Microsoft CEO Steve Ballmer plans to take a leaf out of Apple’s book with the company focusing more on online services and hardware.
Ballmer’s comments in his annual letter to shareholders suggested that Microsoft may eventually make its own phones to build on its forthcoming own-brand Surface tablet PC and market-leading Xbox gaming console.
“There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface,” wrote Ballmer.
There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface
The new approach mimics Apple, whose massively successful iPhone and iPad demonstrated tight integration of high-quality software and hardware.
Ballmer, who took over as CEO from co-founder Bill Gates in 2000, said the company would continue to work with its traditional hardware partners, such as Dell, Samsung and HTC, but he made it clear that Microsoft’s role in the so-called ‘ecosystem’ was changing.
“It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses,” he wrote.
Microsoft already makes money from providing services online, such as access to servers to enable ‘cloud computing’, or web versions of its Office applications, but Ballmer’s new emphasis suggests an acceleration away from its traditional business model of selling installed software.
“This is a significant shift, both in what we do and how we see ourselves — as a devices and services company,” he added.
Boss’s bonus cut
Alongside the shareholders’ letter, Microsoft’s annual proxy filing, which deals with the shareholders’ meeting and other governance issues, showed that Ballmer got a lower bonus than he did last year, partly due to flat sales of Windows and his failure to ensure that the company provided a choice of browser to some European customers.
He earned a bonus of $620,000 for Microsoft’s 2012 fiscal year, which ended in June, down 9% from the year before, according to official documents.
His salary, which is low by US standards for chief executives, remained essentially flat at $685,000. It is the third year in a row that Ballmer has not earned his maximum bonus, set at twice his salary.
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