Steve Ballmer finally admits Microsoft blew it by focusing too much on Windows

Steve Ballmer is one of the least reflective people in the tech world, and among the least willing to admit errors. So it was startling to hear him say yesterday that his biggest regret as Microsoft CEO was focusing too much on Windows, which harmed the company overall.

Ballmer gave a wide-ranging talk to Wall Street analysts, touching on a wide variety of issues. But the most eye-opening was when he spoke about the early years of when he took over as Microsoft CEO, in the early 2000s. Here's what he had to say, according to Business Insider:

"If there's one thing I regret, there was a period in the early 2000s when we were so focused on what we had to do around Windows that we weren't able to redeploy talent to the new device form factor called the phone."

Although he admitted the company's error in focusing too heavily on Windows, he's being a bit disingenuous here. Microsoft had begun research on developing an operating system for mobile devices as far back as 1990. It had a smartphone operating system by 2003, called Windows Mobile, building on the previous Windows CE and Pocket PC operating systems.

So the issue was less one of "redeploying talent" than it was on trying to force-fit Windows onto a device that wasn't suited for Windows. The real problem was that Microsoft was continuing to use Windows as a business hammer to squash competition. So it force-fit Windows onto a device that required a different type of operating system.

And Ballmer certainly never acknowledged Apple's success in phone design and Microsoft's failures. In 2007 he told USA Today:

"There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."

Although Ballmer admitted a mistake in focusing too much on Windows in the early 2000s, he hasn't acknowledged that the company continues to make that same mistake today. Microsoft designed Windows 8 to be a touch-centric, mobile operating system, hoping that when people got used to the interface, they would rush out and buy Windows 8 tablets and Windows Phone devices. Once again, Windows was being used to try and help Microsoft gain share in other markets.

We saw how that turned out: A $900 million writedown on Surface tablets, shrinking PC sales, and sluggish demand for Windows 8 tablets and Windows Phone. So it's refreshing that Ballmer admitted that Microsoft focused too much on Windows in the early 2000s. But the company is continuing to do the same thing today. It needs to learn from its mistakes.

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