Microsoft CEO Steve Ballmer to Resign within 12 Months

Aug 23, 2013

Microsoft CEO Steve Ballmer, who succeeded founder Bill Gates as CEO, will retire within the next 12 months. The world's biggest software company did not name a successor, but one long-time Microsoft watcher says he expects the company to hire its next chief from within.

Microsoft Corp.'s stock rose more than 7 percent after the news. 

Just last month, Ballmer reorganized the company to emphasize hardware devices and services, rather than just software.

Analyst Rob Enderle says there’s no one heir apparent groomed to take over for Ballmer. But he says each of the division heads Ballmer singled out in the reorg stands a good shot of taking over the company. It all depends on how they perform in the next year.

And Enderle says he’d be surprised to see the company hire from elsewhere.

"I don’t think Microsoft’s in enough trouble to force them to go outside and look for a turnaround manager," Enderle said. "I mean, it’s financially very sound."

Frustrated Investors

Enderle says he had expected Ballmer to stick around to oversee the company’s transformation. But the drumbeat of investors calling for a new CEO has grown louder in recent years.

Microsoft’s recent $900 million writedown for unsold Surface tablet computers discouraged shareholders. Enderle says Ballmer doesn’t get enough credit for what he’s done right – including shifting successfully to cloud computing. Still, the company’s shares have lost almost half their value since he took over. 

Ballmer, 57, first met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University. He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that IBM would release in 1981.

Ballmer did the job so well that he became Gates's sounding board and succeeded him as CEO in 2000.