Ballmer: We're cheaper than Apple! (but not Linux)
Whenever Microsoft starts to look like a company that is ready to play fair with open source, along comes its CEO, Steve Ballmer, to ruin all the goodwill the rest of the company has created.
Linux. It's all about Linux. We've been competing with Linux for a number of years. I want to describe our value proposition. We are a high-volume player. We do not, like Apple, believe in low volume, very high prices. Apple's a great company, does a fine job, but their model says high margin, high quality, high price, that's kinda how they come to market.
We say we want big market share, but with big market share you take the lower price.
Well, along comes Linux, and they say, "we have no price," which of course, we know for IP and other reasons, of course they have a price. But they say "we have no price." The problem you have with these so-called free alternatives is there's also not the incentive to a lot of the hard work to build out the ecosystem to support the hardware vendors that is required.
So a model like ours, which is high volume and high value but low priced but not free. You could say are you guys in the middle ground or are you where you want to be? And I say we're exactly where we want to be.
You can listen to it here:
It's bad enough that Ballmer completely botches his math on Apple's strategy. Maybe he didn't get the memo that Windows-based PC shipments have been declining even as Mac shipments continue to rise, and that even his Pyhrric victory in Netbooks is costing Microsoft money. He also seems to have missed the fact that Apple's iPhone has doubled its market share in the past year even as Windows Mobile stalls.
Ballmer says, in other words, that Macs are about "high quality and low volume," but the market says "high quality and ever increasing volume." But then, Ballmer is usually wrong when he attempts to discredit Apple.
Unfortunately, he's zero for two in his at-bats with this interview, because his attempts to discredit Linux also fall flat. Like it or not, Linux is free. He may not like that fact, but he can download Linux for free from a variety of sources. Here's Ubuntu: try it.
He wouldn't be alone. IDC is seeing a massive uptake in Linux adoption because (surprise, Mr Ballmer!) it's a highly cost-effective solution in bad economic times. U.S. retailer The Gap, for example, just dumped Microsoft Windows for Red Hat Enterprise Linux because of its positive return-on-investment and superior flexibility.
Microsoft may have been able to get Novell to "put a price on Linux" through intellectual property scare tactics, but it hasn't worked for the market leaders, Red Hat and Canonical (Ubuntu). Nor has it worked for the leading hardware and software vendors that depend on Linux, e.g., IBM, Oracle, SAP, etc.
Incidentally, these same vendors make up a significant ecosystem around Linux, the very same ecosystem that Ballmer suggests won't form due to a lack of incentives. Apparently he didn't talk to his closest partner, Intel, which is now the No. 2 contributor to the Linux kernel. I guess he didn't realize that there's a lot of money to be made around Linux, and it's money that doesn't have to be shared with Microsoft.
All of which leaves Microsoft squeezed by high-quality, high-volume strategies being used by Apple and by open-source vendors like Red Hat. It's not a battle he's going to win through soundbites. He's been trying that for years, and the market is waiting for Microsoft to learn to compete again, to build real value and to sell it.
With Windows 7, Microsoft appears to be back in action. This is welcome. Time to let your products speak louder than your hype and FUD, Mr. Ballmer.
Follow me on Twitter @mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
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Me? I just want something that works all the time. Is that too much to ask?
Apparently.
Quality is better.
with all the amrket share and billions Microsoft has had for years and years, why can't they make a quality product?
Answer: Because they can't. Without copying Apple that it.
And as Matt says, Ballmer better be careful about price (that's a monopolists strategy) because Linux is FREE too.
Steve talks the talk, but can't walk the walk.
As an owner of MSFT stock, I find that his performance in increasing shareholder value to be unimpressive. Basically, MSFT share price has tracked the S&P 500 over the past five years. The only saving grace is the small dividend.
Note that in their recently reported earning Microsoft missed the First Call estimates. Both revenue and per-share earnings were under.
Being big is fine when you perform. It's not so fine when you don't perform. If you don't believe me, why don't you use the Bing search engine and query "General Motors."
Ballmer has never been a good public speaker. He may mean well, but he just doesn't express his thoughts in a manner that the either the media or consumers can fathom.
That's quite the understatement. I would say he comes across as an arrogant *********.
...judging by the last couple of earnings calls and dropping marketshares, he's not much of a CEO either. ;)
A Freudian slip of the tongue.
Thing is, we're looking at a long, slow grind here, so most media types (and CEO's in Redmond, WA) don't see it, nor will they eyeball any trend past the next couple fiscal quarters.
One disagreement: I don't peg Ballmer as stupid per se. He's a very intelligent man. OTOH, he's very short-sighted, and tends to listen more to 'yes-men' than to critics. I suspect that this will certainly bite him in the butt.
Note the smiley appended to my post.
Anyone?
(crickets chirp)
Ballmer still doesn't get it. Either that, or he's playing the marketing type and is trying to make people believe his position that "Windows is cheaper" by repeating it over and over again.
So what is their model??? "Low margin, low quality, low price"?????
MS is a software company first. If you compare Apple's software to Microsoft's.. you get more for less with Apples.
He is comparing Apple's hardware to Dell and the like.. and it's not going to help his position. If MS would just focus on the fact that they are a software company.. they would treat Apple hardware like an emerging market.. or Linux... etc...
What does he think this is, 1998?
In my experience, 64-bit Linux has much better hardware support than 64-bit Windows.
Yes.. in fact.. he does. That's the problem.
Ballmer and Bill are both old farts now.
The Young guns are out gunning them.
Linux is free. The linux community tends to be against commercial software on their platform So getting the apps you really want, like Photoshop, not Gimp. Like Illustrator, not some clone with missing features. Like InDesign, or Quark, or true office, not Open Office, and Outlook, not Evolution, seems like it will never happen.
I personally don't care for virtual machines. I don't see the point in them. It's much easier to just use the one single OS that does all the things you need. For me, that's Windows.
And I don't think Apple hardware is so great either. In my experience, my PC has fewer issues and does what Macs claim to do, but don't. And that is to say, I work effortlessly with my hardware and software needs.
Someone is always going to be out there and call these statements groundless, or ignorant, or whatever word they choose to inflate their belief that Linux or MacOSX is better. I am sure it is in "their" experience. Not in mine. I like my choice. And I like the price even better.
Nobody argues otherwise. The difference though is that among the majority few makes a conscious choice since they're not really aware of the options, but that's another story. It's just that the landscape is changing shape; more people are choosing something else than what Microsoft offers.
Some like Outlook, I hate it... and so on. Then I love a lot of tools and software not available for the Windows platform, but for some those aren't of any interest... and so on. The good thing is that we've got more choices that appeal to more people. That's something that gains all, independent of choice, since competition gets tougher (otherwise Ballmer and the press wouldn't keep on writing off Linux like it has as long as I remember; Linux should be dead by now if there would have been any truth in such claims).
And still Ballmer is obviously only talking about one or two of the markets for software. In some Microsoft seems to never get above 1% again. It all depends on choice, which is good, and for what it's used.
Gimp is just there because the commercial software developers didn't want to release their software for Linux.
Get Adobe to offer Photoshop or Illustrator for Linux. Have it compete against Gimp.
Same with MS Office. MS Office runs on Mac, which is Unix, so it would not be hard for MS to port it to Linux. And I expect them to do that eventually, since Office, not Windows, is Microsoft's cash cow.
But that will happen only after Ballmer steps down as boss. Ballmer lives in a dream world.
Linux often ticks me off for technical and more basic reasons and I don't have a Macintosh due to the higher price and lack of a compelling reason to use OSX over my MS and Linux machines. But, please do not, like Balmer, think that your personal opinions and prejudices are facts.
Linux developers and the community are not against commercial software. They are simply running a business model based on added value while MS uses the older commodity model.
Virtual computing is the future. You can run several operating systems on a single computer and allows the best of flexibility and savings.
Apple hardware does not appeal to everyone but do not tell me what is supperior without presenting a fact or two. I have never seen a Mac hardware issue, although I concede they do exist. Yesterday my PC sound card stopped working - due to a suggested driver upgrade offered by MS in the update. MS is actually causing the problems and this is far from the first time.
Your statements are not groundless, just ill-conceived, somewhat ignorant, devoid of facts, and prejudiced.
Thankfully the rest of us have moved on to real computing environments and companies like VMware put MS where it belongs in a tight little box that you can suspend.
Good luck feeding Wintel
False.
"getting the apps you really want, like Photoshop, not Gimp. Like Illustrator, not some clone with missing features. Like InDesign, or Quark, or true office, not Open Office, and Outlook, not Evolution, seems like it will never happen."
I would hardly call The GIMP a "clone" of Photoshop, and the developers reject suggestions that it should be made to be more like Photoshop.
Since you mentioned Photoshop let me point out a few things. Criticism of Adobe from the Linux community is usually because they don't support Linux properly and wont port Photoshop to Linux. I've heard a number of Linux users complain asking why Adobe is welcome to join the Linux Foundation when they little to nothing for the platform. Its a token that insults people. And are you aware that companies like Dreamworks and Lucasfilm were begging Adobe at one time to port Photoshop to Linux ? (Linux is their primary post production platform). Adobe could have charged them an arm and a leg for a Linux port and the studios would have paid. But what did Adobe do ? Inexplicably, they refused. The Studios ended up paying someone else (Crossover, Google and the Wine project were involved) to make it work on Linux. I have photographers as customers too who have told me if Adobe ported Photoshop to Linux (they don't like the idea of running it on Wine), they would switch to Linux. There is demand and money to be made, but Adobe shows no interest. I believe Adobe will pay for their lack of foresight in the long run as others will fill the void in a market segment that Adobe just wasn't interested in.
OpenOffice is not a "true office" suite ? Why ? Because its not Microsoft Office ? So, Lotus Symphony is not a "true" office suite ? Or those other past names like WordPerfect Office or Lotus Smartsuite ? I guess they weren't "true" office suites either ? And what's wrong with Evolution (personally I like Kontact better) ?
In a world where Microsoft is rapidly losing ground to very determined and more agile competitors, I would never say "never".
Maya, XSI and Houdini are all native to Linux.
A major criticism of Garage Games is that they dropped Linux support for Torque.
WINE and its commercial offshoots (Cedega) and Crossover) have the single purpose of making Windows applications and games run on Linux.
Oracle DB is huge on Linux.
Anyone who claims Linux users are somehow opposed to commercial programs on Linux is either extremely ignorant, lying or needs their head examining.
glad u got a PC that works...
MY EXPERIENCE... which is FACT to me... just as YOUR experience is fact TO YOU...
My WindowsPC... DVD... stopped working... no explanation...
did everything... got the OS to recognize the DVD drive... oh... now all the DVDs skip...
scratches DVD? nope... how about a software update to fix the problem... nope...
hmmm
Let's try it on my Powerbook (notice not even a MacBook)... nope DVD doesn't skip...
OK... i'll get to my I.T. friend to fix my PC if want to watch or listen to any CDs... he likes Ubuntu... but in the end switched to OS X
the internet works... so, and it has a bigger hard drive than my laptop... i guess i'll keep it....
Another PC guy tells me... hey you know what's interesting... my Windows launches faster and has LESS PROBLEMS when i use it on my (intel-based) MAC.... hmmm
YOU SAID,
"And I don't think Apple hardware is so great either. In my experience, my PC has fewer issues and does what Macs claim to do, but don't. And that is to say, I work effortlessly with my hardware and software needs."
like i said stale_pancake... glad your PC works... cause mine doesn't ...
and sorry... i now have a bunch of ex-APPLE haters dual-booting on Apple hardware because they have LESS PROBLEMS & RUNS WINDOWS FASTER.... hmmm
"Chrome OS is a glorified browser."
It's not even that. It's a press release.
No matter how feature rich Linux becomes, it will never cross its anemic less than 1% market share. Why? Microsoft Office is entrenched on the desktop used by millions of businesses and consumers. Let?s not forget about other programs such as AutoDesk AutoCAD, Adobe Creative Suite, Intuit QuickBooks, Quicken, QuarkXPress and many enterprise class applications in-house developed and commercially for Windows. Mac OS X suffers from this also, but not as bad as Linux. Backward compatibility still faces the same hurdle under Linux, since referring to backward compatibility, Windows applications is often the case. Hardware is also a hit and miss for Linux, there is still no guarantee that your collection of devices will work, but there are improvements over prior versions, but still not enough.
Sorry Matt, but I predict that the Gap will be returning to Windows in no time, so did Tommy Hilfiger. Also, isn't the Gap CEO on the Apple board of directors? Even he had common sense not to go for Paris Hilton Collection high way sunshine robbery. Also, you need to do a search on Twitter and discover how most of those Intel based Macs are actually running Windows...so many people are raving, 'I love running Windows 7 RC on my Mac, way better than OS eXpensive. A friend of mine who recently deployed 20 Intel Macs said he took out the hard disk replaced with bigger drives and loaded them with Windows Vista Business. The reason why he likes Macs better than PC's are because of the durability. I said, ok whatever. The only Mac he has running OS X is for the Boot Camp drivers in his office.
Now crawl back under your rock, MS fanboy.
Did he put you at the head of the list for a free Zune HD?
And I'll take a 'Paris Hilton Collection' any day over the 'Joan Rivers' designed crap you buy off of QVC.
Someone should have told the Windows 7 crowd that they didn't have to buy a copy of OS X when they bought their Macs - OS X comes free and pre-installed.
Old habits die hard. But hey - at least they didn't have to decide which of 47 versions to buy.
Do you guys honestly have no other life than to insult a person that believes that, in his own opinion, Microsoft's products are better? Do you guys think that you have the right to make fun of his choices because you dislike Microsoft? You're calling him a fanboy? Look at yourselves! You are some of the worst Apple fanboys, and I know enough of them. At least the ones that I know use their brain and know that it all depends on the user. If the user doesn't like Apple or their products, then leave them alone. But you guys... you're just huge losers and can't take it when a person disagrees with what you guys believe to be true.
Pathetic...
How is my comment an insult. I'm not allowed to have an opinion? Was what I said wrong? I think you are taking this waay to seriously.
I still go back to the FAST, CHEAP, GOOD purchasing decision. When it comes to cutting edge technology that works good, I'm willing to give up CHEAP for FAST and GOOD.
Mr. Ballmer, there is a difference between the $5,000 call girl and the streetwalker. You want to turn a lot of tricks quick for low profit, go right ahead.
Imagine, offering to give up all your company's cash AND still needing to borrow to buy a company whose employees absolutely despise you and whose software doesn't run on MS's junk and yet still not getting fired. Apparently MS shareholders are incompetent as well.
If MS had succeeded in buying yahoo, today they would likely be in bankruptcy court and begging the feds for a bailout.
While Apple haters love to quote the alleged "Apple tax", it's worth pointing out that Apple users top every single customer satisfaction survey. If saving money is so awesome, why aren't Windows and Linux users happier?
Can money buy happiness? For technology purchases, perhaps it can...
While your comment is mostly right, I haven't come across any Linux user who isn't happy with Linux, especially not to the point of going back to Windows.
While it's not true that something that costs more is, by definition, of higher quality, it's also not true that something given away for free is of lesser quality.
For a good example, compare having sex with a hooker and having sex with the woman you love. The hooker costs more but I'm willing to bet that 99% of the time, sex with the woman you love is of a much higher quality.
Oh and by the way, where did you get that "99%"? :)
I'd just been reading above about the hookers and the image stuck in my mind so I used it.
As for the 99%, it was just a number that popped into my head and it fit the bill, I'd still be willing to make that bet though.
Ballmer is of course an idiot ("who would want an iphone - ipod, mac etc.- ") a liar, and now just a dam fool if he wants us to believe this. That is not any kind of business model; high volume and low price translates into low quality not high value. What business school did he go to? Our is just more lies?
I find myself attracted Linux, but it's still a hassle to use.
Ballmer is a primitive village idiot who in my opinion is
unnecessary and maybe deadly ballast for a sinking boat which Microsoft become after releasing Vista- a boat that's floating on rough water of recession...
and just when you think upcoming Windows7 and laptop hunters commercials have put some patches on it
Ballmer starts to rock it from side to side by opening his mouth :/
Each of those distros is available for download and completely free (beer and speech).
- by jessiethe3rd July 31, 2009 4:33 PM PDT
- Linux = Community support OS/Vendor Hardware + home grown applications + few commercial apps
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- by ballmerisanape July 31, 2009 7:53 PM PDT
- "Now that Windows 7 is here"... but it isn't here. As it stands.. 7 might be as good as Mac OS 10.5... that is.. if it's stable. We don't know that. Vista was billed as the second coming too.. and look what happened there.
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- by yokoono August 1, 2009 7:12 PM PDT
- now that win 7 is here win 7 is is mojave http://www.microsoft.com/windows/mojave-experiment/
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- by jezzali August 2, 2009 2:43 AM PDT
- "tons of commercial apps"
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Showing 1 of 3 pages (109 Comments)Apple = Commercial OS/Commerical Hardware + some home grown applications + Commercial Apps
Microsoft = Commercial OS/Vendor Hardware + home grown applications + tons of commercial apps
Why do you believe the current poster boy of open source is trying to pull us all into the web? The web is their $$$. They hope to at the end of the day pull the rug under everyone's feet and make the platform matter even less. Lofty ambitions, however, not a whole lot of substance yet.
Linux... oh poor Linux. You try and be free with your open source apps and your community support patchwork... at the end of the day you holler and yell about how important you are because you are "free" but when everything comes together it's pretty obvious that you cost more then money.
Mac... oh great market hype... for your sake I hope you keep inventing some nifty cool tech. If you have any misses you'll fall much faster then you rose. Now that Windows 7 is here I hope you continue to reach out to drive that message behind your convergence eco-system of products and services.... we'll see how long the vanity stays around when the Hipsters who were once the rage become completely out of date.
Microsoft? Gobble up more... most people do not realize that Microsoft will never be a best of breed. Their strategy is to consolidate and drive down costs. While the nerds of the net don't quite get it middle road people... the heartland - they continue to buy and use it and unfortunately (or fortunately) that isn't going to change any time soon.
The interesting thing about Macs is.. when someone "switches".. they act like they have been liberated. Right or not.. that's their experience. More importantly.. it's almost viral.. When someone in a group touts the benefits of the Mac OS (there are many).. people eventually listen.. and they end up buying a Mac a year or two later.. and the process repeats itself. Sounds strange.. but it's interesting to see.. when people realize what they have been missing.. they get passionate about it. Don't blame Apple.. blame XP.
don't u get it ? vista sp3 with a washed face i'm running vista and also win 7 RC on the same machine guess what ?? how much memory it takes? almost the same how long does it take to move 4 gb over network ? vista 7 minutes(pathetic 11mb/s in a fully capable hardware that can do 100mb/s win 7 sucks even a lil more like 8 min and 9-10mb/s
microsoft is not only doing crappy software the are laughing at us so don't count with me on upgrading to this sh...
Those apps you would be referring to rely on something called Win32.
Win32 is no longer an advantage for Microsoft, it is a noose that gets tighter by the day.