October 20, 2004 9:00 AM PDT

Ballmer: We need a $100 PC

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ORLANDO, Fla.--What's one of Steve Ballmer's biggest headaches? It's not Linux or security breaches. It's piracy, the Microsoft CEO said Wednesday.

"The biggest problem we have right now is that people who should be paying for software aren't," Ballmer told an audience of technology executives at an industry conference here sponsored by market researcher Gartner.

Steve Ballmer Steve Ballmer

One way to stem piracy is to offer consumers in emerging countries a low-cost PC, Ballmer said. "There has to be...a $100 computer to go down-market in some of these countries. We have to engineer (PCs) to be lighter and cheaper," he said.

People in poorer countries have one low-cost computing option, Ballmer said. "They have a leased-PC concept: the Internet cafe. Pay-by-the-drink computer use--that has a very important place in the market. (Microsoft) has five times as many Hotmail users in India and China than there are PCs because of this," he said.

Ballmer said piracy of Microsoft's Windows and Office software in emerging markets has become a major concern for the software giant, especially among business users who can afford to pay for software.

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"PCs are not selling to the lower end of the population in China and India. People buying machines there are relatively affluent. So...should the prices be lower? Not really. Until government and situational factors reduce piracy...those people...don't pay," Ballmer said.

But lower prices have become part of Microsoft's strategy for gaining market share in developing nations. In recent months, the software maker has announced plans to introduce low-cost "starter editions" of Windows XP into countries including India, Russia and Thailand. These versions will be bundled only with entry-level PCs and will not be available for retail sale.

The Microsoft CEO bristled at the suggestion that Linux is gaining in popularity as a client operating system at the expense of Windows. "There's no appreciable amount of Linux on client systems anywhere in the world," he said.

Ballmer said that some governments have decided against using Linux after studying the costs involved. "You can sit here and read the drama stories and assume they are true. Paris said Linux was dramatically more expensive than Windows. In...Brazil, it's the same thing."

One exception is the city of Munich, Germany, which is planning a widespread Linux installation, Ballmer admitted. "Yes, we lost the city of Munich. But the fact that the same story gets told 65,000 times, and they are still diddling around to some degree...come on, where's the evidence?"

Munich councilors said last month that the city was finally ready to proceed with its Linux installation.

Ballmer also defended a comment made earlier this year by Bill Gates, Microsoft's chairman, who said security will not be an issue in three years. "If (that) was something we weren't shooting for, no one should come to this keynote. Whether that statement will come to be true or not remains to be seen. But it expresses Bill's fundamental optimism," he said.


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MS continues to SQUEEZE
How the hell can someone make a $100 PC when Microsoft
continues to charge...what, $49???...per PC, just for Windows?

Posted by godofbiscuits--2008 (24 comments )
Reply Link Flag
Depends on who pays
Retail is still over $100 for windows. The Operating System is the only component to not be reduced in price. The fact that they are calling on the hardware manufacturers and system builders to reduce their prices to solve Microsoft's problems is quite silly.

"We are losing some money here guys. Can you reduce your profit margins by 90% so we can get more sales?" That's the way to milk the cow!
Posted by zaznet (1138 comments )
Link Flag
That's Microsoft Thinking
Ballmer is such a "numb nut". No, what we need is an OS that works for under $100 and an office application under $100 from MICROSOFT. I'm sure they have fully recovered their invested IP in these products already.

Maybe Linux and Star Office are the answer.
Posted by (2 comments )
Reply Link Flag
Yeah, but...
Yeah but you missed the point where he said that Microsoft should not reduce it's prices just because some people can't afford their products. So they ask others to reduce the total costs of owning a PC while Microsoft keeps the same price level.
Posted by zaznet (1138 comments )
Link Flag
MS Should take the first step
If MS is asking for a $100 PC, why don't they give us a $10 version of Windows?
Posted by brianfairchild (5 comments )
Reply Link Flag
Simple Solution......
Dear MS.
I have a simple solution for you...
STOP PRICE GOUGING THE CUSTOMERS AND YOUR OEMS!!! If you can offer cheapass copies of Windows to some 2 bit company is Asia you sure as hell can here you craptasic POS company!
Posted by Jonathan (832 comments )
Reply Link Flag
Problem is...
that selling flawed products to 'fix' previous flawed products (or simply stop the flow of fixes that leave some life in them) has made Microsoft very very rich. Along with the lock-in theme ofcourse.

The only way to convince Microsoft to provide superior products and superior support that works great with the software of your choice is if that'll be the most easiest way for them to make money.

Until then no amount of judges and angry customers will convince them to change the golden formula.

Example: what made Microsoft drop prices overseas? Real competition. Nothing else. What made Microsoft deliver custom made Windows versions? Real competition. Nothing else. Why are you still paying maxed out premium prices? Lack of real competition. Nothing else. In fact, by not protesting with your wallet you're funding the way Microsoft does business with you today and the many years before that.
Posted by arthur-b (31 comments )
Link Flag
Of course Balmer says this...
Comoditize hardware, not software!

Gee and c|net faithfully parrots it into their little echo chamber.
Posted by (60 comments )
Reply Link Flag
Lighter and cheaper?
How about engineering "lighter and cheaper" software you idiot. M$ software is the poster child of bloated and overpriced.
Posted by (60 comments )
Reply Link Flag
to stop piracy...
Seriously, does Ballmer think before he opens his darn mouth!?
This outlook is insane, even for Microsoft. Putting a $100 PC on
the market isn't going to stop software piracy. Unless that $100
PC comes with all the software (photoshop, full version of
Windows XP).

If companies want to stop software piracy, they need to look for
ways to lower the cost of software. Developing countries or low
to mid class people in the US aren't going to throw down 400
plus for software!

The price of software is the key. People are willing to pay top
dollar for PC's because upgrading them is nothing and cheap.
An upgrade in the software market is easy 200 plus!
Posted by (1 comment )
Reply Link Flag
words just aren't enough!
what a company! wow!
yes, thats exactly what the world, especially the developing world needs, a $100pc so it can cope with a $200 operating system or even a $100 dollar one. Linux and other free/open source offerings aside, surely!!! microsoft could still make a healthy profit selling even the 'pro' version of their operation system for $30 or less!!. it ms window was FULLY open source and what you were paying for was literally just the license(to run either the original or modified version(s)) i might not even have such a problem. But the fees they charge for their buggy inaccesible, insecure and frustrating offering are just...like i said words just aren't enough!
Its been said before but games are the key i believe (im not even a gamer) but it all games were simultaneously released on linux, it would take over within 2years ...no problem!
Posted by benmantle (6 comments )
Reply Link Flag
You are RIGHT!
Have you ever looked at the DirectX developer license? It's quite limiting to the programmer. This is where Microsoft has tied in game developers to their Operating System. You need the best tools to design games for the large Windows market. You are forced to accept their license terms or not play in the market. Even the End User License Agreement for DirectX is more limiting than most people expect.
Posted by zaznet (1138 comments )
Link Flag
Blame Blame Blame
Blame the Engineer
"We have to engineer (PCs) to be lighter and cheaper"

Blame the Potential Customer
"The biggest problem we have right now is that people who should be paying for software aren't"

Blame the Goverment and everything else
"Until government and situational factors reduce piracy"

Blame his employees and customers because they can't figure where they are going

"Ballmer admitted that the company's "integrated innovation" message isn't easy to grasp. "Sometimes, our own people get confused about it"

Why not first try "reducing complexity" in the message being put forth to everyone. Develop a clear focus that does not require any explaining. Reduce the cost of the operating system and trim out all its fat so you can have $100 computer. Maybe they just need to throw out the OS they have and start over. Apple did. Netscape went to Mozilla. The big Unix dues are moving to Linux. Finally stop blaming people for all your problems. Just shut up and fix it.
Posted by (1 comment )
Reply Link Flag
And Linux will look even cheaper ...
Its a fight that M$ can't win.

In their rush to commoditize PCs and beat out the previous competition (I refer to IBM's PesentationManager which, never mind how, gave rise to Windows 3.1, and to Apple's Mac OS, which M$ wanter to copy but didn't know how [http://have you ever seen Windows 1 & 2? ... LOL|http://have you ever seen Windows 1 & 2? ... LOL],) M$ sowed the seeds fo the doom of their OS business.

Now they are starting to have to compete with quality rather that quantity and do it for free.

You can't run an OS business that way. You have to be small, light and focused on providing after sales service. M$ will likely go down hard and take a long time but when the x86 hardware has been supplanted by 64 bit hardware, I think that the will have to change.
Posted by CharlesRovira (97 comments )
Reply Link Flag
Uhmm... I hope you know that there was a GUI before
PresentationManager (4 years before) that was sold to mass
audiences - it was the Macintosh. How did Apple copy

I know I am off topic, but MS was the one that copied (or try to
copy) the Macintosh GUI, after which IBM and MS tried to work
on a GUI for OS/2 3.0, but after Windows 3.0 became a good
seller, MS left PresentationManager.

Now back on topic, I hope MS realizes that people who need
$100 computers will not spend $99 to upgrade their software... I
spent way more than $100 (maybe stupidly so), but I got what I
wanted. How do you suppose a $100 system would behave with
Longhorn installed?
Posted by zarathustra911 (35 comments )
Link Flag
How did you come to the conclusion that IBMs presentation
manager was the first GUI before Apple or MS? .... the
significant order is this:

1. Xerox - Palo Alto Research - The Star Computer, which Xerox
execs had no vision to market properly, or support.

2. Mac OS - Apple visited the Palo Alto Research Center and
found a shared vision. They took the ball from Xerox before it
was fumbled.

3. Microsoft, which the truly did rip off from Apple. Microsoft
was hired as contract developer support to finish work on the
Apple OS before it was released. Of course, they were sweating
over the Lisa OS interface and spent more time trying to copy
design work from Apple rather than actually help finish the Mac
OS. Gee, you would have thought that they could have done a
better job of ripping it off. Just goes to show their true level

4. IBM - whom I believe contracted Microsoft to help in the
development. Hahahha
Posted by Thomas, David (1947 comments )
Link Flag
Do You Suppose....
... that Balmer actually believes what he is saying?? That is a very
frightening idea, especially for anyone who own M$ stock.
Posted by Earl Benser (4310 comments )
Reply Link Flag
He does what he's always done...
... what Bill tells him to do.
Posted by zaznet (1138 comments )
Link Flag
We need US$100 Microsoft Office.
You first, Steve.
Posted by katamari (310 comments )
Reply Link Flag
We need a $100 Windows(Full version)
Windows is the most expensive component of a PC.

Even with the Windows "Lite" version they are offering to foreign
countries, Windows is still at the top if not the most expensive
Posted by technewsjunkie (1265 comments )
Link Flag
More for them, less for everyone else
What else do you expect from such a narrow-minded greedy
Posted by Thomas, David (1947 comments )
Reply Link Flag
Where Are The Windows Bigots?
Wow, nobody yet has come in to defend Steve and Microsoft!
Maybe the tide IS turning.
Posted by dejo (182 comments )
Reply Link Flag
Narrow minded simpletons
<a class="jive-link-external" href="http://news.cbsi.com/AMD+offering+blueprint+for+249+PC/2100-1042_3-5422893.html?tag=nefd.top" target="_newWindow">http://news.cbsi.com/AMD+offering+blueprint+for+249+PC/2100-1042_3-5422893.html?tag=nefd.top</a>

You can make a low-cost pc with a low-cost version of windows. Only the unimaginative and unintelligent jump to the first conclusion that you need all of the bells and whistles when somebody proposes a low cost pc.
Posted by pn12345 (1 comment )
Link Flag
People that type M$ instead of MS
<a class="jive-link-external" href="http://www.penny-arcade.com/view.php3?date=2002-07-22&#38;res=l" target="_newWindow">http://www.penny-arcade.com/view.php3?date=2002-07-22&#38;res=l</a>
Posted by (2 comments )
Reply Link Flag
Ha Ha Ha!
You are so very very cool! :) Thanks for the link, what a riot! :)
Posted by zaznet (1138 comments )
Link Flag
Yes, this is fair...
Yes, hardware companies should sell at a loss so that people will have more money for buying Microsoft's over priced, buggy, outdated, slow to be updated, poorly supported products. Yes, this is absolutly fair.

Pull you head out of your rear Mr. Ballmer and take a breath of fresh air. Your farts are starting to get to you!

Posted by (336 comments )
Reply Link Flag
Isn't that what the XBox is for???
The hack to turn an XBox into a Linux PC shows that it's a valid general purpose PC. It'l prolly be my next home box.
Now to get M$ to admit it and start selling it that way...
Posted by eric_m_allen (4 comments )
Reply Link Flag
And thas box is even more than 100 $
Good you mention it. The XBox is basically a PC, and this cost 150$ in the shop. This is the price you pay after it is heavily subsidized by M$.

I have one, but I wouldn't pay for a new one again.
Media Center on it is good though...
Posted by Steven N (487 comments )
Link Flag
Microsoft X-Box the $100 PC?
Yeah, it is becoming the $100 PC. Microsoft got the idea to create the X-Box when it purchased set-top provider WebTV. The WebTV team has released yet another cheap-PC with "MSN TV 2". Couple a cheap PC with "pay-per-drink" services such as web access, email and games and you can re-coupe the costs over time.

Microsoft is already well into delivering this kind of solution. It is almost too bad that most of the game development for the X-Box 2 will be done on Apple Power-Mac's rather than PC's with Windows.
Posted by zaznet (1138 comments )
Link Flag
More idiot mac users
Most of these comments are obviously from more idiot mac users (not to mention the very few linux users&you know who you are...run any software lately?) that just love to bash MS any chance they get. Oh how you are all owned!

I can see why so many of you posted a reply to this thread. The real truth is you feel even more threatened now. More affordable "Windows" boxes means less people to brainwash into joining your cults. (not PC you fools - that means personal computer which refers to a computer built around a microprocessor for use by an individual, as in an office or at home or school. Check Websters you fools. I just love to hear people say PC when referring to Windows. What a treat.

To sum up my rant  You are all simply owned. I will leave you to your foolish comments and pre-packaged anti-Microsoft sensationalist babble since that about all you can do anyhow. Enjoy.
Posted by (35 comments )
Reply Link Flag
More idiots? Oh come on!
Let's get to basics, this is not Mac vs PC bashing (which we can
do another day). This is really nothing to do with Apple at all.
Think about it. This is bashing Balmer's remarks regarding why
the starving no-name hardware makers should sacrifice their
already minimal margins for MS to profit. Now there is a very
good argument that these no-namers don't deserve the return
of a R&#38;D spender like MS - and I could not agree more.
HOWEVER, the greatest loser of any call for a dramatic low-end
PC price cut is none other than Intel. So let's be honest.
Microsoft doesn't really give a damn about their sole reason for
existence - which is Intel. To obscure the info as an Apple Mac
zealots deal is just dumb.
Posted by (1 comment )
Link Flag
Thank you for silly comment
Thanks for nothing. Ballmer says something so completely dumb that the IT world collectively wants to throw a pox on the whole Windows world and you defend them?

$100 PC is great idea as long as the hardware vendor is making a buck or two. Remember the disaster of the AOL, MSN, etc. free PC's?
Posted by (1 comment )
Link Flag
Who's the fool?
"Check Websters you fools. I just love to hear people say PC
when referring to Windows. What a treat."

You may not have noticed but Steve Ballmer, CEO of Microsoft,
calls them PCs all the time. I guess that makes him a fool too.
(Although most of the posters here would use other terms, and
do, to describe him).
Posted by dejo (182 comments )
Link Flag
You should check before you leap...
"PC" As quoted from PCWebOPedia, an online source of computer terms and definitions: "(1) Short for personal computer or IBM PC. The first personal computer produced by IBM was called the PC, and increasingly the term PC came to mean IBM or IBM-compatible personal computers, to the exclusion of other types of personal computers, such as Macintoshes."

You might also want to note that Microsoft wants people to associate "PC" with Microsoft and their Windows and Office products. It is the same kind of marketing as calling any soda a "coke" or "pepsi".

Today the term PC most often refers to an Intel or AMD based X86 comptuer with Microsoft Windows. Microsoft certainly has no interest to see sub $100 computer systems with no compatibility with Microsoft products and operating systems.
Posted by zaznet (1138 comments )
Link Flag
wow !
Sooo ... Because Balmer makes such stupid and silly statements
that no one can defend, you just drag Apple in just for the hell
of it. Even if it's got nothing to do with it. Wow. Good thinking !

The thirth-world countries thank you for defending an idiot with
an even more stupid defense.
Posted by zwats (8 comments )
Link Flag
Bring Down the cost to $100
Let me think , uhmm, ehhh, PIRACY, ya, wait a second they are pirating SOFTWARE, not hardware, so if bring doen the cost of SYSTEM software to say, $ 1 for windows ( as is a requirement to run) and lets say $ 5 for office as could be optional. YA , lets wok on that Steve, lets make a 5 year plan, wher YOU reduce the cost of windows to $ 1 BUCK. I bet you everyone will buy your software then , NO MORE PIRACY.

Great Plan STEVE
Posted by (1 comment )
Reply Link Flag
Jill to Ballmer: "that would make it cheaper than the OS"
My challenge to you, Steve, is to make it $100 INCLUDING the OS
AND have the manufacturer make a profit.

You can't even buy Windows for that price!!!
Posted by Jill_Gates (17 comments )
Reply Link Flag
Excellent Support Cannot be stolen
The Gates-Balmer regime in Redmond still doesn't get it. As long as they keep force feeding flawed products with lots of bugs and no meaningful product support, they are creating a body of users who feel cheated...and therefore justified if they rip off a few extra copies 'to get even.'

The way to stop the piracy is to put out a quality product and back it up with excellent support. Then let the kids steal a copy: they won't be able to steal the support, and serious users will end up voluntarily paying for these extra copies in order to get the support.

I'm not just dreaming up this scenario. Our firm has shipped payroll software nationwide for over 20 years, and we have ZERO trouble with piracy. Only one case turned up in 20 years, and the kid who stole and resold the copy turned himself in and paid us in order to make the end user quit calling him for the support he was not prepared to provide!!!

The secret is to (1) make the software truly useful, (2) ship a quality product, and (3) provide excellent one-call-solves-the-problem support. We also have a "no hold: call the client back" policy in order to show respect for our clients' valuable time.

If you treat your customers like sheep or foolish children, they will have their revenge. And if you create a misguided "Busines Software Alliance" which publicly encourages disgruntled employees to cause trouble for their employers (which are your customers), you are destroying brand loyalty and creating enemies in the business community which will dump your products at the first opportunity.
Posted by landlines (54 comments )
Reply Link Flag
What's Stevie B smokin'
A $100 computer with a $98 dollar operating system?

I can see linux people making the argument.
Walmart had a linux box for $248 (w/o monitor).
By my standards its stripped down, but it's actually better than my old box that's still functions as an email and IM box.
Posted by (2 comments )
Reply Link Flag
dunno but look for yourselves
Even better without sound...

<a class="jive-link-external" href="http://www.tarmo.fi/arc/monkeydance.mpeg" target="_newWindow">http://www.tarmo.fi/arc/monkeydance.mpeg</a>
Posted by Steven N (487 comments )
Link Flag

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