June 30th, 2011
12:43 AM GMT
New York (CNN) – Can an old dog learn new tricks? That is the question facing tech giant Microsoft.
Once a must-have growth stock, Microsoft shares have been stuck in the mid $20 range. While Apple has surged 391% in the past five years and Google has risen 28%, Microsoft shares are down 8%.
I caught up with Steve Ballmer at the launch of Office 365, the cloud version of its popular software package and a product the company hopes will dispel the image that they are trapped in the past.
He acknowledged the company suffers from a perception problem. “It is hard to understand. Half of the world’s inboxes are on Hotmail. We have maybe 50, 100% more customers than Gmail. We are not newbies.
"A lot of it has to do that because we grew up with on premise software. The other guys don’t do software, they just do service. We still have a software customers that want to run their own stuff.”
For now. Ballmer said he expects that over the next several years the majority of Microsoft customers will migrate to Office 365.
If true, that would change Microsoft from a software company to more of a service company - a major cultural shift.
“It is a different business model. We have embraced it,” said Ballmer.
Investors are hopeful. Microsoft’s stock rallied ahead of the launch, putting in its best performance in months. During the launch Microsoft indicated Skype would be a part of Office 365, regulatory approval pending. We’ll see if this is enough to silence the critics who have been calling for Ballmer’s ouster. (I asked him about that in our interview: He wasn’t too thrilled with the question).
As always Ballmer was an enthusiastic pitchman. But the company is as controlling and paranoid with these launches as they were back in the dark days of their anti-trust problems. Back then the legal stakes were high and I could sort of understand the jitters. I do not understand it now. Why they are so loath to field questions about their basic business strategy? It seems like the same old Microsoft. Which makes me just a little worried.
What do you think? Does Microsoft have its mojo back? Can it compete with Google and Apple? Is it time for Ballmer to go?
Let us know what you think and share your Microsoft experience with us.
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