CES 2009: Can Steve Ballmer steer Microsoft through a perfect storm?

Posted by Wolfgang Gruener

Opinion - Rumored layoffs in the thousands, an operating system that can only be described as a disaster for the company, an ailing browser, virtually no progress against Google and a difficult economic environment create a monumental task for chief executive Steve Ballmer to navigate the company into a more promising future. The CES keynote showed a charismatic Microsoft CEO who delivered a flawless presentation, even if he may not have addressed CES attendees, but Microsoft employees instead.

The CES opening keynote has been a traditional Bill Gates event in recent years and 2009 is the first year that Gates’ successor, Steve Ballmer, had the honor to open what is one of the most important tech tradeshows in the U.S. From a journalist’s perspective, this year’s keynote wasn’t so different - wait times were down from last year, but some waited for more than two hours. The keynote itself was perfectly choreographed and featured music artists such as Tripod and stunning video presentations. Compared to the rather dull keynotes we have seen at CES 2009 so far, Microsoft’s keynote was the one not to miss.

But in the end, there was no Bill Gates and there was the question what Ballmer would talk about and whether he can fill Gates’ shoes.

It was clear from the beginning that the Ballmer keynote was not necessarily directed at CES attendees, but squarely aimed at Microsoft employees in the audience. More than 300 seats in the front rows were reserved for Microsoft employees (which not necessarily makes a journalist’s job at such an event easier), who witnessed a motivational speech that addressed the current “challenging” state of the economy, the need for innovation during such a time, opportunities and the ability of the company to overcome a downturn with a compelling product strategy.

Ballmer has been known to be a much more passionate speaker than Bill Gates ever was. Whether Ballmer delivered on that expectation or not may come down to personal taste, but I have to say that if I was a Microsoft employee, I would be proud of my boss today. Ballmer took elegant shots at Apple without insulting its rival, reiterated the current and future value of the PC and Windows, and spent plenty of time explaining that Microsoft has a strategy to be prepared for a convergence of screens - PC, cellphone and TV. Partners were highlighted, creating a sense of community in which Microsoft has a commanding role.

Without mentioning Vista, Ballmer polished the image of Vista, describing Windows 7 as the “best Windows ever” and hinting to consumer cloud services. “Windows will tie all information together through the cloud,” he said. Of course, there were many questions Ballmer did not answer, especially those inconvenient questions about how Vista is performing.

He noted that in times of “reduced expectation” and a “recession that will be with us for quite some time”, “there is no turning back from the connected world.” The pursuit for innovation during tough economic phases will create an advantage, and this is why Microsoft continues “to invest more than others,” Ballmer said.

Ballmer’s speech was energetic enough to create a certain sense of passion for Windows and technology overall. His promises created great expectations. And that may be just what is needed to motivate the company’s employees following a year of consistent criticism and, if we forget the Xbox 360 for a moment, not so great products overall. Let’s just hope for those employees that the rumor of the company announcing dramatic layoffs (that may affect up to 15,000 people) on January 15 is just a rumor.

So, can Ballmer steer Microsoft through what shapes up to be a perfect storm for the company in 2009? Is a passionate speech enough? No. But it surely helps to get the company fired up. Let’s see what Microsoft we will see in 2009 and if Ballmer can keep his promises.

 

The opinions expressed in this commentary are solely those of the author.