Microsoft has also recently sharpened the focus of its nearly $5 billion investment in R&D innovation around an integrated platform strategy and the forthcoming "Longhorn" wave of products. It is also ratcheting up the pressure on its staff to improve connections with customers, increase internal efficiency and meet competitive challenges, especially those surrounding Linux, head-on.In a teleconference with the media and analysts in April to present Microsofts third-quarter financial results, John Connors, Microsofts chief financial officer, said that Linux and non-commercial software were one of the risks facing the company. That followed the February admission by Gates to more than 600 of Microsofts Most Valuable Professionals (MVPs) that he is taking the Linux threat seriously. In its last 10-Q quarterly filing, Microsoft also said that the popularization of the open-source movement continues to pose a significant challenge to its business model. The latest compensation moves also follow a number of end-of-financial-year staff shuffles. Earlier this month Peter Houston, who as the senior director of Microsofts Windows Server Strategies has had to defend and explain the companys response to the competitive threat posed by Linux and open source for the past 18 months, moved to Microsofts Enterprise Management Division, where he will work on the upcoming Systems Center product. That followed last months reorganization of Microsofts platforms group, where the Developer and Platform Evangelism Business, the Windows Server System Business, and the Enterprise Storage and Management Business were combined under the existing Servers and Tools Profit & Loss center (P&L), headed by Senior Vice President Eric Rudder.
Microsoft executives are increasingly focusing on the Linux threat. In May, the German city of Munich decided to dump Windows and move to Linux and other open-source software, despite the intervention of Ballmer, who interrupted his ski vacation in Switzerland to personally call on Munichs mayor.