Microsoft Chief Executive Steve Ballmer has signaled a new direction for software company, pointing to hardware and online services as its future.
Ballmer's comments in his annual letter to shareholders published on Tuesday suggested that Microsoft will continue to work with its partners to deliver a broad spectrum of Windows PCs, tablets and phones. The company will build specific devices for specific purposes, as it has done with Xbox and the recently announced Microsoft Surface. Ballmer says Microsoft's customers will be getting great devices that are connected to unique communications, productivity and entertainment services from Microsoft as well as access to services and applications from the company's partners and developers around the world - pointing to hardware and online services as its future, taking a page from rival Apple.
Ballmer also sees Windows 8 as an example of the company's business shift.
"Windows 8 unites the light, thin and fun aspects of a tablet with the power of a PC. It's beautiful, it's functional, and it's perfect for both personal and professional use. Xbox Music, Video, Games and SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a phone," Ballmer 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.
The company's clod storage servce, SkyDrive, connects content across a user's devices, along with Bing's search. Skype has also a new Windows 8 app and connects directly into the new Office.
The new Office was designed from the ground up for Windows 8 and takes full advantage of new mobile form factors with touch and pen capabilities. The new Office experience for both consumers and businesses will be paired with a Windows 8 device and delivered as a cloud subscription service with Office 365.
To address these opportunities, businesses turn to Microsoft. They count on our world-class business applications like Microsoft Dynamics, Office, Exchange, SharePoint, Lync, and our business intelligence solutions. They rely on our technology to manage employee corporate identity and to protect their corporate data. And, increasingly, businesses of all sizes are looking to Microsoft to realize the benefits of the cloud.
Helping businesses move to the cloud is one of Microsoft's largest opportunities. For example, a company can choose to deploy Office or Microsoft Dynamics on premises, as a cloud service or a combination of both. With Windows Server 2012, Windows Azure and System Center infrastructure, businesses can deploy applications in their own datacenter, a partner's datacenter or in Microsoft's datacenter with common security, management and administration across all environments, with flexibility and scale.