Steve Ballmer is eyeing up an Apple-style future for Microsoft of device manufacture and support, just as he’s been personally dinged for underperforming in one of the company’s cash cows: Windows.
Microsoft’s chief executive has evangelised devices as the future opportunity for Redmond in his annual letter to shareholders, reserving the right to build more Surface-style hardware and – if persistent rumours are to be believed – Microsoft phones.
“There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface,” he wrote.
Devices represent a “significant shift, both in what we do and how we see ourselves,” Ballmer said. “It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses.”
“Fantastic devices and services for end users” will also drive Microsoft’s enterprise business through the consumerisation of IT, he reckoned.
Ballmer didn’t name-check Apple, but he didn’t have to. Read between the lines and it’s there: control of hardware that's tuned to the software and fed by online services.
This is not the Microsoft of history, which has controlled the operating system and granted x86 hardware partners great latitude in their specs.
Ballmer’s device talk came as it emerged he had lost out financially – thanks in part to under-delivery in sales of Windows during fiscal 2012. Ballmer was awarded $620,000 bonus for the year, 91 per cent of his total target. His total compensation – salary and bonus – was $1.32m for the year.
The figures were published by Microsoft in its fiscal 2012 proxy statement, which lists pay and compensation of top executives.
Ballmer took the hit after a 3 per cent decline in revenue for Windows and Windows Live - along with Server and Tools and Office, Windows is one of the three biggest contributors to Microsoft's bottom line.
Windows and Windows Live earned $18.3bn compared to $18.6bn for Server and Tools and $23.9bn for the Business Division, which houses Office. Microsoft's total revenue for the year ended in June was $73.7bn.
Another worry for Microsoft's CEO as he girds his firm for the great devices adventure is the ongoing failure of Microsoft’s last great new adventure - internet and search. The "slower than planned progress" in the Online Services Division also played a part in Ballmer's missed remuneration target.
Another factor pulling him down was the failure to meet the requirements of the European Commission of providing a browser screen choice for Windows PCs in Europe. Windows and Windows Live president Steven Sinofsky also saw his package marked down for this – he trousered $7.65m, which was 90 per cent of his bonus target. If you tack on his base salary, he pocketed $8.58m altogether. ®
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