CEO trying to win Microsoft some friends

Posted by bink on October 5 2003, 5:45 PM. Posted in Microsoft Corp.

For millions of consumers at home and at work, using a computer means using Microsoft. Its Windows operating system powers more than 90 percent of the world's personal computers. Its programs for Internet surfing, word processing and spreadsheet calculations barely have competition. It is aggressively pushing into online gaming, entertainment and corporate systems.

So why is Chief Executive Steven Ballmer demanding that his troops rethink everything?

The ground is moving under Microsoft's omnipotent footprint, as the technology industry slows and emerging threats endanger what has been inexorable growth.

In the more than three years since Ballmer took over day-to-day control from Bill Gates, the company has overhauled its structure to force improved financial performance. It issued a modest dividend in January and then recently doubled it, hoping to make the stock more attractive to investors. And it eliminated employee stock options, a lifeblood of most technology firms.

But Ballmer, 47, also is driving what might be the most ambitious change of all: transforming the company's culture and image. Legendary for arrogant, boorish and sometimes illegal dealings, Microsoft seeks to improve its relationships with customers, partners and government regulators.

Ballmer knows Microsoft needs more friends to get where it wants to go, to be the center of a world where computing can happen wherever and whenever people want it.

"I think Bill and I both recognized we needed to take a different tack in terms of the way we relate to our industry and our customers," said Ballmer, who dislikes taking sole credit for any of the company's strategic thinking.

Stalked by Linux

Most dangerous for the company is fast-spreading competition posed by open-source software such as the Linux operating system. Open-source code is developed collaboratively and made freely available on the Web but also is being embraced and marketed by some of Microsoft's top competitors, such as International Business Machines Corp.

With their lower costs and greater ability for users to manipulate its code, Linux and other open-source variants are gaining traction with operators of corporate and government networks, an area Microsoft has targeted for aggressive growth with its server systems.

Meanwhile, businesses and consumers alike are howling for relief from an onslaught of viruses, worms and other attacks that seem to exploit Microsoft software with particular ease. Critics say Microsoft has sacrificed security at the altar of sales and profits. The company rejects this, but all its executives cite security as its greatest short-term problem, and it is pleading for patience.

That's a tall order for a company that might have $50 billion in the bank but little goodwill.

Continue at source