Microsoft CEO Steve Ballmer announced last week that he will retire within the next 12 months, ending his reign after 33 years at the company. Until a successor is chosen, Ballmer will continue on as CEO. Many are wondering if there is more to the announcement given then lacklustre response Windows 8 has received as well as inability of Microsoft to gain any traction in the mobile space.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer, 57, 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.”

The company said lead independent director John Thompson will head up the search for a new CEO and the committee will include founder and Chairman Bill Gates. Investors cheered the news sending Microsoft shares up almost 7 percent to over $35 just after the opening bell in New York.

Under Ballmer Microsoft emerged as the undisputed leader in the technology sector, and became the world’s largest company by market value. But the company had been criticised by investors recently for not reacting quickly enough to the way Apple and Google have led the way in mobile devices. Microsoft struggled as consumers began to shun desktops and laptops in favour of tablets and mobile devices.

The news of Ballmer’s departure comes after major company restructuring, which he spearheaded to get Microsoft’s different product divisions working better together. As a result of the organizational change, Julie Larson Green took over as head of the devices and studios group, which oversees the hardware development of everything from the Surface to the Xbox. Before those changes, Windows 8 chief Steven Sinofsky left in November 2012 and Xbox chief Don Mattrick departured in June to take over as CEO of Zynga.

Steve Ballmer’s planned departure comes shortly after activist investing fund ValueAct Capital Management took a small stake in the company, and started agitating for a change in strategy and a clear succession plan. Despite the recent criticism, the timing of his decision to go surprised analysts.

“Yes, this was a surprise, especially considering how close it is to the recently announced strategic overhaul towards devices and services,” said Sid Parakh, an analyst at McAdams Wright Ragen.

Under Ballmer Microsoft emerged as the undisputed leader in the technology sector, and became the world’s largest company by market value. But the company had been criticised by investors recently for not reacting quickly enough to the way Apple and Google have led the way in mobile devices. Microsoft struggled as consumers began to shun desktops and laptops in favour of tablets and mobile devices.