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Apple Inc. (AAPL), Google Inc (GOOG), Microsoft Corporation (MSFT): Microsoft 2.0

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The tech world has been buzzing since Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer announced he’s leaving the company within 12 months. Ballmer’s retirement has come at a pivotal time in Microsoft’s history — and there’s plenty of time for the next leader to get things right.

Source: Microsoft.

The state of the Windows maker

Whomever Microsoft Corporation (NASDAQ:MSFT)’s new CEO will be, he or she will need to fuse the company’s strong software past with its hopeful devices-and-services future. The restructuring Ballmer announced last month should be a good start to moving the company in the right direction — and a new CEO calling the shots should only enhance that.

Under Ballmer, Microsoft Corporation (NASDAQ:MSFT) more than tripled its annual revenue, grew its search market share to 30%, purchased Skype, and made the only corporate investment in Facebook Inc (NASDAQ:FB). But it also saw its stock price drop by 35% since Ballmer took the helm 13 years ago. On top of that, the company lost its mobile footing to Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), botched aspects of its core product (Windows 8), and experienced what can essentially be described as an embarrassing launch of its own tablets.

Apple Inc. (NASDAQ:AAPL) easily surpassed Microsoft Corporation (NASDAQ:MSFT)’s smartphone ambitions when it introduced the iPhone back in 2007. At the time, Ballmer infamously said, “There’s no chance that the iPhone is going to get any significant market share.” It’s no secret the iPhone did gain a significant slice of the market, and iOS still holds the No. 2 spot for worldwide smartphone operating system market share. Meanwhile, Microsoft’s Windows Phone OS trails Apple’s iOS with just 3.7% of smartphone market share.

As the CEO, Microsoft Corporation (NASDAQ:MSFT)’s consumer-side failures rest solely on Ballmer. The Microsoft of today is clearly not the Microsoft of old — and he is partly responsible for that.

Microsoft 2.0

But even in its muddled state Microsoft still retains resources, talent, and drive that could make the company a technological beacon once again — if it can find the right person to lead it.

Ballmer said in his resignation announcement, “There is never a perfect time for this type of transition, but now is the right time.” I wholeheartedly agree. The company is third in mobile OS market share — leaps and bounds behind Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG) — and it may have struck out with Windows RT and its almost $900 million “inventory adjustment,” but Microsoft isn’t a BlackBerry, and there is still time for new endeavors.

As ReadWrite recently pointed out, Microsoft can still tackle wearable computing, the Internet of Things, or in-car technology integration.

But what Microsoft’s new leader will need to bring is the creativity and perspective that turns the company’s products and services ideas into consumer demand. For too long Microsoft was the obvious choice for users. But that ship has sailed.

When portable music players took off, Apple Inc. (NASDAQ:AAPL) left Microsoft in the dust. When smartphones emerged, Microsoft got the software wrong for too long while Apple and Google Inc (NASDAQ:GOOG) marched in. Google smartly decided to give away its mobile operating system, leading to near worldwide smartphone OS domination of 79.3% market share by Android. Android also boasts a worldwide tablet OS market share of 67%, compared to Windows’ 4.5%. Google made itself irreplaceable to consumers by offering a laundry list of free services — and a free mobile OS — that rivals anything other tech companies have created. Microsoft would be wise to take a few chapters out of Google’s playbook as it tries to figure out what to do with its services.

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