Still Competitive And Fierce, Ballmer Blasts Off

VB: I'm starting to hear talk from SCO and others trumpeting the wonders of intellectual property. Do you think more companies will do the same now that more open-source projects are starting to encroach on their proprietary businesses?

Ballmer: Yes. [Duh.] Now, any company that has to feed mouths for a living is going to make sure, in our business, that they innovate and get full value of that innovation. It doesn't matter who you're talking about, that'll be the case. So the notion that others will talk about their innovation, its value, protecting it, etc."no, it doesn't surprise me.

VB: So, you know where I'm going with the next one: You see Sun, Computer Associates, putting stuff into the open-source realm. Obviously, there's Novell and all these others with their hybrid strategies"some open source, some blending intellectual property. What do you make of all this?

Ballmer: Companies that do that are basically commercial-software companies. We've been publishing Driver Source for years. You could argue there are parallels, but the truth of the matter is when people say, "Look at some of my source code, but I really don't want you to use this"I want you to use the other thing, because the other thing is where I have my protected intellectual property and where I make money," it is like a seeding strategy. It's not a real business strategy. Sun is who they are: They are not a company that succeeds by zero-priced published software of theirs going to market. They are trying to sell you their unique value-add. IBM is the funny one, because they're really on the same strategy, too, but they have embraced Linux hook, line and sinker so they can sell you very expensive middleware that sits on top of it. That's where they are coming from. [But] Linux plus WebSphere is a lot more expensive than Windows. So they are not selling inexpensive solutions, but they are doing it without their mainline products.

The truth of the matter is if you're a software company, you're a commercial-software company. That's the only way to pay the bills...

VB: Looking at a chart of your current and future product plans suggests one thing above all else"you've got a boatload of stuff going on. Have you tried to tell your people on the development side, "Can we simplify this? Do we need so many servers?"

Ballmer: You know, we have made some real improvement in that for small businesses with SBS. And in the enterprise, what we have is pretty darn good. Each server has a purpose. BizTalk has a purpose. Exchange has a purpose. And there's enough wherewithal within our bigger customers to kind of like the fact that each has a purpose and to deal with the complexity that all that brings with it. So I think that's fine.

Now, I think there's a middle-sized customer that [that might not work for]. I think there are three levels of customers with various abilities to deal with complexity. I think our product line is pretty good for people who can't deal with much complexity, with SBS, who want a server. I think our product line is pretty good for people who have more ability to deal with complexity...I think it's in the middle area where there's still room for improvement...over time, you'll see changes in the solutions we engineer based upon that understanding.