Although much has been made of the challenges Microsoft faces in readying the next version of Windows, chief executive Steve Ballmer said that "big bets" like Longhorn are not a reason for concern.
Rather, Ballmer said the time the alarm bells should go off is when Microsoft starts saying such technological leaps are not worth the risk.
"I think the day we say that to you, you ought to worry," Ballmer told thousands of partners gathered for the Worldwide Partner Conference in Toronto.
In an interview with ZDNet UK's sister site CNET News.com after his speech on Tuesday, Ballmer addressed the benefits and consequences of such bets, the effect that security issues have had on the company's image, and various other topics.
Q: The maturing Microsoft has been a recurring theme recently. That was a lot of the reaction, for example, to the recent memo you sent to employees. One person wrote last week that, "Having vanquished IBM, Microsoft now faces the risk of becoming IBM." I'm curious, A: what you make of that and B: others might look at IBM and say that's a success story for a company that has been many things in its history and has simply found a new way.
A: Let me say a couple of things. First of all, we haven't vanquished IBM. They still have a $12bn to $13bn software business. Every dollar they derive is still a dollar over time that is available to us, pretty much. I think we've done a good job where we compete, and we still have a great opportunity in front of us relative to IBM and the competition there.
When people say IBM, IBM's core franchise was a software-based franchise. The mainframe was kind of about hardware, but it was also about mainframe operating systems. They have not been able to regenerate their software franchise. They have been able to do some things which are interesting in terms of regenerating their business with services. They don't have an overwhelming presence in any software category off the mainframe. WebSphere doesn't have an overwhelming presence, [same for] DB2, Tivoli, Notes.
When I say are we going to become IBM, the question is, are we a company that can keep innovating and regenerating itself in the software business. I think we've done a pretty good job. Imperfect, but pretty darn good. People say, "Yeah, but there's people that have been first with some things that maybe you should have been first with." People point to iTunes, or they'll point to some of the Google search stuff. I'll say, "Yeah, there's still good competitors out there. But the fact we have some good competitors doesn't mean we don't have the ability to generate new opportunities for ourselves, to compete, to win."
I know what people mean when they say, "They've become like IBM." I won't let that happen. With my every fabric I want to make sure that we keep a culture that allows us to continue to be passionate and innovative and, in a certain way, a little weird, a little unique. I think that's very important. People don't want to go work for a big sedentary, blah, blah, blah.
I think the work that Bill [Gates] and I have been doing, really together, is to make sure we are investing in new areas. Look at what we have done with Xbox. We may still be losing money, but we have gone from nowhere to a significant player with a whole different approach. We've generated something brand new. I bet we can take Sony next generation. I am betting we can take Sony in the next generation.
