As I mentioned a day or so ago, I'm at Executive Partner Summit, and have just returned from the keynote address given by Steve Ballmer. There were a number of things that came out, especially during the question and answer session, which, surprisingly, Steve took from the floor without preparation.
Firstly, on the subject of Software As Service, Steve was clear that SAS is a fundamental change in the structure of the industry, and that we will look back on it in 20 years as one of the most significant things that have happened. He spoke at length of "advertising supported customer experiences", and suggested that Microsoft has embraced the software as service model. He didn't say he was going to deliver Office on the web, but I got the feeling that he wasn't ruling it out. He did suggest that "software as service is a change that will take longer than anyone will forecast".
One question from the floor was answered in an interesting way. It concerned the threat of Linux, and the surprising (but in retrospect obvious) answer was that Linux wasn't the threat, it was new business models that were the threat. Software as service is such a business model (the Google's, Yahoos, and et al), as is open source. For the former, Microsoft are playing already with Live and with other offerings.
For the latter, Steve said "we can't do open source, but we compete on functionality". In other words, you might pay, but you get more. That's an interesting position. Actually, the market data that Microsoft shows on this subject suggest that both Linux and Windows are gaining share, at the expense of Novell and Unix and the other players.
Steve made another interesting point: Linux doesn't really have a monetised business model, so it is likely to be always around. Even if it loses in functionality to Microsoft, there's no business to go out of business. He expected that in 10 years time, he'd still be talking about Linux vs. Windows share, but hoped that he'd be able to report Windows taking share from Linux.
The other thing that I found especially interesting was the emphasis that Steve placed on a new emerging business for Microsoft: that of VOIP. It was quite clear that MS plans to be in the voice market, and not just in the space of telephony. There was a particular slide that Steve used suggesting that rich voice experiences - such as voice enabled email - were in the future, perhaps with their initial product release next year. Another quote from Steve: "if VOIP is just about cheaper phone calls, it doesn't make sense. Putting voice on IP means that you can create interesting voice experiences".
In that sense, he said, Microsoft were a huge opportunity, rather than a threat, for Telcos. Just as well, since Telcos are a big customer for Microsoft. Supporting that, he said that he was involved in an announcement with France Telecom this afternoon (wouldn't say what, but we'll all know in a few hours) that bordered on a VOIP collaboration.
On the subject of security, Steve said that customers expected Microsoft to take end to end accountability for the robustness of its platform. No longer was it acceptable (according to his customer data) for Microsoft to say, "you need Antivirus and must buy it elsewhere". A secure platform from Microsoft, with the ability to get extra functionality from other vendors, was the theme.
There were no new announcements or issues raised in the presentation, but one was left with a feeling that this is a Microsoft that is poised on the point of another major shift, one of the same kind as when they miscued their involvement with the Internet. That time, the whole company turned on a dime and caught up pronto. Remember Netscape?
Microsoft has, to date, been successful in reinventing itself to match the industry, and Steve Ballmer didn't leave all that much to the imagination about the future direction of the company.