Apple Inc. (AAPL), Google Inc (GOOG): Ballmer’s Exit Is Necessary, but Not Enough for Microsoft Corporation (MSFT)

Necessary, not enough

It’s not so much that the PC is dying, but the distinction between PCs, tablets, and smartphones is becoming outdated in a time in which the rise of cloud computing means that everything is stored online and easily accessible from different devices in any place, at any time; consumers can choose different devices depending on their particular preferences, the specific circumstance, and the task at hand.

Microsoft is not the leader it once was. The company needs to transform its culture to start moving like a challenger, taking big risks and thinking outside the box in terms of product innovation. Innovation is one key area in which Ballmer failed during his tenure. His departure from the company opens the door for a more dynamic and aggressive management team to make the necessary changes.

On the other hand, the scenario is looking quite challenging for Microsoft Corporation (NASDAQ:MSFT). The company has lost a lot of terrain in recent years, and that means it’s now in a disadvantaged position to compete. If Microsoft is going succeed in the era of mobile and cloud computing, it will need to bring spectacularly good products to the market in order to take users away from Android and iOS — not an easy task by any means.

When Microsoft was the leader, it could get away with big flops like Windows Vista because its competitive strength was big enough to cushion its mistakes. But things are the other way around now — no more room for errors — and the new CEO will need to be amazingly talented in order to turn the company around.

Bottom line

Ballmer’s departure opens the door for a more innovative management team, and that’s certainly good news for Microsoft Corporation (NASDAQ:MSFT) investors. However, the company is facing some really big challenges as it’s falling behind in major industry trends like mobile computing.

The new management team will need to bring some really good products to the market now that Microsoft is in a disadvantaged competitive position. Until we see evidence that’s happening, it’s far too soon to bet on Microsoft.

The article Ballmer’s Exit Is Necessary, but Not Enough for Microsoft originally appeared on Fool.com and is written by Andres Cardenal.

Andres Cardenal owns shares of Apple and Google. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.