Benefits and Stock
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 createto make a difference in our job, in our workgroup, with customers, in our communities and around the worldare 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 samesimply by holding ourselves accountable and keeping our commitments," he said.
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