Ballmer sets Microsoft apart from the rest

If you ask what will be the next very big business, I'd say probably tapped in there are the Live services and MSN and then the Xbox and TV businesses — in terms of big numbers.

Thinking about the Windows Live announcement, there were some pretty harsh comments from analysts and from other sources around the Web. By contrast, Apple usually gets this overwhelmingly positive response to almost anything it does — ditto for Google. Does that make you angry at times? How can you fix that?
There's sort of the good news and the bad news. The good news is, the expectations are higher for us — frankly, I think — than for anyone else. These people think a lot of us and it's hard to always meet those demands — and we're the big guy. We were the little guy for a while, we had a 10-year run where we were the darling.

Apple, because they kind of went though the valley of the shadow of death and have emerged, they are the darling again, even though they have been around for a while. Google is still in that early phase. I know we're doing good work. As long as we are doing good work and innovative work and exciting work, the customers are going to look at that and they are not going to start and end with the analyst reports. They'll start and end with the actual products we deliver.

A year or so back, you said it's important for the industry to produce a $100 (£57) computer, a low-cost computer. We've heard a lot about this recently from Nick Negroponte at MIT and from companies like AMD. What's Microsoft doing to make a cheap PC a reality?
The first thing you have to say is, what is it that we care about making cheap? Is it the PC or the PC experience? That's important. You can get a PC today for $300. What's broadband connectivity cost you per year? $400. So the broadband connectivity is actually the bigger expense. Even if you go to emerging markets, broadband connectivity is going to cost you $150 to $200 a year.

You have to think through the value proposition of hardware, software and service. There's a need to work on the hardware, there's a need to work on the software, there's a need to work on the connectivity and there's a need to work on the business model. All of those need work and we are actively involved. You see us doing things like Starter Edition and some other tests. But the challenge for all of us — and we all want computing to spread more broadly — I think you have to think through the combined proposition. If a family in an emerging country gets a cheap PC, they may not be able to afford to connect to the Internet.

You said this morning that you really want to go after the low end of the hosting market. We haven't heard much about that in the past. What's the appeal and who are the competitors?
It's a lot of servers. There are a lot of servers in the low-end hosting market. If you look at two big chunks of all of the Linux servers that go in, it's low-end hosting and it's scientific and technical computing.

In both of those areas, we have a set of technologies and initiatives. We're going after a couple of competitive strongholds with innovation and good thinking. A big market and a big opportunity for us.