10 Things Steve Ballmer Must Do to Preserve His Legacy

by Don Reisinger

Microsoft is one of those odd companies that tries desperately to hold on to the past even when it knows that such a strategy probably isn’t best for its operation. Currently, Windows is still the centerpiece of the company’s strategy. To some extent, it’s understandable. Windows is bringing in billions of dollars for the software giant each year, and it’s unwilling to give that up. But Ballmer should know that he doesn’t need to give up Windows, he just needs to focus more of his efforts elsewhere. Windows will coast through the next few software cycles without much trouble. It shouldn’t be the center of Ballmer’s world.

It seems that Steve Ballmer has been focusing much of his time on Google. He’s concerned that the search giant will capture too much market share and corner the advertising market. He’s also worried that it might push Microsoft out of the mobile space. Those are understandable worries, but they can’t be so present in the CEO’s mind. Microsoft can only control itself. It has no control over what Google can and cannot offer. Realizing that, Ballmer should spend more time looking at how to improve his company, not reacting to what Google has already done.

Bill Gates was a visionary who did a fine job running the tech industry’s biggest company. But that was the 1990s. And today, the market is much different. It’s time Ballmer stops thinking like Gates, and starts thinking like Steve Jobs. Yes, Microsoft’s core services must still dictate his decisions to some extent, but he needs to learn to think beyond the outdated mindset that has governed Microsoft since its inception. The times are a’changing. And it’s time Ballmer realizes that.

Currently, Microsoft offers little in the way of solid hardware. The company’s peripherals, such as keyboards and mice, are practically unusable. Only its Zune HD and Xbox 360 are worth highlighting. That’s a problem. If Apple has shown anything, it’s that hardware is key to a solid strategy in today’s marketplace. Microsoft should consider investing in its own hardware to improve the experience of using its products. That said, it should be careful with how it does it. Ballmer shouldn’t offer laptops or desktops—that would be suicide. But developing a phone doesn’t seem like such a bad idea.

Where is all the innovation from Ballmer and Company? It seems that with each product Microsoft sells, it was bested by something that was released months or even years prior. That’s especially true with Windows Vista, the Zune HD and Windows Mobile. Microsoft needs to start being the standard bearer, rather than the company that tries to catch up to those that have already set the new standards in the market. Bring on the fresh ideas, Ballmer. It should help your company—and your chances of improving your legacy.

Microsoft is a wildly successful company. And all the while, Steve Ballmer has watched as the company’s profits have soared. But all that extra cash hasn’t been put to good use. When Google acquired DoubleClick—a monumental deal for the search giant—Microsoft acquired aQuantive, a relatively unknown competitor. And rather than acquire Facebook outright, the software company bought just a small share of the social network. Microsoft’s (and Ballmer’s) past is littered with suspect acquisitions. Maybe it’s time Ballmer sends his acquisitions team out there to find something worthwhile to own.

The Internet is the future. Ballmer knows it. And so does every one of his competitors. So far, he has spent time trying to break into the market, but he hasn’t done enough. Microsoft needs to make it clear to the entire market that it has designs on the Web and it will do whatever it takes to take on Google and the others. By doing so, Microsoft might finally be considered a real contender for Web dominance. It might also help Ballmer’s legacy.

Windows isn’t the only product that Ballmer needs to stop worrying about. The Microsoft CEO tends to focus too much of his time on all the company’s software. And yet, the only software packages that really need time dedicated to them, Windows Mobile and soon, Windows Phone 7, seem to be an after-thought. That’s not a good thing. Software is still a key component in Microsoft’s business, but it’s not the end. Ballmer should focus on fixing Windows Phone 7, and then spend the rest of his time away from software. At this point, it’s the best strategy.

There is no way that Ballmer can leave Microsoft right now. If he decided to depart Microsoft, it would be a major black mark on his legacy. Not only would he be remembered as the CEO who presided over Microsoft’s market-cap decline, he would be defined more by some of the mistakes the company has made than what it has done right. In order for Ballmer to preserve his legacy, he needs to get Microsoft back on track. And only then, when Microsoft is back in its position of dominance, can he leave.

Apple might be the most valuable company in the tech industry right now, but that doesn’t mean that it deserves undue importance. Steve Ballmer needs to stop wasting his time worrying about what Apple has to say about it in its commercials, and start thinking about what he can do to better his company. Apple is certainly important and it is a competitor. But it’s not as important or as dangerous a competitor as Ballmer might think. The most important step for Ballmer to take right now is to focus on his own operation. Let Apple do what it wants. In the end, it likely won’t affect Microsoft’s bottom line all that much.