Steve Ballmer, who succeeded Bill Gates as CEO of Microsoft in 2000 has announced his plans to retire within the next 12 months once his successor has been chosen.

News of this unexpected development comes from an internal email from Ballmer to Microsoft employees in which he also mentions the press release issued today by the Microsoft News Center.

Ballmer writes:

“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. 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. We need a CEO who will be here longer term for this new direction.”

The press release makes it clear that steps are already being taken to find the next CEO in that Microsoft's Board of Directors has appointed a special committee, chaired by John Thompson and including Bill Gates as one of its members, which will work with "a leading executive recruiting firm", Heidrick & Struggles International Inc, to consider both external and internal candidates.

According to his official bio, Steve Ballmer joined Microsoft in 1980 and was the company’s first business manager. Before becoming CEO in 2000, his roles at Microsoft included senior vice president of sales and support, senior vice president of systems software and vice president of marketing.

Ballmer's email describes his decision to retire as an "emotional and difficult thing for me to do" and states:

"I take this step in the best interests of the company I love".

Some of us regard Ballmer as the CEO who, with his goal of making Microsoft a "devices and service company", has sacrificed .NET and its unique technologies and that it is already too late to act in Microsoft's best interests. While it is perfectly logical and reasonable that Microsoft should move to a wider interpretation of "operating system", it could have been achieved without deprecating so much that was good and already working. The desktop may well be dying but there was no commercial reason for Microsoft to hasten its demise. 

To judge from market reaction Ballmer's imminent departure is seen as a good thing. Microsoft share price rose 8% on news of his retirement. Given Ballmer has around a third of a billion shares, he will have seen a considerable boost in his personal wealth.

Bill Gates' reaction in the official press release is somewhat guarded. His comment is:

We’re fortunate to have Steve in his role until the new CEO assumes these duties.

As the duties are to "complete the transition to  a successful devices and services company,”  there is no opportunity to rewrite the past. This is not a fresh start. 

More Information

Steve Ballmer's resignation e-mail

Microsoft press release

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