Ballmer: Adoption and Competition

Q&A: Part Two: The Microsoft CEO discusses with eWEEK why he feels this is a new day for Microsoft, as the company announces the availability of Windows Vista, Office 2007 and Exchange 2007.

Microsoft announced the availability of Windows Vista, Office 2007 and Exchange 2007 for businesses on Nov. 30, an event company CEO Steve Ballmer said was the "biggest launch weve ever done."

After delivering a media address at the Nasdaq Stock Exchange in New York to celebrate the product availability, Ballmer sat down with eWEEK Senior Editor Peter Galli and talked about, among others, projections for Vista adoption, the recent deal with Novell and non-deal with Red Hat, as well as the threat Google poses going forward.

This is part two of that interview. To read part one, click here.

A lot of reports are saying that much of Vistas adoption will be through new computer sales rather than through upgrades to computers within the existing ecosystem. You have also said before that Microsofts own products are sometimes the biggest inhibitor to getting those people to upgrade. Are you aggressively targeting the existing ecosystem with marketing dollars and other programs to try and get them to move?

We will upgrade millions of machines, but you have to remember that analysts estimate we sell between 100 million and 200 million copies of Windows a year, and I dont think they expect 100 million upgrades a year.

We are going to do a very good job on upgrades but, yet, the most typical thing that will happen when people want to move to Vista is that it will be more common that they get it with a new machine, either at home or at work, than buy the upgrade.

But that doesnt mean we are not going to be pushing upgrades. While it is true that most people will upgrade when they replace their hardware, some will accelerate their hardware upgrade cycle because they are excited, and I think there is hope that we will also see a pick-up in PC sales.

Take our PCs at home. We got those PCs in 2003. Can I put Vista on them? Sure, I can put Vista on them, and it will work. But the machines are real slow, and we have a lot of digital photographs that we didnt have before, and we are starting with the digital videos and the price looks reasonable.

So getting new hardware will be our preferred upgrade path for most of the computers in our home.

My son is lobbying for a new school PC; they all carry laptops, and it really doesnt have as much memory as he knows he wants to have. But he probably wont get a new PC, hell probably get a software upgrade.

Microsoft has actively been collaborating with companies that previously were pretty much off the radar screen, with interoperability the new buzzword coming out of Redmond. But, at the same time, you have created some controversy and even hurt some of those partners, Novell being an example of that by your statements that the recent patent deal between you was a recognition that there could be some patent issues with open-source software. So what is your intent with deals like this, and what does interoperability really mean to you?

That was not what I actually said, but we live in a world where we [Microsoft] have a very big presence. But there are other products and services in the marketplace, and our customers expect us to make the stuff they do and dont get from us by and large work together.

Sometimes that is a pure technical issue, and sometimes that involves, what we refer to with the open-source community, as an IP bridge between what happens in the open-source and commercial world, neither of which is going to go away and which are going to both try and deliver value.

We have to make sure that not only the parts work together, but that a customer can have confidence they are properly licensed.

We spent many millions of dollars paying for patent licenses with third parties, and we provide that indemnification to our customers.

So we said rather than do something cuckoo, why dont we work together with the Linux distributors—of course we still want to sell Windows instead of Linux—and make sure that sort of patent confidence can exist in the open-source world.

/zimages/3/28571.gifClick here to read more about Ballmer saying Microsoft is open to talks with Linux distributors.

Sure, we may have one view of the current situation and Novell may have another, and everyone else can have another.

In a sense, thats not the important part: The important part is how we create a bridge that lets people move forward from an IP perspective with confidence, with either Windows or Linux.

And we are actually going to be quite constructive, and the whole deal with Novell, both for them and for us, was an attempt to get constructive relative to some issues on our minds and on our customers minds.

I think we are going to achieve that. There is still more work to be done, and it would have been easier for us not to do what we did.

We did what we did to be constructive, relative to customer need and their desire to support both Linux specifically and Windows systems.

Next Page: Linux.