"There are no earth-shattering technological innovations in Linux -- actually, there's a lot less than can be found in the Windows and Unix platforms."
Microsoft is concerned that people will get sucked into the idea of not paying for software, which would ultimately "be a disservice to them in the long run," Miller said, adding that customers need well-established and well-funded software companies to continue with the innovation and support of complex operating system products.
"We are looking at Linux very carefully from this standpoint and want customers to know that, ultimately, someone has to pay for it," he said. "It may be free up front but there are downstream costs, especially to support customers and continue product innovation."
However, Miller did not rule out the possibility that some Microsoft applications and services could be ported to Linux eventually. But any such move would be customer-driven, he said, and so far there hasn't been any customer pressure to move its desktop or server products to Linux.
"We are not religious about this," Miller said. "We will treat Linux like any other platform - we're commercial software vendors and will do what our customers want. I will not rule out the possibility of moving some of our products to Linux down the line, but we have no immediate plans to do so."
But as the company moves closer to a more services-based vision for software, it will be looking more and more at the Internet - as opposed to a computer - as a platform. Where appropriate, Microsoft will make its services available for multiple operating systems, he said.
All that said, however, Miller launched a stinging attack on Linux and the companies that develop and commercially distribute it.
"I think the shine is dulling around Linux as people scramble to find a business model based on free software that actually works," he said. "Ultimately, there's no such thing as a free lunch - someone has to pay for continued innovation and support."
Like numerous dot-coms that had no real business model and consequently fell by the wayside, there's evidence of a similar fate in store for the free software industry, Miller said.
"Growth projections for some of the businesses are down - VA Linux had a recent announcement in this regard, and Corel announced changes in its strategy," he said.
"Ultimately, there's no long-term model here for these folks to have a viable, profitable business."
Miller said it was difficult to imagine a company like Red Hat "as a major player up there with the established software vendors like us, Novell, Oracle and Computer Associates. I just don't see how they can ever get to that level of revenue based on what they have today."
While there has been much talk about Linux as an operating system, there hasn't been nearly enough talk about how it is solving customer problems through a full suite of business applications, Miller contended, adding it has a "long way to go" to solve the range of business problems that companies like Microsoft solve today.
"Linux is many, many years away from being an enterprise-ready operating system that can compete with, and challenge, the Windows platform," he said. "There is also no vision or driving force around it. We are already in very good shape on the enterprise today and are leading the charge on the Web services front and in new ways of looking at delivering value.
"So, while we will watch Linux very closely, we are not at all threatened by it from a technological standpoint. Our greatest challenge is competing on a cost-effective basis with something that's free."
