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November 8, 2005 4:00 AM PST

Newsmaker: Ballmer says Microsoft is different

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We had an original design point that there would be a new version of Office and a new version of Windows--Vista--that would be co-dependent. We chose to change that decision at the time we did the Vista reset and decided to separate WinFS and a few other things. So although Windows Live will have some things that light up on Vista and may help pull it through, Vista is going to pull itself through.

Is there more that we haven't heard about yet that ties Vista to Windows Live?
Ballmer: Because Live is a service, there will be things that you will hear about all the time. That's sort of the nature of a service-based offering. So there will be things we do in Live that take advantage of Avalon, for instance.

So the Live concept will also apply to Windows Server?
Ballmer: You mean a Live service for Windows Server? Yeah, I think you could imagine that such a thing might exist. It's reasonable to say, look, we have a Windows Live and an Office Live and an Xbox live, what else gets Live and what does it look like? There's a lot of work to be done there.

Clearly, if you just look at what we have done already with identity and Active Directory federation with Passport, you start to get a Live element, if you will, of Windows Server. Perhaps the most important thing we do is to allow developers to federate their own applications running on their own servers with the rest of our cloud-based (on the network) services.

Client and Information Worker segments still deliver more than half of Microsoft's revenue and an enormous chunk of overall profit. Which of your other segments--Microsoft Business Solutions? MSN?--do you see being the fastest to help balance that picture?
Ballmer: It's not the way I think about it. I think about investing in things that will grow. From a percent basis, what's our fastest-growing business? The answer: Mobile and embedded. On a percent basis. It's a small absolute number, but it's growing fast.

If a family in an emerging country gets a cheap PC, they may not be able to afford to connect to the Internet.

We have two things we get paid to do: We get paid to make sure we are investing in the right areas and that we execute well on those investments. If you look today, we are investing broadly. With Xbox 360, we have a very big segment and a business model that will allow us, over the life cycle, to really make some interesting profit. The TV stuff is a rapidly growing business. The sheer scale of Windows and Information Worker insure that they will be our biggest businesses for a number of years to come.

If you ask what will be the next very big business, I'd say probably tapped in there are the Live services and MSN, and then the Xbox and TV businesses. I mean, to be big numbers.

Thinking about the Windows Live announcement, there were some pretty harsh comments from analysts and from other sources around the Web. By contrast, Apple Computer usually gets this overwhelmingly positive response to almost anything it does--ditto for Google. Does that make you angry at times? How can you fix that?
Ballmer: There's sort of the good news and the bad news. The good news is, the expectations are higher for us--frankly, I think--than for anyone else. These people think a lot of us, and it's hard to always meet those demands. And we're the big guy. We were the little guy for a while, we had a 10-year run where we were the darling.

Apple, because they kind of went though the valley of the shadow of death and have emerged, they are the darling again, even though they have been around for a while. And Google is still in that early phase. I know we're doing good work. As long as we are doing good work and innovative work and exciting work, the customers are going to look at that, and they are not going to start and end with the analyst reports. They'll start and end with the actual products we deliver.

A year or so back, you said it's important for the industry to produce a $100 computer, a low-cost computer. We've heard a lot about this recently from Nick Negroponte at MIT and from companies like Advanced Micro Devices. What's Microsoft doing to make a cheap PC a reality?
Ballmer: The first thing you have to say is, what is it that we care about making cheap? Is it the PC or the PC experience? That's important. You can get a PC today for $300. What's broadband connectivity cost you per year? $400. So the broadband connectivity is actually the bigger expense. Even if you go to emerging markets, broadband connectivity is going to cost you $150 to $200 a year.

You have to think through the value proposition of hardware, software and service. There's a need to work on the hardware, there's a need to work on the software, there's a need to work on the connectivity, and there's a need to work on the business model. All of those need work and we are actively involved. You see us doing things like Starter Edition and some other tests. But the challenge for all of us--and we all want computing to spread more broadly--I think you have to think through the combined proposition. If a family in an emerging country gets a cheap PC, they may not be able to afford to connect to the Internet.

You said this morning that you really want to go after the low end of the hosting market. We haven't heard much about that in the past. What's the appeal, and who are the competitors?
Ballmer: It's a lot of servers. There are a lot of servers in the low-end hosting market. If you look at two big chunks of all of the Linux servers that go in, it's low-end hosting, and it's scientific and technical computing.

In both of those areas, we have a set of technologies and initiatives. We're going after a couple of competitive strongholds with innovation and good thinking. A big market and a big opportunity for us.

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Not so much news....
by Earl Benser November 8, 2005 5:47 AM PST
Already have mySQL. Don't need Server 2005 or Visual Studio or
BizTalk.

IE 7 is unnecessary.

WinXP is quite adequate. No interest in Vista

Current Office is quite adequate. Office 12 seems to be coming
with too many functions I don't like or want.

,Net has yet to show any value.

Windows Live and MSN are functional failures, at least at this
time.

Passport seems to be an MS attempt to run your personal data.

Well, Ballmer has his goals. That's nice. They just aren't mine.

And, that's life
Reply to this comment
earl
by SystemsJunky November 9, 2005 8:14 AM PST
",Net has yet to show any value."

Yeah, no value to you because you're obviously not a developer. .Not in the best API i've ever used, MS has innovated heavily in my mind on that front. Its better than pretty much every other Dev Inv i've used.

mySQL Is great for Small DB's...SQL=Large Scaleable DB's

Too many functions in Office? Yeah whatever. There are actually less, that do more, and its by far easier to use than any other orfice on the market.

MSN is a functional failure with 215 Million Users. Failure? Id hate to see what real failure is to you.

If those arent your goals, to upgrade that is. Then why do you comment on things you really dont know much about?
View all 2 replies
Marketing Live!
by gee672 November 8, 2005 7:14 AM PST
Here's another classic example of "vaporware". Bosses discuss imminent threat from competitor. Assigns marketing dept to think of a catchy marketing campaign. Present to the media a non-existing technology.

Microsoft is knee deep in releasing a 5 year project that the Titanic would probably be easier to steer away from the iceberg.

GW
Reply to this comment
catchy marketing campaign
by alek_nedic May 5, 2007 9:54 AM PDT
http://www.analogstereo.com/vacuum/miele_hay_fever.htm
I like Live.com which can give us more choice other than Google and Yahoo e
by poson November 8, 2005 8:03 AM PST
I am from China. we are very confident on Windows Live and Xbox business
Reply to this comment
Ballmer looks like that Kozlowski guy.
by November 8, 2005 8:24 AM PST
I don't know about you guys but Ballmer reminds me of the Kozlowsky guy, they both resemble themselves in appearance. The face i just can't get around that idea each time i see his picture
Reply to this comment
Just a bad picture
by Blito November 8, 2005 8:46 AM PST
Maybe like a football player too He's gotta do a
reality T.V. show.
Blowing Some Serious Smoke
by OneWithTech November 8, 2005 8:52 AM PST
You know Balmer has been doing this for so long for Bill that it's
natural to him. Just likes it's natural for me to do what I do. I'm
very good at, much like Balmer.

The difference between me and Balmer is that I don't blow
smoke up my clients A$$'s in hopes the'll continue to use my
services or products.

Let get this straight, you think your products should be put off
of the legacy level. or should be someday. How about putting
out a product that doesn't derserve the Legacy Level.

Windows is cheap here is the US. Bull! $199 for an upgrade and
$299 for the whole version. Is that cheap to you, or the 10
percent of Americans that are rich. My clients will tell you that
your software is over priced. And I'll tell them the only reason
there is a slimmed down version of XP overseas is becuase if
they didn't create some kind of cheap OS for the Internation
Market they would of lost it to Linux.

Wait, they already lost China!

One thing you'll notice about a truly superior computer
company: There not in the headlines everyday trying to compete
with EVERYBODY's technology in the computer world. A truly
superior computer company will continue to progress on it's
roots. The core that made the company. Take a look at APPLE
and you will see.

For you, Microsoft, the core has been lost to XBOX, book search
competition with Google, search enjine competion with
everybody. As well as a host of other projects that you represent
but fall short of everytime.

Microsoft, a company with endless resources, can't even abide
by a Judges ruling. And now I have been subject to Steve Balmer
telling CNET News.com how everything is just peachy.

Stop lying to yourself and the rest of the %85 percent of general
public about how Microsoft is doing. Why don't you stop yapping
and start producing? I mean producing something that isn't a
security risk for everybody that uses any one of your products!

This is what we would like to see. No a bunch of smoke being
blown up our IT A$$'s.

www.techviewstoday.tech01.net

~Justin
Reply to this comment
Agreed
by jatos November 9, 2005 2:47 AM PST
Mate, when these two things are sorted I will go back to Windows:

A: Make windows a decent price
B: Make so it runs on more than just the latest PC.

Till then, I will stick with my UNIX based OS's.
Earth to Justin
by SystemsJunky November 9, 2005 8:21 AM PST
YAAAAAAAAAAAAAAAAAAAAWN....
WHOOOOWHAT!
by SystemsJunky November 9, 2005 8:25 AM PST
Take a look at crAPPLE and you will see. Please, What roots? Oh you mean the finder right...? Or the OS that couldnt be delivered on there own works alone. Its too bad though that they cant make their own OS.
Re: Low cost reality will come from Open Source Software
by penguinista3 November 8, 2005 9:05 AM PST
I applaud Steve's vision of a low cost Pc. But I believe open source software will be the ones that actually can turn low cost computing dream into reality. Look, I have to pay a few hundred dollars for accounting software, office suite etc.

I recently bought a CD from raptorhead.com, an open source desktop apps company that provide bundled service and support for OSS on Windows Pc. This is an example of providing low cost but quality software to consumers and small business operators.
Reply to this comment
Micro "soft" PR Ad...C/NET "interview"
by Llib Setag November 8, 2005 11:15 AM PST
Ballimer to C/NOT:"Let's act like we are just having an "interview", but in reality it is a Microsoft PR promo for up & comming vaporware & more press for our next savior "Vista"...OK?
Here's the money & script, follow along C/NOT (or we will pull all of our banner ads from your site.
THIS IS NOT NEWS...
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