Ballmer's New Mission for Microsoft
Chief Executive Steve Ballmer is betting on one of Microsoft Corp.'s busiest years ever to keep the company relevant in a new age of mobile technology. — On Monday, Microsoft formally introduced new smartphones that will use a revamped version of the company's mobile-phone operating software.
Context & Ripple Effects
This launch closes a loop Ballmer opened years ago: his 2009 admission that Windows Mobile needed faster advances set up the reboot, followed by his 2010 declaration that Microsoft was 'betting our company' on the cloud and the management shake-up he extended in early 2011. Windows Phone 8 is the first consumer test of that rebuilt leadership team.
The story travelled unusually widely for an OS unveiling — The Verge ran both a review and a Joe Belfiore interview ('we're not done until we've checked all the boxes'), while wpcentral, ZDNet, BGR and Microsoft's own blogs detailed NFC sharing with Android plus bundled Office and Skype apps. It lands mid-blitz: Windows 8 has four million installs against a target needing roughly 396 million more, and Ballmer has predicted close to 400 million new Windows phones, tablets and PCs within a year.
First-order effects
- Microsoft is now a direct competitor to its own hardware partners: its Surface tablet entry has already prompted Acer to delay products, and PC makers must weigh Windows Phone 8 handsets against a licensor selling its own devices.
- Carriers and buyers get a third smartphone ecosystem with differentiators aimed at daily use — tap-to-share NFC between Windows Phone 8 and Android, plus native Office and Skype integration.
Second-order effects
- Steven Sinofsky's claim that full-featured Windows 8 laptops start at $279 forces Apple to defend its premium pricing on price-for-performance grounds rather than design alone.
- App developers face a three-way allocation decision; Microsoft's answer is to make first-party apps like Office and Skype carry the platform until third-party volume justifies porting costs.
Third-order effects
- If Ballmer's 400-million-device forecast holds even partially, Microsoft completes its shift from pure software licensor to integrated hardware-plus-software platform — a structural change in how the PC industry's margins are split among Microsoft, OEMs and carriers.
- The bet also raises the stakes on execution discipline inside Microsoft: the 2011 management restructuring exists precisely because the company had missed mobile cycles before, and another miss would put the integrated model itself under pressure.
The trend: Microsoft is converting a decade of mobile catch-up into a vertically integrated device-and-platform strategy, testing whether a licensor can become a hardware competitor without breaking its partner ecosystem.