Ballmer said the shift to online software and services will mean changes for all of Microsoft's businesses, which range from desktop productivity tools to database and e-mail server software.

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On Sun's part, the acquisition gives the server and software company a database offering that is capable of storing and manipulating the information used by its software tools, a role it has largely handed to Oracle.

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He helped build the database engine in SQL Server 2000, co-founded Spathe.com, and served as Director of Technology at Progress Software and as chief technology officer at AppZero.com.

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