Remarks by Steve Ballmer, CEO, Microsoft Corporation
May 19, 2008
STEVE BALLMER: Well, thanks. It’s an honor and privilege to have a chance to be here with you today. I want to say thank you for taking time out of your busy days to join us here for this launch event.
We did the first of our Windows Server 2008 launch events on February 27th in Los Angeles as we bring this new wave of products to market, and I had a chance to participate there. I’m doubly happy to have a chance to participate here in Budapest.
We’ve had incredible customer feedback on the products that we’ll be talking about today from developers and from IT people literally around the globe.
The Vision of Dynamic IT
The key, the thing I want to really help you understand today is kind of the vision we see for information technology and for the IT organizations in business, and then I want to really help you understand how these three amazing products — Windows Server 2008, Visual Studio 2008, and SQL Server — really come together to help in the development of that vision.
The vision we talk about for IT is quite simply Dynamic IT, dynamic, and you could say, well, what does that mean, that’s very simple, that doesn’t say very much, and yet I think we all are aware that perhaps the number one point of discussion between most businesspeople and their CIOs really centers in the ability for IT to really keep pace with business.
Something changes, the company wants to roll out new products, somebody wants to change a business process at the supply chain, people go to the CIO and they say, that will take us a year or a year and a half; that’s a frustrating situation both for the IT organization and for the businesspeople.
So, this notion of being more dynamic, being able to be more flexible, to move more quickly I think is a key attribute.
The flip side of being dynamic is also be cost-effective, since certainly businesses around the globe are not prepared to fund dramatic expansions in the IT budgets in most organizations. So, a company that is really dynamic in its IT environment will both be very cost-effective and very efficient, and at the same time be able to be very responsive and fast moving.
We see a spectrum of companies in the world that are at various stages of maturity in terms of embracing and being effective in realizing this vision of Dynamic IT.
You have some companies that I’d call relatively basic: IT is a cost center, they certainly have moved many manual processes to be digitized, but they’re not getting valuable information, they’re not very standardized, they’re not very efficient.
In standardized IT organizations you certainly see stronger central CIO figures in these companies, in these organizations. There are standards and policies. There are not the same kinds of issues with not only just cost but also in terms of security and reliability and backup. There’s generally standardized policies for management in place, a good, strong, integrated directory, typically our Active Directory product.
And then thirdly, you get to organizations where they’ve made even more improvements, where literally a lot of the IT processes themselves have been automated: zero touch deployment of new applications, really fine security policies that never lead to much in the way of break.
But all of that still doesn’t get us to the right-hand side of the slide where people want to be, Dynamic IT, where not only does IT deliver great security at great cost with great standardization, but IT is able to really respond and move quickly to unlock new business processes and to unlock business insight.
So, as we talk to you about what we’re trying to do with our product line, we’re talking to you in the context of helping all of you as technology decision-makers and CIOs drive to the right-hand side of the board. That’s where people need to be and want to be, and I think the products that we are launching today really should help you get there.
Three products — Windows Server, SQL Server, and Visual Studio — all in their 2008 incarnations, and all of these products were born from this vision of Dynamic IT. They are all different. They each have a list of new innovations as long as my arm, and I’ll share some of that with you. It’s a very rich and impressive and deep product.
But they share not only the vision of Dynamic IT, but across the three products we focused in four areas that should help each of you move down the path towards Dynamic IT.
We tried to build a secure and trusted foundation in, and make it very hard for people to do anything other than deliver these products in the most secure fashion, that helps move you from basic to standardized in terms of Dynamic IT.
We’ve made virtualization a basic part of all of these product lines. What that means is the cost savings and management benefits of virtualization are now becoming much more widely available at much more low prices, since virtualization grew up as something that was very hard to implement and very expensive, and we’re making it cheap and easy to implement, allowing you to drive standards in terms of the way you manage environments and take cost out.
Number three, Web and developer productivity. Part of what it really takes to be dynamic in IT is to have software developers be able to build new solutions very, very rapidly, whether those are for the Web, facing your customers, or those are the applications that you build and use internally that empower your own employees.
And last but certainly not least is business intelligence. If we’re really going to realize a vision of Dynamic IT where IT is a strategic asset, we need to all enable the people who work in our companies to get more data out of the information that lives inside these IT systems.
How Windows Server 2008, Visual Studio and SQL Server Drive Dynamic IT
The number one frustration point I still hear from chief executive officers is that there’s information that they want and cannot get.
We had about 100 CEOs from some of the biggest companies in the world in Seattle last week. We had the CEO of Wal-Mart, we had the CEO of BBVA, one of the big European banks, we had the CEO of Siemens, we had the CEO of Coca-Cola. As we talked about IT matters together, they weren’t actually talking about cost, they weren’t talking about virtualization; what they wanted to talk about was how do they get the information personally to do their jobs, how do they get better insight on the screen every day in terms of what’s going on in their organizations.
The CEO of Siemens went so far as to say, as a new CEO coming in from the outside, his biggest, single biggest issue is driving culture change through shared information, shared dashboards, shared business intelligence. It just gives you a little bit of a perspective on how important this is.
So, these products drive the Dynamic IT initiative in these ways.
If you take a look at the new products — Windows, Visual Studio, and SQL Server — in terms of a secure and trusted foundation, we’ve done work to harden the core Windows platform. We’ve done work inside of Windows Server so that you can lock it down and make sure it’s only used for exactly the roles you intend, which reduces its surface area from a reliability and security perspective.
We’ve done a lot of work there in IIS, in the domain controller. We’ve extended the capabilities for availability. In SQL Server our new high availability clustering technology, data mirroring, resource monitoring and governance.
From a compliance perspective we finally have built in our Network Access Protection, or NAP technology, which makes sure that you can check and enforce policy on anybody who visits your network before you give them access to other network resources.
We’ve improved your ability to create security context that lives between your own company and your trading partners and your vendors through federated rights management.
Each and every one of these technologies both improve security and gives you greater control over who inside and outside your companies you want to participate in an information sharing dialogue with, and these are just some of the capabilities that take security and trust to the next level.
With the launch of Windows Server 2008 we also launch our so-called Hyper-V technology, which is our new virtual machine technology.
People have asked in the IT industry, we’ve had a virtual server product, but certainly EMC with their VMware product has been very active in the market. VMware is a great product, but it runs on less than 5 percent of all servers. It’s very expensive, and the management of virtual machines is separate from the management of everything else in the datacenter.
What you see us do with the launch of Hyper-V is really bring virtual machine management and what we call server virtualization together with other technologies like our Terminal Server product, which has helped virtualize screen sharing; our SoftGrid technology, which allows you literally to set up applications on a server to the point where somebody on a desktop can just click and start using them instantaneously by having them come down and be distributed virtually off of the server, and all the way through desktop virtualization.
You say, what does this have to do with Dynamic IT, Steve. Dynamic IT is about more effective cost management in part. And the notion of virtualization, virtualization is designed to let you use hardware resources in more flexible and more cost efficient fashion.
The only way you’re going to do that is if virtualization itself is inexpensive, and if you can manage and control virtualization technologies with the same tools that you use to manage and control everything else.
With our Hyper-V technology and the way we’ve implemented that, and the management tools in our System Center management system, which work with all of these new products, we think you’ll find this to be the most affordable and most effective way of driving Dynamic IT through virtualization.
Third, Web and developer productivity — Web and developer productivity. At the end of the day, really customizing and building solutions is in a sense a lot of where businesspeople in your organizations intersect with you. They want to say, how do I get our new Web site up, how do I put up the new application for tracking customers, how do we change the customer service and support process.
And the work that we’ve done not just in Visual Studio and our development tools, not just in Expression, which is our new rich screen design tool, but also in Windows Server and SQL Server themselves, we’ve enhanced the platform to make it easier to build and operate these applications.
If you want to write an AJAX application that runs in the browser inside your company or in your customers, there is no better set of tools than Visual Studio, there’s no better place to run that than Windows Server.
If you want to take advantage of next generation presentation technologies through Windows Presentation Foundation and what we’re doing with Silverlight, our Expression development tools, our Windows Server is the best place to do that.
We’ve innovated in the way you build database applications with something we call LINQ to make it much easier to write applications and access data directly from in tools like Visual Basic or Visual C++, and have those applications really be rich in their use of the important data in your environment.
So, a lot of technology here. I’d say if you visit the blogs, so to speak, on the Internet, a lot of the biggest excitement that you’ll see about this wave of products is in the work that we’ve done to make it easier for developers to build new applications.
Business intelligence: When we talk about business intelligence, you can almost talk about it at three levels. Level number one is do we give people the tools that they need personally to dig into and analyze numbers and information. That’s what Excel was born to do. Excel is the tool that most users understand for helping them dig into numbers.
So, there’s really two issues then. How do we help people participate with others and share information with others from the bottoms up, and how do we take information that is locked in corporate systems and allow people to get access to it with the kind of tools like Excel that they understand?
We’ve added to our product line. For ad hoc collaboration around business intelligence we’ve innovated in our Office SharePoint Server product. For providing you as organizations with the tools to provide people with scorecarding and budgeting and reporting applications we’ve brought to market our PerformancePoint Server product.
All of this runs on top of the new business intelligence infrastructure that we’ve implemented in SQL Server 2008.
We’ve improved its analytics, we’ve improved its scalability, we’ve improved the ability to put together data marts and data warehouse. We’ve improved the integration between Excel and SQL Server. We have improved our reporting and analysis services to support this vision.
Ultimately, what does our goal have to be? Our goal has to be that nobody — nobody feels like they can’t dig into, from tools they understand, the information inside a company to get the important insights to make the decisions that they’re charged to make.
Each of the products individually is actually, as I said at the beginning, rich in capability. They all focus on Dynamic IT, security and trust, virtualization, business intelligence, and developer productivity, but just look at some of the technologies that we’re pioneering in each one of these releases. In Windows Server we have our new virtual machine technology, a dramatically improved version of our Internet Information Server, which makes us far — I think puts us far ahead of the work in the Apache organization, new management and security technologies.
I don’t even have time to talk about it today, but we’ve built a new command line scripting shell called PowerShell, which really builds on — we learn and build on some of the themes from the UNIX world to create an even more powerful scripting and control and management environment.
And in SQL Server you can see policy-based management, new encryption, higher scale, database mirroring, some of the business intelligence technologies and the list goes on.
So, these products, which were several years in the making, are all very capable, and while I may have talked about four big themes, I think for many of you and the people who actually do the work every day in your organizations, to build and implement and operate IT solutions you will find these very, very compelling new products to evaluate and to adopt.
We have a lot of customers doing leading edge work in production already today with these products, obviously some customers here in Hungary, (Kasson, Major Bosta, OTP Bank); Citibank is an example of a customer outside the country.
At OTP Bank they’ve done a bunch of work with Windows Server 2008, which is in production. Kasson is a software vendor here that has actually built products and has them in deployment with all three of Windows Server, Visual Studio, and SQL Server. The Hungarian Post is using Hyper-V in production. And Citibank is using some of our new Dundas chart technologies based on SQL Server in their business intelligence solutions.
So, just some customers here locally and around the world that you can talk to, to get a sense of how people are benefiting through these products and really are better able to participate in this vision of Dynamic IT.
These products are certainly not the end of the road; there’s much more coming. These products, Visual Studio is in market, in production today. So is Windows Server 2008. We will release SQL Server and Hyper-V this summer. We have a version of Windows Server focused in on the scientific and high performance computing market coming in the fall. And then specialized implementation of these technologies for medium and small business, so-called Essential Business Server and Small Business Server, towards the ends of the year. And for Web-based applications we’ll have a new version of our development runtime Silverlight also coming in the fall.
Microsoft is a company that spends over $7 billion a year in R&D. Most of that is very generically spent on these kinds of products, the core foundation products and applications that are used to build applications, manage applications, and deliver business functionality.
We talk about our mission as a company is enabling people and businesses throughout the world to realize their potential. And for businesses we talk about enabling the People-Ready Business, the business that really does value people as its number one asset. But the only way to get there, the only way to deliver on those dreams is with strong underlying technology that really permits all of you to drive your organizations to be Dynamic IT organizations.
I thank you for your time today, I thank you for your support and for your business. We have time now for question and answer, and I’ll look forward to hearing what’s on your minds. Thank you again. (Applause.)