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Ballmer begs partners to love Microsoft clouds

Promises 'full vim and vigor'

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Steve Ballmer wants to rally business partners around Microsoft's flagship internet and mobile initiatives, but in the process, he reveals just how far Microsoft has to go and how much the company relies on decision-makers outside of its control.

Opening Microsoft's annual Worldwide Partner Conference in Los Angeles on Monday, Ballmer enthused about the growing market share of Microsoft's Bing search engine, about Boeing and American Airlines using Windows Azure, and about Nokia embracing Windows Phone.

Ballmer insisted that Microsoft has also stitched together a "much more" coherent and complete public- and private-cloud strategy during the last year, one that combines existing enterprise products such as System Center, Visual Studio, and Active Directory, and lets you take private apps to the public Azure cloud.

VMware, Oracle, Google, and Amazon have merit, he admitted, but he says they're unique, specific, and limited. "We think you want to mix and match between the public and private environments," Ballmer told his conference audience. "We are the only company out there that's investing in on-premises and on the cloud. The amount you learn from working [in] both environments to work in the other is dramatic."

58% of companies now in the heavens

Before Ballmer spoke Monday, Microsoft quoted a partner survey that said 58 per cent of companies are working with cloud, but the same survey characterized that work as "more opportunistic than core" to their business.

In the midst of Monday's round of thank yous to partners selling, customizing, and integrating Microsoft's software, Ballmer revealed how much his company is dependant for success upon a group of businesses who are not exactly rushing to embrace the cloud, mobile, and search strategies upon which he has staked Microsoft's future.

Rather, those businesses continue to sell just the offerings for which Microsoft has become best known: Windows and Office.

Celebrating continued strong sales of Office, Ballmer noted: "If you said to me 10 years ago when we were cooking with Office in the early 2000s [that] we'd still be doing double digits [growth] 10 years later, I have to admit I might be dubious. Yet through the incredible work of this community and the R&D teams, that's exactly what we are doing."

Microsoft's chief executive claimed "outstanding" double-digit growth in Office and Windows Server, with more than 100 million licenses of Office 2010 shipped in the last 12 months, and 76 per cent market share for Windows Server, according to IDC.

Microsoft will announce annual results for the year on July 21. Ballmer let slip at a recent event that Microsoft will make almost $70bn in revenue and more than $20bn in profit.

Interwebs lag

But to a certain extent, partners are staying away from Bing, Ballmer's multi-billion-dollar search and ads reboot that was designed to unseat Google. "Bing is the Microsoft product and service our partners expend the least amount of time with right now," Ballmer admitted.

This will change, he suggested, hinting at some kind of "opening up" of the Bing search infrastructure. "We are thinking about the dynamics and architecture that will let us open Bing up over the next few years to become more of a platform."

Does this mean taking Bing or parts of Bing open source, or just publishing more of the APIs to outsiders? He didn't say.

For all of Microsoft's efforts, Bing has 14.1 per cent market share in the US. Microsoft likes to play college statistician by pointing out that this is a whopping 30 per cent growth rate.

"Sometimes I get asked: 'Isn't this market all done?' That is exactly the wrong thinking," Ballmer said.

"The internet is changing [more] today than at anytime in history, moving from an internet based around HTML documents to an internet based around social graphs and geo information, where you want to access information not just from keyboard and fixed device but using voice and other techniques."

Talking of Windows Phone, Ballmer admitted that Microsoft has "a lot of work to do to break though," and joked: "In a year we've gone from very small to very small. But it's been a heck of year and you are going to see lots of programs in that market as we move forward. Nokia and people in the phone business believe in us," he insisted.

Ballmer also tackled his $8.5bn purchase of Skype, seen as undercutting the Lync communications server – something partners have been jumping all over to sell as part of an email and collaboration stack. Microsoft claims 70 per cent of the Fortune 500 now use Lync.

"I've been asked by partners whether [the Skype acquisition] means you are not as serous or enthusiastic about Lync. Quite the contrary," Ballmer said.

"One of the great motivations is to enable the enterprise to have all the control it wants of communication and collaboration though Active Directory and Lync, yet connect people in the enterprise to consumers and trading partners around the world. Lync and Skype is a strategy that will allow the consumerization of IT to proceed with full vim and vigor."

$580bn for Ballmer pals

To convince partners that they should swing behind their cloud, Bing, and mobile strategies, Microsoft served up some numbers to prove that betting on Redmond results in partner profits: $8 for each $1 earned by Microsoft, producing $580bn revenue in the partner ecosystem.

When beginning his Monday keynote, Ballmer recalled that last years' conference was "scary" because Microsoft had gone "all in" on the cloud, seeing as how the cloud is disruptive to technology and existing business models, factors that mean change for Microsoft and for partners.

"It was scary because I said we are all in on the cloud and we want partners to come with us. It is where things are going and we need you to decide whether you are going with us," Ballmer said.

Closing his talk an hour later, the bullish CEO made it clear who's really in charge. "At the end of the day, we are in with you 100 per cent. As you go so goes Microsoft." ®

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