Ballmer: DOJ Case Barely Impacts MS Workers

At Gartner Group's Symposium/ITxpo 2000 conference in Florida yesterday, Microsoft CEO Steve Ballmer addressed thousands of information technology managers on a wide range of topics -- from the federal government's antitrust case against the software vendor to the company's new .Net computing services strategy to Microsoft's bitter rivalry with Sun Microsystems.

In keeping with the way the conference works, Ballmer answered a series of questions from Gartner analysts instead of delivering a prepared keynote address. Excerpts from his remarks follow.

On the ways in which the behavior of Microsoft employees has changed because of the intense government scrutiny resulting from the antitrust case:

"I think from a cultural perspective, for the vast majority of our employee base, the answer is not much. Our people come to work every day to do great software -- to support it, to sell it, to make it. That drives people to come to work."

On the impact that the case has had on employee e-mail messages and preparation of internal documents:

"If you look at the top people [within Microsoft], I think there's a little bit more consciousness of what you record and how you record it and what tone . . . you use in e-mail. I think that's probably OK in general, by the way. E-mail, as I'm sure most people find in their organizations, can have a much harsher tone in general than the way you communicate with people face-to-face. Softening that is certainly not a bad thing in a number of regards."

On the impact that the possible breakup of Microsoft into two separate companies is having on the company's senior management:

"It's really not a question on which we spend much time dwelling. It's not actionable. The thing that is actionable today is for us to continue to try to build great products and help customers. . . . It is almost 100% assured that whatever the final outcome [of the antitrust case] is, it will not be today's outcome. We remain 100% convinced that we will prevail on appeal. . . . So putting a lot of energy into the ruling as it stands from the lower court would be wasted energy."

On Gartner Group's contention that per-user costs for some Microsoft products have increased 300% during the past five years and could rise another 500 percent by 2005:

"The fact is, we have balanced and changed around some of our licensing terms. . . . The average customer does not pay us 300 percent [more] and will not pay us [an additional] 500 percent. We are talking about doing some things to try to make sure there's no leakage in the system. . . . But the notion that there's been a 300 percent increase in price, if that's true, you can't see it in our financial results, and I'll leave it at that."

On Microsoft's new .Net program, under which the company plans to recast its software products as a set of Internet-based computing services:

".Net is a platform that's designed to allow people to write a next generation of applications with a richer user interface and with an Internet-based application integration model and a programming model that allows more rapid development. . . . It's middleware that runs in clients, middleware that runs in servers and a set of services that we can run out of the Internet platform. There's some technical foundation to that. [But] it'll take a few years before we have all of the .Net platform rolled out."

On the expected differences between desktop Microsoft Office applications and the planned .Net-based versions of the software and when users should switch to the latter:

"[What] we have an opportunity to do with both Windows and Office is to turn [them] into a service. . . . that our enterprise customers can run or that they can subscribe or buy from us. But when we say service in this context, we need something that manages and takes care of itself. The No. 1 issue, when you get right down to it, that I get feedback on from our enterprise customers is, 'Why is it so much of a hassle for us to manage and take care of desktops, to update the software, to provide help desk support?' . . . [But] I think it'll be a few years before we have most of the functionality of Office in that format, and initially what we will have is a subset . . . catering primarily to the types of things that you generally do at home."

On Sun CEO Scott McNealy's contention that software is just a feature of hardware:

"That is the most patently absurd thing I've ever heard in my life. The future of this industry is software. The thing that defines its character, the thing that solves problems . . . is software. Software is what lets you do [enterprise resource planning] or supply-chain management. Software is what lets you build scalable Web sites. . . . I'm not saying there's no value to hardware, but it's just such a patently crazy thing to say. And it denies what the interests are of the user community -- the IT user, the developer, the end users."

On Microsoft's recent US$135 million investment in struggling software vendor Corel Corp.:

"I would characterize our investment in Corel as an investment in .Net. Corel is a company [that] has a new CEO, a fellow we've had a chance to work with very well over the years. And as soon as he was named [as] acting CEO, he came to Microsoft and [said] he wanted to assess for himself what our relationship was. He had a lot of enthusiasm around .Net. . . . They were in a position where they needed to raise some money. We said, 'Great. We'd be happy to help you.' " On the possibility that Corel will make .Net available on Linux, an operating system the Ottawa-based company is targeting:

"Right now, the [intellectual property] environment in Linux is messy enough that we're not pushing any buttons on that front."

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