The reason Robbie Bach was fired

Vague justifications about under-performance of Windows Mobile or cancelled Courier miss the whole point.  The chronic problems with Microsoft’s consumer businesses cited as causes for dismissal have roots in core processes and priorities which management changes will not address.  The failure of Zune was evident long ago. Windows Mobile has not been competitive with RIM for years, and failed to take significant share from Symbian, never mind iPhone. Tablets were the responsibility of the Windows team.  Kin is a rogue project based on a bone-headed acquisition. From a P/L point of view, Entertainment was mostly Xbox, which although deep in the hole over its lifetime, was starting to break even.

No, the reason I believe Bach lost his head is that HP bought Palm.

Bach lost a key account; in fact, he could be responsible for having lost the biggest account that Microsoft ever had.  Ballmer is a sales guy and he knows the importance of these relationships.  A customer like HP must be managed carefully and their strategy must be steered to fit with yours.  If HP felt they needed to go somewhere else for their mobile OS, it’s a slap in the face, but if they buy the asset and IP and internalize a competing platform, then that is a dagger to the heart for Ballmer.

Consider Google’s seduction of Dell. Microsoft can tolerate Dell’s affairs (Dell even fooled around with Linux back in the day.) But in contrast, HP is effectively filing for divorce.

The blow could not have been more obvious and more cruel.


40 Responses to The reason Robbie Bach was fired

  1. Pingback: Horace Dediu on Why Robbie Bach Was Fired «

  2. Pingback: andy's nerd blog: Microsoft’s Robbie Bach and J Allard leaving as part of broader shakeup; Xbox and Windows Phone teams now reporting directly to Ballmer

  3. Harper says:

    It seems to me like this should have been a wakeup call to Microsoft that Windows is not the ideal platform for post-pc devices. I’m not exactly sure what Bach could have done to change that given that Windows is not his responsibility.

  4. Matthew Maurice says:

    While I think you’re right, and Bach is probably paying the price for MS “losing” the HP account, you only touch upon what I think might be Microsoft’s bigger problem-that is; it may be that “partners” like HP no longer need, and certainly don’t want, to “managed” and “steered” by Microsoft anymore (if they ever did). It clearly wasn’t hard for HP to walk away from Windows Mobile, and Microsoft’s worst case scenario is that it becomes as easy for other “partners” to walk away from Windows and Office. Once a few biggies do that, MS is toast.

  5. Cyril Gupta says:

    No words minced here. I like your style.

  6. Frank Shaw says:

    What link bait. Robbie Bach was not fired, he retired.

    • asymco says:

      Do you really believe that? At age 48? While heading the most important growth vehicle for Microsoft that competes in the most rapidly growing technology industry?

      • brassweight says:

        After working for 22 years for MS, Robbie had every reason to retire. He’d been contemplating retiring for over a year. He certainly doesn’t need the money, nor need the headache of being a president at MS.

        Robbie retired. If he’d been fired he wouldn’t still be working for Steve Balmer for another 6 months. MS doesn’t do that. If you’re fired, you’re walked out the door that day. It’s happened to other Balmer directs. It would have happened to Robbie — if it needed to happen. He retired — plain and simple.

        You’re blowing smoke.

  7. Ken Jackson says:

    Fun theories, but based on what I know, from people with some inside info, almost none of this true. For example, Kin/Pink predates the Danger acquisition. They brought them in for expertise. Bach had little to nothing to do with the HP Slate relationship. That was owned by Windows, but the main reasons why HP jumped ship had to do with Intel Atom as much as Windows. While Moorestown may be great down the line, today they need something that can compete in battery life.

    • asymco says:

      Don’t trust inside info. It does not have to pass through the filter of peer review. Inside info is the reason most professional analysts get their forecasts wrong and amateurs don’t.

  8. john.mitas says:

    Your post has no basis and is all hearsay..

    Firstly why would MS fire bach especially on the eve of the launch of there new generation of consumer software/products that could very well turn MS’s consumer business around!

    Natal, Windows Phone 7, Windows CE 7 (next version) are all about to be launched and in a years time the MS story could be completely different.

    Back is leaving because he wants to, and that is all.

    • asymco says:

      This post is not even hearsay. Nobody suggested it to me. It’s speculative analysis. It’s only based on years of professional experience observing and analyzing this industry and these players. Leaving to spend time with the family, is a standard euphemism in corporate-speak.

  9. Malatesta says:

    According to Brian Humphries, HP’s VP of Strategy and Corporate Development, “We intend to continue to be a strategic partner for Microsoft. They’re a huge piece of our business today and will continue to be so.” -HP Conference call 4/28/10

    So whose account was lost? And if the Windows Team oversees tablets, then why would Bach take the rap when that’s not his bag?

    In addition, one would think HTC is a bigger account in terms of their Mobile OS than HP, whose products were just terrible in the WinMo world.

    Sorry, but your post just doesn’t add up.

    • Matthew Maurice says:

      Uh, did you guys NOT see the Ballmer keynote where he chose to demo the HP Slate on stage? Now that product is dead! HP and MS flacks can say whatever they want-much like my ex-Gf who still says I”m a great guy, but that fact is that she doesn’t sleep with me anymore-which says EVERYTHiNG about the nature of that relationship. As far as HTC, I think it’s pretty clear that their “bread is buttered” with Android and not anything from Redmond.

      • Malatesta says:

        Who said the Slate is dead? Dig up where HP or anyone from HP has stated this. You can’t because at this point, it is just speculation by tech-bloggers. in fact CNet is now leaning the other way:

        And HTC *is* Microsoft’s biggest partner for their current and future mobile OS, regardless of Android. HP is not a big partner for MS in this regard.

    • asymco says:

      Steve Ballmer quoted today: “We’re focused on putting Windows Phone 7 in phones, no plans for tablets.”

    • asymco says:

      HP and Microsoft go back a long way in Mobile. Microsoft’s launch partner for PocketPC in 2001 was HP, then with the Jornada brand. They went on to acquire Compaq who had the iPaq brand which quickly became the most popular mobile device Microsoft had. HP fumbled the transition to PocketPC Phones but was active in developing a large portfolio of Windows Mobile devices until today. Over the years Microsoft got every device vendor to license Windows Mobile, including Palm. It all turned sour in the last few years, with Microsoft losing Motorola, HTC, Palm, Dell and many others to Android.

      However, my entire point is that HP *bought* a competing asset. This is the capital offense for which an executive must fall. HP, as an account, was lost in a deeper sense–HP is investing in a competing platform as a strategic asset. HP’s soul has been taken from them.

      What Ballmer fears, maybe even knows, is that the WebOS betrayal can lead to contagion. Hurd is already suggesting embedded uses for WebOS. He won’t publicly state moving it to its non-mobile computers, but make no mistake, they’ve been looking for something other than Windows for years.

  10. peter says:

    So why is Ballmer still around? Win 7 is doing OK but Office is losing ground. These are the only money-makers MS has – everything else is failure.

    Time to go.

  11. Alan Yeung says:

    I might be misunderstanding your post, but what is the connection between HP’s acquisition and Bach? Windows Slate wasn’t his division. Are you suggesting that he was let go because the consumer division should have built a slate operating system de novo? That doesn’t seem to fit with Microsoft’s current or former strategy.

    Animosity between Bach and Ballmer is a given, of course. I just don’t see how HP fits into that picture. Given the respective levels of competency of Bach and Ballmer, this move would seem to be Microsoft’s loss.

    • asymco says:

      It’s speculation, of course, and it may just be another straw on the camel’s back but I do feel that HP’s WebOS investment is a big crack in the relationship between Microsoft and HP. The responsibility for that rift emerging has to be laid at the feet of the executive that oversaw Microsoft’s offering. It’s part of the risk of being an executive (it’s not all perks, you know). When something seriously bad happens on your watch, you fall on your sword. Even if it’s not your fault, you are accountable.

      It does not matter how the failure came to be or what could have been done. The damage is done, trust in judgement is damaged, morale is down, heads must roll.

  12. vishnu says:


    Something does not measure up with your theory, albeit it being very interesting and perhaps consistent with Ballmer’s management style. Having said that, HP has not been an account for WinMo for what, 5 years, already? If your surprise is right about loosing HP as an account, Bach should have been fired 5 years (or earlier) ago!

    About Win Phone 7 inside HP – that’s again speculative. No ports have been made to HP Slate or Netbook or any other. Neither has HP declared their intent to port WebOS to netbooks, notebooks or desktops. Certainly not servers. So, what would Bach have lost to have made Ballmer throw a chair at him as well?

    I think Bach and Allard are really pissed and told Ballmer to shove it. Notice in Ballmer’s email announcement that he has literally offered no thanks or recognition to Allard? Allard is just like an after thought in that email. And “advisor”? That’s like keeping a paying position open so that he does not go work for Android or iGadgets. Not that those guys are desperate for Allard, but Ballmer can also be a control freak you know.

    I just think that MS is feeling the heat and they are making more mistakes in their strategising and decision making. And the right guys are getting fired and the right guys are walking out the door; while the wrong guys are staying on the ship.

    History is both cyclical and cruel. Can you hear the cackle coming out of the valley yet?

  13. Interesting speculation about the industry — something I hadn’t seen in the regular media. Thank you.

    I can’t tell from your blog commentary if you are hinting that HP might license the Palm software to other manufacturers. Do you have any ideas there?

    • asymco says:

      It’s certainly possible, but I don’t think likely in the near term. Consider that prior to WebOS Palm had been using Windows Mobile. Before then it was using PalmOS, but that platform was licensed from PalmSource which spun off from Palm in 2002. Prior to Palm being acquired, there was speculation that Palm would license WebOS.

      The decision to do so would have consequences in HP’s competitive differentiation, and as a licensor to its competitors there would be lots of obstacles to widespread adoption. This did not stop Symbian licensing to Nokia’s competitors while Nokia held a controlling interest in the company, so there certainly are precedents.

  14. Pingback: Noterat – May 26, 2010 | A System Apart

  15. Eric says:

    No doubt you’re right. But I suspect the main reason he failed is because of micromanagement from the top by people who have no taste, and who have different priorities than creative people who want to make great products. Microsoft seems to be the kind of company that Xerox was when they failed to utilized so many of the ideas that came out of Xerox PARC. (“Who would want to use a mouse…?)

    Just like HP themselves gave up Steve Wozniak’s computer which lead to Woz and Jobs creating Apple. Microsoft is floundering because they have salesmen making decisions at the top – Ballmer being the top salesman at MS.

  16. jonco says:

    “And “advisor”? That’s like keeping a paying position open so that he does not go work for Android or iGadgets.
    Vishnu, you are spot on.

    “Microsoft is floundering because they have salesmen making decisions at the top – Ballmer being the top salesman at MS.”
    Same to you Eric. You hit it.

    This is a good article, definitely a vein of truth here. This pattern reminds me of when EdF left in 2004 same deal but with Robbie playing the role of SteveB. Ed put his security badge on RB’s desk and Robbie picked it up. That was that. Ed’s role in creating Word, Xbox, Microsoft Games Studio . . . an afterthought.

  17. Chandra Coomaraswamy says:

    MS fans you can bluster all you want. Reality has a way of biting you in the arse nevertheless!
    Today, Apple ran past MS in Enterprise Value. They will do the same in Market Cap terms real soon now.
    That’s why Gatesy left in such a hurry. He saw the writing on the wall. He saw there was no point in rearranging the deck-chairs any longer on his personal Titanic. Ballmer just saw it and started throwing people. He’s progressed from the chairs obsession.
    Ahhhh yes! There is a God!

    • brassweight says:

      Gates left in a hurry? Two years of separation is hardly a “hurry” in tech companies. Two years is not a hurry anywhere unless you’re talking a Detroit automaker.

  18. Synthmeister says:

    Bach may have sucked or he may have been micromanaged into failure. Once the iPhone came out, MS leadership should have realized that the entire mobile strategy needed to be rebooted. Instead, Ballmer still had delusions of grandeur, talking about selling 10s of millions of mobile devices using WinMo. Yet even then, they weren’t selling 10s of millions of WinMo devices and it was downhill from there.

    Now, three years later, MS realized they have to start over with WinMo, break compatibility with previous WinMo ecosystem, create an app store, etc. and Zune, WinMo, Kin, all use different, incompatible OSes.

  19. Adam C says:

    “There’s no chance that the iPhone is going to get any significant market share. No chance.” Steve Ballmer – April ’07
    “Iceberg? What iceberg?” Steve Ballmer – Summer ’09

    “What would I do? I’d shut it down and give the money back to the shareholders,” Michael Dell – 1997
    “Iceberg? What iceberg?” Michael Dell – Summer ’07

  20. Pingback: PALM HP cause major shake up at Microsoft?? - PreCentral Forums

  21. Nash says:

    You are absolutely right.

    This is the Titanic we are seeing.

  22. Michael says:

    I think the HP Angle is exactly right, but I also think the HTC Angle is important as well. PlaysForSure was a failure. The Zune was a failure. Windows Mobile was a failure. Windows Media Center was a failure. Windows Tablet was a failure. Microsoft Surface was a failure. The XBox has to be subsidized by other businesses.

    Microsoft has lost HP and is losing HTC. Apple surpassed Microsoft in market cap. Google is moving into the second spot in electronics and making Microsoft an also-ran.

    Microsoft has always been able to rely on Windows and Office to sustain everything else they do. If Apple or Google really seriously go after those, things will get very bad in Redmond.

    • asymco says:

      HTC was/is a stunner. To think that HTC first had to re-skin WinMo and then to become Google’s go-to-market partner should have given Ballmer pause. My intuition is that arrogance played a part. Management thought HTC was a disposable account as it was not a “brand”. Then the dominoes kept falling: Motorola, Sony Ericsson, and HP.

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