Steve Ballmer: Microsoft Government Leaders Forum

STEVE BALLMER: Well, thanks very much and welcome. Your Highnesses, Your Excellencies, distinguished guests, I want to thank you all very much for your participation in this Government Leaders Forum. We’re honored to have you here and I hope that these two days have been engaging and productive for you and for the communities and nations that you represent.

I particularly want to thank Sheikh Nahyan Bin Mubarak and Her Highness Sheikh Lubna Al Qasimi for their insightful remarks.

Thanks also to His Highness Sheikh Mohammed bin Rashid Al Maktoum for his patronage of this conference and for his visionary leadership here in Dubai.

And finally thanks very much to the panelists who have enriched this event with their very valuable perspective.

It was seven years ago, in 1998, that I first had the pleasure of visiting here in Dubai and it’s really been amazing frankly to see the incredible progress that’s being made here. It’s fantastic to hear about the advances taking place also in other parts of the Middle East, particularly with regard to broadening access to these 21st-century technologies and for harnessing them really for important economic and social development.

It’s remarkable frankly how fast things are changing technologically in this part of the world. One simple example of this that I’m sure everybody in this room is tremendously aware of is the growth in mobile phones. When I was here in 1998 there were 5 million mobile phone subscribers in the Middle East. Today — or five years later, not even today, but five years later there were more than 33 million subscribers and those numbers continue to just soar.

Use of the personal computer and the Internet is also seeing tremendous growth throughout the Middle East. The region now has nearly 20 million people using the Internet regularly and the numbers are growing nearly twice as fast as that number is growing in the rest of the world.

Nations such as the United Arab Emirates are gaining recognition for their incredibly highly competent, competitive technology infrastructure and the workforce skills that you can find here.

Each year, as I’m sure many of you know, the World Economic Forum ranks countries on how well prepared they are to participate and benefit from IT development. The most recent ranking put the UAE in the top quartile, ahead of some of these so-called Asian Tigers people like to talk about and also ahead of several countries in Western Europe. Congratulations, Your Highness, on that.

I think all of you here today could take pride in these truly remarkable advances. The region is moving forward to meet the challenge posed by the incredible population growth and the need for economic diversification in this region. The region is moving forward with social as well as economic development to really help secure the kind of stability and to help citizens develop and use their talents in much the way Sheikh Nahyan had a chance to describe, to help these economies compete globally and to help strengthen the very rich, distinctive cultures and traditions here in the region.

Microsoft in the Middle East

Information technology is really playing a key role, we think, in this progress and at Microsoft we’re very proud to be a part of that. Our presence in the Middle East has expanded quite substantially since 1998. We now have subsidiaries in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia as well, of course, as here in the UAE, and in other Arab lands such as Algeria, Morocco, Tunisia. All of these subsidiaries have many local employees and we’re working very hard to make sure that we’re good corporate citizens in each country.

What’s more, we’re very proud to be providing a technology platform for thousands of independent software vendors and other IT companies and business partners here in the region. These are locally owned companies that employ literally today many tens of thousands of local people. Through our collaborations with those business partners we believe that we continue to contribute significantly to the development of the indigenous IT industry here in this region. We believe we’re helping to create economic opportunity and helping really nurture knowledge economies here in the Middle East as we are in other parts of the world.

Technology and Economic Development

Today I’d like to talk to you a little bit about some additional ways that technology and specifically Microsoft can help your governments promote economic and social development. By working together I believe we can help improve the lives of millions of people throughout the Arab world and around the globe.

Let me first say that I’m not going to pretend today to be an expert on economic development. You’re the experts, the people who know what’s needed in your communities and your nations. We make software but we also believe that software is a unique tool that helps people enhance their capabilities so they can better their lives and so their societies can progress.

That’s why we talk about the mission of our company as enabling people and businesses throughout the world to realize their full potential. You might say that’s the same mission government has, trying to create public policies and programs that help people realize their full potential. We try to do that job through information technology, which we think is a great enabler.

Over the past few years we’ve given a lot of thought to how we can be the best possible partner to government, how to help you achieve all of these goals that we have in common, how we as a company can be a good global citizen.

We focused a lot on building strong, positive relationships with governments in every region where we do business. I’m proud of the close collaborations we’ve been able to forge with many of the governments that you represent. We’re especially excited about working with governments throughout the Middle East because it’s such an exciting and dynamic part of the world.

Your countries are making incredible advances in so many areas and so many ways. We see the exciting progress here in the UAE and its ambitious plans moving forward. We look at the Egyptian government’s exciting program to broaden access to technology and its focus on public and private partnerships and we see amazing opportunities there in one of the world’s oldest civilizations. We look at Jordan’s ambitious education initiative, Bahrain’s progress in modernizing government services, Qatar’s fast pace of development and growth and we see governments in this region accomplishing great things.

We want to be one of your partners in achieving those great things and in order to be a great partner we need to spend a lot of time listening, really, really listening.

I’ve been with Microsoft since the company was five years old, almost from the beginning, and I’m really humbled by how much we still have to learn about the world. In many ways we’re still a relatively young company. In less than three decades, we’ve grown to a company of 57,000 employees doing business all around the world. In recent years we’ve become much more conscious and much more global in our thinking and our approach. We know we still have a long way to go but we’re very committed and I personally am very optimistic that we can make a positive contribution, including and particularly here in the Middle East.

My optimism stems in large part from some recent initiatives that have been very well received in many countries. In all these programs we really work closely with governments from the beginning and throughout supporting your priorities.

Digital Inclusion

A lot of our efforts go into partnerships to improve education and achieve better digital inclusion, the so-called digital divide that His Excellency had a chance to describe. We’re working on efforts to promote wider access to the benefits of technology and technology skills. We recently set a goal for these efforts: During the next five years our goal is to touch the lives of 250 million people around the world who today have no access to technology and bring them greater access to technology and hopefully some skills that can help them improve their lives.

I’d like to share with you some of the things we’re doing with government in this arena. A wonderful example is the Learning Gateway that we’re announcing today. This is a secure portal that will help universities deliver better services to students within existing tight education budgets. It includes simple, powerful Web publishing tools and many other resources to facilitate the communication that’s so important between faculty and students. It enables audio and video streaming of lectures, Web conferences, computer-aided learning and many other innovations right over the Internet.

Institutions can use the Learning Gateway to develop custom applications in collaboration with other universities and with other development partners in a community of Microsoft partners.

And this Learning Gateway is all available today in Arabic.

We’re working in many other ways to help improve education and ensure that the benefits of technology are available to all. Our flagship programs targeting digital inclusion are what we call Partners in Learning and Unlimited Potential. Partners in Learning involves working with schools to increase access to technology and technology skills, providing software and importantly helping improve and expand teacher training.

We were talking at the table before His Excellency got up and talked, His Highness got up and talked, and we talked extensively about the need for training — teacher training, teacher training, teacher training. It’s a lot about what it’s about. It’s a huge undertaking in many countries. Many teachers lack even basic computer skills so they need training in how to use technology in the classroom to enhance learning worldwide.

Partners in Learning in the Middle East

We’re collaborating on Partners in Learning projects with 93 different national governments, including 13 Arab nations. Here in the Arab world our five-year goal is to train in partnership with you more than 400,000 teachers and to reach 15 million students in new ways. I think that’s a very ambitious goal but I am very confident that together we can achieve it.

In many countries we’ve helped governments create IT academies for teacher training where teachers can acquire computer skills that they can then pass on to their students and also use to enhance their own learning in many subjects.

Here in the region we’ve established IT academies in partnership with governments in Bahrain, Jordan, Lebanon, Morocco, Oman, the UAE and Yemen. In Yemen, for example, we’ve worked with the Ministry of Education to provide several teachers with an intensive 10-week course that qualified them as so-called Master Trainers. They completed the course in December and then they fanned out, establishing IT academies in five cities around Yemen. So far they’ve trained another 1,200 teachers and another 100 teachers are in the training program currently.

As I mentioned, we always work with closely with governments to tailor our Partners in Learning program so they serve the specific needs and priorities of each of your communities and countries. For example, we’ve been very involved in the Jordan Education Initiative, which is a public and private partnership to improve education in the Kingdom. In support of that effort, last February we collaborated with the government on opening a Science Technology Innovation Center in Oman. That center will serve teacher training institutes as a demonstration site and a learning laboratory, a place where educators can develop and share best practices in the use of IT to improve learning.

Also in support of Jordan’s Education Initiative we’ve been helping develop a complete multimedia curriculum for teaching IT skills in grades 1 through 10. We’ve collaborated on this with the Ministry of Education and a Jordanian company, Menhaj Educational Technologies.

We’re also collaborating on training teachers to use curriculum very effectively again in support of the government’s education goal.

The work in Jordan is now being looked at the by the World Economic Forum and by the United Nations to draw lessons that they think can benefit education elsewhere in the world, how to adapt that curriculum and apply the lessons learned about using public/private partnerships, not exclusive to our company but real public/private partnership to advance learning and economic development.

Another example in Egypt: We’re involved in a number of exciting education initiatives designed around the government priorities there. Egypt has a goal of nurturing a community of world class software developers and to do that their aim is to provide in depth training in software development to 25,000 school children before the end of the decade.

Junior Developers

In the past 15 months, Microsoft has begun several training programs in collaboration with Egypt’s Ministry of Education and a number of Egyptian companies. One program that is really neat I think is called Junior Developer. It’s a three-year summer program — summer program for highly capable students in grades 6 to 9. And we’re talking about Junior Developers this time. These Junior Developers are learning all the leading technologies for programming, HTML, Java, C#, ASP, all the stuff that guys like me love, 6th to 9th grade.

By next year we’ll have 3,000 Junior Developers enrolled — 3,000. We’ve also trained 250 teachers to serve as mentors for these students during the school year. And the response to this Junior Developers has been very enthusiastic from the students, from the educators and we’re working actually now to make the program even more widely available. We’re helping to train master teachers from across Egypt who will offer Junior Developer programs in their own school and also train other teachers. We’ll also help develop an online introductory Junior Developer course that students can access over the Internet or via CD-ROM.

Many, many more students across the country will be able to develop their interest in computer programming and work toward joining Egypt’s growing world class community of IT specialists.

We’re also now bringing the Junior Developers concept to other countries, working with governments in Saudi Arabia, in Morocco and here in the United Arab Emirates.

Innovative Teachers Network

Another example of our Partners in Learning effort is what we call our Innovative Teachers program, which encourages teachers to work together to create communities of innovation inside their schools. Teachers receive training in how to enhance learning in the classroom using software.

We’ve collaborated on innovative teachers programs in Egypt, in Kuwait, in Morocco, in Oman and in Bahrain as part of the Schools of the Future Project that the King of Bahrain launched last year.

Last week in Sharjah we sponsored the first Innovative Teachers Forum in the Arab region. It was a two-day workshop that offered very practical, very hands on opportunities for teachers to use the newest technologies and share their ideas for using IT in the classroom. More than 90 teachers from 13 different countries in the region participated.

And to help innovative teachers communicate with each other and support each other, today we’re launching the Arabic language version of our Innovative Teachers Network. This is an online community for educators. It’s completely free to join, it’s a secure portal that offers places for people to discuss, store information, Web pages, advanced search and many other features, all very customizable for individuals or group needs.

Registered members, teachers can access a comprehensive database of teaching, training and subject related materials. They can upload and download lesson plans to share, review or use those in the classroom and do this all, of course, in Arabic. Most importantly, teachers can support and encourage each other as they continue to innovate themselves with technology and without, improving student learning.

Unlimited Potential Program

We’re also working outside the classroom to promote lifelong learning through our other flagship program for digital inclusion, which we call Unlimited Potential. We launched Unlimited Potential in 2003 after consulting with a number of governments and development agencies and finding that they also wanted public/private partnership to help in developing the workforce skills of adults who are outside traditional school settings.

To meet that need we now partner with over 445 organizations in 89 countries around the world helping set up and support thousands of community centers where people can learn IT skills. Our support includes donations of cash, software and help from a global support network.

In Arabic speaking countries we’ve collaborated with governments and nongovernmental organizations and with over 120 local partner companies to provide training in more than 250 Community Technology Centers. We’ve invested more than US$2 million in cash and more than $1.7 million in software to help these Arabic speaking communities.

In this region, because the population is so young and because unemployment of young people is a big challenge, the majority of our Unlimited Potential projects focus on under-served youth. In Kuwait we’re working with the National Career Development Center to provide IT skills to unemployed graduates. In Lebanon we’re working with Partners on Netcorps Lebanon, which is training 600 college graduates in Community Technology Centers around the country and then helping place them in jobs in Lebanon’s tourist industry. The idea is that young people will gain job skills and they will help Lebanon’s tourist industry to grow by using technology in marketing and operations.

About 30 percent of our Unlimited Potential projects in the Middle East are focused on the specific needs of women. In one of our projects in Jordan, for example, we’re working on an e-village project with local communities and with then United Nations Development Fund for Women. That initiative is providing IT skills training to women so they can advance socially and contribute to their communities’ economic development. The goal is to reach every woman in two villages. Then we’ll learn from the experience in those two villages and work to help other communities.

We have a continuing commitment to Unlimited Potential and today we’re very pleased to announce new grants for projects in Bahrain, Egypt, Lebanon, Morocco and Tunisia. In Bahrain we’re announcing a grant to the Career Connections Project to help provide IT skills training to unemployed youth. This project actually echoes a very similar and successful effort we support in Kuwait.

In Lebanon we are support two ambitious projects working with women and people with disabilities to provide them with job skills and even more efficient access to social services.

In Morocco we’re providing funding to extend IT skills training to young people across the country through 50 new Community Technology Centers, which should train over 18,000 people.

We’re continuing our work in Egypt, expecting to expand to 1,500 IT clubs that will serve over 13,000 community members.

And in Tunisia we’re working with UNESCO actually, as well as local NGOs, to set up a regional training center where young people can get IT skills that they need to find jobs and to build careers.

Internet Safety

Projects for digital inclusion and education are extremely important but we think they’re only part of what is required for us as a company to fulfill our mission. We’ve also committed ourselves to achieving some big, bold goals in other key areas of citizenship: Internet safety, responsible business practices and, importantly, economic development and opportunity.

Let me explain just briefly what we’re doing in each of these areas. By Internet safety we mean all of the societal challenges that have sprung up around information technology: security, spam, privacy, children’s online safety. We’re committed to help meet all of those challenges in partnership with governments, other industry leaders, companies and anyone else, frankly, who wants to help.

About three years ago we made software security and information security the No. 1 priority for Microsoft. We’ve invested heavily in a multi-pronged effort to improve software quality and development processes and to reduce the security risks that customers face.

We’ve worked to provide customers with more effective security education, particularly government. We’ve collaborated with others in our industry to better respond to information security threats. And we are working with governments around the world to help enforce laws against cyber crimes.

I think it’s very fair to say that no other technology company has invested as much as we have in security research and development processes and customer education.

We’re especially proud of the progress reflected in our most recent version of our flagship Windows XP product, so-called Service Pack 2. It’s a free download: Go to the Internet, you download it and it has advanced technologies in it that enable safer Web browsing, e-mailing and instant messaging.

We’re developing a wide range of other new technologies and innovations that will enhance security in a variety of ways. Against junk e-mail, spam, we’re making inroads with advanced filtering technologies, tougher laws in conjunction with governments and aggressive enforcement, and with important innovations like Sender ID. Sender ID is a technology for authenticating an e-mail’s source so you know who it really comes from, so that fraudulent messages can be effectively blocked on the Internet and so mail can get through from the people you actually want to hear from.

I read in the newspaper yesterday that the President of the United States, George Bush, does not use e-mail, he’s afraid about the confidentiality of his stuff or something, it said in the newspaper this morning. We need this Sender ID innovation for everybody.

We’ve offered the Sender ID as an Internet standard that anyone can use. We’re a very big contributor to industry standards and open standards that help move technology forward.

We’re also working against online identity theft and other threats to privacy like spyware. This is software that kind of sneaks onto your computer and takes over. In our new Windows XP version there are eight different technologies that we pioneered to help keep this kind of spyware off your computer, and we’ve also made available a new version of this kind of software, an anti-spyware solution for free over the Internet, and we’re working on new antivirus software that will make it even easier to protect computers and data.

Additionally, we’re working to help protect children from threats on the Internet. We’ve collaborated with Interpol and the International Center for Missing and Exploited Children on a series of seminars for law enforcement personnel to help prevent computer-enabled crimes against children. More than 400 police and prosecutors have attended these three-day seminars in Europe, South America, Africa and Asia.

We’re in very regular communication with law enforcement authorities investigating Internet-related cases of harm against children. We maintain absolutely a zero-tolerance policy against child pornography and other harmful content on our MSN communication services.

But perhaps more importantly we’re increasing the investment we make in educating parents and children on how to stay safe on the Internet. Our child safety tips on our MSN service are now available in over 17 languages.

Business Integrity

Another focus for us is ensuring the integrity and transparency of our business processes and practices. We’ve worked hard over many years to be a values-driven company that maintains the highest standards of conduct and that more than meet(s) the ethical expectation and certainly the legal expectations of the countries where we do business. Some of this effort has to do with our internal processes of corporate governance, but a lot of it has to do with being open, honest and respectful with others, which is one of the core values of our company.

In particular in the past several years we’ve been looking for ways to share more information with partners and customers around our products to help people evaluate our products and get more out of them.

Last fall as a result of ongoing collaborations with governments around the world we launched our Solution Sharing Network, our free portal where governments, academic institutions and other agencies can share software architectures, best practices and application source code.

Separately there’s something we called our Shared Source Initiative where we’re making our source codes available to customers, partners and governments worldwide. This includes access to the underlying source code for all versions of Windows 2000, XP, Windows Server and other key products.

To help governments understand and deal with security issues we set up a special program that we call our Government Security Program. It provides national governments with access to Windows and Office source code, technical information, cryptographic code and development tools.

By getting an engineering-level view of our products and their security design, you can probe and understand how Windows can meet the special security requirements your governments place to protect the national security of your government’s information.

It’s worth mentioning that over the last two years we’ve signed Government Security Programs with several governments across the Middle East, including Bahrain, Egypt and Jordan.

Government Partnerships

Finally, our focus on citizenship includes a commitment to partnering with governments and communities to help strengthen the local economy. We do this in part through our products, which help people be more productive and creative. Because our software is both powerful and easy to use, it’s especially helpful to emerging economies. It helps quickly develop the workforce to compete for global service jobs and other businesses that require workers with computer skills.

We also contribute to economic opportunity through the business activity that this spins off from our innovation, which flow from our commitment to research and development, a commitment this year that will be more than $6 billion we will spend this year in R&D.

Perhaps our biggest contribution though to local economic development is through the success of our business partners. Microsoft’s business model has always been based on what we call an ecosystem, a family of independent companies and individuals who earn their livelihoods by building applications and providing services on top of the Windows platform.

Worldwide we have over 750,000 partners who provide jobs in almost every country in the world. IDC analysts estimate that our partners earn $7 or $8 of revenue for every $1 our own company earns. And those partners pay taxes in the countries represented here today and in many more.

Yesterday we had news about the Web site and toolbar developed by MSN Arabia to help promote companies in the region that are developing Arabic software. That’s one very good example of how we partner for economic opportunity here in the Middle East.

Our technologies in themselves represent some of the most important ways that we work to help governments achieve their goals. We’ve worked hard to ensure that our technologies provide the best possible platform for government’s own IT infrastructure.

We’re especially excited about the potential of open Web services from all vendors as a powerful, flexible platform for the next generation of e-government applications and services. Our .NET software is one way to build such open applications, and we think our .NET software facilitates that kind of unparalleled interoperability to non-Microsoft systems, which helps you support your openness agenda and get more from your existing infrastructure. We think it helps you connect systems and helps you extend them more easily and that lets you help build new solutions and create new services more effectively and more quickly.

Helping Governments Achieve Their Citizens’ Goals

I hope today I’ve helped you understand why I’m so excited to be here. This is a time of tremendous progress and opportunity in this region, particularly on the technology front. The possibilities I think are absolutely mind boggling and I do want to make sure I have some time for dialogue, for questions, for comments, so I just want to close by saying that more than anything else we at Microsoft really want to work with you to help you achieve your goals for your citizens and your society.

We believe that strong public/private partnerships with our company and others can really help expand economic opportunity and extend the social benefits that technology can deliver, especially to people who have been excluded or underserved. It’s big, ambitious, but I think that’s a goal we really all share here today in the room, and if we work together we can really achieve it.

Thanks again for listening, thanks very much for your participation in this conference, thanks again very much to His Highness for being with us here today. I wish you great success. It’s been my pleasure to have a chance to make this speech and I look forward to the questions and dialogue that will follow. Thank you very much. (Applause.)