Over the past 50 years, Microsoft has reshaped home computing, gaming, and office work industries, culminating in a $2.9 trillion empire as of 2025. Many people credit Bill Gates with the company’s current success, but there is one person whose efforts are often overlooked. That person is Steve Ballmer, the second CEO of Microsoft, responsible for the massive growth of the company.
So why is his tenure not looked upon so fondly? What happened during those years, and what pivotal role did he play in Microsoft’s success? Let’s find out.
From Assistant to CEO: How Steve Ballmer Started at Microsoft
If you’re still scratching your head on who the guy is, you may recognize him from videos laughing at the first iPhone, or yelling, “Developers! Developers! Developers!” among a crowd of hundreds. But don’t take him for a nobody, as the guy is the tenth-richest person in the world. He holds the highest stake in Microsoft at 4%, estimated to be valued at $120 billion.
To be honest, his time at Microsoft and how he became a part of the firm is intriguing. Steve Ballmer attended Harvard University and lived down the hall from Bill Gates. This might lead you to believe that Steve and Gates co-founded Microsoft, but this is not the case! He did not drop out of Harvard, but rather earned Magna Cum laude, later working as an assistant manager at P&G.
Steve later joined Microsoft after getting bored with the monotony of a 9-5 job, as the 30th employee of the company. He worked as Gates’ assistant and the company’s first manager, looking over jobs that developers didn’t want to do. Ballmer described his role as: “I was Bill’s assistant, basically: chief cook and bottle washer“. He set up the accounting and the HR department, too.
However, he played a huge part in Microsoft’s deal with IBM, which changed the company’s future…
The Deal that Made Microsoft
In 1980, IBM, who were the pioneers of computing at the time, approached Microsoft looking for software for their upcoming personal computer. However, Microsoft didn’t have software of its own, and instead had to look elsewhere to fulfill its needs.
Gates recommended 86-DOS, which was built by a company called SCP (Seattle Computer Products). The idea was to take their OS and customize it to IBM’s needs. But there is a huge gaping flaw in this plan because IBM could directly get it from SCP. Why would they need a middleman?
That’s where Steve Ballmer stepped in. He played the role of a salesman convincing IBM to let them get the rights for 86-DOS and asked for a small fee and the permission to let them ship the software to other companies. The folks at IBM were thrilled, since Microsoft didn’t ask for a huge sum or royalty per copy as they expected. Little did they know that they had been bluffed.
Ballmer’s offer did not grant IBM exclusive rights to the software. This allowed Microsoft to market and distribute its software to other brands, calling it MS-DOS, which later turned into Windows. This skyrocketed the corporation from a small player to the status of a well-known brand.
The Wonder and Blunder Years
The deal cemented Steve Ballmer’s position as a key employee, climbing several executive ranks and earning an 8% ownership. He later became CEO after Bill’s retirement in 2000. During his time as the CEO, he tripled the revenue to nearly $78 billion and doubled the profits to $27 billion.
Under his leadership, Microsoft released several successful products that we still cherish to this day. This includes Windows XP, Windows 7, Windows 10, Microsoft Office 365 products, a cloud hosting service called SkyDrive, which later became OneDrive, and expansion into enterprise-level services.
He even helped Microsoft dive into the gaming and home entertainment sector with Xbox, which launched in 2001. I don’t think that without Steve’s aggressive push, the console would have become as popular as it did. He also overlooked the acquisition of Skype and Nokia.
You might be tired of me praising the guy, waiting for me to mortify him for his mistakes. And the mistakes he made. The biggest one was how he couldn’t predict the smartphone revolution in time, mocking the iPhone because it lacked a physical keyboard and “didn’t appeal to business customers“. He later tried to correct his mistakes with Windows Phones, but it was too late.
Apple’s iPhone was selling millions of units, while Nokia-branded Windows Phone kept seeing a steady decline in sales. Just to be shut down 2 years after Ballmer stepped down from his position.
Other failures under him include Windows Vista, Zune, and Bing, which didn’t see fruitful growth either. Even the stock market wasn’t on his side, as Microsoft’s stock fell almost 40% during his era, and it didn’t recover till his departure. At some point in 2011, even IBM’s stock took over Microsoft’s, which is why the shareholders later pushed him out of his position in 2014.
Was Ballmer the Bad Guy in All of This?
Steve Ballmer’s tenure was a rough one, filled with highs and lows. The guy propelled Microsoft and several of its products to success, but it couldn’t be denied that he wasn’t a visionary and more of an operator or manager. That is why he couldn’t get how big the smartphone industry will be in the future. Questioning the methods of visionary CEOs at the time.
His viral video of laughing at iPhone and comparing sales digits just goes to show that he was unable to see what changes are coming in the industry. Honestly, he reminds me of Lewis Litt from Suits. Here seemed like a silly fellow who had nothing but one intention in mind, to make Microsoft money, and that he did. He served 33 years at Microsoft and loved it like his own child.
A statement even his kids will agree with. The guy had a shy nature, and to overcome it, he became too overenthusiastic. Something I can personally relate to. But that doesn’t come off nicely when you are representing a corporation on a global level. In my eyes, Bill Gates might have engineered the company, but Steve fueled it to succeed.
