Microsoft CEO Steve Ballmer to Retire

Thirteen years later, Bill Gates' heir to a software empire is searching for a successor of his own.

Steve Ballmer is retiring from Microsoft within 12 months, the software giant announced today. Ballmer has held the CEO position since January 2000.

"There is never a perfect time for this type of transition, but now is the right time. We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team," said Ballmer in an Aug. 23 statement.

Ballmer made waves on July 11 when, as part of the new "One Microsoft" strategy, he announced the Great Reorg of 2013. The shakeup winnowed its engineering areas to four (OS, Apps, Cloud and Devices)—the Dynamics business software unit stands apart as a special case—and realigned its divisions according to seven corporate functions, including the Advanced Strategy and Research Group, Marketing, and the Business Development and Evangelism unit.

In a July 11 memo, Ballmer stated that the company's "strengths are in high-value activities, powering devices and enterprise services." As a result, the One Microsoft "strategy will focus on creating a family of devices and services for individuals and businesses that empower people around the globe at home, at work and on the go, for the activities they value most."

Ballmer will step down once a successor is selected. A special committee, chaired by John Thompson, the board of directors' lead independent director, has been formed to find the new CEO. The panel includes influential former CEO and Microsoft co-founder Bill Gates.

Gates suggested in a statement that he will be a hands-on participant during the process. "As a member of the succession planning committee, I'll work closely with the other members of the board to identify a great new CEO. We're fortunate to have Steve in his role until the new CEO assumes these duties," he said.

The committee will work with the executive recruiting firm Heidrick & Struggles International. Both internal and external candidates are being considered for the top spot.

In the meantime, Ballmer will remain at the helm of an IT behemoth transitioning from a software maker to a company that seeks to derive more of its revenues from cloud services and mobile devices. "My original thoughts on timing would have had my retirement happen in the middle of our company's transformation to a devices and services company," Ballmer stated.

He indicated that once Microsoft is well into its new direction, fresh leadership will be required. "We need a CEO who will be here longer term for this new direction," Ballmer said.

Wall Street has welcomed the news. As of this writing, Microsoft shares are trading at $34.60, up nearly 7 percent.

Pedro Hernandez

Pedro Hernandez

Pedro Hernandez is a contributor to eWEEK and the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the network of...