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

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.

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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 has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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39 comments
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  • RE: What's on Steve Ballmer's Microsoft priority list now?

    He probally just finished lunch, so I would think his priority now is whats for dinner.
    William Pharaoh
    • LOL probably so!

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      MSFTWorshipper
      • RE: What's on Steve Ballmer's Microsoft priority list now?

        @MSFTWorshipper
        Only the greatest marketing stunt to ever be performed! Everyone knows the now famous Developers chant and immediately think of Microsoft. Couldn't have asked for better marketing on that one.
        LoverockDavidson
      • LD, a better marketing plan has a positive

        Association with product and campaign;-)
        Richard Flude
    • Probably buying an iPad

      @William Pharaoh
      MacTheMechanic
    • Message has been deleted.

      Alan Smithie
  • RE: What's on Steve Ballmer's Microsoft priority list now?

    @MJF: I think that when Gates was running the ship, the world was a very different place. Back then, Gates structured Microsoft as a set of competing business groups with overlapping remits and encouraged them to compete with one another. This enabled Microsoft to grow quickly and to attract some of the best talent in the industry, but this organizational culture ended up hampering the company and allowed more focussed competitors to jump the shark.

    However, unlike many companies, MS has not sat still. Ballmer has been steadily dismantling the old empires and encouraged many of the old-guard to leave / retire (with the occasional push here and there). The newer blood now running the new groups inside MS are far less interested in protecting their fiefdoms and FAR more interested in working together to make products and services that solve customers' needs. With Win7, Office 2010 & Office 365, Kinect & XBox and even WinPhone, we're seeing Microsoft turn about. With Mango, Win8, Office v.next and all the other product groups revving hard, MS is now sailing full steam ahead.

    It'll be an interesting couple of years, but I predict that those who jumped the shark had better look behind them, because when MS is the underdog, they can be savagely effective.
    bitcrazed
    • i don't know

      @bitcrazed let me just say: this Gates vs. Ballmer talk is just silly. it was Gates & Ballmer, now Ballmer & Gates. If Gates find something wrong, he still say it, don't you think?
      jk_10
      • The tech media treats MS ...

        @jk_10

        ... like the dog in <a href=http://www.imdb.com/title/tt0085382/>the movie Cujo</a>. It simply refuses to allow MS stock price to rise, by regulating its image. Ballmer should set up a department dedicated to ensuring the growth of MS stock. He should also set up a media group (made up of cable companies, blogs, etc.) charged in part with projecting a better, more accurate image of MS, and telling the news. The first group should work with the second group, to image MS out of the stock doldrums, and to beat the tech media over the head, when it works to undermine MS' stock, through unfair negative portrayals.

        Ballmer needs to do the above. He just can't sit there and say, "I've done most everything a CEO is supposed to do, to get his company's stock price to rise. It's now up to the stock gods to do their thing." It's not a good thing, when people keep asking for your head.
        P. Douglas
      • RE: What's on Steve Ballmer's Microsoft priority list now?

        @jk_10 - Before Gates left MS, he was THE major driving influence within the company. Now, Ballmer runs the show. He's been steadily dismantling the old regime and rebuilding the company to be more agile, more focussed and more aggressive, whilst operating well within the bounds defined by the DOJ consent decree & subsequent oversight.

        Do you think it's a coincidence that since Gates has gone that practically every leader of every business unit has gone or has been pushed out the door and has been replaced with someone far more competent?

        Gates is still chairman of the board, but has practically nothing to do with the day-to-day running of the company any more and hasn't for AT LEAST 4 years now.
        bitcrazed
      • RE: What's on Steve Ballmer's Microsoft priority list now?

        @bitcrazed ... I'm not always as certain about your "more competent" replacements idea. Not always, I fear. Sinofsky is definitely a power player, but what happens if he leaves? Who's left? Belfiore?

        Microsoft needed a changing of the guard, yes, and I am a huge supporter of the company. BUT, I'm not sure I agree that they are currently more agile as a result. I think you're right that it's the direction they're heading, but I also believe Ballmer isn't the most effective manager and should go back to being the Chief Marketing Officer.
        GoodThings2Life
      • RE: What's on Steve Ballmer's Microsoft priority list now?

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        ivandulin
    • RE: What's on Steve Ballmer's Microsoft priority list now?

      @bitcrazed "Jumping the shark" does not mean what you think it does.
      rbgaynor
      • RE: What's on Steve Ballmer's Microsoft priority list now?

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    • RE: What's on Steve Ballmer's Microsoft priority list now?

      @bitcrazed +1. Very well stated.
      Skippy99
    • RE: What's on Steve Ballmer's Microsoft priority list now?

      @bitcrazed > agreed, although it is not really clear to me what Steve Balmer was professionally before Bill Gates made him President of Microsoft; he seems to be more of the business side of the company than the developer side. Also, I don't feel Microsoft has any overwelming competition from "anyone" in the industry. Mr. Ballmer's revised focus for Microsoft on the larger picture is straight forward and true. (I have already personally purchased my own copy of Windows7 Retail Copy and gave my oem Windows7 computer to my younger brother; just so I can have this OS for as long as it is relevent on any computer I own and use online.)
      Rob T.
  • Priority is same - total domination of computing

    And by ANY measure, Microsoft has succeeded. Everywhere I look I see the results. Go to any cell phone store, Windows Phone devices are all over the place. I have to laugh at people on line at AT&T and Verizon to buy an iPhone. You have only one model!! I have choices of multiple models! Let's not even start on tablets. I have seen the future in a PowerPoint deck and it clearly points to a world of Windows 8 Tablets with Outlook and Word. Because when I think mobile computing, I think Office.
    Mike Cox
    • So why was Mike flagged?

      @Mike Cox
      This is usual Mike Cox fare and in no way offensive or even off topic.
      John L. Ries
      • Agreed,

        @John L. Ries
        but not one of his best. I think he may be a tad out of practice. :)
        William Pharaoh
    • RE: What's on Steve Ballmer's Microsoft priority list now?

      @Mike Cox goodnesss we have SORELY Missed you ...
      linux4u