Microsoft boss seeks improvement

"We need to do better! We must continue to improve!" Steve Ballmer's bellows this week rang out like a school report card warning. The president of Microsoft, bedecked in a woolly pullover, did not look unlike a Maths teacher.

But image would not rank high in Mr Ballmer's list of priorities. In his 3 1/2 months as Microsoft's new president, he has had more pressing issues to deal with. His predecessor Mr Gates focused strongly on technology issues, Mr Ballmer is switching that focus to the consumer.

In an address to European journalists, he returned repeatedly to Microsoft's commitment to the customer. At times it was almost as if he felt the 85 per cent of the PC population running Windows had been short-changed of late. "I know we can always do better at making the products feel better from a customer perspective. Maybe we can achieve this through a little additional focus on the hardships people have from time to time with our products."

Microsoft is now turning its attention to providing digital nervous systems (DNS) to business. Essentially this means having the core computer infrastructure drive a company's business process and add value, rather than simply acting as a business aid.

The digital nervous system will come to businesses in the form of Office 2000, the soon-to-be-released operating system formerly known as Windows NT 5.0. Even Mr Ballmer is having difficulty getting used to the name change. "Look, I'm going to call it NT for this presentation - it's simpler."

Office 2000 promises to plug business systems together using dynamic HTML, a format for making Internet pages. Office 2000 will allow users to arrange email, Internet, Word, Excel and Access files on one page, and explore each at the click of one button.

But Mr Ballmer knows Microsoft has its work cut out, because Office 2000 must compete in the high end server market, where incumbents like Sun, Unix and IBM have been battling it out for years. "We see them as a threat, and we've a long way to go to beat them. We just have to show applications' developers the merits of our products."

Then there's the small matter of a legal battle with the US government over alleged monopolistic practices. Mr Ballmer shrugs it off. "I get a note from the lawyers every couple of weeks telling us they think we're doing great, and I don't think about it much beyond that." However, he stands over Microsoft's practices, saying he knows it has acted entirely in accordance with US anti-trust and EU laws.

The growing likelihood that Microsoft will see its stock growth slow over the next year worries Mr Ballmer. It will have a major impact on compensation for employees who are largely paid in stock options. One 23-year-old I spoke to here reckoned he had another four years to go before he hit millionaire status. According to Mr Ballmer: "Everyone got a lot more than we could have imagined, now we need to keep a balance of salary and stock. However, without the scheme we may have problems continuing to attract and keep the best people."

Mr Ballmer believes his company's future success lies in three key areas. First, ensuring consumers get the products they want and can use them easily. Second, making Microsoft the greatest place in the world for people to build software. Finally, the next phase of growth will see a push into the development of business applications to manage and control the flow of information in businesses.

Strangely the Internet does not feature strongly in Mr Ballmer's wish list. Even though he acknowledges its potential for business, there is no indication Microsoft is going to hurl its product development unit headlong towards it just yet.