Steve Ballmer: Microsoft Mobile Strategy 'Won't Work' - InformationWeek

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12/3/2015
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Steve Ballmer: Microsoft Mobile Strategy 'Won't Work'

Former Microsoft CEO Steve Ballmer thinks Windows Phone should run Android apps and the company should be more open about cloud earnings.

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Steve Ballmer was not shy about sharing his opinion on Microsoft's financial reporting and mobile app strategy during the company's annual shareholder meeting in Bellevue, Wash.

Ballmer, who is Microsoft's former CEO and biggest individual shareholder, does not think its Universal App strategy will give Windows Phone the boost it desperately needs. In an effort to expand its Windows Store, Microsoft is allowing developers to write Universal Apps, which work across PCs, smartphones and Xbox.

During the meeting, current CEO Satya Nadella cited the Universal Apps strategy in response to an audience member's question about what Microsoft plans to do with a lack of support for popular mobile apps like one for Starbucks.

[A Microsoft "Surface Phone" is reportedly in the works.]

"That won't work," said Ballmer of Nadella's response, according to a Bloomberg Business report. He believes Windows Phone must be able to "run Android apps."

Microsoft has attempted to do this. As part of its mobile strategy, the company created the goal of enabling developers to port iOS and Android apps to Windows Phone with two tools nicknamed Project Islandwood and Project Astoria, respectively.

While the iOS app porting project is still ongoing, Microsoft delayed Project Astoria in November 2015. The app emulator was intended to allow Android developers to port their apps with few changes to the code base.

Ballmer's Android comment may seem strange coming from a man who refused to support rival platforms. During his term as CEO, Ballmer caused his own mobile setbacks when he dangerously underestimated the iPhone's success and bought Nokia to boost Windows Phone.

Since Nadella took over, part of his plan has been to revamp Microsoft's mobile strategy. July 2015 brought 7,800 job cuts, most of them in the smartphone division. Following those layoffs, its next earnings report reflected a $7.5 billion write-down from the Nokia acquisition.

Mobile comments aside, Ballmer also criticized Microsoft's financial reporting structure. It should share profit margins and sales for its cloud and hardware businesses, he said.

Microsoft's cloud earnings are shared as an annualized run rate, meaning sales figures from a certain point in time are reported as generalized rates for the year.

(Image: EdStock/iStockPhoto)

(Image: EdStock/iStockPhoto)

Ballmer called this reporting methodology "bull----" and demanded more detailed information. "They should report the revenue, not the run rate," he said.

The former CEO also noted the company's software business has high gross margins compared with its hardware and cloud services divisions. Reporting the margins would give a better understanding of profitability.

Microsoft seemingly does not plan to alter its strategy as a result of Ballmer's comments, as indicated in a comment following the meeting:

"We enjoy a regular dialogue with Steve, and welcome his input and feedback, as we do from our other investors," said Chris Suh, Microsoft's general manager for investor relations, in a statement.

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Kelly Sheridan is the Staff Editor at Dark Reading, where she focuses on cybersecurity news and analysis. She is a business technology journalist who previously reported for InformationWeek, where she covered Microsoft, and Insurance & Technology, where she covered financial ... View Full Bio

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batye
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batye,
User Rank: Ninja
2/3/2016 | 11:13:58 AM
Re: Pending Review
@danielcawrey, interesting point, I could not agree more... 
batye
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batye,
User Rank: Ninja
2/3/2016 | 10:52:31 AM
Re: Ballmer and Microsoft: Art of the Retort ?
@Technocrati - good observation... lol lol lol :)
Technocrati
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Technocrati,
User Rank: Ninja
12/7/2015 | 6:13:00 PM
Ballmer and Microsoft: Art of the Retort ?

"...We enjoy a regular dialogue with Steve, and welcome his input and feedback, as we do from our other investors," said Chris Suh, Microsoft's general manager for investor relations

 

 

Sounds like someone wants to keep their job.

danielcawrey
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danielcawrey,
User Rank: Ninja
12/4/2015 | 12:42:57 PM
Re: Pending Review
I think it would benefit Microsoft if developers were able to port Android and iOS apps over.

I don't think a unified strategy of allowing apps for Windows Phone, PCs and Xbox will work, as those are all very different platforms. 
nasimson
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nasimson,
User Rank: Ninja
12/4/2015 | 12:38:11 PM
Why now?
These are the two practices that were very much alive in the same shape in Steve Ballmer's time. So if he had no problem with these as CEO, why does he has a problem now as an investor?
jries921
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jries921,
User Rank: Ninja
12/4/2015 | 12:18:13 PM
Maybe he shouldn't have resigned from the board
That is really where the points he made should be debated (or at a stockholders' meeting).  It's one thing for outsiders like most of the readers of this article to discuss the behavior of large corporations, but it's somewhat unseemly for a major stockholder and former CEO who assuredly could have a seat on the board if he wanted one to resort to public criticism, except possibly as a last resort (as with the attempt of the Hewlett and Packard heirs to avert the HP-Compaq merger).

This is the second report of Mr.. Ballmer's criticism of current MS policy I have read, but neither report says exactly where the comments came from.  Did he hold a press conference; or issue a press release?  Was he interviewed on some televised news program?  Did he write a letter to the editor?  Seemingly, there is no knowing, except by means of further research by the reader.
melgross
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melgross,
User Rank: Ninja
12/4/2015 | 10:45:13 AM
What success?
There is no evidence that what Nadella is doing is becoming successful. Windows licensing is down again, and looks to be down in the future. Win 10 has lots of problems. Right now, Azure seems to be the only really successful product Microsoft has on a large scale. And Ballmer is right in that run rates are imaginary numbers. Wall Street is over confident in Microsoft's future. I don't see that future as being so rosy. Phones are down, and comprise a minuscule market share. Surface tablets that some are giddy about, are doing poorly too. Let's face it, over the last 12 months, Microsoft may have sold a total of 3 million Surface tablets. This product, whether continuing to grow or not, has a tiny group of potential users. For a Windows product, it's very expensive, as is the Surfacebook. The entertainment division is still losing money, and the XBox One is being killed by the PS4. Despite them telling us that Bing will become profitable shortly, over the years, it's still losing big money. So, no, Microsoft isn't doing that well under Nadella.
PedroGonzales
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PedroGonzales,
User Rank: Ninja
12/4/2015 | 9:36:19 AM
Re: Dropped the ball
I agree.  It was during Ballmer leadership that Apple and Google set their foundation for their mobile success.  I think let wait and see what the new CEO will do.  I will take time for Microsoft to be able to catch up with Google and Apple since they already have established themselves in the mobile market.  If microsoft can't catch up fast enough, they are competing with two giants in the mobile industry.  I went to a Microsoft store.  I was surprise their employees do not get a lumia phone, I heard people more interested in getting a surface than a lumia  
Whoopty
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Whoopty,
User Rank: Ninja
12/4/2015 | 7:10:08 AM
Dropped the ball
This seems a little rich for Steve Ballmer to suggest that Satya doesn't know what he's doing. Ballmer spent years ignoring mobile and not pushing Microsoft in the direction the industry was moving. Although he did push for Surface, which has become quite a strong entity, it's hard to imagine Steve Ballmer predicting where Microsoft should go where it comes to mobile.
Jason Lebrecht
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Jason Lebrecht,
User Rank: Moderator
12/3/2015 | 5:21:28 PM
Ballmer, Microsoft's Monday Monring QB
Seems like Ballmer and Nadella would have a better relationship then what we are seeing here. Let's hope their communication improves for the good of the industry and new solutions.

 

Jason Lebrecht

IoT Consultant  

 
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