Steve Ballmer has been taken to task by a panel of Gartner Group analysts and corporate users, who told the Microsoft president that his company has a credibility problem and that it needs to improve its consulting division and the scalability of its enterprise products.
The panel, composed of three Gartner analysts and six Microsoft customers including senior executives from Pacific Gas, the USDepartment of Agriculture and MGM Studios, grilled Ballmer for an hour at Gartner's Symposium/ITxpo '99 conference here.
Users said they want Microsoft's consulting division to provide more comprehensive service and be able to take responsibility for an entire enterprise project, much like IBM does. But Ballmer gave them little hope that things will change.
"We can't do what IBM can," Ballmer said, adding that Microsoft doesn't have enough staff to take care of every detail in a project, such as installing hard disks on customers' computers. "We can't be the soup-to-nuts guy."
Microsoft works hand in hand with its customers on the architectural, Microsoft-related parts of projects, he said. Currently, the company's consulting division has about 7,000 staffers, up from nearly zero six years ago, he added.
Ballmer acknowledged that Microsoft hasn't delivered on its scalability promise, which it outlined at an event dubbed "Scalability Day" in 1997. "We got ahead of ourselves," he admitted.
In the past two to three years, however, Microsoft has "learned a lot" about developing enterprise products, Ballmer said.
"We're now smarter about large-scale software development," he said.
Asked why Microsoft was calling the high-end version of Windows 2000 the "data center" version, when in fact a data center requires much more than will probably be delivered with Windows 2000, Ballmer said that Microsoft's goal is to first match Unix and then move on to the mainframe.
He expects Windows 2000 -- the next major upgrade to Windows NT -- to be rock solid and reliable, and Microsoft will not ship it until it's totally certain of that, he said, adding that he expects the product will be available in several months.
Panelists also told Ballmer that Microsoft's credibility is damaged because the company consistently delivers faulty products to the market which users can only fix by spending money on upgrades. Ballmer responded that Microsoft software products ship with few bugs.
"The problems that are reported are minimal," he said.
Plus, Microsoft increasingly is involving its users in the testing phase of its product development cycle, a practice that has helped it cut down on software bugs, Ballmer said.
The Microsoft executive took note of a complaint that Microsoft forces users to contractually agree not to share the results of internal performance tests on Microsoft products. That requirement traps users in a "conspiracy of silence" and prevents them from sharing results from benchmark tests, one Gartner Group analyst said.
"I didn't know we had that" provision in our license contracts, Ballmer replied, adding that he plans to look into the matter.
As he has said in the past, Ballmer said Microsoft is "thinking about" making available part of the Windows NT source code as open-source software. But Microsoft has no plans to fully embrace the open-source model, he said.
"Open source means (giving it away for) free, and we have no plans for that," he said, drawing laughter from the audience.
Microsoft also doesn't like the open-source concept of letting millions of people all over the world tinker with the source code to a program, because it leads to "chaos and lack of reliability," he asserted.
The open-source idea Microsoft likes is letting users modify the source code of Windows NT to provide themselves with "self-support," he said. But Microsoft wouldn't open up 100 percent of NT's code because that would be detrimental and unmanageable for users, according to Ballmer.
Microsoft also doesn't plan to turn its consulting division into a profit center. Doing so would change dramatically its focus, making it less Microsoft-centric and less willing to spend large amounts of time with customers, Ballmer said.
Microsoft's three priorities are to achieve a balance between leading edge technology and attention to customers, to understand that services are changing the software business and adapt accordingly, and to improve the company's enterprise products, the executive said.
He identified these three key areas after finishing a three-month round of interviews with Microsoft staffers, which he began right after being named company president about one year ago, Ballmer said.
"I decided I needed to peer underneath our own hood," he said.
Although the questions Ballmer faced were tough, the mood remained light and jovial, with Ballmer and the panelists often cracking jokes.