Microsoft`s Ballmer Opens Up to Partners

HOUSTON—In a wide-ranging interview following his keynote at the Microsoft Worldwide Partner Conference here, Microsoft CEO Steve Ballmer fielded questions about Bill Gates' departure, Yahoo, Microsoft's software-plus-services strategy, competition with open-source software and more.

Asked about the status of Microsoft's on-again, off-again bid for Yahoo, Ballmer deflected the question from Geoff Colvin of Fortune:

"We love what we're doing today in search. If you go to www.msn.com you use our Live Search every day, every month, every year, every release. We're making incredible progress in innovation, both on the results that you see, the user experience, the relevance, the advertising, and we love what we're doing, and we're going to drive forward in any event."

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Added Ballmer on the Yahoo issue: "I can't really comment much about what's going on today with Yahoo, but I can tell you that with or without anything going on, on that front, I love what we're building. It's fantastic. If we can accelerate our strategy, great, but we're depending on our own guys, our own engineers, their brilliance, their efforts, their energy." 

A Microsoft partner asked if with its new online services Microsoft would be competing with its hosted services partners. Ballmer replied:

"Yes, I certainly understand the question, and yet I would say, as we start introducing more and more of these cloud service offerings, we're actually in the process also of re-engineering our server software. We have great hosting partners. But, the best you can do is the best you can do with our existing server products hosted and managed well. We're basically reinventing some of the server software particularly as it relates to scalability, geo-caching and replication, management, cost of operation, and all of the improvements we'll make in order to do our own cloud services, which are necessary. They're innovation that we and we alone can do. We will also repackage back over time into our server offering. There will be customers who want to work on our scale platform in the cloud. There are going to be customers, though, who want hosted, dedicated solutions from you. We will support both."

Ballmer also reiterated Microsoft's position vis-à-vis open-source software, saying the company would not be open-sourcing its core offerings. "Number one, are our products likely to be open-sourced? No," Ballmer said. "We do provide our source code in special situations, but open source also implies free; free is inconsistent with paying for lunches at the partner conference."

However Microsoft will support and interoperate with open-source software in various ways, Ballmer said. "Will we interoperate with products that come from like Linux, from the open-source world? Yes, we will," he said. "Will we encourage people who want to do open-source development to do it on top of Windows? Yes, we're proud that the best PHP system in the world is actually the one that runs on Windows today, not the one that runs on Linux.

"So we're going to encourage open-source innovation on our platforms, and around our platforms. And, you know, we see interesting things where bits and pieces of technology, commercial companies are now starting to provide it in an open-source form or to digest in an open-source form. And we're open to that as well. But our fundamental business model will remain kind of commercial software, advertising, enterprise licensing, etc."

Meanwhile, Ballmer said Microsoft will be introducing a new version of OCS (Office Communications Server) this year. "When it comes down to unified communications, this year, as we release the next version of Office Communications Server, we're going to be out there telling our partners why for presence, why for instant messaging, why for video conferencing, why for audio conferencing, why for Web conferencing, come on, it's OCS, OCS, OCS, OCS, OCS," Ballmer said.