A New Role for Microsofts Ballmer

As Bill Gates transitions away from working full time at Microsoft, CEO Steve Ballmer will have to become the primary champion of innovation.

REDMOND, Wash.—The decision by Chairman Bill Gates to transition away from working full time at Microsoft to assuming a part-time position has ushered in a new era and a new job for CEO Steve Ballmer.

"When Bill announced his role change, I felt like I was entering a new era and had a new job, given the uniqueness of my relationship with Bill over many years," Ballmer said at Microsofts annual financial analyst meeting at its campus here July 27. "I have never had to be the primary champion of innovation within the company. Bill has always played that role. But, over the next two years, I will have to become the primary champion of innovation at Microsoft."

/zimages/1/28571.gifClick here to read more about whether Microsoft is ready for Gates transition.

With regard to Microsofts longstanding goal of making software a service, Ballmer said this is happening and the Redmond software giant is embracing advertising and subscription-based models and Internet-based delivery across all of its products as an important part of what it does going forward.

He also said the company is like a multicore processor and is looking to add new cores such as entertainment and Internet services to its existing cores of desktop and server software.

The past year has been one of many firsts, he said: This is the first time Gates has not attended Microsofts financial analyst meeting; instead, he is "in Africa somewhere enjoying a long-planned vacation," Ballmer said.

This is also the first time Ballmer addressed the financial analyst community since Gates announced he will change roles, and it marks a time of change and innovation and a new era at Microsoft that will be more exciting and will generate even more shareholder value, Ballmer said.

Windows Vista and Office 2007, expected to ship in early 2007—which Ballmer called "blockbuster releases"—are the engines that will propel Microsoft in the market and attract interest in add-on offerings.

Next up at the financial analyst meeting was Kevin Johnson, co-president with Jim Allchin of Microsofts platforms and services division. Johnson made it clear that Microsoft will ship Windows Vista only when it is ready.

"The team is driving toward the next milestone, Release Candidate 1, which is likely this quarter. There are also no indications at this time that Vista will not ship as planned next January," he said.

/zimages/1/28571.gifMicrosoft is striving for an on-time delivery of Windows Vista. Click here to read more.

"There is something for everyone in Windows Vista, and we will be driving that message home. But, at the same time, we have to make clear the additional value the premium SKUs bring," he said.

The platforms and services division is focused on putting the customer first, creating a compelling environment for end users and third parties to innovate on, while driving clear business value to its targeted audiences.

Leadership priorities include innovation agility, online services, execution and growth, as well as empowering people more and attracting the talent that drives the company, he said.

While Microsoft expects total PC shipment growth to slow to 8 or 9 percent, with 225 million PCs likely to ship next year, emerging market PC shipment growth is rising at double that rate, Johnson said.

Steve Sinofsky, who was recently appointed to head the Windows and Windows Live groups, has retooled the planning and development process for Windows, Johnson said.

Software Assurance renewals are tracking at the highest level in years, and Microsoft is signing up a lot of new users ahead of the release of Windows Vista, he said.

Next Page: Healthy business climate.