Microsoft reaffirms new strategy dedicated to devices, services over software

Microsoft execs follow up via webcast about the company's hefty reorganization plan published earlier today.
Written by Rachel King, Contributor

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.”

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