ORLANDO, Fla. -- Microsoft's corporate IT users see the mountain of challenges facing the computing giant, and they want answers.
The company they have invested in so heavily over the years faces stiff competition from Apple and Google, still hasn't delivered Office for iPad and frustrates its customers with complex software licensing.
Outgoing CEO Steve Ballmer addressed those concerns and explained the company's devices- and services-focused strategy here at the Gartner Symposium/ITxpo, during a sit-down with two Gartner analysts.
The consumerization of IT has changed the way Microsoft and other vendors deliver technology, but traditional methods of work continue; papers and pens are the tried and true tools for note taking and will continue to be used alongside their digital equivalents, Ballmer said.
"There is no reason to digitize things that don't benefit from digitizaiton," he said.
He added that he "believes in the power of the pen" and said Microsoft will deliver tablets with a stylus in the future -- another attempt at something the company first tried to do years ago.
Microsoft the hardware maker
Microsoft now manufactures its own tablets and will do the same with mobile phones through the recent Nokia acquisition. The company is not shopping for a PC manufacturer and will continue to license out its software to hardware partners, Ballmer said.
Its Surface tablets continue to play underdog to Apple Inc.'s iPads and Android tablets, and its Windows Phone devices are in the same low position, below Android and the iPhone. Gartner analysts and some ITxpo attendees don't expect that to change anytime soon, because Microsoft came late to the mobile game and suffers in the court of public opinion.
"Apple, Google, they have that cool factor that Microsoft doesn't have," said Manimaran Balasubramanian, IT director for Decurian Management Company in Los Angeles.
Microsoft's potential for growth is in markets outside of the U.S., where iPads haven't pervaded corporate culture, Balasubramanian said. In India, where he is from, Nokia phones are popular, so Microsoft has a shot to be the major device player there, he added.
The Windows operating system is still deeply entrenched in corporate culture, however, as is Office.
"While our lack of success [in certain markets] is much celebrated, we do have more areas of success" than areas of failures, Ballmer said.
Microsoft's evolution includes iPad, Android support
Microsoft has taken some steps to evolve, such as its recent reorganization, which saw most of its engineering groups consolidated under four technology umbrellas.
"We grew up as a company that since '82, '83 has subdivided things into small manageable problems," Ballmer said. But "things have to work together. … That comes across loud and clear from enterprise customers."
The company will develop software that runs across various devices, from Microsoft or otherwise, he said. That includes a full Office suite for iPad.
"Office, with Word, Excel, is designed to be used with a keyboard and mouse, and last time I checked, iPads didn't have those," Ballmer said. “When we have a touch version of Office -- which is in progress -- we will deliver that."
"Outlook might also make sense [for iPads], but Apple probably wouldn't let us down that path," he added.
Microsoft will also launch a Remote Desktop Services app with Windows Server 2012 R2 on Oct. 18. The app will provide access to PCs and virtual desktops on iOS, Mac OS X and Android, as well as Windows and Windows RT.
"Helping you secure non-Windows devices is important to us," Ballmer said.
The company will make sure its own software and devices are first class prior to supporting competitive platforms, he said.
Microsoft licensing to stay as complicated as ever
As for whether Microsoft can address consumer and corporate business needs simultaneously, Ballmer gave a resounding 'yes.'
"There is no fundamental disconnect," he said. "I bet everyone wants to use the same word processor in their consumer persona and work persona. People want an integrated life."
The company also plans to deliver tools that make life more convenient for users, including a Siri-like application. But that focus on convenience will not extend to the software licensing realm.
"The best thing we can do is make it simpler by not changing it," Ballmer said. "Change is the number one problem with simplicity. We made virtually every customer mad with our licensing 6.0 changes."
Microsoft will also add more licensing options with cloud-based subscription pricing for services such as Office 365.
"With cloud services options, we can't make things more complicated," Ballmer said. "We have to add those things seamlessly, and they have to be simpler to consume and purchase."
Mixing and matching services is where licensing gets complex, he added.