Microsofts Ballmer Promises Midmarket Win-Win

By Peter Galli  |  Posted 2005-09-07 Print this article Print

The CEO suggests skipping Linux in favor of Microsoft's offerings, now tuned to serve the midmarket segment.

REDMOND, Wash.—With his usual boundless energy and optimism, Microsoft CEO Steve Ballmer took to the stage at the Business Summit here Wednesday to sell the companys vision for the midmarket segment. He fielded a question about how midmarket customers should think about Linux, one of Microsoft Corp.s biggest competitive threats. "If you ask me, you dont have to think about it," he quipped, before adding that it is good for any company, including Microsoft, to have competition, saying it makes Microsoft "think more creatively and innovate more."
What does Microsoft CEO Steve Ballmer see as a competitive threat? Click here to read more.
Ballmer said Linux is also directly responsible for helping keep Microsofts prices down: "It makes sure we watch our prices and make sure were offering value. Competition is a good thing and we do compete with Linux," he said. "But IT pros should ask one thing and one thing only: Am I getting the best products and services that allow me to run my business at maximum efficacy. The answer for the lions share of the time will be in favor of Microsoft products and solutions, and we feel you shouldnt have to think about Linux if you do not want to," Ballmer said. He also said Linux was ahead in the area of high-performance computing, but said Microsofts staff comes to work every day looking at how to offer customers an even better solution. "It is important to remember that Linux is not free and that, on a TCO basis, Microsoft comes out tops most of the time. I hope that when you look at Linux, you look at it as a competitor to the vendor with whom you do all of your business," Ballmer said to laughter and applause. He also did not steer clear of other sensitive areas during his presentation, addressing the thorny issue of licensing head on, telling some 700 attendees that "enough is never enough" on the licensing front and that this area needs continual innovation. "Hopefully we are moving forward in that regard, but we have also taken a few steps backwards," he admitted, referring to the brouhaha that arose when Microsoft introduced its Licensing 6.0 and Software Assurance plan. To read more about how some users baulked at renewing their Software Assurance contracts, click here. Ballmer said the midmarket customer was the least well served across the spectrum of people served by IT, adding that midmarket customers were not only challenged by the enterprise but also faced specific IT challenges. "If we want to serve the midmarket customer well, we have to allow them to do amazing things with IT while taking out a whole level of complexity in the process. This will require patience and tenacity, a hallmark at Microsoft, as our customers have come to expect us to get it right, if not at first, then later," he said. Microsofts strategy has been an evolving one, he said, from looking at ways to expand its Windows and Office product lines to expanding its offerings through Great Plains and then through the Navision acquisition. "Our vision is to take all of these parts and to make them work harder for the IT professional in the midmarket," Ballmer said. Click here to read about Microsofts plans for premium versions of Office 12 and Windows Vista. Microsoft has also learned some hard lessons about integrating these large acquisitions and how to deal with all the issues that arose from that, Ballmer said, admitting that this had been more complex and had taken longer than Microsoft had expected or would have liked. But that process is now complete and those companies and their solutions are fully integrated into the company and its line of products, he said. Next Page: Microsoft tries to bring midmarket customers what they want.

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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