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Microsoft's plans don't worry IBM

Steve Ballmer didn't mince words last Sunday at Microsoft's annual partner conference in Minneapolis.

After whooping hello to thousands of people who sell Microsoft software for a living, the chief executive emphatically said their biggest competition is IBM. He also told them the time is ripe to win customers away from the grandaddy of the technology industry.

"I think probably for many of you who compete in larger enterprises the No. 1 competitor for us and for you is IBM," Ballmer said, according to a Microsoft transcript of the event. "Sometimes it's Oracle but really it's IBM, IBM, IBM, IBM, IBM."

But the head of IBM's software division isn't too concerned.

Steve Mills, a senior vice president who runs what is in effect the world's second-largest software business after Microsoft, said he's still waiting for the threat to materialize.

In a recent interview, Mills also discussed the upcoming version of Windows code-named Longhorn, Linux, customers and the state of the software industry.

Here's an edited version of the conversation:

Q: How concerned are you about the high-performance computing products Microsoft is developing and its new database? Are you concerned about the company moving into your business market?

A: The customers are looking for predictability and value today. They've become particularly jaded on all the vendor talk about things coming but coming in the distant future — you know, it's Longhorn when? We're still waiting for Cairo. We're waiting for lots of things that are part of a long list of code names and initiatives that Microsoft has been coming out with for the last decade.

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