Leaked Memo Offers A Peak Inside Steve Ballmer's Head

The Microsoft CEO has Apple, Yahoo and Google in his sights and will deliver a $300 million ad campaign to address any lingering doubts about Vista. He will try to copy-cat Apple’s vertically integrated approach ; turn Microsoft into the leading enterprise software company in the world, and squash Linux. He will push into subscription software services and will make sure that the cloud remains an extension of desktop applications, not a replacement. He stressed that Microsoft is still after search, against Google, with or without Yahoo. To show that he means business, he let one of his key generals leave, split his division into two and reshuffled executives. This is the summary of Steve Ballmer’s leaked memo aimed at boosting his troops’ morale. It also offers unique insight into Steve Ballmer’s new head. Still as shiny as the old one, but perhaps a little wiser, and maybe more determined. Or, have we heard it all before ?

Following the departure of Bill Gates, Steve Ballmer became the visionary, and commander in chief, of Microsoft. Thanks to a leaked internal memo, published in its entirety in this All Things Digital article , we now know more about Ballmer’s ambitions. The document offers an interesting insight into the new Ballmer persona. Sadly, Ballmer had this other set of personas that were popularized on the web : the "used car salesman" , the "monkey boy" , the "man who laughs off" the iPhone , Google’s Android and pretty much everything else, the "developers motivator" and the "advertising guru".

Yes, Steve Ballmer is a unique character and he has obviously grown into his role as CEO of the world’s largest tech company. In the upbeat memo he comments on rivals with respect and actually acknowledges areas where they have the edge over Microsoft. He refrains from laughing off competitors arrogantly. Ballmer makes it clear that Microsoft is still the mighty force that moves and shakes the industry, but he knows that he can’t party like its 1999 anymore.

"We are the best in the world at doing software and nobody should be confused about this. It doesn’t mean that we can’t improve, but nobody is better than we are. Nobody works harder than we do. Nobody is more tenacious than we are. We’re investing more broadly and more seriously than anybody else," he wrote to employees. Although such statements primarily serve to re-energize troops and boost morale, the memo lays out the direction for Microsoft and drops hints at its strategy against rivals. If you had any doubts who the enemies are, Ballmer makes it blatantly clear : Apple, Yahoo and Google.

Windows remains Microsoft’s "number one job." Ballmer says that with SP1 "we’ve addressed device and application compatibility issues in Windows Vista," despite a survey which revealed that IT administrators don’t plan to deploy Vista SP1 anytime soon. He said that Microsoft now needs to tell its customers that Vista isn’t bad after all, referring to the upcoming $300 million marketing blitz aimed at striking back at Apple and those pesky Mac vs PC ads.

"Now it’s time to tell our story. In the weeks ahead, we’ll launch a campaign to address any lingering doubts our customers may have about Windows Vista. And later this year, you’ll see a more comprehensive effort to redefine the meaning and value of Windows for our customers," Ballmer said. In a surprising departure from his trademark arrogant dismissal of Cupertino-based gadget maker, Ballmer acknowledges Apple’s vertical integration as the new direction for Microsoft.

"In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why ? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we’re changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We’ll do the same with phones -providing choice as we work to create great end-to-end experiences."

Ballmer said that Microsoft is "on the verge of becoming the number one enterprise software company." He intends to push Microsoft’s key enterprise products "on all fronts" : mail with Exchange, business intelligence with PerformancePoint, virtualization with Hyper-V, and databases with SQL Server. Linux is also in Microsoft’s sight. "We must continue to compete against Linux in key workloads such as Web servers and high performance computing," Ballmer said.

As expected, Microsoft has no intention to cut the branch it sits on by embracing cloud services at the expense of desktops. Instead, cloud services will serve as value-added extension to its business and consumer desktop applications. "Some people think software plus services is all about search," said Ballmer. "The future is about having a platform in the cloud and delivering applications across PCs, phones, TVs, and other devices, at work and in the home." Microsoft will reveal more about its cloud platform initiatives and the next version of Live and Online technologies at this year’s PDC.

Shift towards cloud computing will "drive changes in business models through advertising, subscriptions, and online transactions." If you had any doubt about how you will purchase the software in the not-so-distant future, Ballmer confirmed that the company will experiment further with the software subscription model for consumers aka Equipt.

Ballmer still admits Google’s lead in search, but hails Microsoft’s lead in the enterprise. "We continue to compete with Google on two fronts - in the enterprise, where we lead ; and in search, where we trail," he said. There’s an enormous cash pile circulating in online advertising and most of it goes through Google. Ballmer said that Microsoft will continue to invest in search and its online division (the one that generates losses quarter after quarter) because "search is the key to unlocking the enormous market opportunities in advertising." If you had been following Microsoft’s strategy over the years, then you can bet that it will just keep coming, and coming, and coming until it gets Google.

Ballmer assured troops that Microsoft "will out-innovate Google in key areas," citing its maps and news search as an example of search that tops Google Maps and Google News services. He announced "new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world," though he didn’t elaborate the new approach in more details.

Ballmer insisted in the memo that the attempted Yahoo acquisition was "a tactic, not a strategy," assuring his troops that they "will get there with or without Yahoo," although he admitted that "Yahoo would have helped us get there faster."

Ballmer is old guard Microsoft. He may also represent the last link to its legacy. His legacy, however, rests on how he handles the coming challenges to Microsoft’s supremacy. Google, the botched Yahoo deal, and Apple’s resurgence have hurt Microsoft’s image. Not too long ago, the Justice Department dented its ego, and shackled its competitive excesses. Not too long before that, Netscape gave it a big fright. We seem to have come full circle. Now, the Internet threatens its position in the tech status quo. For a Microsoft lifer like Ballmer, there’s never been a time when Microsoft was so besieged. Never before. Times change and so does the man, maybe. Maybe.

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  • LePhuronn
    Like I said, he's a cunt.
  • blazer666_uk
    The day Microsoft out-innovate Google will never come! how on earth can he possibly think that, look at the prices MS charge, google is free as it should be, Balmer needs a serious re-think before attempting to challenge Google. Make windows free, simple u will win millions of minds. I cant wait for Google's new OS which has got MS quaking with fear, good I say!
  • blazer666_uk
    blazer666_ukThe day Microsoft out-innovate Google will never come! how on earth can he possibly think that, look at the prices MS charge, google is free as it should be, Ballmer needs a serious re-think before attempting to challenge Google. Make windows free, simple u will win millions of minds. I cant wait for Google's new OS which has got MS quaking with fear, good I say!