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Ballmer: Microsoft Remains Strong

Despite having concluded the most difficult year in its quarter-century history, Microsoft Corp. remains strong, and will continue to lead in the software industry, according to president and CEO Steve Ballmer.

Earnings were down significantly, and a court declared Microsoft a monopoly that must be broken up, but Ballmer, who is nothing if not an optimist, told a conference of financial heavyweights that he expects Windows 2000 sales to grow, and other Microsoft initiatives to recapture some of the company’s lost luster.

At a Morgan Stanley Dean Witter Internet conference in Scottsdale, Ariz. on Monday, Ballmer said Microsoft “has a vision that is rooted in software, not in media, not in big box iron; it’s rooted in the software business.”

That vision is still as strong as ever, especially with continued adoption of Windows 2000, both on the desktop and server, and new initiatives like the .NET framework, Ballmer said.

He made it a point to assuage any fears of the rate of Windows 2000 adoption in the industry, which has been disappointing to Microsoft. “Almost everybody buys some Windows 2000 server for something, and the question is when do we crack the next application type. This year we’ll sell order of magnitude someplace between two and a half million, three million Windows 2000 servers or Windows servers, NT plus 2000. You know, if you take a look at Sun, Sun’s probably around 300,000 servers a year,” Ballmer said.

He also pointed to two products which he said should excite investors - Whistler, the next generation of Windows, and the next version of Office, dubbed Office 10, which is the first major Microsoft product to have a subscription option.

Turning to another front, Ballmer said the biggest immediate threat to Microsoft is not Sun, Oracle or AOL, but Linux.  I think you have to rate competitors that threaten your core higher than you rate competitors where you’re trying to take from them. So in some senses it puts the Linux phenomenon… at the top of the list. That really is job one for us, because that’s the threat to the Windows business,” Ballmer said. He listed Sun and Oracle, and perhaps AOL, in the next tier of competition.

Microsoft announced last Dec. 14 that earnings and revenue per share for quarter two were off by 5 percent or 6 percent from projections, and it expects profits for the fiscal year to be off by about 5 percent. Second quarter earnings will be released Jan. 18. - Keith Ward

Check back with ENT Online for breaking coverage of the Microsoft earnings announcement Jan. 18.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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