On Longhorn:

"Longhorn is our big bet on galvanizing the next big breakthrough—even bigger, perhaps than the first generation Windows release. In addition to the Longhorn client, there will be a Longhorn version of Office, Longhorn server enhancements, Longhorn development tools, and a Longhorn version of MSN. I think about it as a new applications platform, enabling applications and Web sites that are easier to write, integrate better, manage information more effectively, and present information in a richer, more visually compelling manner, along with new end-user functionality and services in collaboration, media, and communication."

On changing IT priorities:

"As I talk with business customers, there is less passion and enthusiasm for technology, and greater focus on doing more for less. Customers spent considerably on Y2K upgrades, which were seen as largely remedial, and they have not yet seen a tangible return on dot.com investments."

On the threat from non-commercial software:

"In this environment of lean IT budgets and concerns about Microsoft's attention to customers, non-commercial software such as Linux and OpenOffice is seen as interesting 'good enough' or 'free' alternatives. IBM's endorsement of Linux has added credibility and an illusion of support and accountability."

On consistency:

"Business consistency means that you make sure customers understand what you're doing, why you're doing it, and the timeframe for whatever the transition is. For example, we shouldn't change from year to year which accounts have customer reps and which don't. We shouldn't randomly change which partners we're working with."

On componentizing Windows:

"Isolating code in smaller pieces will help us achieve engineering excellence, and let us and our customers better tailor the code used in specific embedded application scenarios such as Web servers and firewalls."

On the importance of deployment:

"We know there are many licensed but undeployed units of our products. Because every deployed unit creates a user who will evangelize other users, we must make deployment as critical a goal as selling the product."

On financial results:

The accounting impacts of Licensing 6.0 reduced FY'02 revenue, but increased FY'03 revenue. FY'04 will return more to normal. Customers have embraced Windows Pro on a much higher percentage of machines than projected, but that growth will not be repeated.

Back to associated article: Ballmer Memo Outlines Challenges