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It feels different being here. I have known you for 30 years, watched Microsoft for 30 years and with this Surface thing, it really feels different. It really feels like you guys have taken off the gloves and are going on offensive rather than defense. It is more in the Ballmer style. Talk about how Surface has changed the character of the company.
I am mostly going to just sort of note your reaction. I think it is Windows 8 that really is the catalyst for sort of stepping out.
Look, we needed to reimagine Windows. We really did need to reimagine Windows in order to take the next steps with our customers and take the next steps in competition. Whether it is new silicon support, new form factor, new UI, embracive touch and stylus, all of that stuff had to come with the new version of the operating system. So, of course you see, what should I say, stepped up competitive energy and vigor and the like. Surface is a part of that because we wanted to have the device that was designed for Windows 8 and only Windows 8, and a design that really would make it absolutely clear that you could have a device without compromise that was both a tablet and a PC. And, we think we have done that.
But, we also think our partners, our OEMs, there will be a number of OEMs who have great devices along that road. So with Windows 8, yeah, I think you could say it is a new era. Gloves are off. Let’s go Baby! Bring it!
But, there is not only going to be Surface tablets, which I am very excited about. But, we have partners who are doing tablet designs, x86 tablet designs, Intel SOC tablet designs, Nvidia, Qualcomm. I mean you are going to see an explosion of a number of Windows tablets. I happen to have a personal fondness for the work we are doing with Surface. But, you are going to see a range. You saw that Lenovo Yoga device that Tami showed today. Is that a tablet or a PC? I don’t know. I don’t know what to call that. I think most people call it a notebook. And yet, it looked pretty tabletish to me, too.
With Surface this ability for you guys to act as a vertically integrated hardware software supplier really changes the game. Can any of these OEMs really match what you guys are going to bring to the table when you guys have the secret software sauce?
Look we have been very good about supporting our OEMs. Very good. Our OEMs there is nothing that we can build that our OEMs can’t build I mean with their own energy, innovation and the like. There will be 375 million PCs sold (this year). I think it is probably fair to say that we are not going to sell a super high percentage of the 375 (million). So it is not us alone. It is us and our partners, It remains us and our OEM partners, not just our solution provider partners. But it is us and our OEM partners.
Surface will be a very important thing. And I am really excited about it. But we are also going to see great work from HP and Dell and Samsung and a bunch of other guys.
Don’t you think this will push the OEMs to do more innovative products?
I don’t think it is going to hurt in terms of stretching innovation. It is the time. Windows 8 is a unique opportunity not just for us, but for everybody who builds applications, for everybody who builds computers. Windows 8 is a unique opportunity. And if Surface galvanizes people around the opportunity to do hardware innovation (so be it).
Because in a sense we had ceded, our ecosystem had ceded some of the boundary between hardware and software innovation to the other guys, the guys I don’t like. And I think with Windows 8, with the work we are doing with the OEMs, with the work we are doing with Surface. Heck with the work we are doing now with the PPI acquisition. PPI is powered with a PC that comes from our partners. But that board shows you what you can do with hardware and software innovation. We are going to drive that awfully hard.
What are you going to do to assure that hardware OEMs have a level playing field. When you have talked to them what is your message to those guys?
There is really two things. Number one do we license them everything (in Windows) that we use in our own Surface? And the answer to that question is: yes. Number 2: they will say hey look ‘essentially do you charge yourself some kind of a royalty so that we’re on equal footing from a price perspective? ‘ The answer is: we handle things so that things are appropriate in that dimension. And then the third question they ask is when they give us their confidential information do we protect that from our Surface team. And the answer is of course we’ll do that.
So there will be confidentiality and a level playing field in terms of royalties
I didn’t say it quite that way. You should read precisely what we said at the Surface launch because I think that speaks to (it). There were a couple of sentences where we are trying to be very precise so that our OEMs know absolutely that there is opportunity here despite Surface.
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