The Steve Ballmer Era Dawns

Ballmer has worked seven years, since assuming the CEO role, to move the mighty ship Microsoft. His effort culminated with today's real launches of Office 2007 and Windows Vista. Microsoft calls it a consumer launch, but it's really for everybody. The launch is for all customers—and "customer" is the word to describe Microsoft's new course.

Ballmer took over Microsoft at a terrible time. U.S. trustbusters dogged the company, old business tactics were losing effectiveness as the PC and software markets shifted from growth to maturation, and company shares started to stall after years of phenomenal investor return. Microsoft was quickly becoming a victim of its own success, whether business tactics, market penetration or investor perception.

Gates' buddy would prove to be an unusually appropriate person to take over day-to-day Microsoft management. Ballmer is the consummate salesman, with understanding that success is first and foremost about customer satisfaction. Yet Microsoft had succeeded on sheer force of business will, during 1980s and 1990s sometimes propelled by dissatisfied customers (Who hasn't gotten angry about persistent Windows 9.x crashes?).

The maturing Microsoft faced the worst possible competitor imaginable: Microsoft. Purchasing habits are different in a growth market than a mature market, where rather than buying for the first time people are buying again.

Please see eWEEK's slide show on the Windows Vista launch in New York.

By all observations, Ballmer understood the situation and appropriately acted. In the early years of his tenure, Ballmer changed how Microsoft compensates employees, by tying raises and other benefits to customer satisfaction.

He made mistakes, too. Controversial changes to volume-licensing plans placated Wall Street but stirred up tremendous customer backlash. Microsoft responded by adding salve to customer wounds, in the form of free training and technical support and other volume-license customer goodies, like free Office licenses for business customer employees' personal use.

The more important change—the tiny rudder steering that big ship—took longer: absorbing the customer priority into Microsoft's corporate psyche. Office 2007, Windows Vista and supporting products like Exchange Server 2007 are the most customer-oriented products ever released by Microsoft. With them, Microsoft even took some risks that might to some end users seem anti-customer, such as dramatic changes to the Office 2007 user interface or Windows Vista's User Account Control. But these features are ultimately in customers' best interests.

The approach is the right one. Microsoft must deliver products that will entice people to buy again, to upgrade from what they already have. The company collected feedback from 5 million Office 2007 and Windows Vista beta testers and 1 billion instances from its customer feedback program.

Microsoft also worked with 50 families, taking their feedback and using it to make changes to Vista during its development process. One of the families came on stage today during the Vista launch celebration, where the three children pressed the "start now" button that dispatched electronic billboard advertising throughout Times Square. The moment accentuated Microsoft's transformation into a more customer-oriented company—modeled after the ideas of its CEO.

The Vista advertising is a throwback to the past that reaches into the future. The "Wow Starts Now" motto and marketing campaign takes some of the best elements of successful Windows 95 advertising and capitalizes on the familiar. Microsoft has a long history of customer-unfriendly marketing that emphasizes features instead of empathizing with customers. There has been little emotional content or context.

The first "Wow" ad I saw today is empathetic and familiar. The ad captures peoples' special moments, where they said "wow" and connected them to the first experience using Windows Vista. Everyone has such a wow moment, steeped in rich emotional content, that Microsoft's advertising creates context around Windows Vista. The approach is brilliant, and superbly customer-oriented; people who already have Windows can see why maybe it's time to buy again.

Please see eWEEK Labs' slide show on Windows Vista.

I detected a startling contrast in Gates' and Ballmer's styles as they both spoke on the same stage today—which evoked changes.

Gates talked about the past: "It all started 24 years ago, here in New York," the work on the Windows graphical user interface. Twelve years later, Microsoft's "vision of [the] graphical user interface succeeded" with Windows 95. While Gates went on to discuss how differently people use PCs today than a decade ago, the filter was the past. Maybe he has a reminiscent viewpoint, which would make sense for an executive in the latter days of his corporate career.

When praising employees' sacrifices for the development of Office 2007 and Windows Vista, Gates made "special mention of Jim Allchin," who once had an influential role over Windows development but now has come to his retirement as a Microsoft employee. Allchin and Gates both represent another era in Microsoft's history, one which they will soon be remembered as artifacts.

Contrasting Gates, Ballmer boomed about the future—how Windows Vista would be available in 19 languages (99 by year's end) through 39,000 retail outlets in 70 countries. The sheer size of distribution and support for 1.5 million devices and 31,000 device drivers makes Vista's launch far larger and more far reaching than either Windows 95 or XP.

During this afternoon's Windows Vista launch celebration, I observed that the crowd cheered more loudly for Microsoft's CEO than its co-founder and chairman.

Sad to say, but the Gates era is over. May he be a successful philanthropist.