Steve Ballmer explains why he and Bill Gates drifted apart

Steve Ballmer explains why he and Bill Gates drifted apart

Former Microsoft CEO Steve Ballmer.

Credit: Reuters/2013 file photo

One of the reason's behind Microsoft's recent resurgence has been the company's somewhat surprising and ongoing commitment towards making their own hardware. This new strategy was on full display two weeks ago when the company introduced the Surface Studio, a 28-in. desktop/tablet hybrid that left many tech observers beyond impressed.

While Microsoft's foray into the world of hardware began with Steve Ballmer at the helm, the company's hardware strategy was kicked up a notch once Satya Nadella assumed CEO duties in February of 2014.

Interestingly enough, Ballmer recently explained in a Bloomberg interview that his advocacy for Microsoft getting into the hardware game ultimately created a rift between him and Bill Gates. As Ballmer tells it, he was pushing for Microsoft to more carefully consider Apple's business model, while Gates was vehemently opposed to the idea.

Compounding the problem was that Microsoft's stock price at the time was stagnant, thereby giving Gates and other detractors more ammunition as the debate over Microsoft's strategic direction remained an ongoing and heated topic.

"There was a fundamental disagreement about how important it was to be in the hardware business," Ballmer explained. "I had pushed Surface. The board had been a little—little reluctant in supporting it. And then things came to a climax around what to do about the phone business."

In the wake of his debate, Ballmer said he and Gates "drifted apart," a somewhat somber addendum given Ballmer was one of Microsoft's earliest employees and was actually the first business manager Gates ever hired.

Looking back, Ballmer, now the owner of the NBA's Los Angeles Clippers, opined that he regrets not getting into the hardware business even earlier.

"I would have moved into the hardware business faster," Ballmer said, "and recognized that what we had in the PC, where there was a separation of chips, systems and software, wasn't largely gonna reproduce itself in the mobile world."

Indeed, one of Ballmer's chief failures as CEO of Microsoft wasn't that he didn't come up with the iPhone first, but rather that he didn't appreciate that the iPhone, upon its introduction, represented the future of the mobile market.

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