Microsoft's Ballmer On Windows Server, Yahoo, Linux - InformationWeek

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2/28/2008
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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: Does the interop stuff and the openness stuff and standards stuff play a significant role in that competition with Linux and open source as well?

Ballmer: Sure, it's helpful. It's sort of like all of these things. Interoperability is a two-way street -- the other guy takes share from you and you take share from the other guy -- and always will be. Everything that sort of starts with the word "interoperability" has that characteristic. Our customers benefit, which is a great thing. We go in thinking we have an opportunity to benefit, you're looking for risks, the risks I guess are that interoperability does more harm than good. I don't think that's likely, but nonetheless it's there for us and it's also there for the guys you interoperate with.

I used to always joke with IBM, you know, we were opening up the desktop to them, and they were opening up the mainframe and the data center to us. And who out-hustled who is a big deal in terms of who wins.

InformationWeek: Did you see the New York Times story yesterday with IBM saying that the mainframe's coming back?

Ballmer: I really don't think that's true. They may continue to sustain life and they may grow their revenue, that's a different story. But if you actually went to most of your readers and said the mainframe is actually coming back, I think you wouldn't find 25% who would agree with that statement.

InformationWeek: With every Windows release, you get people who say, "I'm waiting for Service Pack 1." Many of those do so because of perceived "bugginess" of an initial release. Microsoft has said that this version of Windows Server is among the most rigorously tested products that the company's come out with yet. What are some of your proof points there?

Ballmer: It builds off the Vista code base. So all of that testing plus another year. There's some enhancement and a lot of testing. We modified -- about three or four years ago now -- our development process to move to a secure development life cycle approach. Which if you just look -- the proof is in the pudding -- the products that have been released into that kind of development methodology have all shown reduced susceptibilities and reduced vulnerabilities, which I feel very good about and I 100% stand by that statement.

I think a lot of customers will say, "Good, I'm going to move forward." Some people will undoubtedly choose to wait for market feedback, or a service pack.

InformationWeek: Is there an expectation that the server deployments might take place over a longer period than the desktop?

Ballmer: The whole way servers get deployed is so different than desktops. People want to make it sound like they're the same. People replace or upgrade desktops. Mostly, people add servers. Occasionally, somebody will re-platform a server application that's working. But a server doesn't need to be re-platformed, mostly. You only have one desktop for one person, it's the whole environment. You either move it or you don't. You can leave the SharePoint workload on Windows Server 2008 and keep the high-performance computing workload on Linux and some other Web workload on Windows Server 2003 and the user doesn't have to know about that. So it tends to be servers get added and desktops get upgraded.

InformationWeek: In this age of server consolidation with virtualization being a next step to consolidation, Windows Server continues to be a growth engine for the company. What's accounting for the continued adding of servers?

Ballmer: Number one, virtualization is a very early stage, nascent phenomenon. I mean, I already said that less than 5% of servers have been virtualized. Number two, we have actually priced our Windows Server software in such a way that, in fact, even if the systems tend to be more consolidated, we have an opportunity to continue to participate financially, not by over-charging but by properly charging. We charge more for our enterprise and data center edition, and we give you greater numbers of virtual machines, effectively, that they run. We have some pricing which helps us continue to sustain value.

And then number three, the absolute demand, the absolute number of applications that people want to build and run is outgrowing any ability any of us seem to have to shrink workloads. Probably, number four is scale out, which is sort of more server-intensive per workload. The scale-out model is important for a lot of next-generation Web applications that are being run. Those are not getting consolidated, they're going the other direction. We can certainly see that at a place like Microsoft with MSN or Amazon or eBay or any of those.

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