Steven Anthony "Steve" Ballmer (born March 24, 1956) is an American businessman who was the chief executive officer of Microsoft from January 2000 to February 2014, and is the owner of the Los Angeles Clippers. As of May 11, 2015, his personal wealth is estimated at US$22.7 billion, ranking number 21 on the Forbes 400. It was announced on August 23, 2013, that he would step down as Microsoft's CEO within 12 months. On February 4, 2014, Ballmer retired as CEO and was succeeded by Satya Nadella; Ballmer resigned from the Board of Directors on August 19, 2014 to prepare for teaching a new class and for the start of the NBA season.
On May 29, 2014, Ballmer placed a bid of $2 billion to purchase the Los Angeles Clippers of the National Basketball Association (NBA) after NBA commissioner Adam Silver forced Donald Sterling to sell the team. He officially became the Clippers owner on August 12, 2014.
Ballmer was born in Detroit, the son of Beatrice Dworkin and Frederic Henry Ballmer (Fritz Hans Ballmer), a manager at the Ford Motor Company. His father was a Swiss immigrant, and his mother was Jewish (her family was from Belarus). Ballmer grew up in the affluent community of Farmington Hills, Michigan. In 1973, he attended college prep and engineering classes at Lawrence Technological University. He graduated from Detroit Country Day School, a private college preparatory school in Beverly Hills, Michigan, with a score of 800 on the mathematical section of the SAT and was a National Merit Scholar. He now sits on the school's board of directors. In 1977, he graduated magna cum laude from Harvard University with an B.A. in applied mathematics and economics.
At college, Ballmer was a manager for the Harvard Crimson football team, worked on The Harvard Crimson newspaper as well as the Harvard Advocate, and lived down the hall from fellow sophomore Bill Gates. He scored highly in the William Lowell Putnam Mathematical Competition, an exam sponsored by the Mathematical Association of America, scoring higher than Bill Gates. He then worked as an assistant product manager at Procter & Gamble for two years, where he shared an office with Jeffrey R. Immelt, who later became CEO of General Electric. In 1980, he dropped out of the Stanford Graduate School of Business to join Microsoft.
History with Microsoft
Ballmer was initially offered a salary of $50,000 as well as a percentage of ownership of the company. When Microsoft was incorporated in 1981, Ballmer owned 8% of the company. In 2003, Ballmer sold 8.3% of his shareholdings, leaving him with a 4% stake in the company. The same year, Ballmer replaced Microsoft's employee stock options program.
In the 20 years following his hire, Ballmer headed several Microsoft divisions, including operations, operating systems development, and sales and support. From February 1992 onwards, he was Executive Vice President, Sales and Support. Ballmer led Microsoft's development of the .NET Framework. Ballmer was then promoted to President of Microsoft, a title that he held from July 1998 to February 2001, making him the de facto number two in the company to the chairman and CEO, Bill Gates.
Chief Executive Officer (2000-2014)
In January 2000, Ballmer was officially named chief executive officer. As CEO, Ballmer handled company finances and daily operations, but Gates remained chairman of the board and still retained control of the "technological vision" as chief software architect. Gates relinquished day-to-day activities when he stepped down as chief software architect in 2006, while staying on as chairman, and that gave Ballmer the autonomy needed to make major management changes at Microsoft.
When Ballmer took over as CEO, the company was fighting an antitrust lawsuit brought on by the U.S. government and 20 states, plus class-action lawsuits and complaints from rival companies. While it was said that Gates would have continued fighting the suit, Ballmer made it his priority to settle these saying: "Being the object of a lawsuit, effectively, or a complaint from your government is a very awkward, uncomfortable position to be in. It just has all downside. People assume if the government brought a complaint that there's really a problem, and your ability to say we're a good, proper, moral place is tough. It's actually tough, even though you feel that way about yourselves."
Upon becoming CEO, Ballmer required detailed business justification in order to approve of new products, rather than allowing hundreds of products that sounded potentially interesting or trendy. In 2005, he recruited B. Kevin Turner from Wal-Mart Stores, where he was executive vice president, to become Microsoft's chief operating officer to add "scorecards" for measuring customer satisfaction and other key sales metrics.
Since Bill Gates' retirement, Ballmer oversaw a "dramatic shift away from the company's PC-first heritage", replacing most major division heads in order to break down the "talent-hoarding fiefdoms", and Businessweek said that the company "arguably now has the best product lineup in its history". Ballmer was instrumental in driving Microsoft's connected computing strategy, with acquisitions such as Skype.
Under Ballmer's tenure as CEO, Microsoft's annual revenue surged from $25 billion to $70 billion, while its net income increased 215 percent to $23 billion, and its gross profit of 75 cents on every dollar in sales is double that of Google or International Business Machines Corp. In terms of leading the company's total annual profit growth, Ballmer's tenure at Microsoft (16.4%) surpassed the performances of other well-known CEOs such as General Electric's Jack Welch (11.2%) and IBM's Louis V. Gerstner, Jr. (2%). These gains came from the existing Windows and Office franchises, with Ballmer maintaining their profitability, fending off threats from cheaper competitors such as GNU/Linux and other open-source operating systems and Google Docs. Ballmer also built half-a-dozen new businesses such as the data centers division ($6.6 billion in profit for 2011) and the Xbox entertainment and devices division ($8.9 billion) (which has prevented the Sony PlayStation and other gaming consoles from undermining Windows), and oversaw the acquisition of Skype. Ballmer also constructed the company's $20 billion Enterprise Business, consisting of new products and services such as Exchange, Windows Server, SQL Server, SharePoint, System Center, and Dynamics CRM, each of which initially faced an uphill battle for acceptance but have emerged as leading or dominant in each category. This diversified product mix helped to offset the company's reliance on PCs and mobile computing devices as the company entered the Post-PC era; in reporting quarterly results during April 2013, while Windows Phone 8 and Windows 8 had not managed to increase their market share above single digits, the company increased its profit 19% over the previous quarter in 2012, as the Microsoft Business Division (including Office 365) and Server and Tools division (cloud services) are each larger than the Windows division.
Ballmer attracted criticism for failing to capitalize on several new consumer technologies, forcing Microsoft to play catch-up in the areas of tablet computing, smartphones and music players with mixed results. Under Ballmer's watch, "In many cases, Microsoft latched onto technologies like smartphones, touchscreens, 'smart' cars and wristwatches that read sports scores aloud long before Apple or Google did. But it repeatedly killed promising projects if they threatened its cash cows [Windows and Office]." Microsoft's share price stagnated during Ballmer's tenure. As a result, in May 2012, hedge fund manager David Einhorn called on Ballmer to step down as CEO of Microsoft. "His continued presence is the biggest overhang on Microsoft's stock," Einhorn said in reference to Ballmer. In a May 2012 column in Forbes magazine, Adam Hartung described Ballmer as "the worst CEO of a large publicly traded American company", saying he had "steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets)".
In 2009, and for the first time since Bill Gates resigned from day-to-day management at Microsoft, Ballmer delivered the opening keynote at CES.
On August 23, 2013, Microsoft announced that Ballmer would retire within the next 12 months. A special committee that included Bill Gates would decide on the next CEO.
There was a list of potential successors to Ballmer as Microsoft CEO, but all had departed the company: Jim Allchin, Brad Silverberg, Paul Maritz, Nathan Myhrvold, Greg Maffei, Pete Higgins, Jeff Raikes, J. Allard, Robbie Bach, Bill Veghte, Ray Ozzie, Bob Muglia and Steven Sinofsky. B. Kevin Turner, Microsoft's Chief Operating Officer (COO), was considered by some to be a de facto number two to Ballmer, with Turner having a strong grasp of business and operations but lacking technological vision. On February 4, 2014, Satya Nadella succeeded Ballmer as CEO.
Ballmer has also served as director of Accenture Ltd. and a general partner of Accenture SCA since October 2001.
Ballmer is known for his energetic and exuberant personality, which is meant to motivate employees and partners. His flamboyant stage appearances at Microsoft events are widely circulated on the Internet as viral videos.
A widely circulated video, captured at a Windows 2000 developers' conference, features a perspiring Ballmer chanting the word "developers". At the MIX 08 event on March 6, 2008, during a question and answer interview with Guy Kawasaki, one person from the public requested Ballmer to do a "web developers" chant, mirroring the "developers" chant he had done around eight years before. Ballmer screamed "I've been in PR mode the whole time, and you want to hear web developers, web developers, web developers!", receiving a round of applause from the audience.
Relationship with Bill Gates
The Wall Street Journal has reported that there was tension surrounding the 2000 transition of authority from Bill Gates to Ballmer. Things became so bitter that, on one occasion, Gates stormed out of a meeting in a huff after a shouting match in which Ballmer jumped to the defense of several colleagues, according to an individual present at the time. After the exchange, Ballmer seemed "remorseful", the person said. Once Gates leaves, "I'm not going to need him for anything. That's the principle," Ballmer said. "Use him, yes, need him, no."
After saying in 2008 that he intended to remain CEO for another decade, Ballmer announced his retirement in 2013, after losing billions of dollars in acquisitions and on the Surface tablet. Microsoft's stock price rebounded on the news.
On December 24, 2014, the Seattle Times reported that the IRS sued Ballmer, Craig Mundie, Jeff Raikes, Jim Allchin, Orlando Ayala and David Guenther in an effort to compel them to testify in Microsoft’s corporate tax audit. The IRS has been looking into how Microsoft and other companies deal with transfer pricing.
On competing companies and software
In 2007, Ballmer said "There's no chance that the iPhone is going to get any significant market share. No chance."
Speaking at a conference in NYC in 2009, Microsoft CEO Steve Ballmer criticized Apple's pricing, saying, "Now I think the tide has turned back the other direction (against Apple). The economy is helpful. Paying an extra $500 for a computer in this environment—same piece of hardware—paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be."
Free and open source software
He has referred to the free softwareLinux kernel as a "cancer that attaches itself in an intellectual property sense to everything it touches". Ballmer used the notion of "viral" licensing terms to express his concern over the fact that the GNU General Public License (GPL) employed by such software requires that all derivative software be under the GPL or a compatible license.
In 2005, Microsoft sued Google for hiring one of its previous vice presidents, Kai-Fu Lee, claiming it was in violation of his one-year non-compete clause in his contract. Mark Lucovsky, who left for Google in 2004, alleged in a sworn statement to a Washington state court that Ballmer became enraged upon hearing that Lucovsky was about to leave Microsoft for Google, picked up his chair, and threw it across his office, and that, referring to Google CEO Eric Schmidt (who previously worked for competitors Sun and Novell), Ballmer vowed to "kill Google." Lucovsky reports:
At some point in the conversation Mr. Ballmer said: "Just tell me it's not Google." I told him it was Google. At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: "Fucking Eric Schmidt is a fucking pussy. I'm going to fucking bury that guy, I have done it before, and I will do it again. I'm going to fucking kill Google."
Ballmer then resumed attempting to persuade Lucovsky to stay at Microsoft. Ballmer has described Lucovsky's account of the incident as a "gross exaggeration of what actually took place".
During the 2011 Web 2.0 Summit in San Francisco, he said: "You don't need to be a computer scientist to use a Windows Phone and you do to use an Android phone ... It is hard for me to be excited about the Android phones."
On March 6, 2008, Seattle mayorGreg Nickels announced that a local ownership group involving Ballmer made a "game changing" commitment to invest $150 million in cash toward a proposed $300 million renovation of KeyArena and were ready to purchase the Seattle SuperSonics from the Professional Basketball Club LLC in order to keep the team in Seattle. However, this initiative failed, and the SuperSonics relocated to Oklahoma City, Oklahoma, where they now play as the Oklahoma City Thunder.
In June 2012, Ballmer was an investor in Chris Hansen's proposal to build a new arena in the SoDo neighborhood of Seattle and bring the SuperSonics back to Seattle. On January 9, 2013, Ballmer and Hansen led a group of investors in an attempt to purchase the Sacramento Kings from the Maloof family and relocate them to Seattle for an estimated $650 million. However, this attempt also fell through.
Following the Donald Sterling scandal in May 2014, Ballmer was the highest bidder in an attempt to purchase the Los Angeles Clippers for a reported price of $2 billion, which is the second highest bid for a sports franchise in North American sports history (after the $2.15 billion sale of the Los Angeles Dodgers in 2012). After a California court confirmed the authority of Shelly Sterling to sell the team, it was officially announced on August 12, 2014 that Ballmer would become the Los Angeles Clippers owner.
- Bad Boy Ballmer: The Man Who Rules Microsoft (2002), Fredric Alan Maxwell, ISBN 0-06-621014-3 (unauthorized biography)
- The 1999 docudramaPirates of Silicon Valley features Ballmer as a major character; he is played by actor John DiMaggio.
- Killed by Bill Gates on TV comedy South Park's 245th episode, "A Song of Ass and Fire".
- Ballmer recently appeared on the Kiss Cam at a Clippers game with Mark Cuban.
Ballmer was the second person after Roberto Goizueta to become a billionaire in U.S. dollars based on stock options received as an employee of a corporation in which he was neither a founder nor a relative of a founder. Ballmer is the 35th richest person in the world according to Forbes, with an estimated wealth of $22.2 billion. While CEO of Microsoft in 2009, Ballmer earned a total compensation of $1,276,627, which included a base salary of $665,833, a cash bonus of $600,000, no stock or options, and other compensation of $10,794.
On November 12, 2014, it was announced that Ballmer and his wife Connie donated $50 million to the University of Oregon. Connie Ballmer is a University of Oregon alumna, and serves on the institution's board of trustees. The funds will go towards the university's $2 billion fundraising effort, and will focus towards scholarships, public health research and advocacy, and external branding/communications.
On November 13, 2014, it was announced that Ballmer would provide a gift to Harvard University's computer science department. The gift will allow the department to hire new faculty, and hopefully increase the national stature of the program. Ballmer previously donated $10 million to the same department in 1994, in a joint-gift with Bill Gates.