Ex-Microsoft boss Ballmer: 'There is still money to be made in hardware'

Ballmer also denies that Windows is no longer important to Microsoft, saying there aren't many ways of generating as much profit for the vendor

Ex-Microsoft CEO Steve Ballmer has said that there is still money to be made in the PC business, claiming profits from hardware will continue to be lucrative and Windows remains very much at the heart of the vendor's strategy.

Ballmer was speaking at the GeekWire Summit 2019, revealing that he is still involved with Microsoft's hardware business and under NDA.

The former chief exec spent three decades at Microsoft, including a 14-year spell as CEO which ended in 2014 when Satya Nadella took over.

"I am an outsider under SEC regulation, with the exception of the hardware group where I am under non-disclosure which does restrict some of my trading, which I don't do; I hold my Microsoft stock," he said.

Ballmer said that Microsoft's cloud success is playing out in a way that he and the vendor had expected when he was still at the helm, enabling it to enter areas in which it typically hadn't played.

"For Microsoft there were a number of workflows that the company did not participate in, like storage, which the company can now participate in," he said. "That is market growth.

"The company has the opportunity to essentially replace labour with technology. The number of people needed in a company to set up things, distribute them, and set up servers goes down - and when you replace labour you can move to a lower cost expense.

"And the speed at which solutions can be deployed increases so you get more total development of software.

"So the cloud has worked out well and the company has done an amazing job of execution. I give people at the company great credit."

The former CEO remains a strong advocate of Windows, denying that the operating system is being forgotten by Microsoft.

He said that it would be difficult for the vendor to create a revenue stream with such strong profitability again.

Ballmer was also gushing over the recent updates to Microsoft's hardware line, which include a dual-screen device running Google's Android operating system.

He made an off-the-cuff comment to the mythical Microsoft Courier device, rumoured to be of a similar style during his tenure, branding it "a fantasy".

"The other thing which is still coming into fruition as a big business is the hardware business," he claimed.

"I am delighted with what the company is doing with the product line. Despite the rhetoric there is actually plenty of profit in hardware, at least if you look at the number one hardware company in the world. There is a lot of profit being made on the Mac, and the iPhone, and I think Microsoft gets a chance to participate through the Surface.

"Perhaps the most exciting thing is the strength of the Windows business. I read all sorts of rhetoric about Windows not being important to Microsoft. Windows makes billions and billions and billions per year - at least this investor wants to see that profit stream stay around for a very, very long time.

"There aren't a lot of new profit streams you can invent that generate the amount of profit that Windows does."

Tech to sport

Ballmer acquired the LA Clippers NBA franchise in the same year as he left Microsoft, and discussed the parallels between running a tech company and a sports team.

He said his role as chairman of the team has helped him balance the need for long-term development and short-term accountability.

"You always have to have a long term plan," he explained. "I probably get longer presentations about long-term plans from our Clipper staff than I ever did at Microsoft. Maybe too much - 50 or 60 Powerpoints of what-if scenarios.

"The flip side is there is much more short-term accountability in sports. If you miss a quarter you go on a call and say ‘ok we missed for this reason, we'll get it back, blah blah'.

"In basketball every 24 seconds you get a grade, you score or you don't score… at the end of the game you won or you lost. There's no ‘blah blah, we're going to fix it in the future'. We lost the game - that's it.

"The level of accountability is higher in sports despite the way people think about business."