Steve Ballmer: The boss who bet his company on Windows 8 – and lost as computer giant announces 'biggest product U-turn since New Coke'

Updated version of operating system will take into account complaints made by users as decision to overhaul the much-maligned operating system has put Bill Gates’s successor under pressure

It was, proclaimed Microsoft’s irrepressible salesman Steve Ballmer, a “bet-the-company” moment.

But the wager on Windows 8, a new operating system which would halt the slide in PC sales and challenge Apple’s iPad, has turned sour after the computer giant announced a humiliating U-turn.

In what has been described as the biggest admission of commercial failure for a major product launch since “new Coke” was withdrawn 30 years ago, Microsoft is to overhaul Windows 8, the software update which prompted a backlash from customers who found it impossible to navigate.

Pitched as an operating system for both desktop computers and tablets, Windows 8’s touch-screen interface confused Microsoft’s customers with its interactive “tile”-based start screen and the omission of the brand’s famous “Start” button.

Mr Ballmer, the Microsoft CEO, said he was “betting the company” on the worldwide launch of a range of Windows 8 desktops, laptops, notebooks and the company’s answer to the iPad, the new “Surface” tablet.

However, the Surface has failed to make an impression in the tablet market, and the lack of affordable touch-laptops able to use Windows 8 meant customers were left flailing with an operating system they had little idea how to use.

Despite selling 100 million licences, interest in Windows 8 has flagged and Tammy Reller, head of marketing and finance for the Windows business, announced a retreat, admitting that the software had defeated many users. “The learning curve is definitely real and we need to address it,” she said.

A new update, provisionally called Microsoft Blue, will be rolled out by the end of the year. Analysts expect it to restore the Start button. A “boot-to-desktop” option could bypass the unloved Windows 8 interface altogether. Ms Reller said: “We’ve considered a lot of different scenarios to help traditional PC users move forward as well as making usability that much better on all devices.”

Investors are beginning to ask whether the exuberant Mr Ballmer, 57, who took over as CEO from Bill Gates in 2000, is still the man to take Microsoft forward after allowing rivals to revolutionise the market with touch-based mobile computing devices. Global PC sales slumped by 14 per cent in the first quarter of 2013.

Mr Ballmer should quit now, said Joachim Kempin, a former Microsoft executive who helped to build the Windows business. “Microsoft is going into surface tablets. These tablets are OK products, but nothing really distinguishes them either,” he told the BBC.

Microsoft has alienated its manufacturing partners, Mr Kempin said, noting how Hewlett-Packard and Samsung are now producing tablets for Android, not Windows.

Investors talk of a “lost decade” at Microsoft but if they want Mr Ballmer out, it will require the support of Mr Gates, who remains the largest individual shareholder. Mr Gates hand-picked Mr Ballmer and has supported his attempts to move the company from desktop software to a cloud-based, networked future.

Under Mr Ballmer, Microsoft revenues have nearly tripled from $25.3bn (£16.6bn) in 2001 to $74.3bn in 2012. But the share price has failed to match rival Apple’s soaring stock-value.

The Windows 8 U-turn was inevitable, according to analysts. Richard Doherty, of technology research firm Envisioneering, said: “This is like New Coke, going on for seven months.”

Microsoft will make Windows 8 compatible with smaller, seven and eight inch tablets, which would allow hardware makers to compete against such popular devices as the iPad mini, Nexus 7 and Kindle Fire.

PROMOTED VIDEO
Life and Style
ebookNow available in paperback
ebooks
ebookPart of The Independent’s new eBook series The Great Composers
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Sport
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
football
News
Lars Andersen took up archery in his mid thirties
video
Voices
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Gadgets & Tech

    Investigo: Finance Business Partner

    £45000 - £50000 per annum: Investigo: My client, a global leader in providing ...

    Ashdown Group: Application Support Engineer with SQL skills

    £28000 per annum: Ashdown Group: A highly reputable business is looking to rec...

    Ashdown Group: Trainee / Graduate Helpdesk Analyst

    £20000 per annum: Ashdown Group: A highly reputable business is looking to rec...

    Ashdown Group: (PHP / Python) - Global Media firm - London

    £50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

    Day In a Page

    Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

    Auschwitz liberation 70th anniversary

    Woman sent to three Nazi death camps describes surviving gas chamber
    DSK, Dodo the Pimp, and the Carlton Hotel

    The inside track on France's trial of the year

    Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
    As provocative now as they ever were

    Sarah Kane season

    Why her plays are as provocative now as when they were written
    Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

    Murder of Japanese hostage has grim echoes of another killing

    Japanese mood was against what was seen as irresponsible trips to a vicious war zone
    Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

    Celebrities call on David Cameron to take more Syrian refugees

    One young mother tells of torture by Assad regime
    The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

    The enemy within

    People who hear voices in their heads are being encouraged to talk back
    'In Auschwitz you got used to anything'

    'In Auschwitz you got used to anything'

    Survivors of the Nazi concentration camp remember its horror, 70 years on
    Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

    Autumn/winter menswear 2015

    The uniforms that make up modern life come to the fore
    'I'm gay, and plan to fight military homophobia'

    'I'm gay, and plan to fight military homophobia'

    Army general planning to come out
    Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

    What the six wise men told Tony Blair

    Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
    25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

    25 years of The Independent on Sunday

    The stories, the writers and the changes over the last quarter of a century
    Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

    Homeless Veterans appeal

    As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
    Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

    Smash hit go under the hammer

    It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
    Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

    The geeks who rocked the world

    A new documentary looks back at origins of the computer-games industry
    Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

    Belle & Sebastian is taking a new direction

    Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea