A word cloud based on Ballmer's letter to shareholders shows the emphasis on "devices," "services" and "high-value." (Image: Tagxedo.com.)
Ballmer's message about enterprise was virtually the same as the one he gave to financial analysts last month. Then, he said that Microsoft knew how to monetize services to businesses.
"How do we get our services to be popular on non-Windows devices?" Ballmer asked rhetorically during the Q&A with analysts on Sept. 19. "With the enterprise we kind of know how to do that. You walk into the enterprise, you say sign up for Office 365, you say we're going to embrace your iPads and your iPhones, and blah-de, blah-de, blah. We know how to do that. We know how to get paid. Life feels pretty straightforward."
But when it came to consumers, Ballmer tacitly admitted last month, Microsoft faces an iffier sales pitch.
"How do you monetize high-value activities? Amy [Hood, Microsoft's CFO] talked about the three bubbles: devices, consumer services and enterprise services," noted Ballmer. "The two that are most easily monetized, in fact, are devices and enterprise services. Consumer services, as we say, are tough."
Industry analysts saw the prioritization of enterprise in the Sept. 23 introduction of the revamped Surface line, especially the it's-a-tablet-no-it's-a-notebook Surface Pro 2. Ross Rubin of Reticle Research read Microsoft's emphasis on the Surface Pro 2's ultralight notebook-like characteristics as consistent with the strategy to focus on the enterprise over consumers, for example.
While Ballmer gave a quick summary of the restructuring he launched three months ago -- "We are well underway," he said, of the shuffling of executives, personnel and responsibilities -- he said nothing of the search for his replacement.
That search, which conceivably could take until late August 2014, has been the subject of much rumor and discussion by pundits and analysts, but no clear leading candidate has emerged. Among those most often mentioned as possible successors have been Alan Mulally, CEO of Ford Motor; Paul Maritz, a former Microsoft executive and most recently the CEO of VMware; Tony Bates, who joined Microsoft after it bought Skype, and who now leads business development and evangelism; and Stephen Elop, the former CEO of Nokia who will return to Microsoft once the acquisition closes early next year.
Ballmer also reminded everyone that although he will soon step down as CEO, he will remain a major stockholder. "I'm optimistic not only as the CEO but as an investor who treasures his Microsoft stock," Ballmer wrote Monday.
That was muted in comparison to his comments last month before Wall Street analysts.
"I am very long on Microsoft. I believe in the company as an investment," Ballmer said. "I believe in what the company can do. I believe in the people and talent that are here. And at least this one shareholder will absolutely be cheering every day, from the day I'm not working here on. I'm Microsoft, if you will, all over."
As of Sept. 13, Ballmer controlled about 4 percent of the company's shares for a paper value of approximately $11.1 billion at Monday's closing price. Co-founder and current chairman Bill Gates owns about 4.5 percent of Microsoft's shares, but because he sells about 80 million shares annually under a pre-set plan, by this time next year -- assuming Ballmer retains his shares -- Ballmer will be the largest individual stockholder.
Ballmer is up for reelection to the Microsoft board of directors when shareholders meet Nov. 19.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His email address is email@example.com.
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