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With Ballmer Headed Out, What Should Microsoft Do Next?

A replacement for Microsoft CEO Steve Ballmer will soon be announced and the direction of the company could change. Four public-sector CIOs advise the tech giant on what to do next.

by / September 16, 2013
Microsoft CEO Steve Ballmer Microsoft Sweden

Now that Microsoft’s controversial CEO Steve Ballmer is moving on, there has been much speculation as to who will replace him and what the tech giant’s strategy will be as competitors like Google, Apple, Oracle and VMware press on for bigger market shares. Microsoft has been a name in computing since the public first learned what a home personal computer was and the tech giant persists as a mainstay in the world of operating systems, gaming, business and server software.

Ballmer has had his fair share of fans and detractors, but now that he’s leaving, everyone seems to have an opinion on what Microsoft must do to stay relevant and profitable. Government Technology spoke with a few CIOs to get their take on what approach Ballmer’s replacement should take.

Jonathan Reichental, CIO of Palo Alto, Calif.: Be a Leader

In a nutshell, Reichental’s advice for Microsoft is simple. “Good luck. You’ll need all the luck you can get,” he said. Though Microsoft continues to hold a strong position in the marketplace, their competitors are new, they’re flexible and they’re moving fast, he said.

“People moved faster to tablets and smartphones and to cloud-based software service apps than anyone anticipated, and it caught Microsoft by surprise,” he said. Microsoft is now playing catch-up with Windows 8, trying to get people to use their software and devices in a world obsessed by tablets. But this is not an isolated incident for Microsoft, Reichental said – the company has made it a habit to be last on everything.

“The new person needs to create a Microsoft that is moving faster and not just being a fast-follower, which has been their posture for some time,” he said. “I think they need to get ahead of it. It’s not good enough when your competitor releases a tablet and you come up with a tablet four months later.”

The physical Microsoft store is another great example of this, according to Reichental. The Microsoft store doesn’t look original. It looks like an Apple store that has had all the Apple logos replaced with Windows logos. “What the new person needs to think about is, ‘What does a Microsoft store look like that people go into and wish that the Apple store looked like that?’ How can they completely reverse it?” Reichental asked.

Reichental pointed to the Sony store as a great example of a place where people can be impressed by unreleased technology and get a sense of what the company is all about, whereas Microsoft’s store looks like a “poor duplication” of an Apple store. “Microsoft has to re-establish itself as a leader and not as a follower,” he said.

Louis Carr, CIO of Clark County, Nev.: Develop the Online Customer Base

Microsoft can’t afford to lose its edge now that Steve Ballmer is leaving, Carr said. “He and Bill Gates have been the face of Microsoft since the early days,” he said. “It’s certainly a changing of the guard probably not too dissimilar from Apple once Steve Jobs passed away.”

No company can stay on top forever, he said, but Microsoft has such a big customer base that it would be a shame to squander it due to inaction. Google, Carr said, is the company today that best embodies what 21st-century computing represents. Google is fast, nimble, innovative and Web-based.

For Microsoft to succeed, it needs to find a way to bridge its way from its current customer base, which is largely offline, to an online and virtualized customer base, without losing its market share in the transition. Microsoft 365 is the company's attempt to begin that transition, and it will likely continue in that direction, he said, but how it goes about it will make the difference between success and failure.

Windows, which in many ways is the company’s flagship product, will continue to play a big role in the direction the company takes, he said. “I think Windows 8 will really make or break Microsoft from the standpoint of keeping them in the forefront of the technology or relegating them to desktop, back-office sort of systems, and there’s still lots of money in the server side of things, but I think Microsoft would like to continue to be in that consumer market and Windows 8 is probably their best opportunity for that,” he said.

Phil Bertolini, CIO of Oakland County, Mich.: Focus on the Public Sector

Bertolini focused his advice on the public sector and what Microsoft should do to better serve government. There are two main things the new Microsoft CEO should do if he or she wants to cater to government, Bertolini said. The first thing is to continue the push toward cloud computing with Office 365, as it has been doing.

The second thing Microsoft needs to do, he said, is to work on its licensing model so governments can share technologies more easily. “They’ve done some of this in higher ed, but they really need to do it for government so we have an easier path that allows us to share technologies with each other,” he said. “I think it’s very important for Microsoft to not just worry about those big private-sector companies out there or their individual users they may have, but the government space out there that needs some attention.”

Google is likely their biggest competitor in the cloud space -- Bertolini runs a Microsoft shop in Oakland County, he said, they’re not likely to switch vendors soon. “It’s not going to be easy for me to just forklift out everything that I have and go to someone else, but over time if they don’t see to our needs, I can see other companies sliding into that space and taking over,” he said.

Oakland County isn’t exclusively Microsoft, but departments use Microsoft for the Office suite, Windows for desktops and servers, and SharePoint for website content management.

Microsoft has found ways to reinvent itself over the years while maintaining the stability needed with such a large company, Bertolini said. “Other companies are trying to press into that space and Microsoft needs to continue to be innovative and find new ways to solve our business problems and they’ll do quite well,” he said.

David Behen, CIO of Michigan: Stay Innovative

“I’m sure they’re going to hire a great new CEO,” Behen said, adding that innovation is key moving forward, as is maintaining an eye on safety and security.

Devices like the Surface tablet show that Microsoft is staying innovative, he said. They’re more cautious than many smaller, less-widespread companies, but they know what they’re doing and where technology is going, he said.

“I think they’ve done a great job of staying innovative,” he said. “That’s my advice: stay innovative in the future, continue to keep your eye on the ball and they will continue to be one of the best companies in the world.”

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Colin Wood former staff writer

Colin wrote for Government Technology from 2010 through most of 2016.

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