Ballmer sets Microsoft apart from the rest

The thing we would do differently in that position is to say, "look, that may take three or four years, let's not hold the next release for that innovation". There are plenty of innovations that could have been put into the market earlier that would have been interesting and exciting. That's why I talk about the three cycle times. We're going to have things that take longer; we'll have regular releases and we'll have service packs or service-oriented value-adds that people will see every nine months or so.

Back with Windows 95's launch, the stars sort of aligned so that Win 95's debut more or less coincided with the Internet boom. Today, Web-based computing — blogs, IM, Web e-mail, search — that's the new phenomenon. Windows Live and MSN get you in the game. But how do those services pull through sales of Vista? What's the connection between Vista and Windows Live? Is there more that we haven't yet seen?
Windows Live is designed to work on all Windows systems. It may or may not pull through Vista. We will certainly do things in Windows Live that take advantage of Vista. But it's like the next version of Office — it will run on versions of Windows other than Vista, too.

We had an original design point that there would be a new version of Office and a new version of Windows — Vista — that would be co-dependent. We chose to change that decision at the time we did the Vista reset and decided to separate WinFS and a few other things. So although Windows Live will have some things that light up on Vista and may help pull it through, Vista is going to pull itself through.

Is there more that we haven't heard about yet that ties Vista to Windows Live?
Because Live is a service, there will be things that you will hear about all the time. That's sort of the nature of a service-based offering. So there will be things we do in Live that take advantage of Avalon, for instance.

So the Live concept will also apply to Windows Server?
You mean a Live service for Windows Server? Yeah, I think you could imagine that such a thing might exist. It's reasonable to say, look, we have a Windows Live and an Office Live and an Xbox Live, what else gets Live and what does it look like? There's a lot of work to be done there.

Clearly, if you just look at what we have done already with identity and Active Directory Federation with Passport, you start to get a Live element, if you will, of Windows Server. Perhaps the most important thing we do is to allow developers to federate their own applications running on their own servers with the rest of our cloud-based (on the network) services.

Client and Information Worker segments still deliver more than half of Microsoft's revenue and an enormous chunk of overall profit. Which of your other segments — Microsoft Business Solutions? MSN? — do you see being the fastest to help balance that picture?
It's not the way I think about it. I think about investing in things that will grow. From a percentage basis, what's our fastest-growing business? The answer: Mobile and embedded, on a percentage basis. It's a small absolute number, but it's growing fast.

We have two things we get paid to do: We get paid to make sure we are investing in the right areas and that we execute well on those investments. If you look today, we are investing broadly. With Xbox 360, we have a very big segment and a business model that will allow us, over the life cycle, to really make some interesting profit. The TV stuff is a...

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