Alan Mulally

Steve Ballmer bids farewell to shareholders

October 8, 2013: 9:55 AM ET

The outgoing CEO admits that Microsoft is still in the "early days" of a turnaround.

Steve Ballmer

Steve Ballmer

FORTUNE -- Microsoft CEO Steve Ballmer isn't done saying goodbye just yet. After a heartfelt speech to employees late last month, on Monday Ballmer published his final letter to shareholders, taking the opportunity to extoll the company's ongoing "transformation" into a devices and services provider and highlight its key milestones over the last year.

"We brought Windows 8 to the world; we brought consistent user experiences to PCs, tablets, phones and Xbox; and we made important advancements to Windows Server, Windows Azure, Microsoft Dynamics and Office 365," Ballmer wrote in the letter. "We are proud of what we accomplished this year and continue to be passionate about delivering better devices and services more quickly."

Ballmer admitted that Microsoft is still in the "early days" of any kind of turnaround, and while he won't be around to finish carrying out the strategy he laid out last year, he also said he believes the company's best days are still ahead. In late August the outgoing CEO announced he would step down sometime in the next 12 months. Microsoft's (MSFT) board of directors is still searching for a successor, but rumored candidates include Alan Mulally, the current CEO of Ford (F), and Nokia's (NOK) Stephen Elop (Microsoft recently announced it would buy the phonemaker's device business).

MORE: 8 reasons why Alan Mulally is better for Motown than Microsoft

Ballmer has made a lot of changes at Microsoft over the last year, including a giant reorg. "... we are well underway in implementing the new organization structure announced in July," Ballmer said in the letter to shareholders. "The teams are working together in new and exciting ways. The key change we made is deceptively simple but profoundly powerful: Instead of organizing our teams around individual products, we've organized by function, including, for example, engineering, sales, marketing and finance. It ensures we have one strategy and work as one team with one set of shared goals."

Last month the CEO made another big move -- shelling out $7.2 billion for Nokia's devices and services business. "This is a signature event in our transformation and will bring together the best mobile device work of Microsoft and Nokia," Ballmer wrote. "It will accelerate our growth with Windows Phone while strengthening our overall device ecosystem and our opportunity."

But it's still not clear how Microsoft plans to integrate the struggling phonemaker -- and how it plans to drive demand for its mobile operating system and phones, even now that it will control the hardware too (Apple (AAPL) and Google (GOOG) control about 86% of the smartphone market; Microsoft's Windows Phone operating system commands a meager 3.7%).

But Ballmer remained upbeat in his letter to shareholders, infusing it with some of his signature flair: "This is a unique letter for me -- the last shareholder letter I will write as the CEO of the company I love," wrote Ballmer. "We have always believed that technology will unleash human potential and that is why I have come to work every day with a heart full of passion for more than 30 years."

Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.