Outgoing Microsoft (MSFT) CEO Steve Ballmer is leaving the company in a “fantastic position.” He was an excellent leader. Blame the innovator’s dilemma. It was the butler’s fault.

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Okay, that last one was a joke, but the others are actual arguments emerging amid a wave of revisionist history seeking to restore some of the luster to Ballmer’s 13-year record running Microsoft. The college pal of Microsoft co-founder Bill Gates announced on Monday that he would step down within 12 months after a successor was named.

But don’t believe the hype – Ballmer’s mistakes have left Microsoft in a dangerously weakened position.

Take the argument made by some Microsoft investors who see a few green shoots and credit Ballmer with setting the company up for future success. It is true that a unit of Microsoft making software and services for the online “cloud” future is doing well. Sales of products such as SQL Server and the Azure hosting platform garnered revenue of $20.3 billion for the fiscal year ended June 30, up 9%, and operating profit of $8.2 billion, up 13%. Still, the growth rates slowed from 12% and 19% respectively the prior year. And competition from Google (GOOG), Amazon (AMZN), VMWare (VMW) and others is only intensifying.

Alleged success stories

Other alleged success stories are even murkier. Bing? Yes, it has 30% share of Web searches (including traffic it gets from Yahoo), almost half of Google’s reach. But it doesn’t have almost half of Google’s profits – it has none. Online services lost $1.3 billion in fiscal 2013, down from a loss of about $2 billion in 2012. The prior year’s loss was reported as $8.2 billion because of a $6.2 billion write-down in the value of one of Ballmer’s biggest follies, the 2007 acquisition of aQuantive, but the underlying business wasn’t that bad.

The $10 billion-a-year XBox unit turned a small profit but the war to win gamers' hearts for the next generation of consoles has barely begun. Microsoft already got off to a rocky start introducing its Xbox One, backtracking on some controversial policies, and unit leader Don Mattrick just left to head struggling game-maker Zynga (ZNGA).

But aside from those few areas, Ballmer has completely whiffed on the biggest trends in tech today. Microsoft is virtually shut out of software and hardware sales for smartphones and tablets. It almost certainly makes more charging its patent tax on Android manufacturers than it makes from Windows Phone 8, Windows RT and the Surface tablet combined. Traffic at Microsoft stores is minimal, especially compared to Apple (AAPL).

Lining up with Nokia (NOK) on smartphones has done nothing to stem Microsoft’s falling share of smartphones. Partnerships with Dell (DELL) and Barnes & Noble (BKS) don’t look promising at this point, either. To his credit, Ballmer made an early investment with Facebook (FB) that has continued to pay off as the two companies work together, including on a partnership with Bing and Facebook's "graph search" feature. Apple and Google can only dream of having as cozy a relationship with the 1-billion member social network.

Meanwhile, growth in the Windows-Office juggernaut that provided just over half of total revenue – and 96% of operating profits – is grinding to a halt as PC sales dive and competing products improve.

Not doomed, not fantastic

Microsoft may not be doomed, as its most vociferous critics claim, but it’s not in a fantastic position, either.

Judging Ballmer on his leadership performance also reveals a mostly losing record. On his watch, the company used the destructive stacked ranking system that crushed morale and hampered innovation. Many key products, from Windows Vista to the Zune music ecosystem to the Surface tablet, were both flawed and delivered too late. Windows 8 appears similarly damaged.

Ballmer ridiculed competitors such as Apple and Google, ignoring their appeal to individual consumers just as the consumerization of IT was making such a strategy critical.

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