Microsoft chief executive Steve Ballmer showed himself ready to
face up to user concerns about security and licensing when he spoke
to Computer Weekly in London
Corporate users' concerns are getting through to Microsoft chief
executive Steve Ballmer - at least in part. When Computer Weekly
asked him to list the three most important issues UK IT directors
were raising with Microsoft, he named two - security and value for
money.
"The number one concern I hear from IT directors here in the UK -
and elsewhere in the world - has to do with security, and it is not
a Microsoft-specific issue, except insofar as Microsoft products
are the most popular in the world." he said.
The Trustworthy Computing security initiative is approaching its
third birthday, but Ballmer admitted, "We will be working on
Trustworthy Computing for the rest of my days at Microsoft."
He added that the battle to secure the Windows source code and
devise new, secure operating systems had hit Microsoft's product
development pipeline.
"We have made [security] our job-one priority, to the extent that
we pushed out a very significant Windows XP Service Pack 2 release
at the expense of some of our innovations," he said.
The second core issue raised by IT directors is getting more value
from their IT investment. "The notion of doing more with less, as
we say in our advertising, really sums up the way the corporate IT
director is thinking these days," he said.
Three years ago the focus was on spending less, said Ballmer, now
it is on doing more with less. Delivering more productivity, more
applications and more improvements is high on the agenda. "Yet
budgets are being managed in a tight way in IT around the world,"
he said. "It is not unique to Microsoft, but as the industry
leader, industry issues become Microsoft issues."
Talk about value for money leads inevitably to IT users' concerns
about Microsoft licensing, the impact of delays in bringing out new
products - particularly Longhorn, the next generation of Windows -
and Microsoft's increasingly aggressive campaign against
Linux.
Microsoft has done a lot to recover from the 2001 Software
Assurance debacle, when it tried to make fundamental changes to its
enterprise-licensing regime at short notice. The move provoked an
unprecedented user backlash, forcing Microsoft to delay
implementation by 12 months.
With a major round of Software Assurance renewals now due, Ballmer
was keen to emphasise that his company had learned from the angry
user reaction it had provoked and was offering better value.
Software Assurance provides two kinds of benefits, he said. "One is
a set of non-upgrade-related benefits on support and services which
we deliver quite reliably. Not all of our customers take us up and
use the benefits," he added.
"The second thing we deliver is upgrades, and we did have a longer
cycle in terms of major releases on Windows, for example, than we
had anticipated.
"We are hearing the customers. I respect that there are some
customers - not a huge number - who would have expected a major
release and have not got one."
For the benefit of these disgruntled customers, Ballmer said that
Windows XP Service Pack 2 was a significant upgrade.
Just in case its user base is tempted to look for open source
alternatives to Windows, Microsoft has embarked on a major
advertising campaign targeting Linux. It is a concerted effort to
make sure the facts are known, according to Ballmer.
"What customers want to know is, are they buying a product that
gives them the best overall value," he said.
Examples such as the controversial total cost of ownership trials
at Newham Council prove that they are, Ballmer said. The East
London council last year set up a major trial comparing open source
and Microsoft-based systems. Microsoft paid consultants Capgemini
to demonstrate that its systems offered better value for money, and
won the contract.
Microsoft wants all of its customers to understand that they are
"getting a fair deal" when compared with other users of their size
and market sector. "We are always happy to engage in that kind of
dialogue," Ballmer said.
Repeating the line Microsoft has used in antitrust actions in the
US and Europe, he said Linux was just one of a long series of
competitors that Microsoft has seen off over the years.
When asked about Microsoft's filing with the US corporate regulator
the Securities and Exchange Commission last month, which stated
that Linux sales could hit Microsoft profits, Ballmer said, "We did
not say it will - some companies list hurricanes as risk factors."
He said Linux was simply the latest competition his company
faced.
He was relaxed about users following advice from analysts to
compare Linux with Microsoft on total cost of ownership when
considering buying new systems.
"If it is not Linux, it will be something else," said Ballmer. "We
have had good competition throughout my whole time at Microsoft -
we like competing. It brings out the best innovation. Microsoft's
own installed base is a form of competition. It puts the pressure
on us to continue to innovate and add value."
Ballmer enthused about the development of new mobile phone
technology, welcomed the convergence of computing and the mass
media and took swipes at Apple and other digital music
providers.
But he said little about the development of Microsoft's enterprise
computing portfolio, except that he had initiated moves earlier
this year to buy SAP and then decided against it. Microsoft has
said it is not interested in competing for PeopleSoft with
Oracle.
Acknowledging Microsoft's attention to the consumer market, Ballmer
dismissed suggestions that corporate users might lose out as the
company focused on consumer products. Microsoft development teams
did not accept a fundamental division between consumer and
corporate products, he said, claiming that 90% of Microsoft's
R&D resulted in benefits to both.
Despite Ballmer's optimism and his efforts to make Microsoft more
focused on the needs of corporate users, the love-hate relationship
Microsoft enjoys with IT directors is likely to continue.
Users expect the company to make progress on security, to deliver
the upgrades it promises when they take out enterprise licensing
agreements, and they want to see total cost of ownership come down.
Otherwise the search for alternatives will grow ever more
intense.
Quarantine' technologies promised
Microsoft is working on isolation technologies that prevent
infected PCs or mobile devices damaging the rest of the network.
They are already deployed on Microsoft's internal networks and go
part of the way to meeting the security architecture called for by
the Jericho Forum, a user group of IT security chiefs drawn from
major global organisations.
Steve Ballmer, Microsoft's chief executive, said the technology
would, at the latest, be rolled out with the 2006 release of
Longhorn He said the company had made major security improvements
with the release of Windows XP Service Pack 2 and the move to a
monthly patching cycle.
"People should be able to patch when they want to patch, not
when hackers want them to patch. We want to be able to say there is
a patch available, but if you do the following things, you do not
need to apply it until you are ready. "If you have the right
firewalls in place and if you are running the right versions of the
operating system, the OS can isolate itself or make itself
resilient to different kinds of attacks, even if deep inside it has
a vulnerability."
Challenges for Microsoft
- Settling its anti-trust case with the European Commission
- Improving security through its Trustworthy Computing
initiative
- Delivering Longhorn, the next generation of Windows, to hit its
2006 target
- Increased competition from Linux and open source products
- Finding new products that are as profitable as
Windows.