Ballmer: 1 Billion Windows Served

Steve Ballmer said that during fiscal 2008, which started on July 1, there will be "more PCs running Windows in the world than there are automobiles. The number: 1 billion.

Microsoft rightly attributes Windows success in part to partners. But Ballmer made clear that Microsoft's partnering would change, as the company expands into new businesses.

"In phones we don't build the hardware," he said. Microsoft would develop software. But with Xbox and Zune, Microsoft does everything "end to end," Ballmer said. He made clear that Microsoft would use "different techniques of partnering in consumer electronics." Meaning: Microsoft would do more-end-to-end products.

He also mentioned Windows Vista-based Surface, where Microsoft does the hardware and software. "Probably we will partner differently," he said of the opportunities around Surface. Meaning: No Surface for OEMs.

The point: Microsoft is changing the rules about how it partners, and this won't be just about new areas like consumer electronics. Partner opportunities will change as Microsoft rolls out its software plus services concept. Ballmer made absolutely clear that services would be one of the three core parts of forthcoming Microsoft products.

Ballmer is quite a dynamic speaker compared to Chairman Bill Gates, who preceded the CEO's keynote. Ballmer was true to form discussing Microsoft's four competitor categories:

• Other commercial software firms
• Open source
• Advertising
• Consumer electronics

Interestingly, Microsoft sees three of the competitor categories as areas for aggressive expansion. Not surprisingly, open source is the exception.

"It's not a business model we can embrace," Ballmer said of open source, because there is "no shareholder value."

In typical brash, bold form, Ballmer dismissed the challenge presented by upstarts. He said that products like Office 2007 or Windows 2007 don't come about from "three people in a garage [working] for three days." He later added that "big things...don't always happen overnight." Actually, they rarely do, he emphasized.

I found his view on media companies to be quite interesting. Ballmer described a publisher as an ISV (independent software developer) that "also accepts advertising." Is he visionary or out of touch? I would say he's a little of both.

Ballmer repeatedly spoke about the importance of accountability, which I found perplexing—no, humorous. Many Microsoft Watch commenters have called for more accountability, particularly when Microsoft missteps. Accountability should start with Ballmer, who apparently agrees with that sentiment.

Ballmer said that Microsoft's goal is to "hold people accountable at all levels of the organization, from the top down."

Will we see it?