Microsoft CEO Bullish on Strategy

Friday, June 23rd 2000, 12:00 am
By: News On 6

REDMOND, Wash. (AP) — On stage, before a tough audience of journalists and financial analysts, it was vintage Steve Ballmer — passionate, funny and loud, gesticulating wildly and smiling throughout.

``These past three weeks have been killing me!'' Ballmer said, noting that the Forum 2000 event Thursday, where the company announced its Microsoft.NET strategy, had been postponed due to the company's antitrust case.

``For me, the last three weeks made me feel like a caged animal. I wanted to come out of the closet and tell everyone what we've been up to!''

Ballmer, the one-time head of Microsoft's sales and now the company's chief executive officer, put on an hour-long show of salesmanship, with accompanying slide show, making his pitch for the new platform. Afterward, he grabbed some lunch and talked to The Associated Press.

Q: Is this the biggest bet that Microsoft has ever made?

A: It's all relative to size. When we did the graphical user interface in the early '80s, that was just as big a bet, I would say. But in a sense, there's only been four big bets that we've made. The first, Bill (Gates) and Paul (Allen, Microsoft's co-founders) made a bet on the microprocessor. Good bet. Wasn't obvious at the time, but it was only huge relative to their lives. There was no company. Made a bet on the graphical user interface — big bet paid off. Made a bet on the Internet. In some sense, not that big of a bet, but it paid off. ... This is more like Windows. It's another one of those big bet-the-company type deals, and it's the right bet.

Q: When did it hit you that this was the direction Microsoft should go?

A: For me, it all came together last September, and it two things transformed me. One, I went and lived over with our (Microsoft Network) guys. I just really didn't get services at all before I did that. I'm sure there's much more to get, but I didn't get it at all. And number two, I was very involved with our developer guys in a launch they were doing in some of our XML (eXtensible Markup Language, an open language which lets programs talk to each other over the Internet) stuff. And you put those things together with some sessions I did with some of our technical guys, where they were kind of lecturing me on XML a year earlier...those are some of the seminal events. Then I gave our company meeting speech (in September), and as I was trying to parse through my thoughts, it became clear to me. Not as much of the detail that we had today, because we've been working on it for the past nine months, but it's like the switch went on. I see something there, I kinda get it.

Q: In your presentation, you mentioned that Windows.NET version 1.0 will come out next year. Will that be the same thing as Whistler (the code name for the successor to the upcoming Windows Millennium Edition)? What will people see in Windows.NET?

A: You might see evolution in the user interface. You might see more opportunities for services. Windows.NET is not a service, so it has to come with a service. You would see certain kinds of services that would be an integrated aspect of that user interface. Identification, notification, e-mail that no matter what Web site you're looking at, you have access to those kind of services. Now if the Web site takes advantage of them, great. If the Web site doesn't take advantage of them, they're still there for you in a simpler way. ... MSN would certainly take advantage of it. There would be a version of MSN that would substantiate the .NET platform through Windows.NET on consumer PCs.

Q: When you talked about XML in your speech, you had a slide that said there will be some Microsoft-only schema in there. What do you say to the critics who say this is typical Microsoft — they say they're going to embrace a standard and then go and change it to make it more difficult for others to embrace that same standard?

A: I don't believe that, that's the first think I would say. Secondly, I'd say people should observe our actions. ... I think we're behaving consistently in the way I've described, and I think it's good for our partners and good for the industry.

Q: As you go to a subscription-based revenue model, will there be a hiccup in revenues?

A: I don't think things really drop off while something else builds up. People want and need to use their computers all the time. It's not like people stop and say, ``I'm not going to use my computer for a while. We're used to getting, say, $200 for an Office upgrade, and instead you get 20 bucks a month or 25 or whatever the price ends up being. So you'll see a shifting out in time of your revenue, and that could cause some kind of hiccup. We'll have to live through that and do our best, but in the long run, I think we and our shareholders will be better off in the long run if that were to happen.

Q: What about a software developer who might say, this is a great platform, this can give me a lot of things. But if the U.S. Court of Appeals or the Supreme Court uphold even parts of the remedies against Microsoft, will Microsoft still be able to execute this plan?

A: This is the right thing, and we're going to execute on this one way or another. I know which way is infinitely better for users, and we still trust we will prevail, so I would say to you as a developer, look, we'll take care of this either way. We'll get this programming model and user experience to you either way, and by the way, we believe we'll be able to get this to you the right way. We remain confident. We'll give it to you no matter what. Can we really give the level of integration and simplicity in this thing that we know we can? Well, we think so.