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Microsoft sees growth with premium Office, Windows

Microsoft sees growth with premium Office, Windows - Yahoo! News

By Duncan Martell Fri Jul 29, 1:00 AM ET

REDMOND, Wash. (Reuters) - Microsoft Corp. aims to boost growth and win market share by introducing premium versions of its flagship Office and Windows products for high-end corporate use, Chief Executive Steve Ballmer said on Thursday.

Ballmer, who is into his fifth year as CEO, also told Microsoft's annual analysts' meeting that the world's largest software maker was gunning to take a bigger share of tech sector profits from its closest technology peers.

"I am very bullish about our prospects for growth," Ballmer said at Microsoft's Redmond, Washington headquarters.

"I believe in it, I think, more than you do," he said.

Despite buying back more than $8 billion worth of its own stock in its last fiscal year, Microsoft has seen its share price fall more than 10 percent in the past 12 months. The stock ended trade on the
New York Stock Exchange on Thursday at $25.75.

Microsoft also aims to gain even more market share, particularly in the lucrative market for networked server computers, this year, Ballmer said.

"We have plans in the next generation for something even higher-end in Office that we call Office Premium," Ballmer said, adding that Microsoft was also working on a premium version of its Windows product.

Microsoft is betting that the next version, Windows Vista -- formerly code-named Longhorn -- will drive a new wave of personal computer upgrades once it is launched in the second half of 2006.

Microsoft is also working on a new version of Office, currently code-named "Office 12" that will launch in same time frame.

The premium editions of the upgrades would be joined by other editions for home users, Tablet PCs and Media Center entertainment PCs.

Out of a group of 25 tech peers, including International Business Machines Corp., Google Inc., Yahoo Inc. (Nasdaq:YHOO - news), Intel Corp. and Dell Inc., Ballmer said Microsoft captured 23 percent of combined operating profits for the group of companies in the latest fiscal year, up from 18 percent in the prior period.

"I hope we'll continue to grow our share, because of the breadth of investment that we are making in research and development," Ballmer said. "We certainly believe in our opportunity, relative to the growth in that overall pie."

Microsoft, which is expecting PC market growth of between 7 and 8 percent next year, will also be increasing prices for its premium edition products as it seeks to boost revenue and growth.

"With Windows we'll also be adding some richness in the increased price area," Gates said.

Ballmer added that Microsoft will continue to compete aggressively in the Internet services and online search marketplace, where it competes with Yahoo, the most-visited Web site, and Web search leader Google.

"If you get nothing else out of the whole day today, we are very, very, very serious and committed about driving our presence with that community, versus any and all competitors in the marketplace," Ballmer told analysts. "It is a job-one priority for our company, this transformation to services and the competition that it brings with Yahoo and Google and everybody else."

July 30, 2005 at 08:34 PM in Microsoft | Permalink | TrackBack (5) | Top of page | Blog Home