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Ballmer: Microsoft's a 'devices and services' company now

Tim Greene | Oct. 11, 2012
Stop thinking of Microsoft as just a software company; it's not anymore, according to CEO Steve Ballmer.

That could well be the case with Windows Phone 8, he says, given the slow sales of Windows phones made by partners.

In his letter Ballmer says the company will embrace new form factors for devices such as the Surface tablet/PC, but skirts whether that means the rumored Windows 8 Phone handset. But he emphasizes that tying services to all types of hardware is key. "Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily," he says.

One important goal for the company: "Firmly establishing one platform, Windows, across the PC, tablet, phone, server and cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advancements to market," the letter says.

McGregor says that in all this it's important that Microsoft present something different from Apple. "You can't be a copycat and you can't do this haphazardly," he says. "You need unique devices and a unique user experience."

That uniqueness could come through Windows Runtime, the new development platform underlying Windows 8 and Windows Phone 8, making it easier to develop apps for PCs, tablets and phones.

Applications for the platform from third parties are what's lacking, McGregor says, because Microsoft needs to offer unique content. "Maybe they need to invest in or buy Netflix or invest in some gaming company," he says. "It's hard to pick one area, but they need to pick one and build on it."

Ballmer says that beyond its device and services, Microsoft expects that businesses' shift to both public and private cloud infrastructure will be good for his company. That's because more cloud use means the need for more servers. "The volume of Internet services used will continue to grow as people connect to the Internet from more devices for more purposes fueling incredible opportunity in our server business," he says in the shareholder letter.


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