Microsoft CEO Steve Ballmer.jpg
Microsoft CEO Steve Ballmer

Will the Microsoft of a few years from now resemble today’s model? New reports suggest that changes are underway. 

According to The New York Times and other publications, CEO Steve Ballmer is considering a plan that calls for orientation around being a “devices and services company,” a phrase Ballmer used last fall in his annual shareholder letter. In addition to that focus, the company is rumored to be preparing an organizational change in which its divisions and its executive structure will be streamlined.

SkyDrive, Bing, Skype

In the shareholder letter in October, Ballmer wrote that, “over time, the full value of our software will be seen and felt in how people use devices and services at work and in their personal lives.” He described this as “a significant shift, both in what we do and how we see ourselves -- as a devices and services company.”

By devices and services, Ballmer is referring specifically to Windows devices that are connected to “services people want.” The idea, he said, is that, “right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft,” as well as from partners and third-party developers.

As examples, he painted a picture of a Windows 8 device that is connected to services and apps allowing a user to select a movie on a PC, start playing it on a TV, and then finish watching the movie on a smartphone. SkyDrive cloud storage, Bing search engine, and Skype communications all add other services to the device.

More Emphasis on Hardware?

Although these reports suggest Microsoft could refocus itself, it’s not clear how that change would differ significantly from its currently trajectory, which includes some hardware products with backend services, and cloud-based components for most of its software products. One possible new direction could be a greater emphasis on hardware, as exemplified by the Slate tablet or the Xbox console.

A key driver of the changes is the unhappiness by some shareholders over the company’s weak stock performance, and its failure to establish and maintain a substantial mobile presence. Some ideas being discussed by analysts and Microsoft-watchers include selling Bing or the Xbox video game unit.

Image courtesy of imagemaker (Shutterstock)