Microsoft’s Nokia acquisition was the ‘last straw’ that forced Steve Ballmer out

medium_4365717705When Steve Ballmer announced that he was going to quit his role as Microsoft’s CEO last summer, the tech world was pretty shocked – all the more so when he refused to give a reason for his departure, simply stating in a press release that it was time to move on.

Few saw Ballmer’s departure coming at the time, as he’d previously said he wanted to stick around at Microsoft until his kids had finished high school, sometime around 2017. Ballmer had also just begun implementing a massive restructuring of the company as a ‘hardware and services’ provider under its new “One Microsoft” vision. His sudden departure, together with the fact that Microsoft had no clear successor in place, only helped fuel the suspicion that something was amiss within the company. One suggestion was that a rift had emerged between Ballmer and Bill Gates, but is this really what happened?

Now, with new CEO Satya Nadella now installed in Microsoft’s hot seat, Bloomberg has come up with a lengthy feature that paints a picture of what really happened at the company – and it’s not a particularly pretty one, with missed opportunities around products like the Surface tablet and numerous board battles that brought things to a head. Particularly revealing is that most of the tension arose from Microsoft’s acquisition of Nokia – something that Gates and Nadella were strongly opposed to at the start.

According to Bloomberg, when Ballmer learned last June that Microsoft’s board wasn’t going to back the Nokia deal, he exploded into a rage – the yelling could be heard outside the conference room – before eventually getting his way.

Bloomberg reports:

“They were frustrated by his tendency to talk more than listen, the people said, and his reaction to the pushback on Nokia was for some the last straw. The board rejected the first deal as too expensive and complex, including not only the handset division but also a mapping unit Microsoft didn’t need. Even without maps, Fitch Ratings called the price “excessive” in a note yesterday, citing a deterioration in the user base for Windows-based phones.

For more than a decade, directors gave Ballmer what he wanted. Then two outsiders who joined the board in the first half of 2012 — Thompson, a former Symantec Corp. CEO, and Steve Luczo, CEO of Seagate Technology Plc — teamed with others to challenge him. They pressured him to move faster to compete with Apple, Google and others dominating mobile technology, fearful Microsoft would be locked out and left with the shrinking personal-computer market”

Bloomberg’s report also digs into the race to become Microsoft’s new CEO, and how Ford boss Alan Mullaly blew his chances by insisting he didn’t need to go through a formal interview to land the job. The report also reveals that other candidates were also approached, including Paul Maritz of Pivotal and John Donahoe of eBay, but these declined the chance to become CEO.

Even more telling is the rift between Ballmer and Gates, long time friends who didn’t see eye-to-eye on the former’s decision to push Microsoft into the hardware business.

The report is well worth reading, check it out here.

photo credit: The PIX-JOCKEY (visual fantasist) via photopin cc