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The number one thing guys want to know is this Surface thing. Your message to those guys is they can’t sell it out of the gate.
I didn’t say that. They can order it from us and they can’t order from their normal distribution. They can order it off Microsoft.com. And they can do what they want off Microsoft.com. But we are not setting up what I would call a typical distribution chain. What our partners choose to do is up to our partners. In terms of all of the classic machinery not out of the gate. We are not doing that.
A lot of these guys are going to be working deals. They are excited.What do you tell them?
Great! Go for it! Go for it! Great! Love ya. Love ya. Go for it. If Surface makes sense to your customers, yo go for it! Yo Merrily! We Love Ya!
Was it simply a margin issue in terms of not letting the channel sell it?
One step in front of the other. One foot in front of the other.
Do you think next year they will get it?
(Ballmer laughs). One foot in front of the other.
This whole battle with Apple changes with your ability to do the hardware software integration, talk about what it does for you? Now all of a sudden Microsoft is controlling the hardware and software. What does that mean to the partners and for the whole ecosystem out there? It’s a new world all of a sudden. Things changed dramatically.
I think we are trying to make absolutely clear we are not going to leave any space uncovered to Apple. Okay. We are not. No space uncovered that is Apple’s. We have our advantages in productivity. We have our advantages in terms of enterprise management and manageability. We have got our advantages in terms of when you plug into server infrastructure in the enterprise.
But we are not going to let annyyyyyyyyyyyyy piece of this. Not the consumer cloud. Not hardware software innovation. We are not leaving annnnnny of that to Apple by itself. Not going to happen! Not on our watch! Now we’re bringing our partners with us, our hardware vendor partners. But you know we are not going to leave any space.
We do feel empowered to innovate everywhere and bring our partners with us. We are just not going to leave any – what’s the expression people like to use- We’re not going to leave any stone unturned so to speak as we pursue that.
How about the ability for Microsoft to do its own iPhone like competitor. Come on, you did the Surface. How about your own phone?
Right now we are working real hard on the Surface. That’s the focus. That’s our core.
Look we’ll see what happens. We have good partners with Nokia, HTC in the phone space. I love what we got going on with the Surface. We are going to focus on Surface and our other Windows 8 Tablet partners and see if we can go make something happen.
Business wise how does Surface change the balance sheet and how you look at Microsoft as a company, managing it as a CEO?
It depends on how many we wind up selling versus how much you know our partners (sell). If our partners get galvanized.
We’ll have a decent size business. There is no question in Surface. Whether we have a decent size business or better than that will depend on kind of how galvanized our partners really get around the Windows 8 opportunity.
Talk about what factors led to that decision (to build Surface). How you made the call and then pulled it altogether.
I think what I said earlier, what we said at the launch sort of speaks to all of it, which is we just as we brought Windows 8 to market we made a decision that we just were not going to leave any seam exposed to Apple in terms of an innovation boundary.
We were going to think about things holistically. We were going to make sure that this particular form factor that was all the best of a PC and all of the best of a Tablet got all of the best innovation we could bring and not leave that exposed to potential vagaries that may come out of our ecosystem while it is getting galvanized. And we made that decision and moved forward down that path.
So who made the final call and when did you make it?
I know there is a desire to paint things dramatically. But of course there is many decisions. There is the decision to start. There is decisions to proceed. There is decisions to make commitments to hardware partners, to suppliers. There is the decision to make an announcement. There are various people involved.
Obviously starting was a big thing. Starting was a big thing. But the Windows team – the Surface team- we had got kind of ‘A’ people involved. It has been a small team relatively that has been involved. Obviously we ran the program with a lot of kind of privacy and secrecy in order to really have a chance to do it right. So not a lot of people involved really. The Surface guys themselves. Steven Sinofsky. The Windows team basically was mostly in the dark with just a couple of exceptions. Me. The board obviously knew what we were doing.
When did they start developing it? It was a while ago. I don’t think I want to go through that. Three to six months ago? A year ago? A long time ago?
It takes a while to do stuff. I am not going to say anything more than that. It takes a while.
How does it (the Surface) feel?
Not surprising (the great feel of the product) by the way. For guys with good keyboard technology it was sort of a fun thing for those guys to do because we have been working on keyboard technology you know for 10 plus years. Keyboards and mice.
You could say what we have done with the Touch cover and the Type cover is just kind of the ultimate keyboard technology.
Well, talk about that. That is really interesting the reaction that came from people. People seem to really love the keyboard and are really excited about getting their hands on it.
Hey, we are the world’s experts at keyboards Baby!! (Laughing)
Talk about that. How important is that?
It is important. Of course it is important. We have had keyboards in market for what 10 plus years and so we have had webcams, keyboards, mice. It is not like this is the first time that we have done technology that was fundamental in a system. But for Windows 8 there was a way to express those technologies which is what you see in Surface that I think is pretty good powerful.
NEXT: Ballmer Talks About How Microsoft Is Leveraging Licensing In Its Battle Against Apple
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