Ballmer: Onward to the Enterprise

By Peter Galli  |  Posted 2004-04-12 Print this article Print

The Sun settlement clears the decks for Microsoft's main event: addressing the needs of large enterprise customers.

On April 2, Microsoft Corp. President and CEO Steve Ballmer and Sun Microsystems Inc. Chairman and CEO Scott McNealy announced a major settlement to end Suns lawsuits and cross-license patented technologies. Last week, Ballmer met with eWEEK Editor in Chief Eric Lundquist, Executive Editor Stan Gibson and Senior Editor Peter Galli on the Microsoft campus in Redmond, Wash., to explain how Microsofts agreement with the Santa Clara, Calif., company—which cost Microsoft close to $2 billion—will enable the company to drive deeper into the enterprise. Weve seen a lot of executives get up onstage and shake hands over the years. Sometimes, thats all there is to it.
You obviously know that this is not that. Youve been at a lot of silly press events—never one where somebody wrote a check for $1.95 billion. This is unique. $700 million is about settling the antitrust issues; the rest of it is all about intellectual property. We paid $900 million to assure that all past patent issues are behind us. Now why do that? Only to go forward. We paid to Sun $350 million for technical information that theyll provide us, and theyll pay us for technical information and protocols that well provide to them. But this isnt some alliance. This is a concrete set of licenses. Its not everything. It doesnt end the competition between the companies.
As for Scott, hes made part of his reputation with his whole shtick. Now, hell have to put major elements of his shtick behind him and refocus his company in a different way moving forward. How does this agreement play into products and your strategy going forward? What does it give Microsoft the right to do, and what are you going to do with those rights? Its not like there will be one product that comes out. What it lets us do is work with interoperability scenarios—customers who want to plug together for single sign-on, for example. This only extends to the products that they control and we control. This only extends to Solaris, not to anything else they happen to offer. Will [Microsoft Chairman and Chief Software Architect] Bill Gates and [Sun Chief Technology Officer] Greg Papadopoulos talk about .Net and Java integration? Interoperability is a better word than integration, which makes it sound like two things are going to be one thing. But what does it mean to be interoperable? Should there be a common denominator that developers can target? Or should there be interoperability in the execution environment? What does that look like? What does it mean for Web services protocols? Its that kind of discussion. Would Microsoft Office and [Suns] StarOffice be encompassed in any way by the interoperability? Certainly, there are things that Sun can do under the interoperability provisions. Im not going to comment specifically on what that has to do with StarOffice. We spoke with [Sun President and Chief Operating Officer] Jonathan Schwartz a few days ago, and he said this agreement, to him, was a big victory for Linux and open source because it makes interoperability between Suns Java desktop and the Windows client easier to do. That seems to be a contradiction because you guys compete on the desktop. Theres nothing in the agreement that relates to open source. This is all about Solaris. Theres nothing in this thing about Linux. We dont license our intellectual property under that framework, because we need to get paid for it. We indemnify our customers about the use of intellectual property in our products. The open-source community does not—anybody can come after the customer any time for patent fees. We put in place a framework for today and for the next ten years where we can have an intellectual property peace with Sun. Click here to read an interview with Sun President Jonathan Schwartz. Next page: Excellence, integrated innovation, responsiveness, and clear value proposition.

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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