Steve Ballmer Addresses MS Employees About Apple

July 23rd, 2008 at 3:00 PM - Columns and Opinions by John Martellaro

Microsoft, by all accounts, has been on a rough road with the attempted Yahoo! acquisition and the Vista rollout. After a top level reorganization, splitting the single Platforms and Services Division into Windows and Online divisions, Steve Ballmer turned his attention to the competition with Apple in an e-mail to employees.

The e-mail was obtained by Kara Swisher with All Things Digital and was dated Wednesday, July 23, 4:30 PM.

The e-mail opened with a focus on investing in the right opportunities, expanding presence with Windows and the need to drive end user excitement for MS products.

Referring to Apple, Mr. Ballmer wrote:

Apple: 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, weire changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. Weill do the same with phones -- providing choice as we work to create great end-to-end experiences.

Later in the e-mail, which appears to to be a back-to-basics kind of message, Mr. Ballmer confessed that "...Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, weive made incredible progress in our technology, and weill continue to make smart investments that will enable us to build an industry-leading business."

Even in corporate prose like that, itis hard not see an admission of failure and some revision of history.

In order to deal with apparent failures with both Yahoo! and Vista, Microsoft is splitting up its Platform and Services Division into two divisions, Windows and Online Services. Each division will report to Mr. Ballmer. Whether this is a tacit admission that the load on Kevin Johnson was too great is not clear, but Mr. Johnson is now off to become the chief executive of Juniper Networks.

Mr. Ballmeris comments about Apple suggest that there has been a realization that the quality and focus of the product is important to customers, independent of how big a company is.

Microsoft is planning to spend a reported US$300M in an advertising campaign to get their side of the story across on Vista - a response to Appleis "Get a Mac" ads. In the end, however, what Mr. Ballmer is doing is calming the troops with obvious ideas, reorganizing [the deck chairs] and spending advertising money to present an image, not solutions.

Itis amazing to see a real salesman at work.