Ballmer announces 'fundamental shift' in Microsoft's technology trajectory

Expect 'specific devices for specific purposes' says CEO

Microsoft CEO Steve Ballmer has announced intentions for a "fundamental shift" in Microsoft's technology business model, describing a future in which the company will start to "build specific devices for specific purposes".

In his annual letter to shareholders for the fiscal year 2012, Ballmer reflected on Microsoft's record $73.7bn (£46bn) revenue for the year, saying Microsoft is positioned for "an incredible future".

He described Microsoft as a "devices and services" company, backing up his June unveiling of a cloud-focused SaaS-based Office 13, as well as the company's announcement of its own hardware devices with the upcoming Surface hybrid tablet and continued focus on the Xbox home media entertainment range.

"There will be times when we build specific devices for specific purposes," said Ballmer. "In all our work with partners and on our own devices, we will focus relentlessly on delivering delightful, seamless experiences across hardware, software and services."

Ballmer trumpeted the increasingly important "consumerisation of IT", saying businesses now "face a number of important opportunities and challenges.

"Enterprise IT departments are tasked with deploying technology that drives the business strategy forward. They decide what solutions will make employees more productive, collaborative and satisfied."

The cloud, Ballmer said, is the place to be in this regard, and is one of Microsoft's "largest opportunities". He reminded shareholders that Office and CRM suite Microsoft Dynamics can now be run entirely off-site in the cloud, or in combinations with on-premise portions.

Looking to the future, Ballmer laid out five "distinct areas of technology" on which Microsoft would endeavour to focus in "both the next year and the next decade".

The first was a dedication to new form factors to allow users to use touch, gestures and speech in "increasingly natural ways".

Secondly, Ballmer staked Microsoft's claim to AI, announcing Microsoft will make technology "more intuitive and able to act on our behalf".

Thirdly, Ballmer reiterated the company's commitment to cloud, then hammered home the "one platform" commitment for PC, tablet, phone, server and cloud.

Finally, Ballmer said Microsoft will deliver "new scenarios with life-changing improvements in how people learn, work play and interact with one another".

The company's new focus on hardware adds credence to mounting speculation about a Microsoft-produced Windows 8 phone.

Meanwhile, designers at the universities of Cambridge, Newcastle and Crete have revealed a device being called Microsoft Digits – a wrist-mounted camera that appears to work in a similar way to Microsoft's existing Kinect motion controller, but dedicated to scanning the hand with infra-red beams to accurately model the appendage in 3D, and effectively virtually replicating the everyday functions of a human hand on a computer screen.

The device could be seen to support Ballmer's "form factors" pronouncement, though whether it will prove in any way "life-changing" only time will tell.