Microsoft CEO Steve Ballmer Tuesday all but dismissed Google's just-announced US$1.65 billion purchase of video-sharing service YouTube as a waste of money.
But he also said that part of his strategy for meeting the challenge posed by the delivery of applications, often for free, over the Internet will be to give IT managers applications that work with "Internet-style simplicity" inside an enterprise.
Ballmer took questions from Gartner analysts at Gartner's ITxpo conference in Orlando on a range of issues, including Tuesday's news that one of Microsoft's major competitors, Google, has agreed to buy YouTube. "If you look at most of the content up at YouTube today, it is copyrighted material," said Ballmer.
For all the chatter about how YouTube is all about home video, in the end people want to see things like replays of the recent 60 Minutes interview with former Hewlett-Packard chairman Carly Fiorina, said Ballmer.
"The people who create content professionally are going to want that distributed everywhere -- they will want it distributed and found through us and Yahoo," said Ballmer.
Ballmer didn't spell out how Microsoft plans to combat Google on this front. But he said at another point that his company, even when it's not first to market on something, keeps at it, "working and working and coming and coming," he said. "The bone doesn't fall out of our mouth."
That comment drew laughter from a conference that has drawn more than 6,000 attendees. ITxpo runs through Friday.
On enterprise issues, Ballmer, in a question-and-answer session with Gartner analysts David Smith and Yvonne Genovese, offered more overview than detail, while leaving some issues like licensing largely alone.
Microsoft licensing has been problem for one attendee, S-E Haugen, vice president of IT at Strohl Systems Group. "They need to get better on licensing," he said. "You can't address licensing in a short session, and it's definitely nothing he wants to talk about because it is a sore point. It's sold in so many flavors and fashions."
Haugen said he's been unable to get straight answers from resellers about licensing costs, such as the cost of a SQL license on a server with four processors. He said he has documented three different answers from vendors about what the charge might be.
Ballmer did talk about the delivery of software over the Internet, and about the company's own Microsoft Live product. But he stressed that "most people, for the foreseeable future, are still going to want to run enterprise IT as enterprise IT. While more and more enterprises will use Internet-delivered services, it's not going to switch over."
But he did say Microsoft software will have a "click-to-run characteristic" inside a corporation's firewall, meaning Microsoft Office, for instance, could run on a corporate server. "We absolutely believe [in] evolving ... to this kind of click-to-run Internet style simplicity," said Ballmer.
Greg Barkee, director of technology at Providence Health Plans, said it will be interesting to see where Microsoft and others take the Live concept. "We're still pretty fat-client-centric," Barkee said.
"Anytime you can improve speed [and] efficiencies -- it's a good thing, especially in the enterprise," Barkee said. "From what we continue to see, Microsoft's products seem to get bigger, fatter, [with] larger disk space, larger memory requirements. I don't buy that it's getting faster."
On the issue of competition from free software on the Internet, Ballmer said, "The key for us is to be able to show sufficient value." He pointed to the company's software assurance improvements in its upcoming Windows Vista release.
On that latter point, Steve Mihalik, director of application development at American Greetings, agreed. "Microsoft's value to us is going to be the key to whether or not pay for it," Mihalik said.
Gartner analyst Thomas Bittman said he believes that one major change Microsoft will be making is bringing an end to big release cycles for products such as Vista and Longhorn. The company will deliver upgrades "in smaller packages more often," he said. "If they don't do it, they are in trouble. They can't wait five years to deliver a new operating system."