Microsoft CEO Steve Ballmer's vision for the future of the giant software company includes a greater emphasis on services and devices -- a change Ballmer acknowledged in his annual letter to shareholders this week represents "a fundamental shift" in the company's direction.
"To best understand what we are about to deliver and what we're building toward, it's important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future," Ballmer wrote in the letter Tuesday.
Ballmer noted that the "full value" of Microsoft's software "will be seen and felt in how people use devices and services at work and in their personal lives. This is a significant shift, both in what we do and how we see ourselves -- as a devices and services company. It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses."
Microsoft's forays into hardware devices have had mixed results: While its Xbox game controller has been a huge success, other products like the Zune music player and Kin mobile phone have flopped. Earlier this year the company shocked the industry when it debuted its Surface tablet, and there's been ongoing speculation that it's developing a Microsoft-branded smartphone based on its Windows Phone 8 software.
"There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface," Ballmer wrote. "In all our work with partners and on our own devices, we will focus relentlessly 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.
"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. So right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as well as access to great services and applications from our partners and developers around the world," the CEO said.
In the letter, Ballmer touts Windows 8, the pending new release of the company's flagship operating system, and the upcoming Office 2013 as key aspects of the company's future. He sees the accelerating adoption of cloud services as an opportunity for Microsoft to grow its server software business. And, "building and running cloud services" for customers will be a key focus area going forward.
The CEO cites "firmly establishing one platform, Windows, across the PC, tablet, phone, server and cloud" as one of Microsoft's overarching goals. Ballmer also cites "developing new form factors that have increasingly natural ways to use them including touch, gestures and speech" -- an apparent reference to potential applications for the motion detection capabilities in the Xbox Kinect.
PUBLISHED OCT. 10, 2012