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Monday, August 26, 2013

Daily Report: Tech Upstarts Consider Their Mortality

SAN FRANCISCO â€" As a young executive at Microsoft, Steven A. Ballmer helped topple older, slower-moving technology giants like the Digital Equipment Corporation, Wang and Novell. These days, it is Microsoft’s turn to fend off the upstarts as it struggles to compete in a computing world that is increasingly mobile and based in a “cloud” of Internet-connected computers to which many customers gain access at the same time. It is all part of the inevitable life cycle for technology companies, Quentin Hardy reports.

“Getting disrupted is the defining characteristic of this industry,” said Aaron Levie, the chief executive of Box, an online data storage company. “You can even have a near monopoly like Microsoft did, and then everything gets redefined.”

Mr. Ballmer will not have to take Microsoft into the future; on Friday, he announced that he would retire within a year. But young executives like Mr. Levie are not gloating over Mr. Ballmer’s exit. They know well that one day â€" if they are lucky to be as successful as Mr. Ballmer â€" they could face the same problem.

“It just feeds my already-healthy sense of paranoia,” Mr. Levie said.

The rare tech company manages to thrive from one generation of technology to the next. Only a few of the big ones â€" I.B.M., Intel and Apple â€" have done it. And it is not yet clear if Microsoft has a clear path to joining that list of multigeneration kingpins.

Mr. Ballmer was closely identified with the personal computer revolution, and later with corporate software running on computer servers. Those innovations brought Microsoft the cash and talent to adapt to the early Internet with the Explorer browser, and diversify into online gaming.

What it could not buy Mr. Ballmer, the younger generation in tech says, was a clear vision of the future. Apple and Google have led development of smartphones, and a long list of companies like Amazon.com have led the development of cloud computing. Microsoft, meanwhile, has often had to play catch-up.