Microsoft Financial Analyst Meeting: Steve Ballmer, Kevin Turner, Robbie Bach

Rob Enderle

I'm writing this from the Microsoft Financial Analyst Meeting (FAM) in Redmond, Wash. (held last Friday). Redmond typically is cold and cloudy, but is currently experiencing 100+ temperatures, and it feels more like Texas.


This is an important meeting for Microsoft. It just had a bad quarter and announced a partnership with Yahoo, with mixed results. Microsoft has been historically weak on marketing; that makes it difficult for it to sell a deal like the Yahoo partnership because it doesn't have an adequate marketing tool to do that. This is the historic problem of an engineering-driven company. However, it does have the ability to reach out and sell, and this meeting is designed to help do that to an important audience -- the Financial Analyst community.


Steve Ballmer: CEO


I've felt for some time that Microsoft's CEO has been trying too hard to be someone he isn't, and he has generally appeared unhappy and been unsuccessful as a result. In this meeting, Steve, who was the first speaker, was Steve. He had energy, he seemed to enjoy his time on stage, and he was engaging, though he did not engage the audience directly. He'll never be a Steve Jobs, and I don't think he should even try to be as dull as most CEOs seem to feel they must be, but he showcased a personal pride in his people and products that few do well.


He also took ownership for Windows 7. One of the problems I think Microsoft has had much of this decade is that the top leadership just doesn't take ownership for keystone products. This is something Apple does very well, and it helps personalize and make the offering unique and special.


Part of Steve's personality is to be competitive. He argued that Google Chrome was just another lame-brained thin client product with heavy client requirements that will kill it. He argued that Apple buyers are largely focused on attractive hardware and that the new hardware using Windows 7 would match or exceed Apple's at a much lower price. (Actually, I think he got this partially wrong. Folks seem to buy Apple for ease of use, reliability and lack of viruses, but it isn't unusual for someone in software to blame hardware.)


He presented his company in a positive light, as a company cheerleader, and that is exactly what I think the public role of a CEO should be. Too many seem to think their public role is showing off their wealth, their ability to schmooze celebrities, their work on political campaigns, and overwhelm us with contentless PowerPoint slides when they should be focused on what they are being paid to do. Steve earned his salary at this event and the fact that he defended Yahoo's position more than his own enhanced his image as a good partner.


Kevin Turner: COO


Kevin didn't add that much to what Steve did and seemed to be kind of a mini-Steve. If the goal was to position him as the true number-two guy, the event accomplished that, but I think he was too much of a Steve Ballmer clone and not enough of his own personality came though. Granted, this is the first time I've seen him on stage and he actually could be a lot like Steve. The big message is that it appears Microsoft has a succession plan.


Robbie Bach: Entertainment and Devices


Robbie focused initially on his weakest product, which is Windows Mobile. Microsoft has been getting its butt kicked on phones, mostly by Apple. He argued that its strength was in the back end and in connecting back to business services. He admitted that they need to move in the consumer direction to catch RIM and Apple while holding off Google. Part of the strategy is to offer phone choices that exceed the others and improve the experiences dramatically to close the competitive disadvantage they have against Apple and Google.


The biggest initial experience improvement later this year will be with browsing (which sucks on a Windows phone -- my words, not his). Microsoft will then market brand "Windows Phone" so that folks connect the concept with the phones that use the operating system.


He then moved to Project Natal, which has been the positive buzz in console gaming. If you have kids, don't let them see this. This was the first time I'd seen it and it is cool. It's likely the biggest step toward true virtual reality we have yet seen. This is gaming where your body is the controller; it takes the concept that the Wii made famous and makes it massively more incredible. Some of the usage models that were showcased I'm not sure I'd like; for instance, driving without a physical steering wheel. Robbie did a nice job of connecting the dots between his division and the other parts of Microsoft and making the company look more like a company and less like a bunch of warring executives. However, he probably should have shown the 6.5 Windows Mobile platform and discussed his marketing plans for the second half of the year for that product.

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