Microsoft reaffirms new strategy dedicated to devices, services over software

Microsoft reaffirms new strategy dedicated to devices, services over software

Summary: Microsoft execs follow up via webcast about the company's hefty reorganization plan published earlier today.


Following up a lengthy letter to all Microsoft employees, CEO Steve Ballmer and CFO Amy Hood took to the digital airwaves for further explanation on Thursday afternoon.

The internal memo published this morning outlined some of the Redmond, Wash.-headquartered corporation's strategies for virtually every unit within the company as well as some serious reorganization plans.

The Microsoft letter also follows up reports published on Wednesday by market intelligence firms IDC and Gartner -- both of which revealed another dismal quarter for the PC industry as it continues to plummet.

Ballmer led off the call by describing Microsoft’s “shift in our business to being a devices and services company,” which he specified started “over a year ago.”

“The form and delivery of our value will shift to devices and services versus packaged software,” Ballmer reiterated.

To achieve this, Ballmer remarked that Microsoft went back to its core mantra: “To help people in businesses reach their full potential.”

Going forward, Ballmer said that the new strategy will be creating a family of devices and services for both businesses and individuals that power people on-the-go for the "activities people really value."

“That’s the heart and soul of what it takes to help people realize their full potential,” Ballmer asserted.

Microsoft CFO Amy Hood concurred with this notion during the call, declaring, "This is really about setting us up for long-term profit growth."

Ballmer acknowledged that the fine-tuned strategy will introduce plenty of internal changes too.

For example, analysts asked about potential job redundancies -- and cuts -- that could pop up because of the reorg.

However, Ballmer responded there are “no plans for layoffs” at the moment.

In terms of financial reporting, Hood said that next week’s fiscal fourth quarter earnings report on July 18 will maintain the existing structure. But she added that her team will investigate any possible changes over time.

Ballmer also hinted that Microsoft will achieve its customer-facing strategies based on its own restructuring, outlining that all employees should embody the following five characteristics: be nimble, communicative, collaborative, decisive, and motivated.

Hood also replied that she would not associate the new org-chart with any reduction in accountability -- at least not from a financial perspective. Ballmer took it a step further by asserting that the “level of accountability we all feel rises when we have to look at company’s integrated profitability.”

Topics: Microsoft, Enterprise 2.0, PCs, Tech Industry, Windows

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  • Forgot one thing

    and dedication to ah um er Privacy, ya Privacy..
  • windows 8 as impetus

    With Win8 and variants the possibilities of personal computing are endless. Some who complain are not evolving their abilities and potential but are happy with their present state of being. The transition will be easier for the young and mentally agile.
    • Outline just five possibilities..

      .. that have more meaning than the average reality show..
  • Device and Services over Software - REALLY?

    So now they are going to support other software as well?

    Lets see them prove it by porting Office to Linux and BSD.
    • No need to port Office to Linux, since, according to the FOSS crowd,

      Open Office and Libre Office, are good alternatives.

      Or, don't you agree with that FOSS crowd?
    • While I do think that would be nice.

      It's hardly worth the effort for the ~1% market share they could maybe get. That's off course assuming every linux user would go out and buy it, which I don't think most would.
      Sam Wagner
  • Robot Marketeer

    I hope that I am not the only reader who finds this statement a jargon-laden and almost meaningless bulletin from/about Microsoft.

    What real information is communicate by the following?:

    "Going forward, Ballmer said that the new strategy will be creating a family of devices and services for both businesses and individuals that power people on-the-go for the "activities people really value."

    It sounds as though there is a robot at work that joins fashionable stock marketing phrases in random order!

    The whole statement could be summarized by simply saying, "We are going to copy Apple because that is where the money is".
    • Actually, Apple is not a good model to follow, and it would be the farthest

      thing on the minds of the MS executives, since Apple is, basically, a one horse entity.

      That one horse is iOS, with three devices running around it.

      Thus, Apple is likely the easiest company to manage, since they don't have the diversity of Microsoft when it comes to all of the devices and services offered by Microsoft.

      Sure, Apple also has the Macs, but even that is looking more and more like iOS, and eventually, they'll merge iOS and the MacOS.

      Microsoft is looking at making all of their devices speak "one language", and to have seamless operation and communication between all of the form-factors. But, Microsoft is not just Windows, and it's not just XBox and it's not just Surface devices, and it's not just Office software, and it's not just Bing, and it's not just Azure, and... well, hopefully you get the hint. MS is a hugely diversified company, and it plays major roles in everything it gets involved in. Apple? Well, they get involved with iOS devices, and an apps store. Other than that, it's puny in comparison when it comes to all of the markets that Microsoft has to contend with.

      So, no, Apple is not even close to being in the same ballpark as MS. MS needs much deeper and smarter management than the "simple" Apple. ;)
      • And the smarter management is where?

        No argument with "needing" deeper and smarter management. But I'm looking and not seeing any sign of even basic Marketing 101 product understanding. That's very scary because you are right. Microsoft is deeply embedded in our cyberworld and technolife. If they go down, a lot goes down with them; a lot of the economy goes south too. I hope nobody believes that when a big company like MS tanks, it doesn't take a lot of other companies with it.

        I'm betting BIG layoffs are in the works as I type this. Their denial is actually a confirmation.
  • MS Management strategy

    1 - Kill the PC sales market by releasing an OS nobody with a business PC wants to use.
    2 - Any doubt; be sure to cut off all support for any OS PC user do want to use (IE. XP).
    3 - Once we've completely thrashed the PC market wonder why our profits are down.
    4 - Above all else; remain completely oblivious to the side-effects of #1 and #2.

    Wonder who will be the next BIG OS sales on the PC; Seems like MS wants nothing to do with it or the profits to be made there. When I start seeing phones that run factories, engineers creating designs on phones, and business servers on phones only then will I buy this fairytale that PC are dead and MS didn't purposely kill the PC industry.
    • MS profits are down? Not according to all of their quarterly reports

      in the last few years.

      PC sales might be down, but Microsoft will still make money on the Windows franchise.

      Windows 8 will, eventually, get more sales than Windows 7 or even XP.

      WP8 is a long-term strategy, and it will, no doubt, be number 3 this year, and number 2 in about 2 years.

      BTW, the PC isn't being killed, as witnessed by all of the updates that MS is doing to Windows 8 and to WinRT and to WP8. Eventually, all of the form factors will share one OS.

      Also, the OEMs are releasing a huge number of Windows PCs, of various form-factors, including the tablet format. PCs aren't going away, and MS stands to benefit the most from that fact.
    • MS profits are down? Not according to all of their quarterly reports

      Also, PCs don't need to be updated as often as in the past, and people are holding on to whatever PCs they have a lot longer. PCs aren't going away, and there are more PCs still around people's homes than any other type of device. That people are not purchasing new PCs does not mean that, the old PCs are not still being used. In fact, I purchased 2 new PCs around the Xmas period, and I also upgraded 2 older PCs for Windows 8. Those upgrades means that I didn't have to make 2 new PC purchases, because what I had was still working fine. Can't say the same for tablets and smartphones, which get replaced every year or two.

      BTW, the idea that smartphones are running factories and engineers are using them for designs, is very highly exaggerated, and most people in their right minds are not going to be using those tiny devices to do any real work with them. Nice try, but, you're a complete phony.
      • "right minds are not going to be using those tiny devices to do real work"

        It seems you missed the point of my post completely. I agree; that no one in their right mind is going to be using those tiny devices to do any real work and thus is where MS management strategy becomes so twisted. MS seems to remain completely oblivious to the fact that the biggest reason PC sales are diminishing is that most people "in their right mind" are not going to want a tiny device OS on their desktop to do any "real work with". Everyone can keep flapping about how desktops last longer or it'll work in the long run but case and point is; Businesses and most PC users don't want that tiny OS on their "get work done" PC and that seems to be the biggest factor in why they don't upgrade the hardware to something that'll run faster and have more resources.
  • sigh

    Looks like we gonna see a lot of new and existing companies grow their marketshare for on-site software.
    What I learn of this, is that I need go and look for new suppliers...
  • RE: Title should be renamed to

    Microsoft reaffirms new strategy dedicated to throwing their most loyal long term customers under the bus


    Microsoft reaffirmed they are still fully in the Apple "Post PC" reality distortion field.
  • I don't like the sound of this

    This sounds ominous, corporate speak for trouble in river city, or Redmond.
  • Corporate speak

    You all realize that "no plans for immediate layoffs" means they are going to lay off a lot of people very soon, right? I mean ... you aren't oblivious, are you? Microsoft has totally miscalculated what their customers want and need. WE will all pay the price in lost jobs and lots more. It's going to get ugly.