Moving sucks. Our furniture arrived late last week so I’ve been off the clock for awhile and there is a lot of catching-up to do.  We’ll start with Microsoft and Windows 8, which I’ll argue are going to be formidable competitors in the tablet space, primarily because it’s that or start spending all that cash on diversified investments to turn Microsoft into a Berkshire Hathaway. This is probably Ballmer’s last stand as a high tech CEO.

It was entirely by coincidence that I interviewed both Jon Shirley and Bill Gates in their last weeks as Microsoft CEO. In Shirley’s case it was his final day and I’ve never seen a guy more eager to get out of town. And why not?  Running any major corporation must be a huge undertaking that I don’t ever want to try, though of course I’m perfectly willing to criticize. Shirley was at the end of a fabulous run and knew it.  Gates‘ departure was a little different, since I sensed much of the incentive was to help Redmond’s anti-trust strategy at the time, removing from power the guy popularly (and properly) seen as perp-in-chief. Ballmer’s job taking over from Gates was mainly to not rock the boat while carefully turning Microsoft into a kinder and gentler company that could still crush rivals as needed. But in the process (and this is my point here) Ballmer gave up Microsoft’s ability to turn on a dime.  Now Ballmer has to regain that capability or lose his job.

Microsoft under Bill Gates was defined by his 1995 memo The Internet Tidal Wave. Prior to that time the PC future seemed to be about multimedia and CD-ROM, because that’s where Apple was heading and Microsoft was used to following that lead, having developed resources like its Encarta digital encyclopedia. The Internet surprised Gates, but when he came back from his annual Think Week that year he was up to speed and had both a plan (dominate the emerging Internet era) and a rival to crush in order to achieve that end (Netscape). Microsoft always needs a rival to crush. Now it was just a matter of telling several thousand developers that their jobs had changed.

Gates was able to do this — to turn Microsoft’s development supertanker — by force of will and example. Understand this is a guy who hadn’t written production code since the Tandy 102 shipped in 1983, but he had carefully nurtured and preserved the ability to intimidate shy developers with his Aspergerian bluntness. “I can tell good code from across the room,” and “I could write that in a weekend” still worked back in 1995.

Ballmer never had these cards to play, having ceded to Gates-the-genius all claims of technical prowess. Microsoft geeks saw Ballmer as a joke and that image was perpetuated through all the making nice-nice that followed his rise to CEO as well as by a succession of software architects starting with Gates, himself, who simply didn’t envision it being a problem and saw no need to empower Ballmer. Well it was a problem.

Over the last year or so Ballmer has done a lot of executive pruning at Microsoft, taking more control of the company’s direction. He has tried to mute his Monkey Boy image as the honey-swigging sales chief who rants at company meetings. But thanks to YouTube, that image will remain for a long time.

Last week we saw the first public results of Ballmer’s executive makeover. The version of Windows 8 shared with developers was more refined than many expected, the tablet extensions appear to be well done and the ARM support is sincere. There is work still to be done but it feels a lot like Windows NT did post-OS/2. It has to be good because Microsoft is caught in a platform shift that could see it five years from now a profitable but inconsequential company.

In order to avoid that end (and keep his job, because even as the company’s third-largest shareholder Ballmer can’t escape personal responsibility this time) Microsoft has to really push technology for the first time in years. Redmond has to embrace tablets and even use its enterprise clout to push big customers in that direction, because doing a half-assed job this time doesn’t have the saving grace of most customers just re-upping with high-margin earlier versions of Microsoft products. This time the platform transition is going to happen with or without Microsoft and Ballmer knows that.

I won’t be surprised, then, to see Microsoft succeed. They can do this. But will they?  I won’t be surprised, either, to see them fail, though I don’t think they will.

That is not to say, though, that I agree with the industry analysts who are predicting Windows Phone will eventually dominate. That train left the station a long time ago. But Microsoft has a real shot with the enterprise (notice I say enterprise) tablet market.

And this tablet orientation is going to have interesting side effects. Take Yahoo, which we discussed last week.  What evidence is there that Yahoo has a tablet strategy?  None. They need one. Every Microsoft or Apple competitor does.