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The Steve Ballmer Interview
@ Acquired
06/02/25
Takeaways
SB
Steve Ballmer
06/02/25
@ Acquired
I feel good about being recognized as a key figure in building Microsoft's enterprise business, but I also regret that we lost our consumer focus along the way.
SB
Steve Ballmer
06/02/25
@ Acquired
Microsoft started as a consumer company, and our success in that area allowed us to build a strong enterprise business. However, I regret losing the consumer muscle we had.
SB
Steve Ballmer
06/02/25
@ Acquired
The licensing of Microsoft DOS to IBM was the single greatest business deal in history, kickstarting Microsoft's journey to a $3.5 trillion market cap.
SB
Steve Ballmer
06/02/25
@ Acquired
We negotiated a non-exclusive deal with IBM for the operating system, allowing us to license it to others, which was crucial for our growth.
SB
Steve Ballmer
06/02/25
@ Acquired
By the mid to late 80s, we still felt overshadowed by IBM, which was the dominant force in the computing industry at that time.
SB
Steve Ballmer
06/02/25
@ Acquired
After IBM divorced us in 1990, we realized we needed to figure out how to build our own enterprise sales strategy, which was not Bill Gates' passion area.
SB
Steve Ballmer
06/02/25
@ Acquired
Paul Allen emphasized that we should never become a hardware company and pushed for building software for all microprocessor-based computers. I took over system software in '84, which marked the beginning of our enterprise focus at Microsoft.
SB
Steve Ballmer
06/02/25
@ Acquired
From '92 to '98, we experienced a liftoff primarily driven by Windows and applications, not enterprise solutions.
SB
Steve Ballmer
06/02/25
@ Acquired
As late as the late 2000s, customers told us we weren't an enterprise company, which was a significant challenge for us.
SB
Steve Ballmer
06/02/25
@ Acquired
I was determined to prove that Microsoft could be an enterprise company because if we couldn't sell to businesses, we would be limited in growth.
SB
Steve Ballmer
06/02/25
@ Acquired
We aimed to create a recurring revenue model with the enterprise agreement, which allowed companies to pay a fixed amount annually for software usage.
SB
Steve Ballmer
06/02/25
@ Acquired
The enterprise agreement was designed to simplify licensing and provide recurring revenue, allowing companies to pay per machine instead of counting individual licenses.
SB
Steve Ballmer
06/02/25
@ Acquired
The 'developers, developers, developers' speech was about emphasizing the importance of third-party developers to Microsoft's success amidst competition from Linux and others.
SB
Steve Ballmer
06/02/25
@ Acquired
At the time of my 'developers' speech, we were facing competition from Linux and needed to reinforce our platform with third-party support.
SB
Steve Ballmer
06/02/25
@ Acquired
I believe that to be a successful platform company, you need to have strong first-party applications that enhance the platform's value.
SB
Steve Ballmer
06/02/25
@ Acquired
We got caught in the mindset of being just a platform company, which limited our ability to innovate and adapt to new market demands.
SB
Steve Ballmer
06/02/25
@ Acquired
In the mobile space, we were too focused on extending Windows instead of recognizing the need for a completely new approach.
SB
Steve Ballmer
06/02/25
@ Acquired
We needed to develop new capabilities to compete effectively in the mobile and search markets, but we didn't realize how different those businesses would be. The true competitor for Microsoft in mobile was Android, not Apple, as Android monetized through advertising and offered free services, while Microsoft relied on licensing revenue.
SB
Steve Ballmer
06/02/25
@ Acquired
I believed in staying hardcore and learning from our mistakes, but Microsoft struggled to pivot from its established model to embrace new opportunities in mobile.
SB
Steve Ballmer
06/02/25
@ Acquired
Microsoft had an opportunity to become a significant player in mobile before Android took off, but they were too locked into their existing business model to adapt quickly.
SB
Steve Ballmer
06/02/25
@ Acquired
We missed the chance to innovate in mobile and search, which were critical areas where other trillion-dollar companies thrived outside of Microsoft.
SB
Steve Ballmer
06/02/25
@ Acquired
Azure's development began around 2005-2006, as AWS was gaining traction, and we recognized the need for a cloud platform to compete effectively.
SB
Steve Ballmer
06/02/25
@ Acquired
We decided to build Azure as a platform as a service, focusing on developers, which was essential for Microsoft's future in the cloud.
SB
Steve Ballmer
06/02/25
@ Acquired
During my tenure, I prioritized establishing strong relationships with IT departments, which was essential for Microsoft's enterprise success.
SB
Steve Ballmer
06/02/25
@ Acquired
The transition from stock options to stock awards at Microsoft was crucial for employee motivation and addressing cultural issues after the dot-com bubble burst.
SB
Steve Ballmer
06/02/25
@ Acquired
The antitrust issues Microsoft faced were not just business challenges but also cultural ones that affected employee morale and integrity. The federal government ordered a split, but they didn't specify who had to run which part; I was to run operating systems while Bill would take applications.
SB
Steve Ballmer
06/02/25
@ Acquired
When I became CEO, the dotcom bubble was bursting, antitrust issues dominated the company's culture, and we faced a significant accounting headache that affected profitability.
SB
Steve Ballmer
06/02/25
@ Acquired
Bill and I always warned people not to get our stock price too high; we didn't want them to feel cheated buying our stock, which likely lowered expectations on ourselves.
SB
Steve Ballmer
06/02/25
@ Acquired
Bill never attended a quarterly analyst call, and I didn't either; this lack of communication likely affected morale, as stock price is tied to company morale.
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Steve Ballmer
06/02/25
@ Acquired
I took over when the stock was overpriced, but it normalized within a year or two after the bubble burst, creating a narrative about the company's performance.
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Steve Ballmer
06/02/25
@ Acquired
I was viewed as a spender because I was vocal about investing in what we needed to succeed, which Wall Street didn't like.
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Steve Ballmer
06/02/25
@ Acquired
I was committed to spending what was necessary for success, which was not well-received by Wall Street; I was much louder about this than my successor.
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Steve Ballmer
06/02/25
@ Acquired
By the end of my tenure, the stock price staying flat was frustrating, especially after tripling the business in a decade.
SB
Steve Ballmer
06/02/25
@ Acquired
The toughest time for me was during the Vista launch and the early 2000s, which were challenging years for Microsoft.
SB
Steve Ballmer
06/02/25
@ Acquired
I struggled with the transition to being CEO, especially during a year when Bill and I didn't speak; we had to learn how to respect each other's roles.
SB
Steve Ballmer
06/02/25
@ Acquired
Bill and I disagreed on many key decisions, including whether to pursue hardware, which created tension in our relationship.
SB
Steve Ballmer
06/02/25
@ Acquired
I believed we needed to do hardware to compete in the mobile space, but the board disagreed, which contributed to my decision to resign.
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Steve Ballmer
06/02/25
@ Acquired
I held onto my Microsoft stock because of loyalty, and I wanted to be the best investor, staying informed about the company even after leaving.
SB
Steve Ballmer
06/02/25
@ Acquired
I realized I needed to emotionally detach from Microsoft after leaving, but my loyalty to the company remained strong.
SB
Steve Ballmer
06/02/25
@ Acquired
The size of the dividend check from Microsoft is significant, and it closely matches what we give away in philanthropy. I held onto my Microsoft stock because I believe in its long-term value, and I don't need to sell it for cash.
SB
Steve Ballmer
06/02/25
@ Acquired
I believe that the Clippers have the best market in the world, as players want to play in LA, which enhances our team's attractiveness.
SB
Steve Ballmer
06/02/25
@ Acquired
In professional sports, accountability is extreme; every game is a report card, and you can't just make up for losses later.
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Steve Ballmer
06/02/25
@ Acquired
At Microsoft, I wanted to foster an environment where teamwork meant holding each other accountable, not just being nice to one another.
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Steve Ballmer
06/02/25
@ Acquired
I think the analytics in sports are table stakes; the real value comes from how you use the data and the questions you ask.
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Steve Ballmer
06/02/25
@ Acquired
I want to make Intuit Dome the best place for hardcore basketball fans, especially Clippers fans, focusing on energy and intensity during games.
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Steve Ballmer
06/02/25
@ Acquired
The design of Intuit Dome prioritizes the fan experience, with a steep seating arrangement to enhance the atmosphere and energy during games.
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Steve Ballmer
06/02/25
@ Acquired
We built a student section in Intuit Dome that requires fans to stand and cheer, creating an energetic environment for games.
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Steve Ballmer
06/02/25
@ Acquired
The wall behind the visiting team's bench at Intuit Dome is designed to create noise and pressure, contributing to lower free throw shooting percentages for opponents.
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Steve Ballmer
06/02/25
@ Acquired
I want to ensure that the Clippers' practice facilities and player amenities are top-notch to attract and retain talent.