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Cover of 'Bad boy ballmer'

Bad boy ballmer

Fredric Maxwell

The Man Who Rules Microsoft

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Description

Gates was the technology visionary - the strategist and commander shaping Microsoft's future. Ballmer complemented him as the business-focused tactician executing Gates' vision. This divide was clear when Gates ran the antitrust trial defense while Ballmer managed day-to-day operations.

Their skills aligned with their personalities. Gates valued intelligence while Ballmer pushed for results. Yet together they built Microsoft into a hugely successful company that by the 2000s could have closed up shop, given every employee $100K plus stock, and still had billions left over.

Both driven and competitive, they sometimes pushed boundaries too far, like announcing product release dates they knew were impossible. But they also inspired employees to give their all. Their partnership drove Microsoft's meteoric rise.

Table of contents

01

Early life and education

Steve Ballmer, born in March 1956 to Fred, a Swiss immigrant and Ford Motor Company worker, and Beatrice, a Detroit native of Russian descent, showcased remarkable intellect and a vibrant personality from a young age.

His early life was marked by a move to Belgium, where he became fluent in French, and an education at a Detroit prep school where he excelled in academics and sports. Ballmer's academic prowess, particularly in math, earned him admission to Harvard, where he met Bill Gates. Their friendship, despite differing personalities, was cemented by a shared passion for science and math.

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02

Working at procter & gamble

Steve Ballmer began his career at Procter & Gamble's Food Products Group as a brand assistant, where he honed skills in point-of-sale analysis, competitor assessment, sales campaigns, and marketing. His innovative idea to position Duncan Hines brownie mix boxes sideways on shelves to displace competitors was a simple yet effective strategy. In 1979, after leaving P&G and spending a summer in Hollywood, Ballmer visited Bill Gates and Microsoft in Seattle before starting at Stanford Business School. Known for his loud and driven personality, Ballmer excelled at Stanford, winning two business competitions and catching the attention of Gates, who offered him a job at Microsoft. Despite initial hesitation, Ballmer joined Microsoft as the 28th employee, taking charge of business operations and facing resentment from existing programmers over his salary and equity stake.

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03

Joining microsoft

Steve Ballmer joined Microsoft and immediately began recruiting top talent with a focus on intelligence, energy, and drive, personally interviewing every candidate for his first three years. Among his early hires was Charles Simonyi, a skilled Hungarian programmer. Ballmer, though not technical, had a knack for identifying strong programmers, using their ability to explain hash tables as a gauge for their skill.

Just six weeks after Ballmer's arrival, Microsoft was approached by IBM to provide software for a new personal computer. Microsoft, led by Gates and Ballmer, negotiated to supply BASIC, FORTRAN, and a disk operating system, retaining ownership and licensing it to IBM. The contract was signed on November 6, 1980, with a delivery deadline of January 12, 1981. However, Microsoft did not have a PC operating system at the time. They acquired QDOS for $75,000, which was adapted and renamed MS-DOS. Despite the tight deadline and intense work schedule, Microsoft delivered MS-DOS late, which coincidentally did not affect IBM's schedule.

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04

Growing microsoft

As Microsoft experienced rapid growth, Bill Gates and Steve Ballmer recognized the need for more experienced management. They considered having Ballmer return to school for his MBA, but the urgent problems of expansion led them to decide on hiring a president instead. A recruiter recommended James Towne, a 40-year-old manager of a $750 million division at Tektronix. However, Towne resigned within a year.

Around the same time, Paul Allen fell ill with Hodgkin's lymphoma during a European sales trip. Though treatment put his disease into remission, Allen saw it as an opportunity to resign, leaving Gates and Ballmer to primarily run Microsoft.

Microsoft's strategic moves were notable. By pre-announcing a graphical user interface for MS-DOS more than two years before its release, they effectively discouraged competitors and signaled to developers to prepare their software for Windows. This strategy, along with branding all their products under recognizable names like Windows, Excel, and Word, helped Microsoft build significant name recognition.

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05

Announcing windows

In 1991, the Federal Trade Commission began investigating Microsoft for potential anticompetitive practices, including suspicions of collusion with IBM and complaints from Sun Microsystems and Novell about Microsoft's licensing fees to computer manufacturers. Despite a three-year probe, the FTC did not take legal action. During this period, Microsoft's Steve Ballmer recognized the potential of the Internet, a platform Bill Gates had previously overlooked. Microsoft faced competition from Netscape but opted to integrate its own Internet search engine into Windows, a practice known as bundling, despite antitrust concerns similar to those that had constrained IBM.

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06

Antitrust troubles

Steve Ballmer, upon becoming president of Microsoft, prioritized the development of Internet-based services, branding it as ".Net". This move sparked an internal power struggle within the company, with employees aligning with either the Windows platform or Ballmer's new strategy. Ballmer's faction focused on ruthless prioritization and operational execution, while the Windows faction leaned towards a more technical strategy.

When the Department of Justice and 20 state attorneys general filed an antitrust lawsuit against Microsoft, Ballmer responded with humor, a trait appreciated by many. He also found a way to bridge the divide between his vision and Bill Gates' "Windows everywhere" approach by offering .Net as a constantly upgraded service delivered over the Internet. This allowed Microsoft to continue selling packaged software while also renting out Internet services, and provided a strong legal defense against the antitrust action.

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07

Becoming ceo

Steve Ballmer became CEO of Microsoft on January 13, 2000, succeeding Bill Gates. Shortly after, his father died of lung cancer. In a significant challenge to his new role, on June 7, 2000, Judge Thomas Penfield Jackson ordered Microsoft, then valued at $600 billion, to split into two entities due to antitrust violations. This decision caused Microsoft's shares to drop over $15 in one day. Ballmer and Gates quickly announced plans to appeal and pushed forward with Microsoft's .NET vision, emphasizing the importance of adapting to new software trends despite uncertain revenue sources.

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08

Leading microsoft forward

Steve Ballmer, joining Microsoft as the 30th employee in 1980, had a significant impact on the company over his 33-year tenure. Known for his energetic personality and business acumen, Ballmer helped drive Microsoft's growth, increasing revenue from $12 million to over $20 billion. He reorganized Microsoft into separate business units, changed employee compensation, and expanded the company beyond its core Windows and Office products.

Despite struggling in new areas like mobile, search, and social media, Ballmer's investments in cloud and enterprise strategy laid the foundation for future growth. Ballmer's successor, Satya Nadella, took over in 2014 and led Microsoft to new heights with a focus on cloud and AI capabilities.

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