Is Microsoft (Nasdaq: MSFT) really clueless? That's the question I asked last week after noting the company's recent disappointing track record. Today, CEO Steve Ballmer is providing us some answers at the Microsoft Worldwide Partner Conference in Washington, D.C.
Ballmer is basically betting on three areas for the near-term future of his company: clouds, tablets, and phones.
Forecast: Cloudy
The dynamic CEO told his crowd of partners that if they don't want to move to the cloud, Microsoft is not for them. "Cloud computing" is just a catchy way of explaining the act of sharing applications, storage, and resources on distant servers instead of locally. "The cloud removes costs and complexity," according to Ballmer, who clearly believes there's a lot of money for Microsoft in this space with its Windows Azure platform.
This is an area -- working with developers and businesses -- where Mr. Softy shines, and I believe Ballmer when he says Microsoft will be one of the dominant players here.
On the other hand ...
What consumers will notice most in the coming year are phones and tablet PCs based on Windows 7 -- "a terribly important area for us," says Ballmer.
As for phones, Ballmer acknowledges his company's clueless past: "We missed a generation with Windows Mobile." The launch of Windows Phone 7 in a few months is meant to remedy that, and the company is "hell-bent and determined to drive" the type of volume that will really mean something to the bottom line.
But this is where things get unpredictable for investors. In smartphone software, Microsoft has been eaten alive by Nokia (NYSE: NOK), Research In Motion (Nasdaq: RIMM), Apple (Nasdaq: AAPL), and Google (Nasdaq: GOOG). It's not hard to be skeptical that Windows Phone 7 will generate any kind of buzz among consumers.
I expect more impact from the tablet initiative, despite the presence of Apple's wildly successful iPad, RIM's proposed tablet, and reports of allies lining up behind Google's Android and Chrome operating systems. Ballmer says we'll see "a range" of Windows 7 tablets from Asus, Dell (Nasdaq: DELL), Toshiba, Samsung, and Sony (NYSE: SNE). They'll be different in form and function, and targeted at both professionals and consumers. Microsoft whiffed on tablets several years ago, but things are different now, thanks in large part to the iPad's success. The wide array of devices, combined with the marketing might of the manufacturers, could mean decent market share for Mr. Softy.
The partner conference continues throughout the week, and we'll have plenty more coverage in the coming days.
