Ballmer Says Tech Refresh Makes Sense Despite Downturn

Microsoft CEO Steve Ballmer suggested during a 14 July speech in New Orleans that the economic recession wouldn’t necessarily remain an impediment towards enterprises refreshing their IT infrastructure.

“This is not an economic prediction, just a thought exercise,” Ballmer told a large audience at the Microsoft Worldwide Partner Conference. “What if the economy doesn’t pick up again in seven years – do you think there would be an economic refresh cycle in the next seven years? Even if you take the assumption that it won’t turn around for a long period of time, every minute of every day we’re building a pent-up demand for IT.”

Ballmer also said that Microsoft would continue to spend a great deal of money on R&D, even as the recessionary environment.

“We’re investing and keeping our R&D spending flat at $9.5 billion (£5.8bn),” he said. “That is a testament to our belief and optimism about the future. We’re going to keep the same old Microsoft approach: tenacious, long-term.”

Microsoft has a particularly vested interest in companies opening their wallets for IT in 2009. During the four days of the Worldwide Partner Conference, the company has demonstrated a wide swath of its upcoming products, including Office 2010, Windows 7, Silverlight 3, Windows Mobile 6.5 and Windows Server 2008.

One of its main products, Microsoft Office 2010, will be launched as a free online service for subscribers of Microsoft Live, although customers will need to pay for the hosted subscription and on-premises application versions. Azure, Microsoft’s public cloud-computing platform, will be offered for free through November’s Professional Developers Conference, at which point Microsoft will institute a payment structure.

Despite the massive Microsoft push, however, there are signs that IT administrators and executives may be disinclined to invest their dwindling funds in a refresh. A recent survey by ScriptLogic, for example, suggested that six out of 10 companies would avoid purchasing Windows 7 when the new operating system makes its general-release rollout on 22 October.

Those delaying the operating-system upgrade – or denying it altogether – cited costs as one of their chief reasons for doing so.

In an attempt to spread Windows 7 as aggressively as possible despite the economic doldrums, Microsoft is planning a broad campaign of price cuts and sales through online retailers such as Best Buy and Amazon.com. The new operating system will sell for roughly 10 percent less than its much-maligned predecessor, Windows Vista.