Steve Ballmer

Yeah. Our licensing, we had to evolve in the early 90s and then again in the late 90s. No, we didn't have those things. So no, we weren't an enterprise software company.

That's how you viewed it. Certainly, it wasn't before 2005. It wasn't the beginning of my tenure. We were still trying to prove that we were an enterprise company. And now I just find it cuckoo that all Microsoft is characterized as an enterprise company, which I'm not – I mean, I think it's more complicated than that, but I'm not going to say that that's not the primary muscle. For sure it is.

That's how you viewed it. Certainly, it wasn't before 2005. It wasn't the beginning of my tenure. We were still trying to prove that we were an enterprise company. And now I just find it cuckoo that all Microsoft is characterized as an enterprise company, which I'm not – I mean, I think it's more complicated than that, but I'm not going to say that that's not the primary muscle. For sure it is.

But, you know, me, the company, I mean, I was hell-bent and determined to prove we were an enterprise company.

But, you know, me, the company, I mean, I was hell-bent and determined to prove we were an enterprise company.

Easy. Because that's where IBM could squish us like a bug. If we couldn't sell our stuff to businesses, only to consumers... We knew that by then. We'd only get so far because enterprises wanted some features and enterprise don't like, you know, okay, you can go to computer land and buy a few copies.

Easy. Because that's where IBM could squish us like a bug. If we couldn't sell our stuff to businesses, only to consumers... We knew that by then. We'd only get so far because enterprises wanted some features and enterprise don't like, you know, okay, you can go to computer land and buy a few copies.

Our first sort of software pricing packaging model for the enterprise was not the enterprise agreement. First, it was, you know, we sold you disks. Second, we came up with this notion of what we called select licensing. And you could make your own copies. And you just report how many copies you sold.

Our first sort of software pricing packaging model for the enterprise was not the enterprise agreement. First, it was, you know, we sold you disks. Second, we came up with this notion of what we called select licensing. And you could make your own copies. And you just report how many copies you sold.

You tell us how many copies and just pay us what you did. The Enterprise Honor System.

You tell us how many copies and just pay us what you did. The Enterprise Honor System.

Windows typically by then came with the hardware. So you were mostly using the OEM channel? For Windows, yeah. Okay. Yeah. Even to this day. upgrades and stuff are sold direct to enterprises, but the basic computer that comes to an enterprise would have the operating system licensed to the OEM.

Windows typically by then came with the hardware. So you were mostly using the OEM channel? For Windows, yeah. Okay. Yeah. Even to this day. upgrades and stuff are sold direct to enterprises, but the basic computer that comes to an enterprise would have the operating system licensed to the OEM.

And so we were on, you can call it the honor system, but we just couldn't make people buy discs from us or CDs from us. Enterprises didn't like that. So we had this thing called Select, and Select had two problems with it. Number one, Very hard to copy the software you print. And number two problem, we were selling upgrades and new licenses.

And so we were on, you can call it the honor system, but we just couldn't make people buy discs from us or CDs from us. Enterprises didn't like that. So we had this thing called Select, and Select had two problems with it. Number one, Very hard to copy the software you print. And number two problem, we were selling upgrades and new licenses.

And upgrades were less than half the price of new licenses. So what does that mean? The company was headed to a world where its revenue was half of its existing revenue.

And upgrades were less than half the price of new licenses. So what does that mean? The company was headed to a world where its revenue was half of its existing revenue.

So it was a real problem-looking thing. And, uh, bill and I, we'd always dreamed of this thing where you get some recurring revenue and then we came up and say, okay, well, why don't we just do a license? that you didn't have to count the number of licenses you printed, just the number of computers. It made life simpler.

So it was a real problem-looking thing. And, uh, bill and I, we'd always dreamed of this thing where you get some recurring revenue and then we came up and say, okay, well, why don't we just do a license? that you didn't have to count the number of licenses you printed, just the number of computers. It made life simpler.

And we said, instead of doing, sell you a new license, and then God knows when we would sell you another upgrade or whatever, we'll do something that just says, hey, look, you sign up for three years, you pay us per machine, and you just pay us the same amount of money each year for three years. And it sort of led us...