In his annual letter to shareholders, Microsoft CEO Steve Ballmer indicated the company is headed in a new direction and will have a greater focus on hardware and online services in the future. "To best understand what we are about to deliver and what we're building toward, it's important to recognize a fundamental shift underway in our business and the areas of technology that we believe will drive the greatest opportunity in the future," Ballmer wrote.
Ballmer feels this opportunity is around devices and services. As he put it, "Last year in this letter I said that over time, the full value of our software will be seen and felt in how people use devices and services at work and in their personal lives. This is a significant shift, both in what we do and how we see ourselves — as a devices and services company."
Apple has enjoyed great success as it has shifted to creating its own devices, and it appears Ballmer has taken note of this strategy. Although Microsoft will continue to work with its ecosystem of partners to deliver Windows PCs, tablets, and phones, it's possible the company could begin to make its own phones and other devices in the future as well. "There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface," wrote Ballmer.
Ballmer also intends to focus some of the company's efforts in the cloud: "Helping businesses move to the cloud is one of our largest opportunities. All the online services people use today — both from Microsoft and other companies — run on servers in datacenters around the globe. The volume of Internet services used will continue to grow as people connect to the Internet from more devices for more purposes — fueling incredible opportunity in our server business."
Moving forward, Ballmer says the company will focus on developing new form factors, making technology more intuitive, building and running cloud services, and establishing Windows as a single platform for PCs, tablets, phones, servers and the cloud. Devices and services launching this year will reflect this focus.
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