The ten years or so that Steve Ballmer has been running Redmond are often referred to as "Microsoft’s Lost Decade."
As you may recall, it was filled with missteps like overpaying for the now failed aQuantive acquisition, doomed products ranging from tablets to MP3 players, and a sharp decline followed by flat company valuation.
However, many but certainly not all of the above-mentioned mistakes originated from decisions that were made before Ballmer - like a Forced Employee ranking policy which actually destroyed rather than encouraged internal collaboration and way too much love for the Windows interface (effectively killing their eBook and Phone platforms) by Bill Gates.
In fact, looking back, one can't help but wonder if Gates was more of a problem than Ballmer. Indeed, while many of us thought Gates was covering for Ballmer over the last decade, it may have instead been Ballmer trying to dig out from under BIll's mistakes. Then again, success clearly isn't measured by who was or is to blame, but rather, whether long-term endemic problems have been fixed. If they have, well, 2013 may indeed be Steve Ballmer’s year at long last.
Of course, this isn’t a given, as Steve has his own issues. Essentially, Ballmer tends to under-resource critical efforts, yet has apparently managed to fix some of the incredibly foolish internal practices with regard to information and employee motivation. As such, Microsoft is arguably stronger now than when Ballmer took over and things are coming together for what could be a banner 2013.
The highest profile Microsoft product/effort in 2013 won’t be Windows 8, but the recently debuted Surface Tablets. Yet as powerful as an operating system may be, it is only a part of a product. This is why the iPad, iPod, and iPhone overshadow the iOS, MacOS, and Windows - they are solutions and complete products that don’t require any real fiddling.
It also explains why both Android tablets and Google Chromebooks have largely failed in terms of sales. They worked off a weaker version of the Windows model, showcasing how difficult it is to move a product without heavy marketing and a concerted focus. Fortunately, the cell phone carriers filled that roll with Android handsets, but currently don’t push tablets or PCs. This is probably why seemingly similar projects on tablets and PCs by Google failed.
Microsoft bases itself on a model of selling parts and letting someone else put the pieces together into a coherent solution. However, this paradigm was already in the process of breaking down before Steve even assumed control of Redmond. Indeed, Dell and HP are heavily investing in software, IBM is stepping sharply away from Microsoft and putting software in the lead position, while Oracle, a software company, is buying Sun and investing in hardware. And Microsoft? Well, Redmond is increasingly being isolated as a company whose very own market is moving to replace it.
Surface Tablets are therefore a critical test to see if Microsoft can successfully go vertical, or if the tablets will inevitably follow the recent Zune and Kin failures - illustrating how executing an entire solution is far from easy if a company isn't properly set up for it. However, one can also categorize the Zune and Kin debacles as vital learning experiences that may have taught Microsoft what not to do.
When Surface is considered alongside Microsoft’s Xbox, App Store, and Azure online services, one may perceive a level of solution that even Apple currently lacks - and this combination could be more powerful than the last time Microsoft drove an innovative bundle, Windows 95, into the market and changed it forever. In reality, the current effort makes Windows 95 look like little more than a baby step.
Wrapping Up: This Could Go Either Way
We all should realize that if the Surface Tablets fail they will likely cost Ballmer his job. To be sure, the tablets are currently the keystone Windows 8 product, and where Windows 8 goes IE, Office, and much of Microsoft’s back-end offerings will likely follow. Such aa failure could trigger a Palm or RIM type of cascade, and IBM, with even stronger lock in than Microsoft has, discovered in the late 80s that a big enough catastrophe can take down the most powerful company.
If Redmond properly resources this effort and sells a total solution, I can see it as a huge success for Steve Ballmer and Microsoft. It may very well end up being Steve's signature moment, deciding whether he is remembered as the CEO or who took the company into the 21st century or the one who killed it.
Unfortunately, Microsoft doesn’t collect or report accurate market information to its executives - a problem that was also core to IBM”s failure in the 1980s and the Vista debacle. So in the end, Microsoft succeeding or failing will come down to the employees. If they aren’t properly motivated and/or can’t get the information they need to make informed decisions, the outcome will likely be dire.
So while I think 2013 will be Steve’s comeback year, there is plenty of compelling evidence to suggest it may also be his last. Given how long Ballmer has run Microsoft it could very well be both - but ultimately the difference will come down to how he is remembered by the industry.