Steve Ballmer to retire from Microsoft within the year

Microsoft CEO Steve Ballmer will retire within the next 12 months, the company announced today.

The Redmond-based giant says Ballmer, who has been CEO since Bill Gates stepped down from the position in 2000, will continue as CEO while it looks for his successor. The people in charge of figuring out who that will be include John Thompson, the board’s lead independent director, Gates himself, chairman of the audit committee Chuck Noski and chairman of the compensation committee Steve Luczo.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in an official post by the company. “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 restructuring that Ballmer is talking about saw the him outline a vision for “One Microsoft”. This vision is meant to help both it and its employees continue to “change the world” as technology continues to evolve.

“The board is committed to the effective transformation of Microsoft to a successful devices and services company,” Thompson said. “As this work continues, we are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company’s course and execute on it in a highly competitive industry.”

“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,” said Gates. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

While Microsoft has continued to be a profitable company under Ballmer’s tenure — its entry into the console market via the XBox and the clever acquisition of Skype stand out as highlights — he has drawn a fair amount of flak over the years.

Among his perceived gaffes was his initial dismissal of cloud computing, although that position soon evolved and Microsoft is now one of the world’s leading providers of cloud services.

Perhaps the biggest criticism however has come from his inability to lead Microsoft into a position of dominance in the mobile sphere. While Apple was sweeping the world away with the iPad for instance, Microsoft was playing around with its table top Surface and its smartphone OS was pretty messy until the launch of Windows Phone 8. That said, the smartphone OS is now the third most popular in the US and the second most popular in parts of Latin America. Oh, and according to a February poll, most people think Microsoft is cooler than it has ever been.

None of that can detract from the fact that its eventual entry onto the tablet market courtesy of the Surface was an unmitigated failure. In its most recent quarter, it was forced into a US$900-million writedown because of weak Surface sales.

It may not be his most expensive gamble at the the company’s helm — that would be the US$6.2-billion writedown it was forced to make for internet advertising company aQuantive in a bid to take on Google, but it is the one people are most likely to remember.

Markets have generally reacted positively to the news, with Microsoft’s stock up over seven percent since trading opened.

Header image: jdlasica (via Flickr).