Microsoft remains a software company whether Ballmer mentions it in his letter or not, McGregor says. "What he is saying is that we need to be in hardware; our partners have not gotten us where we need to be," McGregor says.

The Surface is an attractive device, he says, that Microsoft needed to make because it needed hardware to show off its software and services to its best advantage. "They came out with it because they weren't happy with what they were getting with their OEMs," he says.

That could well be the case with Windows Phone 8, he says, given the slow sales of Windows phones made by partners.

In his letter Ballmer says the company will embrace new form factors for devices such as the Surface tablet/PC, but skirts whether that means the rumored Windows 8 Phone handset. But he emphasizes that tying services to all types of hardware is key. "Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily," he says.

One important goal for the company: "Firmly establishing one platform, Windows, across the PC, tablet, phone, and cloud to drive a thriving ecosystem of developers, unify the cross-device user experience, and increase agility when bringing new advancements to market," the letter says.