Microsoft's top executives spent nearly four hours Thursday explaining why the company is charging ahead with retiring CEO Steve Ballmer's "One Microsoft" plan. The remarks came during Microsoft's first financial analyst meeting in two years and touched on a number of much-discussed topics, including whether Microsoft Office will be released for the iPad and why consumers are crucial to the company's core enterprise products.
What can Microsoft customers expect going forward? Here are 11 takeaways from Thursday's financial analyst meeting:
1. No news on Microsoft's next CEO.
Speculation about Microsoft's next CEO has run rampant ever since Ballmer announced in August that he will retire within the next year. Nonetheless, Microsoft CFO Amy Hood put the kibosh on any such talk Thursday. "There will be no update on [the CEO selection process]," she said as the meeting began.
2. Microsoft Office will come to the iPad... eventually.
Microsoft has been under pressure for months to release a version of Microsoft Office optimized for iOS. The company has declined to do so, ostensibly because it fears an iOS version would hurt the appeal of Windows tablets.
On Thursday, Microsoft never directly confirmed that an iPad-optimized version of Office is on the way, but company execs implied as much. "We are working away on all the things you think we should be working away on," Ballmer said, adding, "We don't have our heads in the sand."
[ Can Microsoft save the Surface? Read Microsoft Surface Tablets: 7 Things To Expect. ]
Microsoft Applications and Services Group VP Qi Lu also dropped hints, stating that the company is working on "touch-first" editions of Office that would be available on platforms other than Windows. He noted, however, that Microsoft will do this in the way the best serves the company's financial interests; with Windows 8.1 tablets about to hit the market, in other words, it will could a while before Microsoft extends Office to the iPad.
3. Microsoft makes most of its money from large enterprises.
Microsoft Office's inevitable release for the iPad speaks to Microsoft's consumer interests -- but the company makes most of its money from large corporations and governments. These customers comprise 55% of Microsoft's business. Consumers and online services are a distant second, contributing 20%. OEMs account for another 19%, and SMBs are a surprisingly small 6%.
4. Microsoft believes consumers are essential to its enterprise business.
After Ballmer announced his impending retirement, some wondered if Microsoft would change tactics, paying more attention to enterprise products and less to struggling consumer efforts such as the Surface RT. Since then, Microsoft has given every indication that it intends to keep chasing both consumers and businesses, and on Thursday, company leaders argued that the two categories are increasingly intertwined.
Ballmer said innovations in end-user computing require "the right hardware and software skills" and an understanding of both enterprise and consumer users. He also touted the importance of "the right machine learning and cloud infrastructure"-- references to Bing and Azure.
Ballmer also said that aside from Microsoft, only a few companies meet these prerequisites -- namely Google. Apple qualifies in many dimensions, Ballmer said, but lacks the investment in cloud infrastructure or machine learning. He said Facebook is one of the few others that might figure out how to monetize consumer services.
"Other than that, most of the consumer services companies just don't make enough profit to register at this scale," Ballmer continued, adding that Microsoft is uniquely positioned to "create something that might generate $30 billion, $50 billion, $100 billion of new economic value."
Microsoft COO Kevin Turner said because the company's consumer efforts involve "multi-tenant, at-scale gigantic services," they help Microsoft to produce enterprise services at scale.
5. Microsoft will still make most of its profit from the enterprise.
Consumer products don't always yield the profit margins of enterprise services. Ballmer conceded as much, noting that enterprise services and devices will fuel Microsoft's profits but that consumers are nonetheless important because their preferences bleed into the enterprise.
Turner illustrated how such consumerization trends are already impacting Microsoft's business products. Consumers have driven demand for social tools in the enterprise, which Turner said now represents a $38 billion market opportunity. He pointed out that 85% of the Fortune 500 use Yammer and 90% of the Fortune 100 use Lync. As for other enterprise focuses, Turner also touted Microsoft's advances in big data and the cloud, and Ballmer said that Windows Azure is among Microsoft's most important projects.