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.
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.)
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."
Sources of Information
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"The Top 25." Forbes 13 October 1997.
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Ballmer, Steve 1956–
Chief executive officer, Microsoft Corporation
Education: Harvard University, BS, 1977.
Career: Proctor & Gamble, 1977–1979, brand assistant; Microsoft Corporation, 1980–1983, business manager; 1983–1984, vice president of marketing; 1984–1989, vice president of systems software; 1989–1992, senior vice president of systems software; 1992–1998, senior vice president of sales and support; 1998–2001, president; 2000–, chief executive officer.
Address: Microsoft Corporation, 1 Microsoft Way, Redmond, Washington 98052-6399; http://www.microsoft.com.
■ Steven A. Ballmer joined a tiny startup called Microsoft in 1980 at the invitation of his college friend, founder Bill Gates. In a variety of roles that placed him second only to Gates, Ballmer played a crucial role in Microsoft's growth into the most powerful force in the computer industry. He became Microsoft's chief executive officer in 2001. Ballmer's exuberant, aggressive, and highly competitive personality helped shape the company's strategy and was critical to its success. Many consider him the author of Microsoft's more aggressive and questionable tactics, aimed not simply at strengthening Microsoft but at weakening the competition. Unquestionably, those tactics achieved results—including both dominance of the software market and numerous legal challenges over the years. The most prominent legal challenge was the 1998 antitrust case brought by U.S. Justice Department, which accused Microsoft of abusing its power as an illegal monopoly. Additionally, as of 2004 it faced antitrust charges in the European Union.
COMPETITIVE FROM THE START
Ballmer and his sister, Shelly, grew up in a wealthy suburb of Detroit, where their father, a Swiss immigrant, had a midlevel management job at Ford Motor Company. At Detroit Country Day School, which he attended on a scholarship, Ballmer was perceived as an overachiever. A highly intelligent and enthusiastic student with a talent for math, he earned a 4.0 grade point average, played on the football and track teams, managed the basketball team, and participated in various school clubs. He repeated this experience at Harvard University, where he studied applied mathematics, managed the football team, and worked on the Harvard Crimson newspaper and the university literary magazine. He also played poker with a classmate, Bill Gates, who dropped out in their junior year to start a software company.
After earning a BS degree at Harvard, Ballmer spent a year and a half at Procter & Gamble, marketing brownie and muffin mixes. He entered Stanford University's Graduate School of Business in 1979, and after his first year, visited his college friend Gates in Seattle, hoping for a summer job at Gates's company, Microsoft. Instead, Gates persuaded him to take a full-time job managing the company's operations. Ballmer's earliest role was as head recruiter for the fast-growing firm; although he was not a programmer himself, Ballmer could recognize technical talent. Not long after Ballmer was hired, Microsoft signed a contract to create an operating system for IBM's new line of what eventually would be called personal computers. Under a tight deadline, Microsoft licensed a program called QDOS from a small Seattle company, rewrote it, and renamed it MS-DOS.
The roles of the major players were set: Bill Gates and his partner and cofounder, Paul Allen, oversaw the technical side, while Ballmer handled the business end. In 1981 Ballmer reorganized the partnership into a corporate structure in which Gates held 53 percent of the equity, Allen 35 percent, and Ballmer 8 percent. He also implemented a stock option plan for Microsoft employees, which kept programmers from leaving until their options vested and would ultimately result in the creation of numerous "Microsoft Millionaires." Faced with health problems, Allen left the company in 1983, leaving the team of Gates and Ballmer in charge.
During the 1980s Ballmer headed the development of operating systems, the core of the company's business. He was quick to realize that the graphical user interface (GUI) introduced by Apple's MacIntosh in 1984 was a major step toward making personal computers easier to use and more popular. In addition, it was a potential threat to Microsoft's goal of making MS-DOS the industry standard. To stave off the competition and ensure that developers would continue creating applications for the MS-DOS platform, Microsoft announced Windows, a GUI for MS-DOS, in late 1983. Windows was heavily promoted during the two years between its announcement and the product's actual release in October 1985, gaining a reputation as vaporware (an industry term for products announced far in advance of any release, which may or may not actually take place). The Windows interface used the visual metaphor of a desktop and file folders, which was originally created at Xerox's Palo Alto Research Center in the early 1970s and first brought to market by Apple. Although some aspects of the desktop interface were licensed to Microsoft for use in Windows 1.0, Apple sued Microsoft in 1988, claiming that the "look and feel" of Windows 2.0 infringed its copyright. Apple lost this suit in 1992.
Microsoft became a publicly held company in 1986, making Ballmer a multimillionaire before he turned 30. But Gates and Ballmer were not solely motivated by wealth; their ambition was for Microsoft to control every aspect of the software market. They were particularly successful with the Microsoft Office suite of applications, comprising word-processing, spreadsheet, and presentation software (Word, Excel, and PowerPoint, respectively). By 2004 Microsoft Office had achieved a 90 percent market share. Windows 3.0, released in 1990, had finally resolved many of the technical problems of earlier versions. In 1993 the company introduced Windows NT, an operating system for mainframes and large networks, to compete with UNIX. Ballmer was ahead of Gates in recognizing the importance of the Internet in the early 1990s, and in 1995 the company launched the Microsoft Network and its own Web browser, Internet Explorer, to compete with Netscape, one of the earliest browser programs. The launch of Windows 95, another long-delayed upgrade to the operating system, became a media event.
But increasing criticism mirrored the company's growth. Many industry observers expressed the view that Microsoft dominated the market because of its success at crowding out smaller competitors by any means available, not because of the quality of its products. Microsoft's aggressive business practices resulted in a number of legal challenges in the 1990s. One lawsuit came from Sun Microsystems, which had created the platform-independent Java Web programming language. Microsoft had licensed Java from Sun in 1995, and in 1997 Sun sued, claiming that Microsoft had created a version of Java that was incompatible with non-Windows platforms. The suit was settled in 2001.
The most serious charges came in 1998, when the U.S. Justice Department and 18 states joined to prosecute Microsoft on antitrust charges. The case focused largely on the "bundling" of Internet Explorer with the Windows operating system, making it difficult to use competing Web browsers such as Netscape, and on other illegal anticompetitive actions. The government accused Microsoft of being a monopoly and of using that monopoly power to illegally expand and protect its Windows operating system. In 1999 a district court judge ruled that Microsoft was a monopoly and in 2000 found the company had violated the Sherman Antitrust Act. In June 2000 the judge ordered that Microsoft be split into two companies. Microsoft, of course, appealed, and while the appeals court upheld the monopoly and antitrust rulings, it threw out the order to split up Microsoft. A tentative settlement that would keep Microsoft intact but restrict its activities was issued in November 2001. In May 2003 Microsoft settled with AOL Time Warner, owner of the competing browser Netscape, in a deal that included a $750 million payment to AOL Time Warner and plans for the two companies to work together. However, litigation continued: in 2004 the European Union rejected a settlement offer in its long-running antitrust case against Microsoft that focused on the bundling of Media Player, its audio and video software, into Windows. Ballmer, always a passionate, outspoken advocate for the company and its products, vigorously defended Microsoft in the media, declaring that the company's only goal was to provide the best possible products to its customers.
A KEY PLAYER PLANS FOR THE FUTURE
From 1980 to 1998 Ballmer headed several Microsoft divisions, including operations, operating systems development, and sales and support. In July 1998 he was promoted to president, and in January 2000 he was named chief executive officer, a position Gates had held since the company began. The concerns he faced as the new CEO included Microsoft's tarnished reputation as a fair and ethical competitor; escalating attacks by hackers pinpointing vulnerabilities in Explorer, Windows, and other products; and the growing popularity of open-source operating systems like Linux. Ballmer also found a need for internal changes at Microsoft. Under Gates, who was more of a technical visionary than a business manager, the company had been highly centralized. As CEO, Ballmer divided the company into seven operating divisions, worked to create systematic procedures for everything from product development to strategic planning to employee and management evaluation, and revamped the compensation plan by eliminating stock options in favor of outright grants of restricted stock.
By the early 2000s Microsoft's strategy had shifted away from the PC-centered approach to focus on Microsoft.net, an architecture based on XML technology, which would enable the integration of data and applications. Ballmer viewed this focus on interoperability as a major shift in the information technology industry, comparable to the introduction of the graphical user interface in the 1980s. As ever, he energetically promoted Microsoft's role as the dominant player, setting the standards and selling the software behind the next big thing in computing.
Since 1980 Microsoft's growth has been driven by Ballmer's fierce loyalty and managerial talent. Although he was described as affable and easygoing, he was best known for a loud, boisterous style, and a high-energy personality that dominated most interactions. Such exuberance had its price: in 1991 he damaged his vocal cords at a meeting in Japan by screaming "Windows!" But the defining characteristic of Steve Ballmer was his passionate belief in Microsoft Corporation.
See also entry on Microsoft Corporation in International Directory of Company Histories.
sources for further information
Maxwell, Frederic Alan, Bad Boy Ballmer, the Man Who Rules Microsoft, New York: HarperCollins, 2002.
Schlender, Brent, "Ballmer Unbound: How Do You Impose Order on a Giant, Runaway Mensa Meeting? Just Watch Microsoft's CEO," Fortune, January 26, 2004, p. 116.
Shepard, Stephen B., "Steve Ballmer on Microsoft's Future," BusinessWeek, December 1, 2003.
—Sandra M. Larkin
When Steve Ballmer assumed the CEO position at Microsoft Corp., he filled the shoes of Bill Gates—the world's richest man and most famous software mogul. He took over at the start of 2000, in the thick of the government's antitrust lawsuit against the company. A longtime friend and number-two man to Bill Gates, Ballmer was tapped as CEO to smooth over Microsoft's transition to a post-litigation phase by streamlining the company's internal bureaucracy and freeing Gates to concentrate on a future vision for the company, a vision which Ballmer would be charged with implementing.
Ballmer and Gates first met when the two were classmates at Harvard University. While Gates famously dropped out to start Microsoft, Ballmer stayed on to graduate, before accepting a job at Procter & Gamble. After Gates lured him to Microsoft, where he started in the sales department in 1980, Ballmer spent many years managing the company's relationship with high-tech giant IBM and overseeing the development of the Windows operating system, which would become the company's premier product and cash cow. In 1998, Gates named Ballmer president of the company, and his appointment to CEO followed less than two years later.
One of Ballmer's responsibilities was overhauling Microsoft's image in the face of its contentious legal difficulties. During this challenging period, Ballmer was insistent about the company's innocence. Additionally, Ballmer announced the next phase in Microsoft's technological evolution, that of transforming Windows products into a fundamentally new kind of operating system that will be spread throughout the Internet and all machines connected to it.
Notorious for his bombastic and hard-headed management style, along with an easygoing and affable personal demeanor—features that distinguished him from Gates—Ballmer was widely viewed as the logical and perfect choice to succeed Gates amidst the company's late-1990s difficulties. Meanwhile, managing the ambitions and difficulties of Bill Gates has paid off handsomely; in 2000, Forbes listed Ballmer as the 12th-richest man in the world.
Ignatius, David. "A Kinder, Gentler Microsoft?" Washington Post. May 7, 2000.
Markoff, John. "Microsoft's Chief Settles into His Best Friend's Old Job." New York Times. January 15, 2000.
Rooney, Paula. "Steve Ballmer: Citizen Microsoft." Computer Reseller News. November 13, 2000.
Schlender, Brent. "The $100 Billion Friendship." Fortune. October 25, 1999.
SEE ALSO: Allen, Paul; Gates, William (Bill); Microsoft Corp.; Microsoft Network (MSN); Microsoft Windows
BALLMER, STEVE (1956– ), U.S. business executive. As the first business manager hired by Bill Gates at the Microsoft Corporation, Ballmer, over 25 years with the computer giant, rose to become chief executive officer. In the process, he became one of the richest Jews in the world.
Steven Anthony Ballmer was born in Detroit, Michigan, the son of a Ford Motor Company employee. Shy as a child, he remembered hyperventilating before heading off to Hebrew school. His mother studied Hebrew with him. A scholarship student at Detroit Country Day School, he turned out to be a whiz in math, ranking in the top 10 among high school students on a statewide test. Thus he was able to fulfill his Protestant Swiss-born father's dream, a Harvard education. There he got his start as a leader, as manager of the football team, the student newspaper, the Harvard Crimson, and the literary magazine. It was at Harvard that Ballmer met Gates; they lived at opposite ends of a dormitory floor. Their shared passions for math and science brought them together.
In 1980 Gates persuaded Ballmer to drop out of Stanford University's business school to help run a fledgling Microsoft that was growing so fast it was nearly out of control. Gates valued Ballmer's management experience at Procter & Gamble, where he had helped market Duncan Hines cake mixes. Microsoft was then grossing $12.5 million in annual sales and had 43 employees. After taking over Windows in 1984, Ballmer drove engineers relentlessly to meet a launch deadline. But when Windows 1.0 was released, it flopped. It took Ballmer six more years to produce Windows 3.1, which took the world by storm. Ballmer played a classic role in tech start-ups: "He was the bottom-line–oriented grown-up," an article in the New York Times said, "who freed the computer nerds to focus on writing code." Gates was the code writer, Ballmer the hard-driving, charismatic, behind-the-scenes tactician, the arm twister and deal closer. Ballmer, and Microsoft, were highly competitive, and Ballmer was intimately involved in the company's tough tactics. In 2000, at the age of 43, Ballmer became executive vice president of sales and support, where he drove all activities related to Microsoft's sales, support, and marketing, and president, responsible for broadening the leadership of the company and positioning it to take advantage of future growth opportunities. But Ballmer also became known for his blunt, aggressive style. By 2002, Microsoft had a stock market valuation of $250 billion, and Ballmer was one of the leading businessmen in the world. He was also instrumental in making more than 10,000 Microsoft employees millionaires through stock options. According to F.A. Maxwell's biography, which was unauthorized, Ballmer "didn't turn his back on his Jewish heritage, even when doing so might have benefited him."
[Stewart Kampel (2nd ed.)]