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http://www.usatoday.com/tech/news/2003-06-29-gates-linux_x.htm
Gates on Linux
USA TODAY:There seems to be some worry at Microsoft about Linux and some of these Web-based things like Sim Desk that have popped up. Houston, Munich, and Beijing have all been considering using Linux-based products rather than going through Microsoft. How much of this is a concern?
Linux is the current OS competition, but it's no more threatening than OS/2. Remember OS/2?
By H. Darr Beiser, USA TODAY
Bill Gates: Well those are our current competitors. I mean, it's no different than in the past people used [IBM's operating system] OS/2.
USA TODAY: Nobody used OS/2.
BG: Are you kidding? I mean, let's be serious. That was IBM, a company 15 times our size. Name a bank that didn't use OS/2. OS/2 was IBM's product, and the IBM army marched behind that product. People always think today's competition is somehow different and unique in some way. Let's be serious. I mean, we've had to bet the company many times on big technological advances. We bet on the 16-bit PC. We bet on graphical user interface. We bet on the NT technology base. Now we're in the process of betting on a combination of technologies called .Net; Longhorn Web services go along with that. You always have to do something very dramatic to move things up to the next level. Who has the guts and the willingness to do risk-taking to get ink into the standard user interface? Who else is going to push that forward? Who else has the guts to get speech, get the recognition levels up, get the learning levels up in the standard interface? We've chosen to do that. If we didn't believe in those things we wouldn't be increasing the R&D budget the way that we are.
USA TODAY: There has been some criticism of the way in which you're been competing against Linux, and in The New York Times, assuming it was accurate, reporting that the e-mails in Europe talked about undercutting Linux at any cost, per se. How do you react to that, and where do you cross the line of that going back to some of the behaviors that surfaced in the Justice Department case?
BG: Well I'm not sure what you mean by undercutting. We will never have a price lower than Linux, in terms of just what you charge for the software. We compete on the basis of, if you look at the value you get out of the system and the overall cost that the system has that apply in our software. For any project, if you look at communications costs, hardware costs, personnel costs, all that, software licensing ranges — the highest you'd ever find is, like, 3% of any IT-type project. And so the question is can that 3% [compensate], in terms of how quickly you get the system set up? How much value you get out of that system, can it justify itself in that way? And that's the business that we're in every day.
USA TODAY: On May 14th, Orlando Ayala [Microsoft's senior VP for the Small and Midmarket Solutions & Partner Group, which aims to introduce Microsoft products to smaller companies and purchasers] in his e-mails authorizing him to draw from a special fund to offer the software set discounts or even free if necessary, under no circumstances lose against Linux. Has Microsoft changed its behavior patterns?
BG: The idea is that we're in a competitive situation, that we're willing to provide a better price. This is not a general problem. This is about education situations, and educational bids are very, very price sensitive, and we've always provided super low pricing for education. We're actually providing even lower pricing now for education then we ever have, but it's been unique pricing for us, literally since the company was founded. And yeah, we, on educational bids, we will meet competition. That's considered healthy pro-competitive behavior.
USA TODAY: Is there a scenario by which you would at some point consider porting Microsoft applications into Linux?
BG: There's no consideration of that at this point.
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