Microsoft's Future Glimpsed at Analyst Meeting

By Pedro Hernandez  |  Print this article Print

Outgoing CEO Steve Ballmer and other execs discuss the "One Microsoft" approach to software, the cloud and devices.

The company's consumer and online divisions are responsible for 20 percent—also with some OEM overlap—while OEM is 19 percent. The small and midsize business segment is last with 6 percent.

Microsoft is foremost an enterprise software and services provider, suggested Turner. "When you look at that full picture, as a segment, it's really telling of where we've got a lot of strength, and it's complemented with our consumer presence," he said.

Cloud Data Center Arms Race

In terms of cloud heavyweights, Ballmer evoked a cinematic classic to describe the competitive landscape. With Google, "there's sort of this almost Dr. Strangelove kind of arms race that goes on," he said.

It all boils down to designing data center facilities "as the unit of compute work in order to take cost and complexity out of the equation" and, of course, megawatts. "You know, how many megawatts are they buying this year? That's sort of the way in which data centers are rated. How many megawatts will Google put in? How many megawatts will we put in?"

"Three companies … are really pursuing that at scale," said Ballmer. "Amazon is, we are, and of course Google is.

Saving Surface, Xbox Style

Microsoft's efforts to dethrone Apple's iPad, or at least knock it down a few pegs, fell short. Surface RT sales were meager, causing the company to write off $900 million during the fourth quarter 2013.

Ahead of an impending Surface announcement, Julie Larson-Green, head of Microsoft Devices and Studios, suggested during an Engineering Leader Panel that the company is taking cues from its successful video game business, which is set to launch its next-gen Xbox One console in November, to help turns things around.

Asserting that a "combination of great hardware, great software, apps and services [is required] in order to win," she said that the company already learned that lesson with the Xbox. "Hardly any games" accompanied the console when it first launched, "and it took a while for us to get going with it," said Larson-Green.

Applying that experience to Surface, she added that Microsoft is "very optimistic about what we're doing in terms of the changes that are being made in the software, the applications that are coming online, the services, and improving the hardware, both in terms of speed, performance and the integration with the software."