CEO Change: Red Flag for Microsoft’s Current Quarter?
Amid all the debate and coverage about Microsoft (MSFT) CEO Steve Ballmer’s surprise resignation, one key question has yet to be raised: How is the software giant performing in its current quarter? Was there something about Microsoft’s current business climate — right now, in this quarter — that triggered Ballmer’s decision to step down within the next 12 months? Hmmm…
Most pundits mention a range of potential factors that triggered Ballmer’s exit — everything from Windows 8 missing the mark in the mobile and smartphone market, to a potential proxy fight with ValueAct.
But The VAR Guy has a different theory. We are half-way into Microsoft’s Q1 2014. We are several weeks removed from Ballmer’s self-managed reorganization of Microsoft. We are several weeks removed from Microsoft’s $900 million write-down for unsold Surface RT tablet inventory.
Two big questions:
- Was Ballmer — and/or Microsoft’s board — begin to suspect that Microsoft’s transition to a device plus services business was going to take longer than expected?
- Was Ballmer — and/or Microsoft’s board — starting to get nervous about business weakness based on the current mid-quarter performance data?
The VAR Guy will never know for sure. Microsoft’s statement about Ballmer’s gradual exit — which could take as long as 12 months — didn’t offer any warnings about current quarter performance.
And don’t forget: Microsoft revenues grew (yes grew) in Q4, 2013. And net income for full-year 2013 was $21.8 billion — up sharply from $16.9 billion the previous year.
For a “struggling” company, that’s pretty awesome.