Ballmer memo: Windows cost, security beat Linux

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On the same day Novell and Dell announced a major Linux pact, Microsoft CEO Steve Ballmer sent customers a memo touting the benefits of migrating to Windows rather than Linux.

In the four page memo, Ballmer said the hefty premiums that Linux vendors Novell, Red Hat and IBM charge for must have items such as technical service and support, product warranties and licensing indemnification outweigh the cost advantages of free, open-source software.

"There is no question that customers are benefiting today from a healthy, competitive IT industry customers have a clearer opportunity than ever before to evaluate choices," Ballmer stated.

"It's pretty clear the facts show that Windows provides a lower total cost of ownership than Linux. The number of security vulnerabilities is lower on Windows, and Windows' responsiveness on security is better than Linux. And Microsoft provided uncapped [intellectual property] indemnification of their products."

To support his claims, Ballmer cited studies from research firms Forrester Research, Yankee Group and Meta Group as well as home-grown studies completed by customers.

For example, he said in the memo that a cost analysis performed by one customer, Equifax, concluded that it would realise a 14 percent savings and cut its time to market by six months by embracing Windows over Linux. He also cited another customer, Computers Builders Warehouse, a system builder that embraced Red Hat and Mandrake, but then migrated to Windows Server and reduced its total cost of ownership by 25 percent.

Ballmer also claimed in the memo that Linux is more of a security liability than Windows. "It's fair to say that no other software platform has invested as much in security R&D, process improvements and customer education as we have at Microsoft," he said."

Still, Linux is touted as a more secure platform." The CEO cited a Forrester report saying the four Linux distributions have a higher incidence and severity of security vulnerabilities and are slower to provide security than Microsoft.

Microsoft also lifted the cap in its patent indemnification policy that limited the company's liability to the cost of the software, according to Ballmer. He said in the memo that whenever customers sign a volume licensing agreement with Microsoft today, they can expect uncapped protection for legal costs associated with a patent, copyright, trademark, or trade secret claim that alleges infringement from a Microsoft product.

Ballmer pointed to one customer, Regal Entertainment, that moved to Red Hat Linux in 2001 but then switched to Microsoft's platform because the company was more "fully indemnified" on Windows than Linux. "No vendor today stands behind Linux with full IP indemnification," Ballmer charged.

In addition, Ballmer said in the memo that customers should migrate their Unix-based ERP workloads -- such as SAP and PeopleSoft -- to Windows to enjoy cost savings associated with server consolidation. For instance, he said, Raiffeisen Bank Group of Austria decided to migrate to Windows Server 2003 after a cost analysis between the Microsoft platform and Linux indicated that the savings, performance and integration of Windows and business applications were compelling benefits.

Another customer -- BET.com, the portal run by Viacom's BET Networks -- concluded that Windows' total cost of ownership was 30 percent better than a comparable Red Hat Linux solution, Ballmer said. Similarly, travel company Grand Expeditions switched from a mixed Unix/Linux environment to Windows Server 2003 and saved US$200,000 per year, he said. Microsoft solution provider Bayshore Solutions handled that deal.

Steven Norall, vice president of marketing at PolyServe, a US-based ISV that provides a high-end clustering solution for Linux and Windows, said in an interview that the two x86-based operating systems are the main choices for customers migrating from Unix, but Microsoft faces a key disadvantage in the marketplace that it can't overcome.

"Unix customers are migrating, and it's a real trend that's fueling the growth of Linux. The majority are Linux migrations because it's such a close sibling to Unix and the transition is easier," Norall said. "There's nothing saying the Microsoft platform can't handle Unix workloads, but Microsoft has a fundamental problem. There are soft issues. If I'm a CIO with a bunch of Unix boxes and my database administrators and systems admins are trained on [Sun Solaris], then I am very familiar with that operating system and don't have anyone familiar with Windows then they go to Linux. The skills transfer issue is a big one that Microsoft can't do much about." 

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