Microsoft announced Friday that CEO Steve Ballmer has decided to retire within the next 12 months.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer said in a statement. “We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company. We need a CEO who will be here longer term for this new direction.”

Ballmer, 57, joined Microsoft in 1980 and was the company’s first business manager. He was named CEO in 2000, and has served in various roles at the software giant including head of sales and support, senior VP of systems software and VP of marketing.

Microsoft said its board has appointed a special committee to select a new CEO, working with exec search firm Heidrick & Struggles. The committee is headed by lead independent diretor John Thompson and includes Microsoft chairman and co-founder Bill Gates.

“As a member of the succession planning committee, I’ll work closely with the other members of the board to identify a great new CEO,” Gates said in a statement. “We’re fortunate to have Steve in his role until the new CEO assumes these duties.”

Ballmer, who conveys a gruff but goofily lovable persona, grew up near Detroit where his father worked as a manager at Ford Motor Co. He earned a bachelor’s degree in mathematics and economics from Harvard U. and an MBA from Stanford U. Before joining Microsoft, he worked for two years at Procter & Gamble.