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Ballmer, Steve - Overview, Personal Life, Career Details, Chronology: Steve Ballmer, Social and Economic Impact

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Microsoft Corporation

Overview

Steve Ballmer who has worked for Microsoft Corporation since 1980, has left a lasting impression on his business colleagues and the Microsoft employees with his energetic and motivational style. Credited for revamping the Microsoft marketing program, Ballmer has served as second in command to Chairman Bill Gates. Gates relied on Ballmer for his opinions and as an information provider. Ballmer has continued to benefit Microsoft Corporation by combining his personal charisma with business savvy and a sharp intellect.

Personal Life

Born in a suburb of Detroit, Michigan, Ballmer’s charisma and talent as a motivator were revealed early in life. While attending school in Birmingham, Michigan, a teacher remembered that Ballmer was always very excited and animated.

Ballmer first met his future boss, Bill Gates, in 1973 when they attended Harvard University. In a Computer Reseller News article, Gates described Ballmer as his opposite. Ballmer was involved in a wide variety of extracurricular leadership roles, while Gates knew no one. Although Gates dropped out after his first year at Harvard, Ballmer completed school with a degree in applied math and economics. After graduation, he worked for Proctor and Gamble. He also attended Stanford Business School before Gates recruited him to join the young Microsoft Corporation in 1980.

In 1992, Ballmer surprised many in the software industry by publicly voicing his support for the Clinton-Gore campaign. Other industry players, including Microsoft, had traditionally steered clear of taking political stances. Ballmer insisted that his support, which included a $2000 personal check, had nothing to do with the views of the company and were based on his respect for Al Gore. However, Microsoft at that time had been undergoing an 18 month investigation by the Federal Trade Commission, who questioned whether the company was complying with fair competition laws. Ballmer denied any connection between the investigation and his personal support of Clinton and Gore in that year’s presidential campaigns.

Ballmer remained largely devoted to work in his life, though in a 1992 Seattle Times article he mentioned that he had decreased his working hours down to 60 hours a week from a previous 90-100 hours per week. He was hoping to spend more time with his wife, Connie, and their two sons. His hobbies include jogging, golf, and watching basketball games. But generally, he said, “I don’t juggle, I don’t ride a unicycle. I work. I’m consumed by it. It’s fun.” (An August 1998 Time magazine article values Ballmer at $14 billion.)

Career Details

In 1980, Ballmer joined Microsoft in the company’s first non-programming position. Gates hired him at a starting salary of $50,000. Ballmer’s immediate advice to Gates was to hire 50 to 60 more people (the company at that time had a base of 30 employees.) Gates reacted strongly, claiming that Ballmer was going to “bankrupt the company.” In their first years together, Gates and Ballmer often clashed on strategy. They learned to work together and modified their strategy so that they planned for the long term, without losing control. Ballmer undertook such tasks as heading the systems software division, driving the company’s marketing efforts, and providing a crucial link with key company customers.

Ballmer and Gates worked together in the early years to achieve their long term vision for Microsoft. Although they were fortunate to have International Business Machines (IBM) as a first customer for their MS-DOS program. Ballmer and Gates actively recruited college graduates to work for the company, and established offices in Europe. They were also careful to ensure that the company had no cash flow problems so that they could continue to keep their focus on becoming a billion dollar software company.

During the late 1980s, Microsoft made new strides in the software industry and continued to penetrate new markets for their products; Ballmer was instrumental in guiding and representing these company moves. They collaborated with Ashton-Tate to provide a software development kit, released an improved operating system, and signed deals with such companies as Compaq and Novell. By 1995, Microsoft had annual revenues of nearly $6 billion. Ballmer was responsible for steering the company sales strategy and taking it to unprecedented heights. Between 1991 and 1995, sales increased at the rate of $1 billion per year.

According to a 1995 article in Computer Reseller News, employees were inspired by Ballmer’s hard driving motivational style and his productive work habits. When the Federal government began to object to what was perceived as Microsoft’s monopoly on the software market, sources close to the company attributed the origins of the troubles to less senior employees who were trying to imitate Ballmer’s competitive style and strategy. As one Microsoft marketing manager put it, “(Ballmer) challenges you to think outside the box. After a session with Steve, you want to run through walls for the guy.”

Ballmer was also instrumental in the success of Windows 95 software, having previously laid the groundwork for the development of earlier Windows versions. Additionally, he smoothed the original Windows partnership with IBM, a relationship that was not always easy due to philosophic differences and IBM’s bureaucracy. Ballmer later referred to the relationship as dancing with the bear. Microsoft wanted IBM to install Windows on its computers. IBM, however, wanted its own versions of Windows and DOS, which eventually became known as OS/2 and Presentation Manager. However, the partnership ended in 1992, when IBM announced a plan to combine Windows into OS/2, with the emphasis on the latter. Ballmer argued that the arrangement would not work technically. Microsoft also opposed IBM’s move because it had the potential to undercut sales of Microsoft’s successful MS-DOS program. The incident ended a relationship of 11 years between Microsoft and IBM. Shortly after the break in that collaboration, Microsoft changed the name of the newest version of OS/2 to Windows NT, standing for New Technology.

Ballmer designed the means by which Microsoft distributed and resold its products, and he created strategies for pricing and branding that led Microsoft to the forefront of the software industry. To market Windows 95, Ballmer made a mock television commercial which became famous and which demonstrated his charisma and salesmanship.

Ballmer’s extroverted style, according to peers, masked his sharp intellect. Though Ballmer served Microsoft’s sales force, industry observers such as software newsletter publisher Jeffrey Tartar warned that, “the notion that Ballmer is the rah-rah king of Microsoft really underestimates his role. He’s the marketing genius behind that company. He comes up with the branding, the pricing. These are things that Bill Gates neither knows nor cares about.”

Ballmer’s ability to take in and retain information worked to his advantage, both with colleagues and potential competitors. One colleague in the industry, Doug Hamilton of Hamilton Laboratories, encountered Ballmer at a trade show. Hamilton was shocked when Ballmer “knew my product, knew where I was, knew all about me because Microsoft makes it their business.” Hamilton contrasted that with the attitude he had encountered at IBM, who acted like they could not be bothered.

Besides being a good listener, Ballmer admitted to being a sponge for information and is recognized for being an excellent strategic thinker. Ballmer was well known for his loud and forceful meetings; in one case, he damaged his vocal chords and required surgery to recover. At marketing presentations he often cut straight to the point, insisting that presenters cut out the marketing talk and get to the real issues. Company sources called this strategy “push back.”

By 1995, Microsoft had grown to more than 20,000 employees. In mid-1995 Ballmer and Gates announced the company’s next strategic direction, to facilitate customers’ use of the Internet and intranet applications. Ballmer promised that Microsoft would lead the way in providing new Internet technologies that would satisfy customers needs. The company updated software such as Internet Explorer and Windows NT to keep up with technological advances in the Internet. In an article in Computer Reseller News (November 16, 1997) Ballmer commented on Intenet trends, emphasizing that the Internet provided an excellent way for businesses to access potential customers. He predicted more and more commerce being conducted on the Internet once issues such as security and speed of transactions were overcome. (Ballmer also believed that an increasingly mobile workforce would lead to changing customer needs, such as increased demand for sophisticated laptops and new functions provided by PCs, like videoconferencing and better links, to work mainframes and the Internet from home.) Microsoft’s entry into the world of the Internet reflected how the company had reacted to technological trends in the past—Microsoft was not always the first company to recognize an opportunity but when it did, it was especially skilled at spotting or creating products that would catch on.

Chronology: Steve Ballmer

1973: Meets Bill Gates at Harvard University.

1980: Joins Microsoft Corporation.

1984: Begins directing Microsoft work on Windows.

1984: Named head of Microsoft systems software group.

1987: Begins directing Microsoft work on OS/2.

1992: Promoted to Microsoft’s head of Worldwide Sales and Support.

1995: Becomes the 29th richest man in America.

1998: Appointed President of Microsoft Corp.

While Microsoft had excelled in selling PCs to corporate customers, it still had not sold corporate customers on the use of Microsoft software for more centralized corporate functions like record keeping or budget management. Ballmer recognized that as a weakness and focused company efforts on customer service and developing software that could meet corporate needs. Ballmer also recognized the threat to Microsoft from companies that were working on ways to eliminate operating systems such as Windows from computers. Two contenders included Lotus Development Corp. and Netscape Communications Corp. Bill Gates appointed Ballmer president of Microsoft Corp. on July 21, 1998. His new responsibilities included addressing these problems. An August 1998 Time article quoted Bill Gates citing that one benefit of making Ballmer the president is that Gates will be freed up to work on “architectural breakthroughs” for a variety of computer devices.

Social and Economic Impact

While Ballmer has been at least partially responsible for Microsoft’s meteoric rise in the software industry, he also realized that the ongoing government investigation into the company was shaking company relationships with customers and hurting company morale. The probe was initiated when the Justice Department decided that Microsoft was violating the tenets of fair competition when it included its Internet software with every sale of Windows 95. In 1998, Ballmer admitted that the company, known for its hardball tactics and fearlessness, was examining whether its corporate culture needed to change. But Ballmer refused to apologize for the company’s aggressive stance in business. In an article in the San Francisco Chronicle Ballmer said “I’m not apologetic. This is America. This is capitalism. The notion that added value for consumers is criminal is ludicrous. If we can’t add innovation, then that doesn’t help the customers.” Ballmer went on to describe the future of Microsoft, including such as simplifying software, doing everything on the Internet, and making software smaller for appliances and bigger for networks.

Ballmer’s influence on the computer world is undeniable. His participation in the development of the Windows operating system has meant that the average person can easily navigate computers. Though Microsoft has been accused of being monopolistic, the domination of this operating system has allowed a nearly universal exchange of information. Ballmer has also contributed to Microsoft, and by extension the computer world, in less tangible ways. He has brought a new philosophy to Microsoft and the computer world. In a world of technology where Microsoft is sometimes seen as the evil, monopolistic empire, he has understood the importance of maintaining customer satisfaction on all levels, whether the customer is a business or an individual. According to Microsoft, his new goal is to reinvent “the Microsoft working environment so that the company is even more responsive to changing customer needs, new technologies and market dynamics.”

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