What's on Steve Ballmer's Microsoft priority list now?

Summary:Microsoft officials have publicly prided themselves on dabbling in lots of different areas that might some day become Microsoft's next billion-dollar business. But it seems there's a new modus operandi in place these days. And I'm curious what Ballmer & Co. now consider to be worthy big bets.

Microsoft officials have publicly prided themselves on dabbling in lots of different areas that might some day become Microsoft's next billion-dollar business. But it seems there's a new modus operandi in place these days. And I'm curious what Ballmer & Co. now consider to be worthy big bets.

A week ago -- just before the Fourth of July -- Ballmer spoke at the Seattle Rotary club. Besides giving a detailed preview as to what the company's earnings are expected to be for fiscal 2011 (close to $70 billion in sales and $26 billion to $27 billion in profit), Ballmer shared some other interesting pronouncements. He also made it pretty clear that he isn't expecting to go anywhere any time soon, despite calls by some outsiders for him to step down as CEO at Microsoft.

He also said some interesting things about the company's decision to hunker down and make fewer strategic bets. I'm not sure whether this is just Ballmer saying what he and the Microsoft board believe Wall Street wants to hear (and isn't really all that different from the company's usual prioritization strategy) or if it signals a new and different direction.

From the Q&A from that Rotary club speech, here's Ballmer's verbatim response to an audience member's question about Windows 8 that got Ballmer going:

QUESTION: I have a question on Windows 8. It's come out to great reviews so far. I'm curious how important is it to the Microsoft organization, what are your (inaudible) and goals for it? And just if you can give us a sense of the size and the scope of the investment there.

STEVE BALLMER: The answer to your last question first, no, I'm not going to give you any sense of the size and scale of investment.

How important is it? We basically increasingly only are working on things which are actually very important. I would say the day and age of sort of idle, kind of smaller things is a little bit behind us. There were sort of more small probes; we're putting bigger, more energy behind fewer things than we have historically.

I can't say that about Windows in general. Windows is -- you know, if you cut me open and saw what was inside, Windows, it's just sort of Windows, Windows, Windows. Our company was born on the back of Windows. Windows underpins a huge percentage of all of our success, all of our profitability, all of the important things that we do. So, how important is it? Very would be a very fair answer.

Unsurprisingly, Windows counts as one of the bigger and fewer things on Microsoft's priorities short list. I'd imagine Office would be there, too, as would Xbox/Kinect Bing, Windows Phone, Skype, public and private cloud building blocks including Azure, Office 365, SQL Server and Hyper-V.

But I'm wondering what's now considered to be in the "idle, kind of smaller things" camp that is at risk of being discontinued. Just hours after Ballmer gave this Rotary Club speech, Microsoft announced it was pulling the plug on its Hohm energy-management service and dropped its Zune HD Originals product linem signaling the end of the Zune media player hardware plans, I'd say. (The company is believed to be dropping imminently its Forefront Threat Management Gateway product, too, as one reader reminded me.)

What about other less-than-profitable initiatives, like Midori, or robotics, or OfficeTalk -- just to pick a few Microsoft initiatives randomly and not because I've heard anything about their imminent demise. When does a research project, or product-lab-group technology, or something from Microsoft's Startup Business Group move from "fledgling project with great potential" to "small probe that is easily cuttable"? Do consumer products/projects have an edge over enteprise-focused ones? Does a blessing from Facebook or an anti-Google angle mean a given Microsoft technology or strategy is more likely to survive than another without those "benefits"?

There are always priorities inside every company. But when Bill Gates was still working at Microsoft on a day-to-day basis, there seemed to be more tolerance for more speculative, technology-driven pilots and incubations than there appears to be now. Would that still be true if Gates (or anyone else) was acting Chief Software Architect at Microsoft? Or would changing times and increased market/competitive pressures still have made Microsoft more tightly focused -- no matter who making strategic-investment decisions?

Lots of things about which we all can, and no doubt, will, speculate. I'm hoping after attending next week's Worldwide Partner Conference, where Microsoft shares with its resellers various roadmaps and strategic priority commitments, I'll have a clearer picture. Stay tuned for lots of posts from Los Angeles from me, all next week.

Topics: Operating Systems, Microsoft, Software, Windows

About

Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network. Got a tip? Se... Full Bio

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