Microsoft CEO Steve Ballmer, in a Sept. 29 e-mail to customers, promotes a triad of Microsoft products -- the newly unveiled Windows 7 and Windows Server 2008 R2 and the upcoming Exchange 2010 -- as enablers for "new efficiency" in business.

[Find out when Windows 7 will be right for your enterprise. If you're weighing whether or not to migrate to Microsoft's new operating system, then be sure to check out InformationWeek's Business Case For Windows 7.]

It's partly marketing, but Ballmer is tapping into an issue that many business and technology executives are grappling with as they continue to scrutinize every dollar that goes into IT operations. Amid tight IT budgets, which Ballmer calls "the new normal," CIOs are hard pressed to fund the kind of companywide software and computer upgrades that Ballmer says can lower costs, increase productivity, and lead to new products and services.

InformationWeek sat down with Ballmer in San Francisco to discuss how IT departments can accomplish both -- manage IT resources with a close eye on costs, while also investing in new systems and software to support business growth.

InformationWeek: Let's start with the e-mail that you sent to customers today about finding 'new efficiency' in IT. You say 'do more with less,' but with a slightly different spin on it.

Ballmer: With less, do more.

InformationWeek: IT and business folks have been doing more with less for years. What's the nuance?

Ballmer: During boom times, doing more is the number one agenda being batted around in most companies at the CXO level. In these times, the lead thought is how do we conserve, how do we economize. But don't think for a second that there's still not a certain set of pressures: we've got an application backlog, we have a new product we want to put in market, we want to innovate.

People are talking about the new normal. The new normal implies a new efficiency. That efficiency is a balance between productivity and innovation, it's a balance between doing more with less. But I think the lead dog right now, if you will, is 'with less, do more.'

Four or five years ago, maybe a Windows Server launch, we did an ad campaign. The theme was 'do more with less.' We kind of flipped it around, because I think it represents where our IT customers are right now.

InformationWeek: We surveyed more than 1,400 IT pros and asked about barriers to Windows 7 adoption. Number one was budget limitations. How do they get over that hurdle?

Ballmer: I don't think we can expect a lot of ad hoc discretionary investment money. That's not going to happen. The case you have to make for anything with IT right now is, how do you take some of the money that's in your budget and carve it out, because this is important enough for future cost savings that it brings, important enough for innovation benefits that it may bring. You're not going to get a lot of discretionary investments being allocated in this economic climate; yet I think we have some of our best cases with the new products that we have coming out.

There's one other thing, which has got to be put in context, particularly as it relates to Windows 7. Most Windows will actually come with new computers. That's a statistical truth. We may sell a lot of upgrades, but by the time all is said and done, most people will get Windows 7 with a new computer. There's not some huge budget that I expect to be allocated for new computers. The average company, even with the economic issues, is still going to refresh computers every three to four years. We're going to be rolling in Windows 7 computers with a lot of our customers--or they're going to have to sit there and say, we want Vista or XP deployed in the year 2010, and I don't think we're going to see a lot of that. I think fairly quickly we'll at least see new machines coming in with Windows 7, which means it sort of has a place in the budget, if you will, already.