July 27, 2006 10:07 AM PDT

Ballmer: Software is becoming a service

Related Stories

Where on the horizon is Vista?

July 27, 2006
REDMOND, Wash.--Acknowledging the software industry is undergoing a radical transformation, Microsoft CEO Steve Ballmer said Thursday that his company is moving rapidly to create products that can be funded by ads and served up over the Internet.

"Software is becoming a service," Ballmer said at the company's financial analyst meeting being held here. "Embracing advertising and subscription-based models and Internet-based delivery across Microsoft's product line is an important part of what we will do."

Ballmer likened Microsoft to a multicore processor, saying the company is trying to add two new cores, entertainment and Internet services, to its existing cores, desktop and server software.

He pointed out that in the 1990s, investors questioned whether the company could even manage those two.

"We were a desktop company," he said. "That's what we were thought of for many years."

In the new areas of entertainment and Internet-based services, Ballmer said Microsoft may not succeed overnight, but he is confident that in the long term the company will profit.

"We're not afraid to (encounter) initial resistance to our ideas," Ballmer said, adding that the company will "put even more bright people" behind those ideas. "Sometimes things take a really long time."

Earlier this month, Kevin Turner, Microsoft's chief operating officer, told a meeting of the company's business partners that Microsoft is "shifting from being a product-centric company to a services and solutions company."

At Thursday's meeting, the big question on financial analysts' minds was when Vista, the next version of Windows, will ship. Kevin Johnson, co-president of the company's platform unit, said the product will ship when it is ready, but did not offer a firm date.

Johnson said there was no data that suggested the company can't wrap up development in time for a launch to business customers in November and to consumers in January. He didn't, however, commit to hitting that time frame. "We will ship Windows Vista when the product is ready. Quality is job No. 1. We go milestone by milestone."

Johnson did not announce pricing for Vista, but said Microsoft will charge roughly similar prices as it does for the comparable Windows XP flavor. "We don't expect significant changes in our pricing strategy," he said. "However, Vista Ultimate is a new (product) and we will sell that at a modest premium to today's offerings."

See more CNET content tagged:
Steve Ballmer, financial analyst, pricing, CEO, entertainment

15 comments

Join the conversation!
Add your comment
Will someone just shut this guy up already?
He's obviously the largest ******* in all of the technical world. Even Michael Dell poses no threat to Ballmer's stupidity.

When will this primate drag his knuckles eslewhere?
Posted by (461 comments )
Reply Link Flag
Your mission critical data on THEIR servers?!
Just how stupid does Microsoft take the average business person
to be?

Answer: Pretty damn stupid.

If anyone thinks for one silly second that they are not going to
build in methods of looking at any and everything that runs on
their "subscription-based services," well, I have this bridge in
Brooklyn that I want to talk to them about on a real estate deal...

Darrow's First Rule of World Domination states: "To control the
world, all one needs to do is control and have access to all of the
lines of critical information. Once you have that, you know what
everyone is doing and can circumvent anyone's plans to thwart
your plans!"

And it's as plain as a pikestaff that this has been the goal in
Redmond for a very long time.

This Clues Missive has been brought to you by:

Lee Darrow, C.H.
Chicago, IL
Posted by mstrhypno (49 comments )
Reply Link Flag
Hahaha! Right
Exactly! Now... how's about this wonderfull palace I inherited in Central London... Has it's own guard in nice red uniforms... Anyone interested?!
But seriously!
How can anyone imagine just for a tiny-bit fraction of a second that people who use software for doing business (even if it's just being used to write faxes and memos) will allow themselves the "luxury" of depending on their Internet connection for opening their documents!?! Imagine the CEO inking a deal for purchasing an entire company and the secretary saying: "Sorry sir, we can't print that out... The Internet connection is down! Some clown is performing a DOS attack on our Internet servers..." What?!
Gosh! They definitely must think we're stupid!
Posted by Kostagh (57 comments )
Link Flag
Software is a Torrent!
The future of software is a mess. just like everthing Good luck.
Posted by jaystring (12 comments )
Reply Link Flag
Software future looks pretty damn good.
The future of software looks pretty good.

Linux is envolving faster then MS can handle it.

Apple OS X is growing at an accelerated pace, like it or not. Mac Laptops now account for 12.5% of all laptop sales and this is slowly increasing, day by day.

From my experiance with hosting servers and all that, there is no way!!!! I trust MS with not only their past history of behavior, but their spotty and buggy software, that crashes and freezes all the time.

I know from experiance what works and what doesn't, what is reliable and what is not.
Posted by rmiecznik (224 comments )
Link Flag
In other words . . .
Google is about to eat our lunch, and we are trying to minimize
the damage.

Any way you look at it the Windows and Office monopoly has no
where to go but down. The alternatives are getting better and
are all cheaper. It won't be too many years before the average
user doesn't know or care what OS runs their Internet device any
more than they care what runs their telephone.

Microsoft is in late middle age and is worrying, with cause,
about the new hotshots that are faster and smarter.
Posted by rcrusoe (1305 comments )
Reply Link Flag
Re: In Other Words
The alternatives and competition are getting better and better, no question about that.

There are a lot of things I like about some of the Microsoft products out there. But at this point in time, I have no interest in using their software as a service at this time. I imagine when that time rolls around, I'll be looking even more heavily into alternative products.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
Re: In other words
The alternatives and competition are getting better and better, no question about that.

There are a lot of things I like about some of the Microsoft products out there. But at this point in time, I have no interest in using their software as a service at this time. I imagine when that time rolls around, I'll be looking even more heavily into alternative products.

Charles R. Whealton
Charles Whealton @ pleasedontspam.com
Posted by chuck_whealton (521 comments )
Link Flag
Ballmer is so clueless when he say...
..."we'll put even more bright people behind those ideas."

He has thrown tons of money and bright people towards ideas and what has he come up with? Same old, same old.

Microsoft should stop walking the hallways where bright geeks with MBA's lurk (hell, look what they did for Net 1.0!) and find some genuinely creative and innovative people with a touch of geek thrown in.

Only then will MSFT go from bloated, button-down Geek Central to a truly passionate, innovative company!
Posted by rayted32-191126880979139043961 (19 comments )
Reply Link Flag
FrankenSteveBaldyBalmer : it's alive!
<a class="jive-link-external" href="http://www.youtube.com/watch?" target="_newWindow">http://www.youtube.com/watch?</a>
v=m6rqXHX3O48&#38;search=FrankenSteve
Posted by Llib Setag (951 comments )
Reply Link Flag
New URL to the FrankenSteve Show!
<a class="jive-link-external" href="http://www.youtube.com/watch?v=m6rqXHX3O48&#38;search=FrankenSteve" target="_newWindow">http://www.youtube.com/watch?v=m6rqXHX3O48&#38;search=FrankenSteve</a>
Posted by Llib Setag (951 comments )
Link Flag
and that's a good thing?
Okay, and what does Ballmer see as being the good thing about software being a service? In many ways Microsoft's current software is a service--when anyone buys a pc with their os and Office suite they get free access to updates ad infinitum. So where's the profit for Microsoft in that model? When you sell somebody a disc of something and then make them pay for the upgrades, at least that model pays something. Microsoft is already running its software as a service and it seems to be a charity that must cost them big bucks. So is Ballmer talking about changing that? How? Most people won't pay for upgrades, we've already been down that road. They won't put up with adware and spyware, that's the road to branding oneself as evil. I'm not seeing the money here or where it leads...
Posted by Razzl (1318 comments )
Reply Link Flag
When will the world grow up and STOP Microsoft
When will the world grow up and STOP Microsoft from expanding any further. They are an anathema to the progess of this world unless we really want BIG BROTHER WATCHING EVERY MOVE WE MAKE and if they don't like it, preventing us from doing it! This is getting SERIOUSLY dangerous for individual freedom.
BREAK IT UP NOW BEFORE IT IS TOO LATE!
Posted by koolmuszah (2 comments )
Reply Link Flag
Your Ideas?? I DON"T think so...
"We're not afraid to (encounter) initial resistance to our ideas"

Ballmer!! They're NOT your ideas. They are OTHER people's ideas! Is it just you or is the whole company delusional?

Maybe you don't remember, but you spouted this stuff a while back but since the whole company is clueless on how to go about implementing anything new and innovative - you have to wait until someone developes a solid business model.

At this point, you can buy them out or create some cheap knock-off (giving yourselves credit for inventing it all).

You are adding RSS feeds to IE 7, right? Well, why don't you go and COPY the SERVICE at:

<a class="jive-link-external" href="http://www.attensa.com" target="_newWindow">http://www.attensa.com</a>

You have office products? Why don't you COPY these sites:
<a class="jive-link-external" href="http://www.goffice.com" target="_newWindow">http://www.goffice.com</a>
<a class="jive-link-external" href="http://www.thinkfree.com" target="_newWindow">http://www.thinkfree.com</a>

Spreadsheet:
<a class="jive-link-external" href="http://numsum.com" target="_newWindow">http://numsum.com</a>

Calendering:
<a class="jive-link-external" href="http://www.kiko.com" target="_newWindow">http://www.kiko.com</a>

Instant Messenger:
<a class="jive-link-external" href="http://www2.meebo.com" target="_newWindow">http://www2.meebo.com</a>

Operating System:
<a class="jive-link-external" href="http://www.workspot.com/" target="_newWindow">http://www.workspot.com/</a>
<a class="jive-link-external" href="https://www.youos.com/" target="_newWindow">https://www.youos.com/</a>

Search Engine:
<a class="jive-link-external" href="http://www.google.com" target="_newWindow">http://www.google.com</a>

This is just a SMALL taste of what innovators and SERVICE oriented companies/individuals are doing out there.

Why don't you keep logging into your Yahoo Account and keep looking at the integration Yahoo has done with CRONs, Calendars, Email, collaboration, etc.. I'm pretty sure they are on the path toward SERVICES. I'm pretty sure they've been on this path for a while.

And while you're thinking about SERVICES, think about this...

Is it the answer? Is it a piece to the puzzle?

Since you clearly do NOT know the answer to this question and doubtfully fully understand the question itself... I'll give you one clue:

01000011 01101000 01100001 01101110 01100111 01100101 01100100 00100000 01101101 01111001 00100000 01101101 01101001 01101110 01100100 00101110 00001101 00001010 00001101 00001010 01011001 01101111 01110101 00100111 01110010 01100101 00100000 01101111 01101110 00100000 01111001 01101111 01110101 01110010 00100000 01101111 01110111 01101110 00101110 00101110 00101110 00001101 00001010
Posted by randombits (16 comments )
Reply Link Flag
'Becoming' a service???
Software is only 'becoming' a service because an all-but-monopolistic software industry giant is FORCING it to be so. The day I have to 'subscribe' to use a word processor or other common software is the day I give up Windows and all MS products. I know many people who are already doing so, smelling the stink of greed in the air coming from Redmond. Apple made the big mistake years ago of making its hardware unavailable to the average computer user. They have suffered for it, and learned. Subscription based software will only make sense for huge corporations or those who must have the latest versions to survive in their industry. Note to Redmond: Most of your user base is NOT in huge corporations. Everyone else won't want the intrusiveness or expense of subscription 'service' software. Get a clue, before you become Apple, too.
Posted by chrisw63 (26 comments )
Reply Link Flag
 

Join the conversation

Add your comment

The posting of advertisements, profanity, or personal attacks is prohibited. Click here to review our Terms of Use.

What's Hot

Discussions

Shared

RSS Feeds

Add headlines from CNET News to your homepage or feedreader.