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Microsoft's Ballmer On Windows Server, Yahoo, Linux

How does Microsoft beat Linux? The same way "you beat any other competitor: You offer good value, which in this case means good total cost of ownership," Microsoft CEO Steve Ballmer says.
InformationWeek: Two of the main concerns I've heard about the Yahoo acquisition have been the major infrastructural differences between Yahoo and Microsoft and a lot of product redundancies. Craig Mundie actually mentioned it in a speech to the Goldman Sachs people yesterday. Why shouldn't customers and investors be worried about those two things?

Ballmer: I'm not sure what customer would think twice about that, honestly. I mean, customers here now are consumers and advertisers. And whatever is happening in the back room, that's kind of our problem to solve. So these are not enterprise customers. This is something we have to deal with, so I don't understand the customer point.

We've told shareholders, look, we think there's an opportunity to drive value, drive synergy in this combination, and that we have a number of ideas, we've talked about some areas to drive synergy. And at the same time, until we and Yahoo have a real discussion about it, it's just premature to be more specific.

InformationWeek: I guess the customer point was that customers might be worried about, for example, Flickr. Will something happen to it or is it going to go away?

Ballmer: Like I said, that would be our problem to solve. And, sure, there'd be some issues to think through. I'm not sure why a good thing like Flickr would disappear, I don't know why anybody would hypothesize that.

InformationWeek: The openness pledge you guys made last week, one thing that I didn't really get a better sense of is, do you feel like Microsoft is moving more toward embracing open standards than you have in the past? That's part one. And the second thing, what do you guys hope to get out of this increasing engagement with the open source community?

Ballmer: I think what we really worked to do last week is to systematize and formalize and make digestible to partners, industry participants, customers, etcetera, how we think about interoperability and standards support. We didn't say absolutely we don't do innovation. We didn't do that. We say when we embrace standards, we'll be transparent about how we're embracing standards. We're going to embrace a lot of standards, we're going to be transparent about how we embrace those standards. If we have deviations, we'll be transparent about the deviations.

We talked about what I would call a transparent and open involvement with industry standards, which I think is very good. I might even say I think it's sort of how we've been trying to get things done. Others would disagree, but rather than argue about it, why don't we lay it out as a principle. We're going to follow that principle both internally and with our customers.

In the case of open source, you know, we have many things that we're doing. There are all kinds of open source projects. Microsoft has always strived to be at the center of where innovative work is happening. If innovative work is going to happen in the open source community, I want it to happen on our platforms. We've always tried to get innovative work to happen on our operating system, and I want Windows to be the number one destination for open source innovation.

At the same time, some of our products have, themselves, open source competitors. The open source competitors we have, we're going to compete with and we're going to interoperate with, we're going to do, essentially, anything we would do with a commercial competitor. If it's announcing interoperability to get closer to Linux, you're talking about a value proposition and what we're trying to do to take share from Linux. In a sense, what you can say is Windows competes with Linux, Microsoft does not compete with open source, not in general. Windows does compete with Linux, SQL Server does compete with MySQL, etcetera.