Benefits and Stock

By Peter Galli  |  Posted 2004-07-06 Print this article Print

Ballmer also addressed the controversial issue of profits and the companys stock price, telling employees that the company has to grow its revenues to grow profits and cannot just cut costs. But acknowledging the competitive environment, he said, "We must ensure a competitive cost structure, or competitors will offer prices, services or innovations that we cannot afford to match. "This year, we are targeting nearly $1 billion in efficiency improvement and cost reduction across the company, primarily by rethinking how we do things …
"Some employees have asked why we cant use some of our $56 billion in cash to avoid making the benefits changes. Using the cash reduces profits, which reduces the stock price. The cash is shareholders money, so we need to either invest in new opportunities or return it to them," he said.
Looking at the past year, Ballmer said the company made strong progress on several fronts that are essential for its future: It delivered new products that gave customers value and created opportunity for partners; it improved customer satisfaction among key audiences; and it made strides in connecting much more deeply with customers, he said. "We favorably resolved the lions share of the 150,000 customer issues in our field response system for nontechnical issues. We have fixed nearly 70 percent of crashes and hangs experienced by customers in our key products this year by relying on our Watson technologies to statistically target our service-pack work," Ballmer said. Turning to the threat posed by the open-source Linux operating system, Ballmer said Microsoft knows how to compete with Linux through innovation, quality support execution and facts-based customer education. "We gained server market share, as did Linux, and are poised for more progress. Open-source software products have yet to provide meaningful customer value on the client compared with our offerings. "We put most of our legal issues behind us in a year marked by the significant affirmation of our consent decree by the U.S. Court of Appeals, the framing of the EU [European Union] case for appeal and milestone agreements with key competitors," he said. In keeping with his reputation as Microsofts cheerleader, Ballmer said in closing that even after 24 years there, he still considers it "an amazing company. The possibilities we can each create—to make a difference in our job, in our workgroup, with customers, in our communities and around the world—are unparalleled … "Although Microsoft has grown in size, we are still, at the end of the day, a group of people each of whom can and does have an impact on our overall success. I just want to say how honored I am to work with each of you. "This is an incredible, incredible company. We are well-positioned to help customers realize their goals and aspirations, and for us to do the same—simply by holding ourselves accountable and keeping our commitments," he said. Check out eWEEK.coms Windows Center at for Microsoft and Windows news, views and analysis.

Be sure to add our Windows news feed to your RSS newsreader or My Yahoo page

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel