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 chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 






- by jessiethe3rd July 31, 2009 4:33 PM PDT
- Linux = Community support OS/Vendor Hardware + home grown applications + few commercial apps
<br />Apple = Commercial OS/Commerical Hardware + some home grown applications + Commercial Apps
<br />Microsoft = Commercial OS/Vendor Hardware + home grown applications + tons of commercial apps
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<br />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.
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<br />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.
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<br />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.
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<br />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.
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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. <br /><br />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.
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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/<br />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<br />microsoft is not only doing crappy software the are laughing at us so don't count with me on upgrading to this sh...
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- by jezzali August 2, 2009 2:43 AM PDT
- "tons of commercial apps"<br /><br />Those apps you would be referring to rely on something called Win32.<br /><br />Win32 is no longer an advantage for Microsoft, it is a noose that gets tighter by the day.
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