By Paula Rooney ,
Microsoft Corp.'s president and CEO this week named Linux as the company's biggest problem going into 2001.
Speaking at an Internet conference hosted by Morgan Stanley Dean Witter, Steve Ballmer said that both Unix and Linux threaten Windows' stronghold in the marketplace, but that the latter is the bigger headache.
Many observers consider Linux 2.4, which was released late last week, to be a much-improved operating system kernel that can compete more aggressively against Windows 2000 and Unix in the enterprise market.
"I think you have to rate competitors that threaten your core higher than you rate competitors where you're trying to take from them," Ballmer said. "It puts the Linux phenomenon and the Unix phenomenon at the top of the list. I'd put the Linux phenomenon really as threat No. 1."
Ballmer made his statements on the same day that Corel Corp. (stock: CORL) revealed it would disclose its new corporate strategy on Jan. 23.
It is widely expected that Corel, which received a critical $135 million infusion in cash from Microsoft (stock: MSFT) in October, will dump its Linux line of products, such as its WordPerfect suite for Linux, to focus on Microsoft's .Net initiative.
In his talk, Ballmer identified Oracle Corp. (stock: ORCL) and Sun Microsystems Inc. (stock: SUNW) as second-tier rivals because "I think [server sales are] our biggest potential short-term return."
In statements last summer, Ballmer identified America Online Inc. (stock: AOL) as the top threat to Microsoft, Redmond, Wash.
But this week he said, "I'd put AOL probably maybe at that level or a half-step down [from Oracle and Sun]."
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