RANCHO PALOS VERDES, Calif. — Walt Mossberg is interviewing Microsoft Chief Executive Steve Ballmer and Chief Software Architect Ray Ozzie here at the All Things Digital conference. Mossberg started it off asking Ballmer about the economy, but the conversation heated up when they came around to competition with Apple and Google.
Mossberg also elicited a bit of news from Ozzie, who confirmed that Microsoft is considering letting other companies integrate applications into its Bing search engine.
“That’s something we’d like to experiment with. We’re doing it in maps right now,” Ozzie said.
Facing a room full of iPad users who heard Steve Jobs on Tuesday predict a fading PC market, Ballmer said “the real question is, what’s a PC?”
Is the iPad a PC? Mossberg asked.
“Sure, of course, it is. It’s a different form factor of PC,” Ballmer said.
The PC business will continue to grow but the design, size and weight of the devices will change, Ballmer said.
“I think people are going to be using PCs in greater and greater number for years to come,” he said. “I think PCs are going to continue to shift in form factor …. They’ll get smaller and lighter, some of them will have a keyboard, some of them won’t have a keyboard.”
Ballmer said the iPad is “a flat device where you can buy a docking station — you can dock it and start turning it back into a PC,” he said.
PCs can also be flat, he continued.
“Are these really separate categories? No these are one category where you’ve got a different cut at the form factor.”
Looking ahead, Ballmer said the discussion “won’t be about Mac and PC anymore. It will be about the thing that replaced the Mac.”
It’s not clear that there will be one general purpose computing device, Ballmer said. Nor does he think “the whole world will be able to afford five devices per person. Maybe in the bubble of Terranea,” he said, referring to the swanky resort where the conference is taking place.
Ballmer also fired back at Jobs’ characterization of PCs becoming the equivalent of trucks, saying Windows computers will continue to appeal to the masses.
“There may be a reason why they call them Mac trucks, but Windows machines are not going to be trucks,” he said.
Asked about Google developing new operating systems, Ballmer said he’s perplexed about Google’s decision to create both the Android and Chrome operating systems simultaneously.
“The other guy’s trying to start incoherent. Talk to them,” he said.
Ballmer was candid about how Microsoft fumbled its strong position in the phone business, which he’s now directly overseeing, saying it was the result of poor execution. He told Mossberg that Microsoft’s phone business has been overhauled, similar to the way its Windows business was sorted after the Vista debacle, and is better positioned with the new version of the phone platform going on sale this fall.
“What do you mean about learning the value of excellent execution?” Mossberg said.
“We missed a whole cycle,” Ballmer said.
“We had to do a little cleanup, change things around a little bit in big Windows,” he explained. “We’ve done a little bit of the same in mobile. You can’t just say innovation is all about going off into the ivory tower. It’s also about good, consistent engineering.”
Ballmer said Microsoft may benefit from the “dynamic” phone market, in which market leadership has shifted several times over the last five or six years.
Mossberg began the conversation by asking Ballmer about the state of the economy and Ozzie about cloud computing.
“I would say developed world, things have come off the lows for sure,” Ballmer said. “I think our industry is even more revved up about how good the economy is than maybe some others but we’ve all been in a good product cycle.” He added that “we’ve started to see some comeback in business spending.”
Ozzie said the new environment, with sharing material online, connected devices and common standards for sharing, is prompting changes in the way products are developed at Microsoft. He’s going to different product groups and asking them to “re-pivot around specifically what people are using that product for.”
“In essence I think the real opportunity is for us to say for all the different solutions …. how do we re-pivot to the cloud and think about this centralized view to the solution,” he said.
Although there is different rhetoric around cloud computing, Ballmer said companies are actually pursuing a pretty similar vision of computing with “smart” devices like PCs and phones still handling a lot of processing and storage.
“When people say ‘I love HTML5 …. They’re saying they actually like a pretty rich processing storage, graphics engine that runs down on the client,” Ballmer said.
“At the end of the day, I think actually the worlds we’re talking about is driven from the cloud out but it’s smart cloud talking to mostly smart devices – phones, PCs, TVs – and apps that execute locally but are controlled and kind of seamlessly integrate with the cloud,” he said.