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Ballmer: Nothing's rotten in Denmark

Microsoft's CEO says the company and its partners should strive to expand its midmarket success with Danish customers.

TORONTO--Steve Ballmer says there is a simple way to turn around Microsoft's money-losing enterprise applications business--make the whole world like Denmark.

There, Microsoft's enterprise resource planning software has a commanding share of the midmarket and a thriving collection of partners that are reaching a much broader range of small and midsize customers than the company is elsewhere.

"My ambition is to make the whole world Danish," the Microsoft CEO said in a keynote speech at the company's Worldwide Partner Conference in Toronto. "If we were just as successful in other countries as we are in Denmark, the Microsoft Business Solutions (unit) would be a factor of 10 bigger in terms of revenue."

Of course, Microsoft has an edge in Denmark, in that it is the birthplace of Navision, one of a handful of companies Microsoft acquired to create the Microsoft Business Solutions Unit, along with the purchases of Great Plains Software and Solomon.

Also in the speech, Ballmer dismissed the notion that the company's merger talks with SAP indicate that its current plan of focusing on small and midsize businesses isn't working.

"We didn't approach SAP because we didn't like that strategy," Ballmer said. "We love that strategy."

Ballmer then issued a rallying cry for partners to just "drive, drive, drive" the strategy, saying that he is sure it can be a multibillion-dollar business over the next several years.

And while he stressed that the products will continue to be designed for midsize companies, Ballmer said there will be occasions on which Microsoft will be up against SAP, and he encouraged the partners to compete aggressively and win, pointing out that SAP's partners will be doing the same thing.

Asked how Microsoft would integrate the MBS with its classic programs, such as Office, Ballmer spoke of two stages. Currently, the company is working on individual connections, such as a way to view data from MBS programs within Excel. Longer term, the company wants a unified way to program for both MBS and classic programs, though Ballmer said such an approach will take time and will require Longhorn, the next version of Windows.

"That means we're probably not in '05 or '06," Ballmer said, referring to the new programming model. Microsoft has said it doesn't expect to ship Longhorn until at least 2006.

In his talk, which featured Ballmer answering a series of prepared questions from three resellers as well as questions Microsoft had received via e-mail, Ballmer also addressed the issue of competition from open-source software.

Ballmer said innovation is much more likely to come from commercial software companies than from open-source ones.

"A lot of what open source, not all, has been about is creating good clones of commercial software," Ballmer said. "That's what Linux is. It's a good clone of Unix."

The talk ended with Ballmer encouraging Microsoft's partners to win, in particular to go after customers that run software from Novell and want to make a change, either to Windows or Linux.

"Let's get up and really go after the Novell base and help them move into the modern (age)."

Ballmer also said he is seeing more interest in customers moving from IBM's Lotus Notes to Microsoft's Exchange than at any time in the past five years.

"Those two install bases are ripe for a little winning time," Ballmer said.