In the face of growing competition from Linux, Microsoft CEO Steve Ballmer delivered a four-page memo to customers on Wednesday outlining the economic and security advantages Windows has over Linux, the potential dangers of open source involving indemnification, and the intent to aggressively convince Unix shops to migrate to Windows.

In his lengthy e-mail, Ballmer contended that the increasingly higher prices companies such as IBM, Red Hat, and Novell charge for technical services and support, along with costs associated with indemnification, now outstrip the financial advantages of free open source software.

"It's pretty clear the facts show Windows provides a lower total cost of ownership than Linux. The number of security vulnerabilities is lower on Windows, and Windows responsiveness on security is better than Linux, and Microsoft provides uncapped IP (intellectual property) indemnification of their products. (There is) no such comprehensive offering available for Linux or open source," he wrote.

According to the memo, Microsoft last year took a closer look at its volume licensing contracts in order to see what else the company could do to increase customer satisfaction. He said the top issue users discussed by customers was patent indemnification, which Microsoft then capped at the amount the customer paid for the software. Consequently, he wrote, Microsoft lifted that cap for volume licensing customers who are often the target of IP lawsuits.

"No vendor today stands behind Linux with full IP indemnification. In fact, it is rare for open source software to provide customers with any indemnification at all. We think Microsoft's indemnification already is one of the best offered by the leading players in the industry for volume licensing customers, and we're looking at ways to expand it to an even broader set of our customers," Ballmer wrote.

Backing up his assertion, Ballmer cited Regal Entertainment Group, the world's largest movie theater chain, which made the move to Red Hat Linux in 2001. After evaluating Linux for several months, they migrated to Windows for multiple reasons including lower TCO, more reliability and manageability, and because they felt they were more fully indemnified with regards to IP.

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