Ballmer's bullish outlook

Q: Has Microsoft changed the way it sells its software? Do you spend less time discussing features?

Ballmer: We're certainly not about talking about products and their features. In our case, you need to be able to say, here's the higher- level framework, and if you want to drill down into security or trustworthy computing or infrastructure, we can do that. That's what I did today, and no other company can do what I did today: stand up in front of 11,000 IT pros and say we have the integrated products that let you do the cool stuff you can do. Somebody has to do that, and as the highest-ranking guy at the show, I draw that lot. But I'm happy to talk to you about Active Directory or any other product. And you have to do that in a sales situation. We have to compete at all levels.

I understand that you met with Matthew Szulik (Red Hat's CEO) recently...

Ballmer: So I read on CNET...I certainly wouldn't comment.

Maybe you can't tell us whether or not you met with him. But if you did, does that indicate any change in thinking toward Red Hat and Linux from Microsoft's point of view?

Ballmer: I have no comment whatsoever at all about any possible conversation with Matthew Szulik or anyone at Red Hat. If you'd like my general point of view, I'd be happy to give you that: We come to work every day and we compete with products, we don't compete with movements. Some of the products we compete with are open source products. Every day, we're pushing ourselves to innovate in ways that deliver better capabilities. We try to compete on total cost of ownership, despite the fact that they, quote, don't have any price of acquisition. Every day we are competing, competing, competing.

With that said, there is a level of interest at some of our customers and that puts some pressures on us to figure out the competitive side and the cooperative side. We haven't done much on that side, although we have done some work on interoperation and we will continue to do that. It's silly to not engage in dialogues to pursue co-opetition as well as competition. Competing with open source is different but more similar to competing with established commercial competitors than we thought three years ago.

This is the first competitor we've ever had where our cost of acquisition is higher than their cost of acquisition. Usually, we're able to come in and say we're cheaper and better. Oracle? Cheaper and better. WebSphere? Cheaper and better. Here we have to say "lower total cost of ownership -- and better."