Big ask for Ballmer: championing innovation

Microsoft CEO says he has to take over Bill Gates' role of driving innovation at Redmond

Microsoft CEO Steve Ballmer says that with his co-leader Bill Gates preparing to move to a part-time role at Microsoft, he has a big job to fill, to ensure the company continues to innovate and grow its revenue in new business markets.

“Bill has been the real champion of innovation, pushing us to expand into new areas,” Ballmer said at Microsoft’s recent annual Financial Analyst Meeting (FAM) in Redmond, Washington.

“I have never had to be the primary champion of innovation in our company.”

Now, he says, he is “the full-time champion of innovation,” responsible for filling the shoes Gates is vacating, to make sure Microsoft moves ahead and is successful in new product areas and markets.

Last month, Gates announced he would move to a part-time role at Microsoft in 2008 so he could focus more time on philanthropy through the Bill and Melinda Gates Foundation.

Microsoft’s chairman, who is on vacation in Africa, is a no-show at this year’s Microsoft FAM for the first time.

Ballmer says Microsoft is focused on expanding its entertainment, mobile-device and online businesses, to stay competitive as well as provide a return on investments. Investments have been made in these areas to develop offerings such as the Xbox 360 and Windows Live web-based services.

Microsoft’s CEO says he has been asked this year by financial analysts how Microsoft’s investment in these new products and markets will pay off.

“This notion that there wasn’t a big return on [our investments] — this is the first time for me that I heard those kind of questions,” Ballmer says.

In the fiscal year 2007, Microsoft plans to spend nearly US$3 billion (NZ$4.8 billion) to promote both core products as well as invest in new businesses. Wall Street analysts have questioned the size of the investment and are still unclear how it will bring returns to Microsoft shareholders. Ballmer says the company will shed more light on this topic during its next shareholders’ meeting.

Even as Microsoft expands into new markets, the company must ensure that businesses for core products, such as Windows and Office, continue to grow, Ballmer says.

Microsoft has two major product launches coming up later this year and in early 2007, when both Windows Vista and Office 2007 are expected to be released. Both products have been plagued by delays, and many analysts feel Vista will be delayed even further, beyond its expected January 2007 consumer release.

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