In an interview Monday prior to Ellison's keynote address, Ballmer said, "I think Larry's probably going to give the same tired old view of computing, and I think that's out of step.
"Larry's been talking about ideas that have gone nowhere for years. How long has he been talking about the NC? Six years, seven years? Where did it go? Nowhere. Remember old Raw Iron? It went nowhere."
When Ellison took the stage later Monday he promoted the concept of networked computing and denigrated the PC, saying it "is becoming a network computer; it's turning into an appliance.
"The only thing left is a browser, Microsoft Office and some games. The only thing new and interesting (on PCs) are the games."
Intramural trash talk between Oracle and Microsoft has become one of the fixtures of the computing world and underscores the different markets in which the two software giants derive the bulk of their profits.
Ellison has advocated a technical world with a multiplicity of simplified devices speaking to large servers churning databases. One ambition was Raw Iron, an integrated server-and-database appliance not dependent on Microsoft's Windows operating systems. The first Raw Iron devices shipped in April, more than a year behind schedule.
By contrast, Microsoft sees the world dominated by intelligent devices such as PCs that connect to servers. In the future, according to Microsoft, these will all be linked by Extensible Markup Language (XML), a software language that makes it easier for computers to exchange data.
"I don't think there is a zero role for (simplified) devices, but I think the trend is going to be smart devices talking to smart devices," he said, adding later, "Consumers like smart devices. Why fight City Hall? Give the users what they want."
Although Microsoft has made its fortune on the PC, the company is also branching into handhelds and devices such as Web tablets.
Business plans aside, the debate carries a personal tone. Asked if Ellison mostly wants to squeeze Microsoft's role in the computing world, Ballmer laughed and said, "There's a jihad. There's no doubt about that. That may be it."
Ballmer also acknowledged that PC growth has slowed but stated that sales will continue.
"The market is growing less quickly than it did in the past. But you have to remember, the penetration of PCs for white-collar workers in Europe is only two-thirds of what it is in the U.S.," he said. "I think there is plenty of upside. If the U.S. is saturated, Europe is not, and I'm not sure that the U.S. is saturated."
Windows 2000 has achieved a slower adoption rate than other Microsoft OSes, but Ballmer said that was expected because it was a corporate, not a consumer, OS, and it didn't come with a large campaign. "It was destined to be a slower burn than Windows 95...Was that a mistake or not? History will tell."
The next major Microsoft upgrade, he added, will come sooner than Windows 2000. "We had four years almost between Windows NT releases, which is too long. I don't know if we have a pattern where we can stay the same," he said. "I think every two, two and a half years for big OS releases. We will probably do big releases every two and a half years and point releases in between."
As for its battle with Palm, Microsoft will differentiate Microsoft's Pocket PC by touting a variety of devices, many of which will come from traditional Microsoft allies.
"If these are just appliances that people don't add applications to, there is no reason that it necessarily has to move to just one" OS, he said. "If they are devices that people want to add applications to, I think it is quite likely that the market will...focus more on one guy or the other, but it remains to be seen."