Microsoft entered the PC business for the first time last month with the launch of the Windows RT-based Surface tablet. While Microsoft has still not said how many of the devices it has sold since its launch, the company's CEO, Steve Ballmer, did admit this week that perhaps Microsoft should have released a tablet like the Surface sooner.
The admission came as part of an answer to a question posed by a Microsoft stockholder during its annual meeting on Wednesday in Redmond, Washington.
"I remember five or fifteen years ago Bill Gates holding up something and saying this is the future of computing, some tablet," the man said. "That idea was so far ahead of its time and now we are playing catch-up with the iPad."
Ballmer was then asked, "...what are we doing to encourage an atmosphere that supports innovation, the things that are going to be coming next?" In his response, Ballmer seemed to admit that Microsoft should have brought a product like the Surface to market much earlier than this year. He said:
Bill did hold up a tablet many years ago. And not because we don't have good hardware problems but sometimes getting the innovation right across the seam between hardware and software is difficult unless you do both of them. And maybe if we had started innovating, which is what we really did was Surface, we are innovating on the seam between hardware and software. Maybe we should have done that earlier, maybe that tablet shift would have been sooner but we are also building a big business working with those partners and serving a lot of needs.
Ballmer said that he felt Microsoft was very innovative in terms of its software development and that the company was now "really pushing forward aggressively" to combine hardware innovation with its software products.
Many have believed that Microsoft's move to launch its Surface tablet now was simply a response to what Apple had done. However, this week's frank admission from Ballmer shows that the company – and its leaders – have come to the realization that it has perhaps been too complacent for a long time.
Ballmer pointed out to another shareholder this week that the company has continued to grow its business, both in revenues and in profits, over the last decade. However, it has also seen other companies, most notably Google and Apple, take the lead in technology divisions outside the Windows PC industry.
Microsoft has tried and failed to compete with Apple in the past in other areas (such as the failure of the Zune), but it has succeeded in other parts of the industry. Microsoft launched its Xbox division in 2001 and now Microsoft is arguably the biggest force in the gaming console industry. Its Microsoft Office division is still number one in the productivity software business, even with free software such as OpenOffice available for anyone to use.
Now Microsoft needs to do what it did when it launched the Xbox, and continues to do with Office. Many people didn't believe the company could compete with Sony and Nintendo, but it did with the Xbox, thanks to offering features that the other two companies could not, or would not, add in their consoles. The Office team has embraced the cloud with SkyDrive and added even more features for users on the go.
It has already made the Surface tablet a more durable product than any other product like it on the market, and the Windows RT version comes with Office RT out of the box. That addition has made Surface a bigger-value proposition out of the box than anything that Apple and Google have offered for their respective tablets.
What's next? Ballmer has already indicated that he would like to see more links between other Microsoft products. We are already seeing that happen with Skype using Microsoft account sign ups, even on the iOS version, and of course with Xbox SmartGlass apps. I'm sure he would like to see a living room with an Xbox console connected to a TV, along with a Surface tablet and a Windows Phone device all connected to each other.
Ballmer seems to know that Microsoft has been slow in the past to be leading the technology charge, but that doesn't appear to be the case anymore. It may take a couple more years, but it seems clear that Ballmer has made - or will soon make - decisions that will keep Apple, Google and other companies up at night as it launches even more products and services in the months to come.
One thing is clear: the components of Microsoft's enormous empire are coming together and integrating as never before. Will the company finally succeed in conquering all corners of the tech world? Watch this space...
Images via Microsoft
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