Steve Ballmer

We can't make my play here. Not out of pique. It's just, hey, I thought about this in advance and said, look, if it doesn't work, it doesn't work. If the board doesn't want to do it, fine. And so I said, this is a good time. It's also a good time because the cloud's just coming on. And I'm saying to myself, look, we're going to have to build new capabilities.

Even the way we're moving to a gross margin, to a non... Something below 100% gross margin business. We have whole new capabilities we need to build up around that. I even think of it through the lens of the accounting system. How do you... We have these revenue and cost reports. They have to change in the world of the cloud because you really have to get tight on gross margin, not on revenue.

Even the way we're moving to a gross margin, to a non... Something below 100% gross margin business. We have whole new capabilities we need to build up around that. I even think of it through the lens of the accounting system. How do you... We have these revenue and cost reports. They have to change in the world of the cloud because you really have to get tight on gross margin, not on revenue.

Revenue, I don't really pay much attention to Microsoft's revenue. I pay attention to the gross margin growth. These days, you're saying? Those days. When I said the move to the cloud, I used to say this to analysts. You should expect us. You want us to have lower gross margins going forward, but we'll make it up in volume. Right? I mean, that is the whole proposition of the cloud.

Revenue, I don't really pay much attention to Microsoft's revenue. I pay attention to the gross margin growth. These days, you're saying? Those days. When I said the move to the cloud, I used to say this to analysts. You should expect us. You want us to have lower gross margins going forward, but we'll make it up in volume. Right? I mean, that is the whole proposition of the cloud.

Lower gross margins. It's like Walmart's an okay company, even though that margin's whatever, a percent and a half, 2%. You just got to make it up in volume. So I knew it was a good time to let the new person sort of build from what we had to sort of the next generation of all the machinery that would have to happen to make cloud happen. Phone was...

Lower gross margins. It's like Walmart's an okay company, even though that margin's whatever, a percent and a half, 2%. You just got to make it up in volume. So I knew it was a good time to let the new person sort of build from what we had to sort of the next generation of all the machinery that would have to happen to make cloud happen. Phone was...

I never lost my desire to be an end-user company. I bemoan the fact that I couldn't keep us focused on being an end-user company slash consumer. It killed me. And you don't just, I want to be a consumer company. No, you've got to find the locomotive, not just a bunch of cabooses. At the end of the day, Zune was a caboose. A lot of things we invested in were cabooses.

I never lost my desire to be an end-user company. I bemoan the fact that I couldn't keep us focused on being an end-user company slash consumer. It killed me. And you don't just, I want to be a consumer company. No, you've got to find the locomotive, not just a bunch of cabooses. At the end of the day, Zune was a caboose. A lot of things we invested in were cabooses.

We had to find the locomotive, and there were only two possible locomotives that made any sense. I didn't have a play that I thought was going to break through anytime soon in search. Mobile was going to be really hard, but I knew in my heart of hearts that without physical hardware, we weren't going to break through there either because of search. Board said, no. I said, okay.

We had to find the locomotive, and there were only two possible locomotives that made any sense. I didn't have a play that I thought was going to break through anytime soon in search. Mobile was going to be really hard, but I knew in my heart of hearts that without physical hardware, we weren't going to break through there either because of search. Board said, no. I said, okay.

Bill and I are, it's not really the board being disrespectful. Like maybe it is, but it's mostly me and Bill. We're grinding, grinding, and that's never fun when we grind. And I said, okay, we're grinding. I know it's frustrating for him. It's frustrating for me. We're grinding. Here goes my idea. And oh, by the way, this is a great juncture point. So I said, okay, I'll pass.

Bill and I are, it's not really the board being disrespectful. Like maybe it is, but it's mostly me and Bill. We're grinding, grinding, and that's never fun when we grind. And I said, okay, we're grinding. I know it's frustrating for him. It's frustrating for me. We're grinding. Here goes my idea. And oh, by the way, this is a great juncture point. So I said, okay, I'll pass.

And then the board changed its mind.

And then the board changed its mind.

I don't really know. I mean, I'm not sure they really understood, but I had told them. About, you know, we had a deep partnership with Nokia and I'm not really sure maybe guys really understood. I hadn't done a good job explaining how close the partnership was. So there was really no go back to Nokia and see if we can have a bigger partnership.

I don't really know. I mean, I'm not sure they really understood, but I had told them. About, you know, we had a deep partnership with Nokia and I'm not really sure maybe guys really understood. I hadn't done a good job explaining how close the partnership was. So there was really no go back to Nokia and see if we can have a bigger partnership.

The problem with the partnership with Nokia is they didn't have the money to invest in marketing. We did. We did. They didn't have the market to go – they did not have the ability to go deep pockets. We did.

The problem with the partnership with Nokia is they didn't have the money to invest in marketing. We did. We did. They didn't have the market to go – they did not have the ability to go deep pockets. We did.

But if we didn't have the monetization capability back through the phone, we weren't going to be able to make it work as a partnership because we had to put in the cash and therefore we had to get the return and it wasn't going to work. And it reached a point where – You had to buy the company or just cut bait totally on the whole phone thing. Yeah, just because the math wouldn't work.