Microsoft's Ballmer: More investments coming

Software giant's CEO on the eight core areas vital to the future of Microsoft

Here is how Ballmer highlighted each area of opportunity:

-- With Windows for PCs, Ballmer said it was not the fastest growing area (by percentage), but remains one of the most lucrative in terms of absolute dollars. He noted emerging markets, where Microsoft does not get as much per copy of Windows as it does in established markets, will fuel growth and he said Microsoft is investing in R&D, marketing, the next version of Windows and will invest in building "consumer excitement" around Windows. He said the growth prospect with Windows Live services would be advertising.

-- For corporate desktops, Ballmer said the focus would be on providing more value per desktop and highlighted Office 2007 as the current driver in larger companies. He highlighted enterprise search, using the recent acquisition of Fast, and expanding the corporate sales force as investment areas. He said providing online services to large companies, especially around platforms such as Exchange and SharePoint via Microsoft Managed Services, would be another priority.

-- In terms of server units, Ballmer said the company would "democratize virtualization." He said, "You can read that as saying our prices are going to be lower than other people's prices." He added that investments will be needed in management, high-performance computing and Web servers, as well as sales, marketing and technology around various server workloads, including security where he admitted weakness. On the services side, he said the opportunity would be in subscription-based services around deploying servers and data center infrastructure.

-- For SMBs and consumers, Ballmer said Microsoft would focus on expanding Office to the Web via Office Live and continue to invest in Dynamics CRM and ERP. He said the Dynamics Live service would grow via subscriptions and advertising.

-- In terms of online advertising, Ballmer highlighted R&D investment and building out scale for both the Web search and advertising platform.

-- For Xbox, he said the investments would focus on expanding into weak sales areas such as continental Europe and Japan and to extend the appeal of Xbox beyond traditional gamers. The growth opportunities, he said, would be around subscriptions, advertising and transactions.

-- In Windows mobile, investments will come around additional applications that run the platform, which Ballmer said would start to appear in the next 12 months. He said the growth prospects would be around Windows Live Mobile and advertising.

-- In other areas of investment opportunity, Ballmer mentioned healthcare and education, Zune, sales force in emerging markets, and commercializing the cloud platform. Ballmer also said Microsoft's Surface computing platform would get a consumer makeover. "We have had more push back to get a consumer version of Surface to market than you can shake a stick at. So we will follow our nose in terms of customer interest and make a set of investments to try to take some steps toward making Surface a consumer product.

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