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what has been described as the biggest admission of commercial failure for a major product launch since “new Coke” was withdrawn 30 years ago, Microsoft is to overhaul Windows 8, the software update which prompted a backlash from customers who found it impossible to navigate.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

Life and Style
ebookNow available in paperback
ebooks
ebookA delicious collection of 50 meaty main courses
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

    Metail Ltd: Business Development Manager for Asia Pacific

    £35,000 - £40,000 based on experience : Metail Ltd: As a Business Development ...

    Recruitment Genius: Customer Service Supervisor

    £15000 - £20000 per annum: Recruitment Genius: This company is a well establis...

    Guru Careers: Product Manager / Product Owner

    £30 - 40k (DOE) + Bonus & Benefits: Guru Careers: A Product Manager / Product ...

    Recruitment Genius: Customer Service Executive

    £30000 - £35000 per annum: Recruitment Genius: This company provides a number ...

    Day In a Page

    Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

    EU 'family' needs to forgive rather than punish an impoverished state

    An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
    Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

    Gaza, a year on from Operation Protective Edge

    The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
    How to survive electrical storms: What are the chances of being hit by lightning?

    Heavy weather

    What are the chances of being hit by lightning?
    World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

    World Bodypainting Festival 2015

    Bizarre and brilliant photos celebrate 'the body as art'
    alt-j: A private jet, a Mercury Prize and Latitude headliners

    Don't call us nerds

    Craig Mclean meets alt-j - the math-folk act who are flying high
    How to find gold: The Californian badlands, digging out crevasses and sifting sludge

    How to find gold

    Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
    Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

    Not born in the USA

    Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
    10 best balsamic vinegars

    10 best balsamic vinegars

    Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
    Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

    Greece referendum

    Greeks say 'No' to austerity and plunge Europe into crisis
    Ten years after the 7/7 terror attacks, is Britain an altered state?

    7/7 bombings anniversary

    Ten years after the terror attacks, is Britain an altered state?
    Beautiful evening dresses are some of the loveliest Donatella has created

    Versace haute couture review

    Beautiful evening dresses are some of the loveliest Donatella has ever created
    No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

    No hope and no jobs in Gaza

    So the young risk their lives and run for it
    Fashion apps: Retailers roll together shopping and social networking for mobile customers

    Fashion apps

    Retailers roll together shopping and social networking for mobile customers
    The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

    Gaping hole at the heart of the European Union

    Treatment of Greece has shown up a lack of genuine legitimacy
    Number of young homeless in Britain 'more than three times the official figures'

    'Everything changed when I went to the hostel'

    Number of young homeless people in Britain is 'more than three times the official figures'