Munichand Linux: "Ballmer chuckles over Linux Woes."  Reminds me of when a bunch of us programmers we're pulled together for a presentation including Total Cost of Ownership.  A company or a government agency with Office ends up spending a small amount for the actual software.  A lot of money goes into installing, maintaining, and upgrading that software.  That's why Office is supposed to have a simple upgrade story (no reboot required) and can't go touching system files (to do such would be a worrisome risk that some customers will understandably balk at).  We provide value not only by providing useful features but also by being easier to maintain.

So going for free software doesn't mean you're saving a big bundle of cash.  It's going to cost you more with-respect-to maintenance and most likely with-respect-to lost productivity and effectiveness.  There's zero reason for a business to actually do this unless they can develop a better business by being on Open Source (how many raised hands are there out there for that?).

So it comes down to being political or some other choice beyond economics.  Interesting quote from Ballmer:

"The people who are making political decisions instead of business decisions, we're going to lose some," said Ballmer. "The people who are making business decisions based on where are the applications, what is the value, what is the lowest cost of ownership, we're not losing them.

"For us, anything that becomes a political issue, nobody wins them all on merit."

Eric Richards.