Steven A. Ballmer has been Microsoft Corp.'s (MSFT ) chief executive officer for five years. He has steered the company through the tech downturn and a slowdown in revenue growth. Now he's predicting an upswing. BusinessWeek Seattle Bureau Chief Jay Greene and Executive Editor Kathy Rebello interviewed Ballmer at the Venetian Hotel in Las Vegas, where he was attending a Hewlett-Packard (HPQ ) partner conference. Following is an extended, online-only version of the interview that appears in the Sept. 26, 2005, issue of BusinessWeek.
How is morale at Microsoft?
We have as an excited and engaged a team at Microsoft as I could possibly manage. We have 85% of our people say they feel strongly that they're proud to be at Microsoft. They love their work. They're passionate about the impact that we're having on customers and society. And that's a real powerful, a really, really powerful statement about where our people are.
Certainly, we continue to bring in new people. We'll hire, net new, over 4,000 people this year, and attract great people into the company. I'm very bullish about the employee base and what it can accomplish.
Where does that 85% number come from, and how does that relate to previous years?
Where does that 85% number come from, and how does that relate to previous years?We have various sources of information. We do a regular analysis of where we stand with our employees. It's something I could say very objectively. That number is, frankly, about as high as it has ever been.
Two researchers at Microsoft wrote a paper for [Bill Gates] called "10 Crazy Ideas to Shake Up Microsoft." One of the things they say is that "a crisis is imminent" because of the growing bureaucracy and impediments to innovation. Do you agree?
Two researchers at Microsoft wrote a paper for [Bill Gates] called "10 Crazy Ideas to Shake Up Microsoft." One of the things they say is that "a crisis is imminent" because of the growing bureaucracy and impediments to innovation. Do you agree?I think we have a great culture. It's a culture that encourages and fosters criticism, and constructive suggestions, and I love that about our culture. People criticize everything -- the way we do things, what we need to do in the marketplace, in our products, and lots of other things. That's a fantastic thing because it's only through that kind of strong culture that drives self-improvement, which is one of our core values, that we continue to try to get better.
We certainly have the best pipeline of new innovation [over the next 12 months] we've ever had in our history. We obviously can always improve. We've set high expectations for ourselves. But, man oh man, have we got an incredible pipeline of innovation coming in the next year.
To be clear, do you think the point that the authors made in that paper is one that needs to addressed?
To be clear, do you think the point that the authors made in that paper is one that needs to addressed?If you take a look at where we're going with innovation and what we have in the pipeline, I'm very excited. Take a look at what we've done with [Windows] Vista and Office 12, both of which while we're sitting here, we've got about 8,000 developers [at Microsoft's Professional Developers conference in Los Angeles] who are fantastically excited by what those products are, not only as developers, but as end users.
We have a wave of new things coming in the server and platform side: The new version of Visual Studio 2005, [and] SQL Server 2005 product comes later this year. If you look over the last few years, we've done nothing but build market share, both with .Net and with SQL Server. We outsell Oracle (ORCL ) and DB2 [IBM's database software] on unit volume combined, and it's because of the innovation in those products. And I can keep going through a number of areas.
So, I think the output of our innovation is great. We have a culture of self-improvement. I know we can continue to improve. There is no issue. But at the same time, our absolute level of output is fantastic.
Do you have concerns about bureaucracy at Microsoft?
Do you have concerns about bureaucracy at Microsoft?Great companies in the way they work, start with great leaders. You have to say, do you have great leaders? If you have great leaders, you're going to have a great company. It's a little more complicated than that. But we have a fantastic leadership team in place. A leadership team that is empowered, a leadership team that everyday we're pushing to take advantage of, and move quickly, to act quickly, to drive, get things done, do innovation, new programs in front of customers, new support offerings.
All companies of any size have to continue to push to make sure you get the right leaders, the right team, the right people to be fast acting, and fast moving in the marketplace. We've got great leaders, and we continue to attract and promote great new leaders.
Take a look. We have brought in new folks from the outside like Kevin Turner, our new chief operating officer. We're attracting new leaders with the way we move people up in our ranks to take over businesses, guys like Robbie Bach, who is willing to take on our Xbox activities. Leaders like that are really pushing forward in a way that is fast, and quick, and that is the key as you continue to work on that.
Does process hold them back at all?
Does process hold them back at all?Our company has to be a company that enables its people. I think if you were to take a look broadly through our company, we've got more empowered, innovative, creative people than any other company in the world. There are things that you can do to help enable people to be even more productive. Over the last year-and-a-half or so, we've reengineered some of our development tools in the Windows area in order to enable people to be even more productive in the marketplace, to be even more productive in their innovation. That's the important thing.
But, any time you get larger groups of people who are working together on something, you need to try to find the right tools to enable the whole to be bigger than the sum of the parts. I think we've been very good in investing in the tools that allow people to work together in the way in which the whole is bigger than the sum of its parts.
Some of this sentiment comes out in blogs like Mini-Microsoft and others. Do you read those?
Some of this sentiment comes out in blogs like Mini-Microsoft and others. Do you read those?I do not.
Are you aware of them?
Are you aware of them?I know there is a blog called Mini-Microsoft.
But is information from those blogs getting to you?
But is information from those blogs getting to you?I have lots of sources of information about what's going on at the company. I think I have a pretty good pulse on where we are and what people are thinking. I'm not sure blogs are necessarily the best place to get a pulse on anything. People want to blog for a variety of reasons, and that may or may not be representative.
It's important in my job that I understand broadly the pulse of the company. Over a third of my time, I'm spending with our people interacting with their work.
We have a great culture that promotes criticism. I think that does fantastic things. We're always looking for everything everyone says to make sure that I'm doing what I need to do, and our leaders are doing what they need to do to continue to push the company to new heights. And you see that in the results.
Look at the product pipeline, look at the fantastic financial results we've had for the last five years. You only get that kind of performance on the innovation side, on the financial side, if you're really listening and reacting to the best ideas of the people we have. And we've got great people.
In interviews and on blogs, some employees say you've instituted bureaucracy that is hampering innovation so much so that they question whether you should be CEO. What's your response?
In interviews and on blogs, some employees say you've instituted bureaucracy that is hampering innovation so much so that they question whether you should be CEO. What's your response?At the end of the day, the proof is in the output. Do we have the innovation output? Do we have the market share? Do we have the customer satisfaction? Do we have the numbers? And do we have the talent? So you go through each one of those things and say, how are we doing? We've grown from 18% of the profits of the top 25 companies in our industry to 23% of the profits of the top 25 companies in our industry over the last five years. Profits are up over 70%, where the industry profit is up about 35%. Pretty good.
How are we doing in terms of talent? We've brought on fantastic new talent. People like Ray Ozzie, I don't think I need to say more. Gary Flake, who has joined us in the MSN area [and] is really the technical guru and genius behind everything that had happened at Overture, a fantastic addition to our team. Li Gong who has joined our MSN team in China, who was one of the leading architects at Sun Microsystems (SUNW ).
These are all people who have joined us in the last six months. Look at our performance in campus recruiting. According to Universum, which is an organization that surveys these things, we're the No. 1 choice among computer science students at U.S. universities as a place to go work -- 90% of people who we make offers to accept our offers. We're doing every well on the talent front.
You take a look at the market share, virtually every business we're in, our market shares are up over the last five years. And then, certainly, if you look at innovation, I talked about Vista, when I talked about Office 12. And I talked about Visual Studio. I talked about where we are with SQL Server 2005. Take a look at where we are with Xbox 360. Xbox is not only innovative compared with the competition, we're going to be raising the bar. This is not the question of catch-up, this is the question of us really raising the innovation bar, and now the market leader, so to speak, is going to be forced to respond to our innovation.
Take a look at what we've done in MSN. Technologically, innovation-wise, our desktop search is widely recognized as the best thing in the market today. We have that innovative work, and we're the market leader in instant messaging on a global basis. Our mail product, Hotmail, is the market leader globally. And then you take a look at Spaces, there is this great innovation that came out of nowhere. We have the number one blogging site in the world because of the innovation that's there.
So, I think if you take a look at any of those critical dimensions, our company has performed well, and [we] are bullish about how we will drive that continually.
And you talk about your performance. Why has that not been reflected better in the stock price?
And you talk about your performance. Why has that not been reflected better in the stock price?Remember, we're a company that will generate over $1 billion of free cash flow this month and every other month this year. I think that's performance from a financial perspective, and certainly if you look at the growth, we have grown our profits over 70% over the last five years. We've outgrown everybody else. The financials are quite good. We have over $75 billion of free cash flow, and we've returned an incredible amount of cash to our shareholders.
Obviously, I think our stock is attractively priced, and we're buying our stock. That's the ultimate expression of our view. I think our stock represents such a good value that we've told people we'd go out and buy about $30 billion of it over four years on behalf of our shareholders. So on behalf of every one of our shareholders, we're out there buying the stock every day, because we happen to think it represents a good value.
There seems to be some disconnect between Microsoft's performance and these disgruntled employees. How do you explain such a different perception of how Microsoft is doing?
There seems to be some disconnect between Microsoft's performance and these disgruntled employees. How do you explain such a different perception of how Microsoft is doing?We have for ourselves, I have for us, our shareholders have for us, and our employees have for us, incredibly high expectations. And that's in some sense the greatest blessing and opportunity anybody can ever have. Our people, our shareholders, me, Bill Gates, we expect to change the world in every way, to succeed wildly at everything we touch, to have the broadest impact of any company in the world.
And our people, in our culture of criticism, of course, want to see us do that. I want to see us do that. Hey, it's great. There's no other company that has been so profoundly good at innovation and business success, that people would begin to have the expectations that we, including our employees, have for Microsoft.
And we will realize those expectations. We have people, of course, who have high expectations. It's great they're saying, "Come on, improve." And whether it's 1 employee in 60,000 or 5 or a 100, people are saying, "Come on, we can still do better." Great, we need those high expectations.
I think it's pretty clear that we have risen to those expectations fairly consistently over the years, and we have performed well the last five years, and we will rise to these expectations.
I like to say we did win the desktop, and there were doubters and naysayers. We did win the server. I mean, in the last five years it's been incredible in terms of what we've done in the server business. And there were doubters and there were naysayers.
And we will win the Web. That's the current question from some people or expectation. I have the expectation and we will. And to have people having this high expectation and wanting us to move fast and get there, that's great because that's what I want, and that's what we will do. We will move fast, we will get there, we will win the Web.
What does it mean to win the Web?
What does it mean to win the Web?When we think about the next round of opportunity for our company and for our industry, it's really going to come in the ways that software ties together experiences people have on their own devices, on the devices that live in their company, and then services and devices that live out there someplace in the Internet. And we are innovating, we are putting our best people to work thinking through how to harness that power across the PC, the corporate server, and the Internet, so that when people want to communicate, when people want to find information, when people want to get entertained, when people want to write a report for school, they can turn to our innovation to drive that.
And the win-the-Web part says we have to be best in class, not only in taking advantage of those devices that you hold or you type on on your desk, or that will end up on the server, but also those services that are out in the Internet itself.
If you look at the kinds of innovations that you see from us in MSN, you look at some of the kinds of acquisitions we've done, companies like FrontBridge that provide services for businesses that run on the Web, new business models that we and others are embracing -- be those subscription models or advertising models -- those scenarios that leverage the power of things living out in the Internet and the set of business models that support them, we will win.
I'm very, very bullish about our prospects, and as I tell our board, as I tell our employees, this is the time to invest. There's so much opportunity. Let's just invest in that opportunity, and really get after it.
There has been some criticism among employees about the integrated innovation strategy. They say it creates dependencies among groups that slow down development and that rivals don't have those same challenges. Is that a fair criticism?
There has been some criticism among employees about the integrated innovation strategy. They say it creates dependencies among groups that slow down development and that rivals don't have those same challenges. Is that a fair criticism?Our vision and our mandate is to give customers the kind of holistic, simple experiences they want, and we do that every day. You can see that in the work that we've done with .Net and with our SQL Server product for developers. You can see that in the way in which we've made Outlook and our e-mail server, Exchange, and our Windows Mobile devices work together seamlessly. People want great innovation, and they want the simplicity that comes with things just working.
Our mandate, to be fair, is really no different than anybody who wants to come to meet with us. If we think there is something that's important to go do that's disconnected from everything else that a user has, we'll be disconnected. But when there is unique value that can be added, value in terms of simplicity and convenience of getting things to work together for the user, we're going to prioritize those user needs, and we're going to use our unique ability to deliver things in a way that the user really appreciates.
And we'll drive those innovations hard, we'll drive them fast, as fast as anybody else will ever get them into the market. And I'm very bullish, not just based upon sort of forward-looking stuff. Again, I come back to this year's pipeline, and I take a look at some of the stuff we're doing and it sort of bears it out. If you take a look at what we're doing with integration with Microsoft CRM [customer relationship management software] and some of the new RSS stuff [blogging technology] and the way we expose business data out of our CRM systems to users. We've integrated things simply and nicely between what we're doing in Vista and what's happening in the CRM product.
It's those kinds of things that are concretely in the market today and will be enhanced over the next 12 months that make me bullish. And we'll stay and continue to drive that basic value proposition.
You talk about Vista and the CRM product. One of the complaints I've heard is that if Vista is delayed, it delays products that are tied to it. Is that a concern?
You talk about Vista and the CRM product. One of the complaints I've heard is that if Vista is delayed, it delays products that are tied to it. Is that a concern?No, Vista will be out next year.
But it had been delayed?
But it had been delayed?Vista will be out next year. Vista has never been delayed. I mean, we had earlier conceptualizations, but the thing that is Vista is on its track.
We had work we certainly had to do over the last several years, both to address customer issues around security and to reengineer our engineering processes that were very important for us to get done, in order to be able to continue to propel ourselves forward, and to take our customers where they want to go.
Sometimes the better part of innovation is responsiveness, listening to your customers. People sometimes ignore the fact that we put a Windows XP SP2 version (an update to the operating system with improved security features) out into the marketplace, which was an incredibly major release. It doesn't have an incredibly major release name, but it's an incredibly major release relative to the concerns and issues people were having about security. That took time, that took effort, that took energy.
We have revamped our engineering tools that we brought over about a year-and-a-half ago from our research team. And we elevated a fellow named Amitabh Srivastava to really help rethink, because we're trying to do things people haven't had to do before. There's kind of a scale of our engineering. And it's not about the number of people necessarily. It's about our customers and their expectations and their environment. And Amitabh has really driven a redesign of those engineering processes. So we're in a great position relative to driving quick, rapid, important innovation in our Windows product line and across Microsoft.
You said earlier that there haven't been delays in Vista. When it was code-named Longhorn, there was something folks internally call the "Longhorn reset" last summer where some features were taken out of what people thought were going to be in the final release. Some current and former employees assert that the top executives in that group in particular are not being held accountable. Do you think that assessment is accurate?
You said earlier that there haven't been delays in Vista. When it was code-named Longhorn, there was something folks internally call the "Longhorn reset" last summer where some features were taken out of what people thought were going to be in the final release. Some current and former employees assert that the top executives in that group in particular are not being held accountable. Do you think that assessment is accurate?We have a fantastic leadership team, and we have a culture and a value of accountability. Great companies have high cultures of accountability, it comes with this culture of criticism I was talking about before, and I think our culture is strong on that. Accountability takes many forms. It takes the form of learning and moving forward. It takes the form of [a] reward system and all that. It takes many forms.
I think our leadership team is a highly accountable leadership team. I certainly look at things that go on in the company, and I know I make mistakes. I make them every day. I tend to do a lot more things right, but I learn when I make mistakes. And the culture of accountability is all about making sure that people learn and don't repeat the same mistakes, and I think we've got a fantastic culture on that. Our people really appreciate that and see that. And certainly the end measure of accountability is what you do.
I come back to the same thing: We've got the greatest pipeline in the company's history in the next 12 months, and we've had the most amazing financial results possible over the last five years, and we're predicting being back at double-digit revenue growth in fiscal year '06.
So, yeah, I'm happy for me, I'm happy for Bill, I'm happy for the rest of our great leadership team, who take accountability for those results.
We've been talking a fair amount about the innovation. Bill is chief software architect. Give him a grade. He has been in that job for a little over five years.
We've been talking a fair amount about the innovation. Bill is chief software architect. Give him a grade. He has been in that job for a little over five years.I think if you take a look at it, [the] chief software architect, [is] the man responsible for driving our innovation pipeline. I've told you guys a few times in this session, I'll tell you again, I'll add a few more things onto the list of achievements of our pipeline, and you tell me how we should grade our chief software architect. I grade him great.
Our IPTV [Internet protocol TV] work releases in the next 12 months -- it will change the way video gets delivered around the world, incredibly powerful innovation coming to market this year. You take a look at what we're doing in the area of business productivity with Office 12, whether it's business intelligence or workflow or document management. The work we have coming out in security and manageability, real-time communication, unified messaging, voice over IP. We have incredible innovation in every one of the areas I mentioned, not to mention some of the others I've already talked about coming in the next year.
I think our chief software architect deserves a very good grade, but I'll also say I think the rest of our teams deserve very good grades, too. This is not a world in which one person does all the innovating, it's too big and too broad for that, and I think you've got to give a lot of credit to the broad set of innovators, starting with our technical leadership and going on down to the kids one, two years out of school.
You talked earlier about your ability to recruit at colleges, and in discussions with professors and recruitment officials, they've said that Microsoft certainly does well with recruiting. But when it comes to top students, Google is actually beginning to do better. Does Microsoft have trouble competing with Google for top recruits?
You talked earlier about your ability to recruit at colleges, and in discussions with professors and recruitment officials, they've said that Microsoft certainly does well with recruiting. But when it comes to top students, Google is actually beginning to do better. Does Microsoft have trouble competing with Google for top recruits?I've been at Microsoft 25 years. In the last 25 years, it has been absolutely the case, and remains so today, that the best and the brightest computer science technical talent in the world wants to come to Microsoft. We have been head and shoulders above everybody else in our ability to bring in the top talent.
Undoubtedly, there's a little bit more competition today than there has been throughout most of that 25 year period for talent, coming I would say broadly from the industry, because there's more competition. We continue to compete very effectively.
And again just look at the people: Ozzie, Flake, Gong. I just sat down for lunch with 10 interns who worked for us this summer from one major East Coast institution. Most of our people who join us full-time did do some kind of internship. I'm pretty sure we'll get 7 or 8 out of those 10 to come join us, and probably lose one of them to graduate school or something like that. We'll probably lose one of them because they had family someplace else that they want to stay close to. And we'll probably lose one of them to some competitor. But our ability to get great talent remains absolutely top notch.
You talked about some of the new employees who have come in. Obviously, employees have left too. There are some people who are important. There is the lawsuit over Kai-Fu Lee. Mark Lucovsky came up in that case. But there are others who are maybe less well-known, like Lenn Pryor, who went to Skype. Are you concerned about those departures?
You talked about some of the new employees who have come in. Obviously, employees have left too. There are some people who are important. There is the lawsuit over Kai-Fu Lee. Mark Lucovsky came up in that case. But there are others who are maybe less well-known, like Lenn Pryor, who went to Skype. Are you concerned about those departures?We have and we need great talent. We continue to have, and we continue to recruit, and we continue to develop great talent. So, no, I feel very good about where we are.
A small clarification, the case you referred to, of course, is about the protection of confidential information. That is what the case is about, and noncompete agreements and the like. It has nothing to do with your last question.
There's such a difference between your telling us everything is great, that there's a pipeline of innovative products you've had in a long time, wonderful things going on with talent, employees really happy. The picture we're getting is very different. Do you really think everything at Microsoft is that good? Are you not trying to make the company more nimble and less bureaucratic?
There's such a difference between your telling us everything is great, that there's a pipeline of innovative products you've had in a long time, wonderful things going on with talent, employees really happy. The picture we're getting is very different. Do you really think everything at Microsoft is that good? Are you not trying to make the company more nimble and less bureaucratic?Just as our culture is the culture of criticism, and I think that's beneficial, I, too, am self-critical. I'm critical of myself. I'm critical of my colleagues. I hold myself and my colleagues accountable. I'm critical of what we do. Being critical is part of improvement, and we work every day on improving.
But at the same time, the outcome is what our shareholders are interested in and what our customers are interested in. The outcomes have been good. The prospects are good. And sure, I have things I'm working on. I've got a long list. I've got a list as long as my arm of things that I'm working on, that I think need to be better, that our leaders are working on that need to be better. I'll never be happy. I can always tell you of things that I want to improve in the company.
But I think it misses the fundamental point for me to go through that laundry list. I tell our people I fundamentally think that we have the healthiest company in the world. I can't look inside anybody else's business but, man, there is no company in our industry I'd change positions with. I wouldn't take the cards of anybody else in the business. We've got the best talent, we've got the best way of working. Yeah, sure, we can improve. We can improve. Of course we can. I feel about that strongly, too.
On the other hand, I also think it's possible that I have a much better understanding, and I'm much better in touch with our company than basically anybody else in the world. I know more, I do more research, I talk to more people, I have more data. I feel very in touch with those things. So when I talk to you, I talk to you with full knowledge of what's going on and with full bullishness about the success of the company, and not unaware that there are things I still want to improve, of course.
What are some of the high-level things you're working on that could have an impact here?
What are some of the high-level things you're working on that could have an impact here?I'd start with our strengths, and the question is, how do we continue to enhance the strengths that we have? We have great talent, so I spend a lot of time saying, how do we make sure we get even more great talent? And when there's something to talk to you about, I don't think you'll be the first to know, but you'll undoubtedly know. I think that's in front of us.
We have great talent, and we continue to invest and want to make sure that this is the greatest place in the world to come change the world. Our employees agree with that, and yet I want to make sure that we leave no stone unturned as we continue to push forward as part of this high expectation thing.
Our talent pool is our strength. Nobody out there has the talent pool that we have. And we're not going to allow that advantage to do anything other than increase. So that would be No. 1.
The second strength I'd take a look at is our ability to get products in the market, to ship. Shipping is a part of our culture. The only real award we've ever had in our software development team was something we called the Ship It Award, because people who come to work at Microsoft want their products used. They want to get them in the marketplace, and they want to get millions and millions and billions of people to use their stuff. That's a strength of ours, and we're always working on enhancements.
And I talked about some of the work Amitabh has done to invest in the engineering tools that allow us to stay right out there at the forefront of shipping new innovation into the marketplace. There is nobody who will ship as much new innovation into the marketplace in the next 12 months as we will. Nobody will come close to doing what we'll do in the next 12 months.
So we have to continue to enhance and invest behind the advantages that we have, and if we do that, and we will, there is no reason for us not to just be as bullish as could be about the future.
You've been CEO for nearly six years; give yourself a grade.
You've been CEO for nearly six years; give yourself a grade.Again, you come back to me and you look at the results. There are two ways to look at anybody's performance. You can look at their results, and you can speculate about what their future results would be. On the results, well, let's see: Profit is up over 70% in an industry where profits were only up 35%. Hmmm, sounds pretty good. Since I took over as CEO, our stock has marginally performed as well or better as anybody in our industry. Now, 2000 was a weird year, we had the bubble.
Market share: With developers and .Net we've increased our market share. In the server business we've increased our market share. We've grown our Windows business. We've grown our Office business. We have really come from a start to a real significant position in online services, with Hotmail, with our instant messaging, with Spaces, some of the things I talked about earlier. We weren't in the video-game business five years ago. Today we are a clear player in the business and poised to take market leadership in the next generation with an innovative leading edge product. We have invested in new businesses.
Now, we could have just sat there during my reign and decided to focus on our core. We looked at it and said the only way we were going to get growth is to continue to expand and invest. And whether it's what we'll be doing in security, what we've done with business applications, what we've done with mobile, we continue to invest for growth, invest for the future, invest in innovation.
So whether it's innovation, market share, financials, you know, hey, I'm self-critical, I never give myself perfect grades, but if you take a look at all that, I think the CEO deserves a pretty good grade, too.
Do you feel that you have put too much process in place? Are you thinking about streamlining it or trying to remove some of that process?
Do you feel that you have put too much process in place? Are you thinking about streamlining it or trying to remove some of that process?All good leaders have a responsibility, and I view myself as a very good leader, to enable their people. Now, how do you enable people? Sometimes you say set them free, that's an important thing. Sometimes you have to say part of enabling people is putting in the tools that facilitate them working together in an effective way. And you always are sort of running the balance between giving them tools, encouraging them to work together, and allowing them to just sort of fly as solo contributors.
I'm always tuning that balance. At any time, there will be some people saying great things, and there will be some naysayers, and people who say, "Hey, we're not moving enough on our own." But there will be somebody else who says, "Hey, look, we're flying so much on our own, we're not able to do some of the unique things our customers want us to do by working together." And so as a leader, my job has got to be to find the right balance point.
You know, in the old days, life was kind of simple. Bill and I could sit, and everybody could bring [us] a decision [to make], and we'd make it. It would be implemented. Everybody was focused on one or two things. We really do need to have a place now where you can have independent actors who are coordinated to some degree but are able to drive very rapidly themselves, and the evolution from where we were to where we are now has certainly taken some time. And there have certainly been kinks that we needed to work out of the system. And I think we have come through that and we're driving forward.
I say I'm very excited about our future, I'm very bullish about the future. There have been naysayers about our future at all times in the company's existence. In March of '03 you guys wrote a big piece about Linux uprising -- Linux will be popular on the desktop, which, of course, has just not happened.
And there is always going to be somebody who is questioning the company's future performance. I question it myself, again, in the spirit of criticism, in the spirit of self improvement, in the spirit of high expectations. If we want to achieve the very high expectation that we have for ourselves, let alone that shareholders and other constituents have for us, we're going to have to continue to improve our game, to rise up, to get to the next level. But that's exciting, that's energizing.
And I think we've proven to the naysayers time and time again is that we get things right. If there is one hallmark of our company of which I am most proud, it is we learn and we improve. You know, if v.1 is not right, v.2 is, v.2, v.3. We stay behind things. We're tenacious. We're smart. We learn. We improve. It's our history. It's the history of Windows. It's the history of our involvement in the server business. It's the history of a lot of things we've done.
And whether it's the way we run the company or our innovation pipeline or getting the products right, you can count on us. We've got the financial strength, we've got the talented leadership team, and we've got the culture that really allows us to focus, to improve and to succeed. And I think we have proven we succeed at those things that we do.
What seems different this time is that the naysayers in the past were outsiders. Some of the most strident naysaying now is coming from within. Do you see that as well, and do you think that's an issue.
What seems different this time is that the naysayers in the past were outsiders. Some of the most strident naysaying now is coming from within. Do you see that as well, and do you think that's an issue.No, I think you guys are just confused. I probably should say that in a different way. The strongest push for us to do better has always come from our employees. There is nothing new about this. Our employees have always pushed on us harder, pushed on themselves, pushed on their colleagues, pushed on their management, pushed on me, pushed on Bill. Nobody has ever pushed us harder to raise our game and continue to improve than our employees have. Never.
There is nothing unique about this point in time. Nobody cares more about changing the world, having an impact and having a great company than the employees of Microsoft.
The only thing that I think is vaguely different these days is we live in a world of e-mail and blogging and electronic communications. Some of it may be more visible than it has been in the past. But I guarantee you in 1985 when we were shipping Windows 1.0, it was our own employee base that was most [critical].
I'll tell you a small story. I took over the Windows 1.0 development team in 1983. We had already announced Windows. Blah, blah, blah, blah, blah. There were plenty of external people saying Fu and Bar. I got up in front of the team, I talked about kind of the plan of record, whatever it was at the time, and I heard a bunch of people snicker. So I went back afterwards and followed up on that.
It was that internal group that was most critical, most wanted us to do better, had the most feedback. It wasn't this article in this journal or this in this newspaper. It was our employees, because that's the kind of people we have. We have people with passion, who care about doing better.
And, you know, that's always been visible to me. It may not always have been visible to others. It has always been visible to me. And I think it's a strength of our company that our employees care so much.
The one interesting thing you've got to stop and ask yourself is, our employees must care a lot. All the employees that you think are not content, they must care a lot because they're our employees, they aren't somebody else's employees. They're our employees, and they care, they care passionately. It's not like I don't hear from them. I hear from them.