Ballmer to crackers: this PC ain't big enough for the both of us

And it ain't me who's going to leave

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The smart choice: opportunity from uncertainty

The recent deluge of Internet worms and security vulnerabilities affecting Windows will not affect Microsoft's ability to "innovate", CEO Steve Ballmer pledged yesterday.

Ballmer told an audience at the Churchill Club in Santa Clara, California, that "better security and constant innovation go hand in hand". Essentially this was a message for the markets- all these security problems are not going to slow our production of newer, bigger, more expensive stuff.

On the plus side, Ballmer acknowledged that Blaster and the like are causing customers "pain" and that patching is a problem. He said Microsoft felt "humbled by the events of the last few weeks".

Against this he failed to demonstrate much of an understanding about managing risk, the core of the security problem.

Instead Ballmer compared IT companies to town marshals (or safe manufacturers?) facing down the threat of various black hat hackers in the pursuit of protect homesteaders / boosting shareholder returns.

"Today we're faced with, I think, another new and growing challenge to innovation, and that's the need for the highest levels of security in a world that frankly is full of thieves, con artists, terrorists and hackers," he said.

Warming to his theme, Ballmer came up with a Wild West analogy.

"In the Old West the banks didn't shut down because of the bank robbers; they improved the banks, they improved law enforcement, they went after it," said Sheriff Ballmer.

"Issues of safety have not stopped innovation in the auto industry. They continue to move forward innovation and safety, and they've even helped spur many of the better technologies like air bags and ABS brake systems," he added.

[Memo to Steve - We've said this to you before: drop the car / computer analogies. It makes people think of crashes.]

Ballmer is mindful of the fact IT spending has decreased even as the US economy as a whole expanded 2.4 per cent last year. Much of his speech concentrates on the value that IT developments bring to the wider economy. Thinking about IT as a cost centre is short-sighted, he argues.

Post Dotcom Bubble, companies are more cautious about spending, Ballmer acknoweldges. But argues that companies which fail to invest in IT risk getting left behind by their competitors.

He rejects any idea that IT as a "transforming technology has really reached the end of the road.

"Cutting costs is very important but doing it without thinking about long-term productivity will certainly, in my perspective, be a shortsighted decision," he said.

Wither Trustworthy Computing?

Returning to security, Ballmer refers to the progress of Microsoft's Trustworthy Computing initiative, the programme launched last year with the aim of making Microsoft's products more secure.

He argues that Microsoft is making progress but admits there is "not enough evidence of progress".

Ballmer argues, counter-intuitively in our opinion, that all the vulnerabilities recently discovered in Windows might be a good thing in helping Redmond develop more secure code.

"One area of investment that we're pursuing is what's called post-processing of source code to find vulnerabilities, so you actually go back and you have tools that look through the source code and help identify potential vulnerabilities. And it is true that those tools do get dramatically better with each vulnerability as we learn and can teach them to help spot whole new classes of attacks that come from hackers," Ballmer said.

"We're working to determine how we can take those tools and make them available to other independent software vendors in the industry as well as corporate developers to help everybody raise their performance in this issue," he added.

Ballmer said the software giant is working with law enforcement in tracking down attackers; and it is seeking to make applying patches far easier. Microsoft is working with industry partners in promoting better security among end users. Security is more than just a question of software vulnerabilities, Ballmer argued.

"There are many ways to work this problem: shields up, as well as improving the basic security and quality in the products," he said.

By way of example, Ballmer referred to the Internet connection firewall built into XP but neatly avoided mentioning that this is not enabled by default. If it was enabled by default the effect of the worm would have been greatly diminished.

That's one example of the conflict between functionality and security in Microsoft's development efforts which lies behind so many security problems (e.g. worms that exploit flaws with the preview function in Outlook to execute).

Unless and until Microsoft finds a way of applying the security philosophy behind Windows Server 2003 (secure by default, design and deployment) to its earlier products its software will remain fundamentally insecure.

And how are organisations going to find the time to innovate when they are engaged in constant firefighting?

There's also a sound business case for Microsoft to make its products more secure. There's only so much pain Windows users will take from security problems before they look for other options.

With every Windows worm, the alternatives (such as Linux on the desktop) look that little bit more attractive. The rich variety of applications available for Windows is its trump card and will keep many tied to the platform, at least over the shorter term. But longer term, Microsoft is right to be worried, since any move to open source software would be very difficult to reverse. ®

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