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By silicon.com, 4 October 2004 18:20

Microsoft CEO Steve Ballmer was in engaging mood when he hosted an exclusive small gathering of UK press in London at the weekend attended by silicon.com, but despite his usual quips and headline-friendly soundbites he skirted around some of the more serious issues facing the software giant.

First up was the ongoing competition court case with the European Commission, where Microsoft is appealing to have the sanctions that it should offer a separate version of Windows without Media Player bundled in suspended pending a full appeal – which could take years.

Essentially if this goes against Microsoft it could seriously restrict Redmond's ability to enter new markets by bundling new products with the Windows operating system.

Ballmer dismissed this by saying the case "doesn't discuss our entry into new markets". And he's right, but he also misses the point. It's the precedent that the ruling sets if it goes in favour of the EC and the fact competitors and rivals will be able to use it as a stick to beat Microsoft every time it tries to tie new products in with its operating system.

Next was the entry into the security market and the possibility of its own antivirus product and/or the acquisition of a major security vendor. Microsoft is still keeping its cards close to its chest, however, and Ballmer made it clear this topic was not up for discussion.

Then came the subject of software licensing, and Ballmer was asked if the continued rise of Linux as a competitor and the need for introducing cut-price cut-down Windows in places like India would cause price erosion on licensing around the world.

"We offer a good product, good value, good price, good total cost," he said. "This product [the cut-price Windows] is designed for poor people in poor countries."

Finally the thorny subject of the delayed release of Longhorn, the next iteration of Windows, and the staged rollout of some features in order to meet the 2006 ship date.

Ballmer insisted customers will still be blown away by the initial release despite the fact it will have some features missing. No word, however, on the customers who signed up to the Software Assurance licensing framework expecting Longhorn to be released during the length of the contracts and so covered as a free update.

There's no doubt Microsoft is still sitting pretty with a huge pile of cash in the bank even after doling out billions back to shareholders and Ballmer gave some hints as to what the software giant has planned around consumer software and the future digital experience. But corporate customers may still be feeling like there's a lot of unanswered questions.

Read the full Q&A with Ballmer tomorrow on silicon.com