Remarks by Steve Ballmer
Government Leaders Conference
March 27, 2001
MR. BALLMER: It’s my pleasure, certainly, to have the great honor of addressing the group that is collected here today. This conference, we have conducted it now for a few years. And every year I am impressed and excited about the level of discussion and dialogue that we have, not only on important technology topics, but really, really fundamental issues about how technology can help governments improve the way they run, governments can improve the interactions that they have with their citizens, and governments can improve the
— or can stimulate the level of interest and excitement in the citizens in getting involved in the computing world.
It is certainly now common wisdom that one of the great sources of economic boom and prosperity and jobs and advancement in productivity has come out of the computer and IT sector. And so it’s a fundamental question for all governments to decide how to really do the most to stimulate that kind of prosperity and productivity inside their own countries, states, et cetera.
I am very appreciative and thankful for the time that you’ve spent with us. Many people in this room have traveled a long way. We have tried to use your time well. And hopefully if you go home with just a few new thoughts, a few new ideas, things you want to try, think about, do, people you want to follow up with, to better develop some of the plans and thoughts that you have, we will consider that certainly a success.
Microsoft is a very different company than the company I joined 20 years ago. Twenty years ago, we had offices in one state, I can’t even say one country, we had offices in one place in the world. Today we’re a global company, offices in almost 60 countries, and certainly we’ll look forward to following up with many of you on key ideas that were stimulated here at this conference.
What I want to do as we kind of wrap things up is a couple of things. First, I want to try to summarize what I think we’ve been talking about the last couple of days. Hopefully stimulate one or two ideas in there about why Microsoft, why Microsoft can be an incredible partner for you as you attack the e-government possibilities and opportunities that are in front of you, and then I want to have a chance to take your questions, your thoughts and your comments. So we will have definitely a discussion and question and answer session as I wrap up.
The most important thing I think we’ve tried to highlight here today is the real opportunity presented by focusing in on being an e-government. An e-government is a government that can move quickly, that can respond, and has, as we say in English, an agility to it, a flexibility, a quickness of reaction that is very important. An agile government is able to focus in on what really matters, communication with, and services to the citizens that it serves. An e-government, an agile government, a flexible government, isn’t a government of islands, despite the fact that that’s the way government grows up. There are many processes in government that are far better delivered if there is a connection point across the government, a common approach, whether it’s the business licensing, criminal justice, government contacts, voting, public discussions, et cetera.
Microsoft has grown up as a company that focuses on what we call knowledge workers, people that deal with information every day for a living. It’s funny, we talk about manufacturing organizations, and a variety of other kinds of businesses, but a government is an organization almost 100 percent filled with knowledge workers, people who work with information, every day in their lives, and really working with you to give your employees the flexibility, the information, the agility they need so the government really is represented by the people who work for it, and those people need to be empowered with right kind of information.
And last, but not least, an agile government, a flexible government is one that can move quickly when we discuss with you the kinds of projects, some of the ones that were discussed, the UK Government Gateway, the Swiss Census Project, these are not projects that disappeared into five-year development cycles, and hundreds of millions of dollars of costs. These are projects which move quickly to marketplace, and they had their successes, they had their points where the government had a chance to learn more, but you’re constantly in the loop of moving, learning, improving, in a very positive, virtuous cycle. And that really is the focus of our company, to give you the tools to focus on the flexibility and the speed of implementation that you need to be an agile organization pursuing these e-government opportunities.
We talked about a number of the technological changes that will allow you to stay or increase your agility, your flexibility. I hope everybody leaving this room, even if you’re not sure exactly what it means by the end of this session, I hope everybody leaves thinking there’s a thing called XML that’s going to happen, and it’s going to change the way information technology works in a very positive way. And certainly our company is building off of this XML revolution. And it will be a revolution, as Bill Gates described in his remarks yesterday. We’re trying to build off of that our own platform, .NET, which will let you, in an open and flexible way, implement business processes with a speed and flexibility that was unheard of before. It’s a technology base that will let you integrate your work and let you integrate what you do with the citizens that you serve.
Our software has to focus on giving you that agility, building off XML. We have to succeed in delivering this .NET platform that we had a chance to talk to you about. And we’ve got to make sure hat the systems you can build with those things have the kind of reliability and scalability that you need, and depend, and deserve, in the systems that you implement.
I think particularly in the government context, it’s also important for me to reinforce our commitment to doing the absolute best job possible on the security and privacy front. I had a chance to sit down with a number of customers today, and every one of them, almost to a person, emphasized again and again the importance of security, the importance of making sure two things happen. Number one, that we give you the tools to authenticate and to authorize access to any piece of information in the government, and to do that with 100 percent predictability. And I think we are in very good shape in terms of our ability to serve you in that regard.
The other part of this security and privacy issue is the ability to give you tools that make it easy for you to give your users the flexibility to partition up and manage that information. Maybe you want to make some information public and some private. We have to make sure it’s very easy for you to do that in the right way with the right kind of flexibility.
Our company has really focused in on this notion of speed. And certainly, as you see us embrace XML, and you see us introduce more and more members of our .NET family, Windows XP a release coming later this year, our BizTalk product which is in the market, our VisualStudio.NET product, you’ll see us focus in on building in new capabilities which let you move faster to realize your vision.
Microsoft is a company that prides itself on really being a long-term thinker, and a long-term participant in the growth of — and the benefits that come from — the information technology industry. We’ve really been a pioneer on a variety of Internet standards. We think of ourselves, maybe not as an owner, certainly, but as a real inventor of XML and some of the important standards that go along with it. We reinvest almost 20 percent of our revenue back into R & D. This year alone we will spend almost $4-1/2 billion in R & D. I think there’s only three companies now in the world that spend more money than we do on research and development. We try to invest aggressively to support education, whether that’s through lower prices for educational institutions, philanthropic giving top educational institutions around the world, allocating and dedicating some of our people’s time to training teachers, et cetera, to help promote computer literacy amongst the community that’s got to then turn around and tough the students of the world.
We’ve been a champion of intellectual property rights. Of course, we benefit when people, when governments properly protect software. We only get paid if people want to pay us. Our product is easy to copy. It’s easy to steal. But, even more important than protecting ourselves the key to a healthy software industry in any country, in China, in Mozambique, in Belgium, in the United States, the key to a healthy software industry, and therefore the key to a healthy information technology industry is the protection of property rights. We’re not going to see great Chinese, or Indian, or Belgian, or Italian, or whatever, we’re not going to see great software companies originate in countries in which their domestic markets are not excellent markets for them.
And last, but certainly not least, we’re very active around the world in helping to train the technical professionals, the software developers of the world to understand and embrace new technologies. I was asked once, when we move into a new country, what’s the first thing we do? We go hire the sales manager, what is it? The first thing we focus in on in any country we move into is building the infrastructure of people, of training organizations that know how our stuff works, that understand .NET, that understands Windows, that understands office, and can create a market and a supply of trained and educated technical professionals in every country around the world.
One of the keys for us and one of the keys I think for you, in terms of how we serve you, and how you can benefit from the kinds of technologies we’re talking about, is the way that we partner with a wide variety of third party organizations. Software development companies, systems integration companies, custom software development companies, these are the people that many government organizations particularly turn to for help and support. Many of these are big, global, strong partners, key partners to us, people like Accenture, and Avenade, people like Unisys and KPMG. But, many of these partners are also local companies, very specialized companies that focus in on government applications in Israel, in Spain, in Portugal. And in every country around the world we have a set of local partners who also help us serve the governments inside those countries.
These partnerships are key when it comes time to do a big project, when it comes time to redo a tax system or a customs system. We don’t have and we don’t specialize in having the systems integration capability to get that to happen, but we come in with partners like Unisys and Accenture, and we can give you a total picture of how that solution should get built, the Microsoft skin in the game, so to speak, which is we’ll be responsible for working on technology architecture, why our partners can focus in on the operations, the outsourcing, the application design, that’s absolutely critical to the success of these projects. So there is a diverse set of partners, but the investment we make in partners is fundamentally always local. The need to have people in every country around the world with these skills, and in every country around the world we have both global and local partners who focus in on these opportunities.
One area we didn’t spend a lot of time on in the conference, but I at least want to make the point and get you to think a little bit about, and particularly think about it in the context of UK Government Gateway, this notion of how you connect to your citizens, where you want to connect to your citizens.
I’ll use a couple of examples from the United States. When someone goes and buys a car, let’s say they want to but that car online over the Internet, they’re shopping over the Internet, they’re getting all the other information, maybe they turn to our CarPoint car buying site, shouldn’t they be able to register their car right there? I’m not saying we should build the logic for automobile licensing, but if the government has a back end engine as the UK government does, that can connect up any Web site to the transactional systems of the government, then it gives you the opportunity to open up and let third parties s build government interaction into everything they do. When someone buys a home, shouldn’t they be able to automatically go in and register to vote? When someone buys a car, shouldn’t they be able to license it, just as they should be able to buy insurance for it, and the like?
We are currently the proud developer of the largest consumer portal in the world. Our MSN property is used by over 200 million, 200 million people around the Internet, around the world, access the Internet through our MSN property. And we think there’s a unique opportunity for governments that do want to open themselves up for us to partner in exposing that to the citizens through MSN.
We did a detailed partnership with the Commonwealth of Pennsylvania here in the United States, where there was a lot of technical work back and forth, but we also made sure working with that government institution that we did more to expose their services through the natural stopping points for citizens on the Internet. People on the Internet all do one thing, they all read electronic mail. We have over 100 million people who come visit us every month to read their electronic mail.
I think it is very important for us to think about the kind of work we can do together in terms of the business world. We have an established infrastructure, great products, Windows 2000, SQL Server, products on which you can build the applications that are at the heart and soul of your business, the licensing applications, the healthcare applications, the student registry applications, the taxation application, the customs application. We have an infrastructure that lets you build those applications, and our team around the world stands ready to help you get those applications built.
With our Office and Windows products, we also build the tools that are very close to your workers, to the people who need to analyze and express themselves and communicate the information, and with virtually everybody in this room we have been involved in projects to deploy PC infrastructure and Office productivity software infrastructure to all of your employees. And we think that is also a great, great opportunity.
I hope by the end of this conference you certainly have a sense that this is not an area in which Microsoft is starting from scratch. We have strong products that can help enterprises do e-government. We’ve tried to share with you a number of cases, the work that we’ve done with the Swiss government on census applications. The work that we’ve been doing with the Dubai Ports and Customs for just-in-time freight transportation. I visited Dubai in 1998, and even in 1998, we already were hard at work with the Dubai Customs on this very important application. Customs revenue is one of the most important revenue sources to the government in the United Arab Emirates.
With the United States Housing and Urban Development, we’ve had projects to give citizen access to building and environmental information for any neighborhood. So, if you’re a citizen and you want to know is this apartment building, what are its characteristics, does it have problems, has it ever had, heaven forbid, asbestos, there’s a mission-critical application from the Housing Authority that has been built, and that we participated on.
This is just two or three or four of literally hundreds of applications, e-government applications, that our company has been involved with, and we are ready and eager with our partners to share that experience with you, not just in a two-day forum in Seattle, Washington, but at your offices, in your countries, where you really need it most, with the technical staff who needs to drill in and get up close with the details of these kind of solutions.
We think there’s a real opportunity here where we, and you, and our partners can come together and deliver on the e-government vision. We think there’s a real opportunity to work with you, quickly, successfully, and efficiently to build new solutions. We think most governments should at least have one or two projects that they’re working on that they showcase for their citizens, this is a model project, this is what technology can mean, so that every business, and every citizen in the country can say, ah-ha, I have it, I got it, and we’re finding more and more governments want to be that kind of model user of technology. We think we can help.
More and more citizens simply expect to do business with government online, as they are doing business with private industry online. We think we can help. Governments still need to focus even more on the protection of intellectual properties and the laws that go around that. We think we can help. And there’s certainly the case with technology at the heart and soul of continued innovation and progress in society and, again, we want to be a positive force in every country represented in the audience today to make sure that that really goes forth and happens.
A good partner with a long-term vision, some great products, and great willingness to help, that’s what we want to be, that’s how we want to participate, and we certainly thank you for taking the time and coming and visiting and talking with us, talking with your peers. I look forward to having a chance to meet many of you in your home countries this next time, and certainly our teams are eager, anxious and willing to help in any way.