Steve Ballmer's revelation that Microsoft could soon become a "devices-and-services company" may be a sign that Microsoft is assuming the leader position no other company seems to want.
Microsoft CEO Steve Ballmer told the Seattle Times recently that he expects Microsoft to transition from a software company to a “devices-and-services” company in the next five to ten years.
His comment came at the end of a Q&A and didn’t have a follow-up, although in fairness, he had given the Times a fair amount of time for this interview. So we’re left to piece together the clues on this one. That’s OK by me. Heck, that’s the fun of it.
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“I think that in a back-looking view, people would say we were a software company. That’s kind of how we were born. I think when you look forward, our core capability will be software, (but) you’ll probably think of us more as a devices-and-services company. Which is a little different. Software powers devices and software powers these cloud services, but it’s a different form of delivery…
“Doesn’t mean we have to make every device. I don’t want you to leap to that conclusion. We’ll have partners who make devices with our software in it and our services built in… We’re going to be a leader at that,” said the boss.
The question then becomes what kind of a hardware company would Microsoft be. It has a nice business with input devices, but those are made by other OEMs who then put Microsoft’s name on them.
The success of Xbox and the Xbox Network illustrates Microsoft’s success as a hardware and services provider. The real question is why they got Xbox Online so right and everything else so wrong.
Some people reading between the lines think this is Microsoft giving itself clearance to buy whatever is left of Nokia once it crashes and burns, which is where it’s headed now. If the new Windows Phone 8 devices are stillborn and Nokia goes down in flames, Microsoft will practically be obliged to step in and help its partner that bet the business on Windows Phone.
Then there’s the question as to whether Microsoft will go into the tablet business. Many people believe Microsoft would make a baseline tablet similar to the way Google makes its Nexus phones and tablets, so as to set a bar for its competitors to target.
Also, let’s not forget the Microsoft Signature line of PCs. It baffles me that it took Microsoft so long to get such a simple idea right – providing a PC with no bloatware. Vizio has shown there is room for new PC ideas. HP is in a freefall and Dell has become complacent. So maybe Microsoft can give the industry a badly-needed kick in the rear. HP can hardly get upset at Microsoft getting into the PC business when its own efforts have been fairly lame and uninspired for years.
There’s a very fine line for Microsoft to walk. I hope the company can continue to pick select targets where its software expertise can boost the market. That’s still not a guarantee of success. The Zune was a pretty nice music player and had the iPod beat in many ways, but it came far too late, after single-use devices like the iPod were on their way out.
It all comes down to focus, timing and selective targets. Your move, Microsoft.
