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Ballmer discusses Microsoft's future

Some industry analysts believe that the company's new products will offer its last chance to cash in on programs built to reside on PC hard drives as software becomes increasingly supplied and used online. Microsoft CEO Steven Ballmer, however, believes that computers will continue to need an underlying system to tie hardware devices together and says that the company will also offer Web-based services

NY TIMES NEWS SERVICE , NEW YORK

Steven Ballmer has his hands full. The next version of the Windows operating system, Vista, is finally about to arrive, years late and its future clouded by doubts that it might violate antitrust rules in Europe.

Microsoft announced on Friday that Vista would be shipped in late January and expressed confidence that it would pass regulatory scrutiny. Ballmer, 50, was deeply involved in the discussions with European authorities.

Windows Vista and Office 2007, according to industry analysts, may be the last time Microsoft can really cash in on these lucrative personal computer products, as software becomes increasingly distributed, developed and used on the Internet.

In fast-growing consumer markets, Microsoft is playing catch-up. It trails well behind Google in Internet search. Next month, Microsoft will introduce its Zune music player in an uphill effort to take on the Apple iPod.

At Microsoft, Ballmer must adjust to being alone at the top, as his friend and long-time partner, Bill Gates, eases out of his duties at the company to work full-time on philanthropic projects.

In a meeting last week with editors and reporters of The New York Times, Ballmer answered questions about Microsoft, his job and the future of software.

New York Times: What was the lesson learned in Windows Vista? After all, it wasn't supposed to ship more than five years after Windows XP.

Steven Ballmer: No. No. It wasn't. We tried to re-engineer every piece of Windows in one big bang. That was the original post-Windows XP design philosophy. And it wasn't misshapen. It wasn't executed, but it wasn't misshapen. We said, `let's try to give them a new file system and a new presentation system and a new user interface all at the same time.'

It's not like we had them and were just trying to integrate them. We were trying to develop and integrate at the same time. And that was beyond the state of the art.

NYT: In the future, will the software model change? Will the Internet, for example, be the way most software is distributed?

Ballmer: That will happen. It'll happen from us. It'll happen from everybody.

NYT: Doesn't that mean that software product cycles are going to be much shorter, months instead of years?

Ballmer: Things will change at different paces. There are aspects of our Office Live service, for example, that change every three months, four months, six months.

And there are aspects that are still not going to change but every couple of years. The truth of the matter is that some big innovations -- and it's a little like having a baby -- can't happen in under a certain amount of time. And, you know, Google doesn't change their core search algorithms every month. It's just not done.

NYT: Is Vista the last operating system of this era? That is, the last operating system in the traditional sense of being this monolithic software product? Don't these Internet changes open the door to Windows a la carte? After all, you have different versions of Windows now for personal computers, cellphones and handhelds.

Ballmer: Windows is a little different because Windows manages the hardware. It's got to come with the hardware and manage the hardware.

For the thing called the PC -- the thing we think of as having a big screen and a keyboard -- there really is one infrastructure for supporting hardware, for supporting application development. It's not 100 percent monolithic. But it's almost 100 percent monolithic.

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