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Q&A: Micrososft CEO Steve Ballmer On Windows, Longhorn, And The EU's Ruling

Micrososft CEO Steve Ballmer talks with InformationWeek editors about the European Union's ruling regarding additions to Windows, Longhorn's release schedule, and it's vertical-industry strategy.
InformationWeek: What about companies such as JBoss Inc. and MySQL AB, which would claim that they control the code base?

Ballmer: Those companies are more interesting. But in a sense, they have some of the same problems. If they're open source, they're open source, and if they're not open source, they're off on a bunch of proprietary extensions. If this is just a question of saying, here's my free piece, here's my pay piece, they're going to wind up pretty quickly in the position of having to say, and my free piece isn't very good. It's a very tough set of economics. We don't have free software. We're not choosing between zero and something. These guys are choosing every day between zero and something. And it's not like they're huge companies and that's an easy set of decisions for them to make. So, how will they do as companies? I'm doubtful. I'm trying to be less doubtful about the technologies [than] I am about the companies. Because I think we're going to be competing against open source even if we're not competing against these so-called open-source-based companies. If you ask me to make my prediction, five years from now it may not be JBoss Inc. and MySQL AB and [others], but we're still going to be competing against the community that develops software.

Software Repositories
InformationWeek: Our publication recently reported on state governments, including Massachusetts, that are creating a repository of open-source software to share among local agencies, and some federal governments are developing open-source policies and opening labs. What is your reaction to those types of efforts?

Ballmer: I don't understand why any government wants to waste its taxpayers' money. I think it's unconscionable. That's different from saying, 'Somebody else's software, including open-source software, does a better job of meeting their needs than ours does.' Do what you think is right. But as a position of policy to say that government should be involved in the creation of products that compete in the software market? Come on, there's not even enough critical mass. The state of Massachusetts, a very important state, doesn't create a market phenomenon. Whatever market phenomenon exists, exists, and its chances of success aren't appreciably helped or hindered by the state of Massachusetts. I think the state of Massachusetts is best served by picking the products that deliver the best total value for the people of Massachusetts. If you take a look and say, how widespread is the phenomenon you describe, I think you overstate it. In this country so far, I think we have only one state on the record, and it's one very interesting state. They're on the record on something else I pay attention to, too. [Editor's note: Massachusetts is pressing for stricter restrictions on Microsoft than specified in its 2002 settlement with the Justice Department.]

If you go outside the United States, you do find some interesting phenomena. First of all, these aren't mostly projects supported by national governments. National governments are mostly following what I would call sane policies, that is, they're going to be good users of technology, wherever that happens to take them. You do get a few local/state-type governments that want to get out there, get some attention, some press. We've seen some in Spain, some in Germany. But the fact that we can name on our fingers [only] a handful of state governments around the world that have made statements around open-source software just proves how small a phenomenon it really is. Governments are conditioned to doing tender process, which focuses a lot on absolute price, and so one of the things we're having to work on with governments is to look at total cost as opposed to price. So, it's likely we'll see zero-cost-of-acquisition alternatives get more of a look-see, particularly in local governments, but at the end of the day, I think even those governments will end up making total-cost-of-ownership decisions.

In the case of China, China's always wondering, are we going to have our own standards or are we going to follow world standards? And it's one the few countries that's absolutely big enough to go through that kind of a process. We had some problems a couple of years ago getting off on the good foot with the Chinese government. I think we're well past those. We have a very constructive relationship. We just brought aboard a new president [Tim Chen], who used to run Motorola China and is very well connected in the Chinese government. And I think the Chinese are getting more and more comfortable with Windows as part of their infrastructure. They were worried at one point, will this have issues of national security? So we worked to make sure that the Chinese government had a [Windows] source-code license, so they can guarantee there weren't any back doors or inspections, appropriately, from people outside China. Last week, we made a major announcement with the [China Ministry of Information Industry], the major agency on this stuff in China, in terms of their support of .Net. That was a very big deal for us. So I think we're on a very good path with Windows in China.

In fact, our market share relative to Linux is better in China than almost any other country in the world. It might be our strongest country. You might say, hmm, that's odd. But countries that have high piracy, you could say in a country like that, our acquisition cost is the same as Linux. I don't mean to sound facetious, that's not where we want to be, but really, for most people in China, Windows and Linux cost the same amount of money. I was in a book store when I was in Beijing last time, and I see all these copies of Windows in a funny-looking package for $2.50. Then, way in the back, behind a lock and key, I actually found a Microsoft Windows for $99. It was our copyright--you couldn't see it, it was collecting dust, it was behind lock and key. The $2.50 version was the popular version.

Photo of Steve Ballmer by Rudy Archuleta/Redux Pictures

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