Ballmer Memo Cites Linux Threat

By Peter Galli  |  Posted 2003-06-04 Print this article Print

Microsoft officials on Wednesday again expressed concerns about the threat Linux and open-source software poses to the company's business.

Microsoft Corp. officials on Wednesday again expressed concerns about the threat Linux and open-source software poses to the companys business. In an annual letter sent to all Microsoft employees by CEO Steve Ballmer following the companys annual retreat for senior managers, Ballmer said that while most non-commercial software products present challenges to the firm, Linux in particular poses a competitive challenge to both Microsoft and the rest of the industry. "There is always enthusiasm in our business for new concepts. So-called free software is the latest new thing. We will rise to this challenge, and we will compete in a fair and responsible manner that puts our customers first. We will show that our approach offers better value, better security and better opportunity … In the event of needed enhancements or fixes, the Linux development community, no matter how well intentioned, simply cannot advance Linux the way we can—and must—innovate in Windows," Ballmer said.
Ballmers comments follow last weeks news that 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.
In a controversial move late last month, Microsoft also said it was licensing the Unix source code and patent from the SCO Group, which has sued IBM for $1 billion, threatened to sue Novell and warned Linux users that they could face legal liability for using code that SCO claims violates its Unix rights. Ballmers latest comments about non-commercial software follow those made by other senior Microsoft executives in recent months. In a teleconference with the media and analysts in April to present the Redmond, Wash., companys third-quarter financial results, John Connors, Microsofts chief financial officer, said that Linux and non-commercial software was one of the risks facing the company. That followed the February admission by Bill Gates, Microsofts chairman and chief software architect, to more than 600 of Microsofts Most Valuable Professionals (MVPs) that he took the Linux threat seriously. In its last 10-Q quarterly filing, Microsoft also said that the popularization of the open-source movement continued to pose a significant challenge to its business model.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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