­gy, and on and on.

Yes, the future of Microsoft will always be soft­ware. But it does­n’t hurt that Microsoft now has sweet hard­ware prowess. And that is all thanks to Steve Ballmer, who does­n’t get enough praise, and never will.

Ballmer will always be the guy that laughed at the iPhone, the guy respon­si­ble for Vis­ta, and the guy that ran around sweat­ing and scream­ing like a crazy person.

But hope­ful­ly, we can remem­ber some good things, like how he sin­gle­hand­edly made Sur­face hap­pen. So if you love good hard­ware and believe com­pe­ti­tion is good — after all, no one wants to live in a world where only Apple can make great products — you should give Ballmer some credit.

Hard­ware is hard, and we need more play­ers.

So thank you, Steve.

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