Security Dampens Microsoft Deals

By Peter Galli  |  Posted 2003-10-23 Print this article Print

In a conference call with analysts Thursday, Microsoft officials admitted that security concerns were weighing on its business, resulting in lost or delayed partnerships and sales.

Microsoft Corp. officials on Thursday admitted that security concerns had diverted the focus of its customers, sales staff, channel and partners away from closing deals, resulting in lost or delayed sales. In an analyst and press teleconference to discuss the Redmond software makers first quarter financial results on Thursday, Microsofts chief financial officer John Connors outlined the largest risks to Microsofts business going forward. "Our efforts to help our customers address the security challenges they face will absolutely continue. This is the number one priority at Microsoft.
"[CEO] Steve Ballmer recently outlined some of the new security initiatives we are taking, and our sales force and support organizations are focused on taking care of our customers. That could require in additional time being required to close deals or additional investments in education, business process and technology," he said.
Microsoft CEO Steve Ballmer recently detailed the companys security initiatives. Click here for more information. In addition, Microsoft did not count on any improvement in the economy for its second quarter forecast, though it did expect some modest increase in corporate spending in the second half of the year. So, if things were to deteriorate, its future financial results would be affected, Connors cautioned. As regards Linux and other non-commercial software products, Connors would only say that these continued to be a threat to all commercial software companies. Any strengthening of the dollar would also reduce the benefits from foreign exchange rates going forward, he said, adding that "litigation, generally, remains a risk. Finally, continuing to be successful requires great execution on all fronts. "In closing I want to reiterate that we had a very solid quarter from a financial results perspective. We have great momentum in our consumer business and our forecast going forward reflects that optimism. We have a host of new products being launched this quarter that deliver real value to customers. The product roadmap over the next few years looks really promising as well," he said. Discuss this in the eWEEK forum.
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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