Ballmer’s bold vision of Microsoft’s future

Innovation is the name of the game, Microsoft CEO Steve Ballmer claimed at the company’s annual financial analyst meeting, where he outlined its business strategies for the fiscal year 2006.

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By  Caroline Denslow Published  August 14, 2005

Innovation is the name of the game, Microsoft CEO Steve Ballmer claimed at the company’s annual financial analyst meeting, where he outlined its business strategies for the fiscal year 2006. New strategies will include higher-end versions of its core Windows and Office products and a broader portfolio of products. “There is no way for our company to grow without innovation,” Ballmer told the audience at the conference, held last month. “Let there be no doubt, Microsoft is trying to innovate… starting with the core devices, and not just PCs anymore, but phones and set-top boxes,” he said. In order for a company as big as Microsoft to grow more, it has to reinvent itself, Ballmer said. Microsoft’s reinvention will come in the form of new services — many of them based on advertising or subscription revenue. “We’re trying to reshape our portfolio. We’re moving forward today with a broad portfolio of products, with the goal of having really best-in-class products in every one of the major marketplaces we play in: games, entertainment, search, mobile, business applications,” Ballmer explained. Part of its strategy is to further develop its core strengths, namely its Windows, Office and server businesses. Ballmer claimed Microsoft could still gain more market share in these areas significantly by expanding the breadth of products available. In fact, Microsoft believes that the next version, Windows Vista, will drive a new surge of PC upgrades once it is launched in the second half of 2006. Microsoft is also working on a new version of Office, codenamed “Office 12”, which will launch in the same time frame. The company is also planning to introduce an enterprise edition of Windows Vista and develop a higher-end version of Office that will be called Office Premium. “We think of a new concept that we call the Office Server. It will have associated with it a new premium client access license. And when you take a look at all of the premium work that we’re doing in management and security and e-mail, we think about a new premium client access license also for our Windows product,” Ballmer added. Other editions for home users, tablet PCs and media center entertainment PCs would join the premium editions of the upgrades. The move to introduce higher value versions of existing products is not something new to Microsoft. Ballmer said that such a move has helped drive new growth and new value to the company before when it launched a professional edition of Windows, Windows Pro, which “drove literally billions of dollars of revenue growth versus the home version.” “I believe in the future of Microsoft from an innovation perspective and from a growth perspective. I believe in it I think more than you do. You might be thinking that Windows and server and Office are slow-growing businesses. We think that they are poised for very steady, robust growth,” Ballmer said. “We believe that the future is exciting, [and] the future for innovation is even more exciting… We’re thinking our future is bigger and bolder and brighter than I think many of the folks who watch us.”

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