Microsoft's CEO Steve "I love this company" Ballmer defended its licensing structure and pricing for desktop version of Windows this week at the Gartner Symposium/ITxpo conference.

When asked if Microsoft is reconsidering its Software Assurance plan, Ballmer outlined the plan's benefits, which include giving customers a right to all upgrades, fixes, patches, and any enhancements Microsoft issues via add-on packs and capabilities as opposed to more frequent full upgrades. He added that customers have the right to any major upgrades that Microsoft issues as well.

"Our goal when we started out was to simplify things. We learned that when you clean things up, sometimes it ends up costing customers more money," Ballmer said.

Gartner analyst David Smith, who was on stage with Ballmer, asked if Microsoft is planning to move toward a per-user licensing basis.

"We agreed it would be nice to have a number of options," Ballmer said. He explained that some situations call for a per-user fee, while for others a per-device model is more effective — for example, on a shop room floor where 30 people might use a single machine at different times.

Gartner analysts pressed Ballmer on the idea that lowering the price of Windows desktop operating systems would bring down the price of PCs, thereby potentially stimulating demand.

Ballmer explained that even lowering the price of Windows to, say, $20 (£12) would mean that Microsoft would have that much less to put into product development.

"We're not blind to the issues," Ballmer said. "Will it drive a lot of demand? No. Will it take away our ability to innovate? Yes."

Ballmer also used the opportunity to tout a forthcoming version of Office, which is currently in beta testing, as well as the future of the suite.

"The big breakthrough for Office lies in XML," Ballmer said, adding that XML enables a slew of new features and capabilities, such as collaboration, better management, the ability for users to find the information that they want, and new Office application categories.

"The ability people have today to find and share information within intranets is not what people want. We want to take it up a level," he said.