Microsoft President and CEO Steve Ballmer dropped some bombshells at a recent Gartner Symposium/ITxpo in late October 2000. During a post-keynote question-and-answer session, Ballmer disparaged high-end competitor Sun Microsystems and eased into the news that Microsoft will support the Palm OS and might eventually support Linux as well.

Sun, Palm, and Linux, of course, all offer products that compete head-to-head with Windows. Sun Solaris is generally considered the bulletproof high-end alternative to Windows 2000 Server and Windows NT Server. The best-selling Palm OS dominates Windows CE in the handheld-device market. (According to International Data Corporation—IDC—in 1999, the Palm OS owned more than 70 percent of the handheld market. After three lackluster generations, Microsoft Windows CE-based offerings—which are available from a variety of vendors—combined for less than 15 percent of the market.) And Linux presents low-cost competition to Windows on both desktops and servers.

First, Ballmer had a lot to say in response to Sun's CEO, Scott McNealy, who was the keynote speaker at the previous day's event. McNealy, whose company makes most of its money from high-end hardware sales, had said that "software is a feature \[of hardware\], not an industry," discounting the wide gulf between hardware-maker Sun's financial results and those of software-maker Microsoft.

"And that, my friend, is why you want to steer clear of Sun. It's software that lets you build scalable Web sites," Ballmer retorted. "When people benefit from PowerPoint or email, it's software that enables it. Sun just doesn't get it. Software is the future, not big, honking Sun servers." (McNealy had described his company as the maker of "big freaking WebTone servers." WebTone is Sun's term for an always-on Internet.)

Next, Ballmer surprised the audience by saying that Microsoft will begin offering software such as Word and Excel—as well as upcoming .NET products—for the Palm OS and other handheld OSs. "No offense to the Pocket PC, but we might need to bring .NET services to Palm and other PDA devices," Ballmer said, admitting that Palm has "more marketing position" than Windows CE. "We're not abandoning Pocket PC, absolutely not," he added. "We're 100 percent committed to it."

But the biggest news from Ballmer took the form of some offhand remarks about Linux, the open-source software solution that's already a credible challenger of Windows on servers and is increasingly interesting as a desktop OS. Calling the Linux movement a "phenomenon," Ballmer admitted that his company was continuously evaluating Linux and would probably port .NET services to Linux, although "there are hurdles to putting Microsoft software on Linux." These hurdles include a "messy and confused" intellectual-property environment, according to the Microsoft CEO. Small doubt that Microsoft finds a world of open and free software both messy and confusing: For 25 years, the company has made its fortune selling proprietary, closed software, a model Microsoft surely would like to continue. Observing that the PC's open hardware model is what let that system emerge victorious over closed systems such as the Macintosh, Linux analysts say that the open Linux OS will similarly triumph over the closed Windows environment.

The crucial open-source software battlefield could well decide Microsoft's role in the future of the industry. Thanks to Ballmer's comments, Microsoft's public protestations regarding the possibility of its developing Linux applications now seem a bit weak.