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Ballmer: Linux Changed Our Game

By Rich Cirillo, VARBusiness

6:56 PM EST Mon., July 15, 2002

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Since the arrival of Linux, Microsoft has been forced to abandon its traditional value proposition of being the lower-cost solution in the IT industry and embrace a message that focuses more on the overall value of its solutions, says its president and CEO Steve Ballmer.

Ballmer, speaking Monday at Microsoft's Fusion 2002 partner conference in Los Angeles, saidin this new competitive landscape, the software giant relies even more heavily on the expertise, contacts and value-added-services of its business partners to compete effectively against the Linux threat.

"We have prided ourselves on always being the cheapest guy on the block--we were going to be higher volume and lower priced than anybody else out there, whether it was Novell, Lotus or anybody else," said Ballmer, during a keynote that closed the event. "One issue we have now, a unique competitor, is Linux. We haven't figured out how to be lower priced than Linux. For us as a company, we're going through a whole new world of thinking."

Instead of leading with price, the company has changed its go-to-market strategy to present a value proposition to customers and partners to explain why a solution from Microsoft delivers more capability at an appropriate price.

"We are actually having to learn how to say, 'We may have a high price on this one, but look at the additional value and how that value actually leads to a lower cost of ownership despite the fact that our price may be higher,'" he said.

Ballmer also spoke about the technology sector as a whole, noting that the past year has been one of the toughest in recent history. Still, he says he's optimistic.

"I do have a fundamental faith that the technology industry, our company, our partners, the people in our business, still have more of an opportunity to have a positive impact on the world than anybody else around," said Ballmer. "So despite the fact that it's been a tough year, I think about it exactly as that--a tough year, not the start of a cold winter. My optimism and enthusiasm about where we are going has been unabated."

Addressing his audience directly, Ballmer spoke about the challenges Microsoft has faced in the last year, both internally as well as in its partner relationships.

"Some of that change I argue will be net positive over the long run, and some of that change has certainly been troublesome over the course of the last 12 months," he said.

He mentioned the controversy over perceived competition from Microsoft Consulting Services, noting that it was more a result of poor communication than a direct effort to change strategy.

"Our strategy has never changed with what we are trying to do with consulting, but it sure looked that way in the early part of the year because we managed to get a disalignment between our incentives and our resources and our strategy in the marketplace," Ballmer said. "That caused our consultants to look sometimes less like your friend and more like your foe than we ever have intended it to."

He also addressed the licensing changes that the company put in place over the last year, calling them an important part of a long-term simplification strategy.

"I personally reviewed most of the key decisions that went into that, and I personally will take most of the blame, credit and responsibility that goes along with it," he said.

As a result of the issues, Ballmer said the company learned a few lessons about the best ways to introduce change to its partners, noting that in the past it may have been done that too quickly and without enough foresight.

Ballmer then spoke about efforts in the last year to redefine the company's overall mission statement, moving away from the notion of putting a PC on every desk and in every home to one of enabling people and businesses worldwide to realize their full potential. That comes in the way of new tools and technologies that allow people to extend productivity, capability, communication and creativity.

He said that despite concerns he has heard from many partners over the ongoing Department of Justice antitrust case, Microsoft has no plans to slow down efforts to innovate and expand into new areas where it believes it can create value for customers. Some of those areas include storage, management and security. he also outlined the next three technology waves for Microsoft technology: the current wave, driven by XML, Windows and .Net server solutions; the "Yukon" wave, which will be at least a year out and be driven by the next-generation database product; and the "Longhorn" wave, which will include integrated experience.

During his keynote, Ballmer also announced the availability by the middle of 2003 of Exchange Server "Titanium," which will include integrated wireless access, greater scalability and availability and contextual collaboration. Simultaneous to that release will be the arrival of Outlook 11, which will include XML and new features like meetings innovation, note-taking tools, personal information management and expanded e-mail.


 

 TalkBack  
Subject Replies Thread Author Date of
latest post
LDAP, not AD 0   Otis Wildflower 7/17/02 11:13:54 AM
  Hi, If you know what you are doing, you can use free LDAP, samba, cyrus IMAP, etc. and build a killer MS workgroup server for NO LICENSE FEES. With Mandrake Linux, you can do this OUT OF THE BOX. Using the 'Directory Administrator' tool for Linux, you get a clicky-feely GUI LDAP interface to manage your LDAP domain. Additionally, in Linux desktop, you can run many applications (including Office 2k) in WINE, and even do so across x-windowed connections for citrix-like behavior for no OS license fees. If you're a little bit creative, you can compute a lot more cost-effectively..
LDAP, not AD 0   Otis Wildflower 7/17/02 11:10:54 AM
  Hi, If you know what you are doing, you can use free LDAP, samba, cyrus IMAP, etc. and build a killer MS workgroup server for NO LICENSE FEES. With Mandrake Linux, you can do this OUT OF THE BOX. Using the 'Directory Administrator' tool for Linux, you get a clicky-feely GUI LDAP interface to manage your LDAP domain. Additionally, in Linux desktop, you can run many applications (including Office 2k) in WINE, and even do so across x-windowed connections for citrix-like behavior for no OS license fees. If you're a little bit creative, you can compute a lot more cost-effectively..
LDAP, not AD 0   Otis Wildflower 7/17/02 11:08:26 AM
  Hi, If you know what you are doing, you can use free LDAP, samba, cyrus IMAP, etc. and build a killer MS workgroup server for NO LICENSE FEES. With Mandrake Linux, you can do this OUT OF THE BOX. Using the 'Directory Administrator' tool for Linux, you get a clicky-feely GUI LDAP interface to manage your LDAP domain. Additionally, in Linux desktop, you can run many applications (including Office 2k) in WINE, and even do so across x-windowed connections for citrix-like behavior for no OS license fees. If you're a little bit creative, you can compute a lot more cost-effectively..
Just check the history of Linux 0   Jackill 7/17/02 10:37:21 AM
  Sorry fo my bad english. I just want to say, that Linux starts like a toy. And now after 11 years it force MicroSoft to change they plans and business style. Linux support more features, then MS Windows, it more stable, more flexible. I use it 1,5 years and have windows like a second operation system due to use some windows applications, like adobe photoshop and adobe indesign. Linux ready to desktop like an environment, but it need more ports of Windows or Mac applications or it's analog with lower cost to smooth discomfort of adaptation.
AD 0   Andy 7/17/02 9:56:17 AM
  You are correct. Windows did not invent AD.It would be nice if Novel or Caldera would work together to make Linux integrate into a Novel network as easily as SCO did/does. Then MS would have a real fight on its hands.
Lower price & stop the bloat 0   EEM 7/17/02 9:55:22 AM
  If Microsoft would lower the price of Windows XP Home Edition to around $30 and Professional to $60, they would not have to worry about Linux so much. Also, they should learn to make an operating system that does not require a processor upgrade every time you want to upgrade to the next version.
Lower price & stop the bloat 0   EEM 7/17/02 9:54:04 AM
  If Microsoft would lower the price of Windows XP Home Edition to around $30 and Professional to $60, they would not have to worry about Linux so much. Also, they should learn to make an operating system that does not require a processor upgrade every time you want to upgrade to the next version.
Linux on the desktop 0   Sorin M 7/17/02 9:48:39 AM
  A lot is said about linux on the desktop. I don't believe that it has no chance. It will always be the choice for the people that like to fiddle with their computer. And it is expected that the computing knowledge will increase. I for one don't care much if linux beats Microsoft. I want linux to be there in 15 years because I want to be able to use it in 15 years. I like to have the control that linux gives me on my computer. I like to search the net for the latest pre-alpha useless software and see how it works. It IS an attitude. And I am a desktop user, not sysadmin or programmer.
Drawing a Clear line between System types 0   Tim Rue 7/17/02 9:22:49 AM
  With all the intellectual property batteling and technology being introduced to control the use of such machinery, as well as to control the innovation and creativity of it's users, it's becoming obvious that there needs to be a clear line drawn between Intellectual Property Constrained system and an Open System. I'm not a "pirate" and that word was coined by Bill Gates himself when others got ahold of a late to be released copy of Bill port of BASIC to the Altair, got into learning about it and debugging it themselves. Learning and fixing things is good. But Bill disrupted what was a nature evolution of software developement. I'm not a pirate, and I do not like the idea of those wanting to infringe upon my freedoms of creativity and innovation. As though they are musceling in on what is open because they know nobody wants their constraints. And if that is not true then why don't they just make their IP constrained system and leave alone the open systems, or what there is of open systems. A clear line need to be drawn, for I do not want to have to try and figure out what I can and cannot do with the constraint pollution that is being injected into an otherwise free and open system. In fairness, DRM products should simple just not work on the open systems, but be well marked. Consumers in general are not theives. But you should consider how theiving it is to steal away creativity and innovation, from all of us. It's a real shame that it takes alot of indenpendant freesoftware developers (not a company) to get Microsoft to start doing (or at least claim) what they should have been doing all along. Producing quality software....Or was it the DOJ ..... Microsoft is a criminal, proven in court. And now they want to muscle in on the creativity and innovation of others using the money they obtained thru illegal antitrust acts. But what I really want to know is: IS Microsoft genuinely being constrained by the DOJ such that if a company of freesoftware developers and users is created (so to better finance freesoftware development and use), that MS wouldn't be able to apply their anti-competitive practices against such a company? MicroSoft has a much longer history of questionable practices then ....well have they really even begun changing their ways? .... IP constraints ...... The best way to be anti-competitive is to suppress innovation and creativity.
Hmm... 0   Jeremy 7/17/02 9:14:05 AM
  Linux is making plenty of inroads on the desktop. I personally have been using it solid for two years. I am a Unix admin so that makes me less dependant on needing MS apps. But at the rate my machine is solid doesn't hang up on me and offers fast performance. I think you have it all wrong Linux is best for small businesses right now. With the lack of a good Journaled filesystem Linux will nut cut the mustard on the enterprise. People like Sun and HP hold the market there. I am not sure if you have tried the installation of most distros but they are as easy as setting up Windows. Now granted you do need to know the technology you are implementing, there is no click and pray method in Linux.. just as there isn't one in Unix. Most Windows admins don't know the technology in depth like Linux/Unix admins have been forced to. Until Linux gets that part of the game figured out your average Joe Bob isn't going to pick it up... but I wonder if they really want there system used by point and clickers??
Linux intergration 1   Ted 7/17/02 9:20:10 AM
  Linux hard??? I think not. I've found MS's point and click configuration often much harder to deal with. My background was not in IT when I started using Linux as a staging platform for web development work (I was a graphic designer), but I've used the knowledge gained in working with Linux to change careers. I'm now a senior web developer, writing database-driven web applications for intranet and internet. Incidently, with all the new pricing changes taking place with the lastest releases of Windows, I have heard the rumblings about finding alternatives to Windows on the desktop -- this for a company with over 7,000 employees.
active diretctory 2   Run 7/17/02 9:51:58 AM
  OK, come on here, you have to be kidding me. There is no way that Linux will ever beat MS on the desktop side or the small server side. As far as large scale operations are concerned, look out, because I think Novell wiill start making an inroad into the large server market. The reason? Standards my friend, standards. With Novell you can get the server installed, youy can set up rights and permissions, then your done. The same on Windows. Linux, is a different creature. If you have little experience with it, then give up. There are no discussions for the newby, and the RTFM posts just drive people away. Until a newby can come in and figure it out, it will be a loosing battle, especially against the likes of Bill Gates and the MS camp. The only viable alternative is Macintosh, and their X (OS 10) desktop. It is easy to install, takes a learning curve, but there is documentation on using it. Something Linux is missing. Sorry guys, but you are beating a dead horse, does not matter how well it works is no one knows how to use it. I will not support Linux here because of that factor, hence the inception of Netware to replace old Unix servers.
active diretctory 4   Run 7/17/02 8:50:00 AM
  Look gnome2 & KDE 3.x, maybe better than XP GUI. Linux Desktop setups, I think, are needed in such enviroments where they can be configured specially, in most cases, so a well configured fvwm2 can be far more better than gnome or XP where everything is pushable. In a supervised network with geek administrator users are prohibited to modify setup via control- panels. Sorry my Hunglish :)
Conspiracy theory? 1   Andr�s Castillo 7/17/02 3:01:44 AM
  Oh, please! Any corporation can deciede how much money they will spend on IT. Even a simple calculation will show you the benefit of Linux. Most of what MS is saying about their advantage over Linux is FUD. As an example - in my company we are constatnly paying for our BIG windows server being serviced by MS partners (at list1 big downtime a month), while linuxes (4 of them) prant along silently for over 2 years with NO downtime. You do not have to be an ubergeek to use a linux machine, but you do have to be really rich and have nothing to do to pay servicing hours for windows, while you can not work on tha machine.
MS drives them to linux... 0   rupert 7/16/02 8:29:48 PM
  until linux gets support for the AD and becomes easyier to intergrate to a windows network it will never rule in the land that is microsoft. great for the uber geeks out there but not great for corporations
MS drives them to linux... 4   rupert 7/17/02 2:35:33 AM
  The orriginal Active directory system came from Novell not MS. Also, its MS that has to fit in with the 'Standard' network. Was it 70% UNIX/linux at the last count on the internet? There are starting to realise the other OS's are not going away and are being more 'network friendly'. Even in applications MS has noticed that for example, Access was never going to compete with the big boys of the database world until it came into line. Which it has done in recent releases, almost. I'm not anti-MS, they have done the job they set out to do, an easy OS that anyone can use. It's the practices of buying any company that has a good idea, damageing those it can't buy, that I am against. Other than that, I'd say the world is big enough for several OS's.
"Integrated Experience" ??? 0   Marius 7/16/02 2:23:42 PM
  Not great for corporations? Then why is IBM doing so well with their Linux efforts? Why does Apache consistently have on the order of 40-50% of the webserver market according to Netcraft? If it's only for ubergeeks, why is walmart.com now selling PCs with Mandrake preinstalled?
DRM ON EVERY BOX !!!! 3   Tom 7/16/02 1:08:47 PM
  But Active Directory is only a hacked LDAP implementation - I am starting to integrate my Unix / Linux Systems via AD - it is slow going - but it has potential...
Death Spiral 2   Sinan 7/16/02 11:27:09 AM
  rubbish, look i wont argue linux on the desktop, thats where windows belongs (does joe really care if he has support for X diff languages for free and by default or that he can point and click his way around the internet?) but in the server market, unix has ms beat hands down, there is no arguement there. And windows will never beat them their, sorry. As for linux integrating easier, wth do you want? it integrates fine. and it does windows' native filesharing better than windows does ;]
Cheap vs. Inexpensive 2   Chris 7/17/02 7:32:42 AM
  until linux gets support for the AD and becomes easyier to intergrate to a windows network it will never rule in the land that is microsoft. great for the uber geeks out there but not great for corporations
 
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