Ballmer Redefines Microsoft for Future

This month will see the release of Windows 8, the Surface tablet, and Windows Phone 8, as well as the opening of more than a score of Microsoft “pop-up” stores to promote the company’s products for the holidays. That’s a busy month for the software giant, but CEO Steve Ballmer still found time to reveal his company’s future direction. No one can doubt that Microsoft needs a change. If it continues on the road it has traveled until relatively recently, it will eventually turn into a niche provider. Indeed, a recent article from Vanity Fair talked about Microsoft’s “lost decade.” While it’s hard to argue with the popularity of the Windows operating system, it’s also hard to argue with the market and its relentless numbers. Here are a pair to give any marketer pause: in the first quarter of 2012, Apple’s iPhone brought in sales of $22.7 billion, while all of Microsoft brought in sales of only $17.4 billion. “One Apple product, something that didn’t exist five years ago, has higher sales than everything Microsoft has to offer,” Vanity Fair  pointed out in reporting these numbers. What’s a CEO to do if he wants to avoid seeing his company become irrelevant? In the case of Steve Ballmer, he writes a shareholder letter in which he redefines the firm as “a devices and services company.” It isn’t all about the software anymore – and even when it IS about the software, it’s focused on the consumer and his or her needs. This attitude signals a paradigm shift already hinted at when Microsoft unveiled Windows 8. But it’s bigger than making an operating system flexible enough to offer the best of the tablet and the desktop with a cloud thrown in. It means that “There will be times when we build specific devices for specific purposes,” Ballmer noted. Whether by itself or with its partners, Microsoft will work on “delivering delightful, seamless experiences across, hardware, software and services. This means as we, with our partners, develop new Windows devices we’ll build in services people want.” If this sounds a lot like the approach Apple and even Google has taken lately, well, that’s because it is. It’s taken a long time, but Microsoft finally realizes that it can’t continue to conduct “business as usual” and hope to remain viable in a marketplace where Apple, Google, Facebook and even Amazon are coming up with innovations that, in one way or another, nibble on Microsoft’s hoped-for market share. Ideally, Microsoft wants to build a seamless experience into its products. Users should be able to move from one device to the next smoothly, without having to worry about compatibility issues or whether they’ve been synchronized. For example, “Xbox Music, Video, Games and SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a phone,” Ballmer explained. Microsoft plans to focus on a number of areas moving forward. The company hopes to create more natural ways of interacting with hardware and data, including touch, gestures and speech; we’ve seen this with Kinect, and with Digits, a working prototype that shows promise but still needs work before it’s ready to hit the market. You can also expect to see Microsoft doing even more with cloud services, for both businesses and individuals. Ballmer also wrote of “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.” How much of that is serious and heartfelt, and how much is meant simply to reassure the stockholders, remains to be determined in the days and months ahead.