Ballmer Memo Cites Linux Threat, 'Challenging' Environment, Longhorn Response

Linux, the open-source operating system that has dogged Microsoft's Windows platform, appears to remain a top-of-mind consideration. "In this environment of lean IT budgets and concerns about Microsoft's attention to customers, noncommercial software such as Linux and OpenOffice is seen as interesting, good enough or free alternatives," Ballmer wrote in the memo.

IBM, another bete noir for Microsoft, also earned some ink in the memo. "IBM's endorsement of Linux has added credibility and an illusion of support and accountability, although the reality is there is no center of gravity or central body investing in the health and growth of noncommercial software or innovating in critical areas like engineering, manageability, compatibility and security," Ballmer added.

IBM and Linux were top-tier competitive issues for Microsoft a year ago as well (see story).

Earlier this spring, David Stutz, a top programming mind at Microsoft, retired from the company and posted a "sanitized" version of his retirement letter, challenging Microsoft to stop looking over its shoulder at Linux and open-source efforts and instead focus on forward-thinking innovation. Stutz had been trying to bring more of an open-source mindset to Microsoft, long known for its proprietary, or closed, code (see story).

In the memo, Ballmer reiterated the open-source threat to Microsoft. "Noncommercial software products in general, and Linux in particular, present a competitive challenge for us and our entire industry, and they require our concentrated focus and attention," he wrote.

He again warned that the General Public License structure used in the open-source arena prohibits commercialization of software, "thereby undermining an ingredient essential to innovation and to addressing key elements of an integrated platform such as a product road map, fixing issues, improving documentation and so forth."

At Microsoft's TechEd 2003 conference, one solution provider, who requested anonymity, said Linux represents a huge challenge for systems integrators and other solution providers. "How do you justify charging for an application that runs on a free operating system? You can't. The model is broken," he said.

Open-source fans, however, probably would beg to differ and cite the range of software already available for Linux.

Ballmer's memo also re-emphasized such Microsoft mantras as the need to deliver high customer satisfaction, the best development platform and ever-tighter integration between Microsoft technologies.

In the memo, Ballmer also highlighted the "Longhorn Wave of Innovation." The next major client release of Windows, Longhorn, is due in 2005, according to a road map presented by Paul Flessner, senior vice president of Microsoft's Server Platform Division, at TechEd this week.

"In addition to the Longhorn client, there will be a Longhorn version of Office, Longhorn server enhancements, Longhorn development tools and a Longhorn version of MSN," Ballmer wrote. "We will do the work and take the time required to get it right, because it truly is the next quantum leap in computing, which will put us years ahead of any other product on the market." Partners will be critical in building and supporting a broad array of applications, he said.