Steve Ballmer’s latest rant against open source, and Microsoft’s internal reaction to it, reflect deep problems within the company.Part of the problem is that, as they say, Elvis has left the building. Elvis in this case is Bill Gates, Ballmer’s one-time Harvard classmate, the drop-out whose strategic vision and intense focus made Microsoft what it is.

Part of the problem is that Ballmer has never really acknowledged this. It was Steve Ballmer who built Microsoft’s sales effort, Steve Ballmer who created its esprit de corps, and Steve Ballmer, whose chip on the shoulder attitude he’s never been without that we recall, who doesn’t understand how the game has changed.

You can’t fight open source as you would fight IBM, or Novell, or the U.S. Justice Department, the enemies from the 1990s. Those foes put their pants on one leg at a time, just like Microsoft did. Open source is not like that.

Open source is not a person, or a company, but a movement. It’s an idea. It’s like water. You fight water you drown. Each time Steve Ballmer opens his mouth this becomes more obvious to observers on the shore. Yet it never seems to occur to him. And he’s the boss.

The fact Ballmer made these remarks in England only compounds the problem. The EU still has an active antitrust case against Microsoft. The EU has not yet agreed with the U.S. policy on software patents. Bluster in the face of all this was ill-advised, yet Ballmer blustered away.

Bill Gates would have handled things differently. He would have smiled. He would have been diplomatic. He probably would not have commented at all, yet he would have left the impression that the EU is somehow working against competition in fighting Microsoft, and ignoring the interests of its own innovators in rejecting software patents.

Microsoft is going through a tough transition. It is an entrepreneurial company whose entrepreneur has left. Steve Ballmer was as close to Gates as anyone, and has long felt he could fill his shoes, but can he really make Microsoft an ad-driven company when his sense of public relations is so poor?

None of this really matters to open source. Open source, like water, will flow around Microsoft the way a stream flows past a rock in its path. But Microsoft needs a swimmer to succeed in this new environment, and its leader keeps doing cannonballs.

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