Ballmer Lays Out 'Multicore' Business Plan to Investors

Published: August 16, 2006

by Alex Woodie

During a recent financial analyst meeting, Microsoft CEO Steve Ballmer said the company needs to be a "multicore" business to survive. No, Ballmer wasn't referring to the new multi-core X64 processors making their way onto the market, but instead was making an analogy to demonstrate how he views Microsoft's different divisions evolving in the future.

"I think about us as a business that we might characterize as multicore," Ballmer told his audience. "If the new generations of microprocessors are all supposed to have multiple cores on a single chip, Microsoft has multiple core capabilities or operations or businesses in a single entity."

For many years, people thought of Microsoft as a provider of development tools, but then the company found success writing desktop operating systems and applications, Ballmer says. "And throughout most of the 1990s, there were big questions from customers, from investors, can this company become a server company, an enterprise company? There are no questions about that anymore," he says.

Now, Microsoft is on the cusp of growing two more "cores" to complement the two successful businesses it already has. "I don't think most technology companies ever get a second big set of capabilities. And we're trying to grow today two new cores, one in online and one in entertainment," he says.

While Microsoft has steep competition in all four "cores" (except for the desktop, where it still enjoys a supremely profitable monopoly), Ballmer shows no doubt that Microsoft will ultimately be successful in each one. However, to be successful in this quest, the company will need to truly understand customer needs, and be one step in front of the curve in applying technological solutions.

"What we do in our Information Worker Division, now renamed our Business Division, some of that is very desktop oriented, but as we enter the world of unified communications, as we enter the world of business applications, that segment actually spans different kinds of customers with different kinds of needs," Ballmer says. "And the fact that we uniquely can make multiple technologies map and work for multiple business models and multiple segments, I think is great."

You can read the entirety of Ballmer's speech at www.microsoft.com/msft/speech/FY06/BallmerFAM2006.mspx