In an open letter to shareholders, Steve Balmer, Microsoft’s chief executive officer, has indicated in no uncertain terms that Microsoft was undergoing a fundamental and “significant shift” both in what the company does, and in how it sees itself as a devices and services company.

Part of this, Balmer elaborated, had to do with the full value of the company’s software being seen and felt in how people use devices and services at work and in their personal lives. He added that this shift would impact on how the company is run and how it develops new experiences, as well as how it takes products to market for both consumers and businesses.

Most interestingly of all, Balmer also alluded to a move by the company to make its own “specific devices for specific purposes,” as it had done with the Xbox 360 and as it somewhat controversially announced it would be doing with its Surface tablets as well.

However, perhaps in a bid to make it clear that the company was not abandoning or rejecting its third party friends, Balmer continued that the company would continue to work with a vast ecosystem of partners to deliver a broad spectrum of Windows PCs, tablets and smartphones.

This, he explained, was part of implementing its philosophy that there was no one size that could possibly fits the 1.3 billion Windows users globally.

Experiences and services

Bridging the divide between devices created by Microsoft, and those co-created in partnership though, was the all important services.

“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. This means as we, with our partners, develop new Windows devices we'll build in services people want. Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily,” explained Balmer.

To our minds, this is really the crux of the matter. Indeed, the Xbox 360 has inarguably become one of the most popular gaming consoles and multimedia entertainment hubs on the market; due in no small part to its Xbox Live service.

Balmer already alluded to this being the company’s primary focus moving forward.

“Right out of the box, a customer will get a stunning device that is connected to unique communications, productivity and entertainment services from Microsoft as well as access to great services and applications from our partners and developers around the world,” he said.

Opening Windows

Balmer cited the forthcoming Windows 8, which is due to launch towards the end of this month, as a prime example of the shift that the company was undergoing.

“Windows 8 unites the light, thin and fun aspects of a tablet with the power of a PC. It's beautiful, it's functional, and it's perfect for both personal and professional use. Xbox Music, Video, Games and SmartGlass apps make it possible to select a movie from a PC, start playing it on the TV, and finish watching it on a phone. SkyDrive, our cloud storage solution, effortlessly connects content across a user's devices. Bing's powerful search technologies in Windows 8 will help customers get more done. Skype has a beautiful new Windows 8 app and connects directly into the new Office,” he enthused.

No less important to the company – and if Microsoft has its way, to general users as well -  is Office. Balmer explained that the new Office was designed from the ground up for Windows 8 and takes full advantage of new mobile form factors with touch and pen capabilities.

“It unlocks new experiences for reading, note taking, meetings and communications and brings social directly into productivity and collaboration scenarios. The combination of a Windows 8 tablet with OneNote and SkyDrive has truly revolutionized how to take notes, annotate documents and share information,” he asserted.

To the point

In short, Balmer’s address was full of hope and promise. While he stressed that there was “a remarkable amount of opportunity ahead for Microsoft” in both the next year and the next decade, he added that this wave of opportunity would spill over onto its partners, developers, and for general users and businesses as well.