Technology

What If Microsoft Asks Steve Ballmer to Stay On as CEO?

Microsoft Corp. (NASDAQ: MSFT) managed to post such strong earnings and was positive enough in its outlook that there is one thing to consider. No one wants to consider this either. What if Microsoft is happy enough that it asks Steve Ballmer not to retire as CEO? This is not a prediction, nor is it even a suggestion. It is still something that needs at least to be asked.

Apple Inc. (NASDAQ: AAPL) stole all of Microsoft’s thunder on the software and devices in the past decade. The problem is that Apple is not the same without Steve Jobs running the ship. Another issue is that Microsoft shares are up more than 36% so far in 2013, versus some 13% for Apple.

Google Inc. (NASDAQ: GOOG) also has been a thorn in the side of Microsoft. Its Android operating system is dirt cheap compared to Windows, and its office suite products are virtually free, versus box-buying at the stores. Google is still the king of search, even if Microsoft has made major inroads with Bing in the past two years or so. Microsoft’s gain of more than 36% in the stock actually lags that of Google, which is up 43% so far in 2013 after earnings.

Ballmer gets faulted for every misstep of the company these days, but in some cases the criticism may be too harsh. The company’s earnings significantly beat expectations, even after backing out Windows 8.1 pre-sale numbers.

Analysts from Wall Street have had a mixed reaction to the earnings report. That being said, Microsoft shares are up handily after the report. Ballmer has made Microsoft a success in business and enterprise markets and a competitor to Oracle Corp. (NYSE: ORCL) at a time when Oracle is trying to figure out how to keep up organic growth in a finite market. Oracle’s earnings problems have been bad enough that its stock virtually is unchanged so far in 2013.

Weak PC sales have been the Achilles’ heel for Ballmer. He said after earnings that Microsoft’s new commercial services will help it continue to outgrow the enterprise market. He also signaled that enterprise renewals were very healthy and the Devices and Consumer business were continuing to improve. That segment’s revenue grew 4% to $7.46 billion, while the Commercial segment’s revenue grew 10% to $11.20 billion.

Again, we are not suggesting nor are we predicting that Ballmer will remain as CEO. That being said, it does again at least need to be asked.

Rumors have suggested that Bill Gates may retake the helm as CEO. We have serious doubts about this. Gates said that the chance of that was almost zero. Once suggestion we would make is that the next generation of Microsoft directors and managers needs to be younger, because its board is too old for the way the world is heading in technology.

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