Steve Ballmer: Vision Forum Keynote

STEVE BALLMER: Well, I am very excited — (laughter) — to have a chance to be here with you today. This is my third day visiting customers in various parts of Asia, and I have to say this was the most enthusiastic crowd I’ve had a chance to talk to. (Cheers, applause.) And I think in a sense I shouldn’t be surprised. It reflects the enthusiasm about technology and its future here in Taiwan.

So, it’s just fantastic to have a chance to meet with you all, to have a chance to share some views about the future, maybe look back a little bit with a bit of celebration of all the great accomplishments of our industry.

And when I say our industry, I mean our industry, because our industry has been led by incredible innovation coming from Taiwanese companies, and it’s certainly been essential to getting the ICT industry to where it is today.

When Microsoft got started, Bill Gates and Paul Allen talked about putting a computer on every desk and in every home. And I’ll tell you, we haven’t reached every desk and we haven’t reached every home, and that’s part of the quota for me and many of our partners here. We’re still going after every desk and every home — (applause) — and yet at the same time the opportunity to engage in, to innovate, to do even a broader set of things is amazing.

We’re sitting here today also at Microsoft celebrating 20 years of Microsoft being present in Taiwan. And if you look back and think back 20 years ago, what was our industry like? Twenty years ago, for all intents and purposes there was no Internet. Crazy! Twenty years ago, the first cell phones were coming to market, and they all weighed, I don’t know, 10 pounds. They were huge, they were unbelievably bulky. Twenty years ago, if you worked at Microsoft, you would remember that Windows was a failing product that might never make it. That was 1989. And 20 years ago, though, the center in some senses of the computer hardware industry was already here in Taiwan.

So, some things have evolved and changed, and certainly as we look back, you say, wow, so much has gone on; are the next 20 years going to be as exciting and dynamic and bring as much new innovation as the last 20 years? And if no other point in my speech comes across, the next 20 years, better than the last 20 years I tell you. We have so much we can do, so much.

And particularly with the economic crisis and blah, blah, blah, people can get sad, depressed, and I think we have to recognize we are in sort of an unusual financial time, but from the information technology industry point of view the chance to provide innovations that are going to help drive the way people work and live, that will drive productivity and innovation that powers GDP growth and job growth, that’s an amazing opportunity.

Some people have asked me, they said, can your industry really still do it? I mean, the computer was basically invented about 60 years ago, 1949. Very few industries can continue to surprise and amaze people with their innovation after 20 or 30 years. Even the automotive industry that did amazing things in the early 1900s and then after 30, 40 years it faded, and now it’s trying to reemerge.

Our industry I guarantee you and I guarantee if you talk to any of our partners here in Taiwan, the next five, 10, 15 years, it’s obvious we need to teach computers to recognize your voice, your image, what you mean, what you want to do. So much is going to continue to evolve and change.

And so I will talk a little bit about how we get there, and the key technology shifts and advances, but the next 20 years are going to be fantastic, and the opportunities for companies here in Taiwan and around the world that seize both the hardware and the software opportunities are really going to be quite amazing.

I’ve managed to talk for almost six minutes and I haven’t mentioned three screens and a cloud. (Laughter.) And now I’m quite sure that’s what I’m supposed to do, so let’s try to now move ahead.

One of the most important things for all of us in the information technology industry is to recognize, anticipate, and drive the key transformations in our business. There’s a lot of innovation, but from time to time in our business there’s a major disruption, a new technology that is more important, has more pervasive impact, where there’s a fundamental change in the way hardware gets built, software gets written, and applications get used by real people. The PC was such a change, the Internet was such a change, client-server computing was such a change.

The change that is upon us now will be as profound as any of those, and we choose to call it at Microsoft “three screens and a cloud.”

I don’t know why we use that expression. I gave one speech and everybody kind of likes it. Sometimes I think to myself, it sounds like “Three Men and a Baby,” which was a movie that came out maybe 20 years ago in the U.S. and maybe somebody had that in their mind when they said three screens and a cloud.

But when we say three screens and a cloud, we’re really talking about a transformation in a number of senses. One, the world of Internet computing and corporate data center computing are going to come together. That’s what we mean when we talk about the cloud. Public clouds, private clouds, you’ll hear about cloud, cloud, cloud, but we’re talking about those phenomena coming together.

Number two, the world of computing has really been centered in the PC, PC screen, and people now want to participate in the world of information and computing on big screens, which sometimes we call TVs, and small screens, which sometimes we call phones.

The truth is this is a large screen. We’ll meet here 10 years from now, that will be a large digital interactive screen. It will recognize me. When I go like this, it will advance the slide, because it will have a camera that recognizes that means next slide, instead of me putting down this clicker and I continue to use it.

So intelligence is going to come to all of these devices, and how do you build programs that come from the cloud, that have the security and protection and privacy of a private data center, but have the kind of global scale and availability of the Internet? How do those things come to not just the PC but these other devices?

And don’t think these are dumb devices. These devices are going to get smarter. The cloud is not about thin computing. What we all know is the users, the real people are going to insist that these user interfaces continue to get smarter and better about knowing them, recognizing them, working on their behalf.

So these are smart devices talking to a smart cloud. In fact, these devices need to get even smarter. They can’t just be a keyboard and a mouse; they have to be cameras and voice and video recognition, natural language and speech recognition. Those are technologies that need to come to these devices.

When you read in the newspapers that the world is going to thin client computing, not only is that wrong, but no place in the world — there are only two places, three places in the world that really matters: Redmond, Washington, our headquarters; Santa Clara, California, and Taipei. That’s where the three smart screens are going to get invented, pushed forward — oh, and there will be other players in other parts of the world, but we believe in the power of the rich client, as do our partners who are inventing the future of these smart devices.

And so we talk about three screens and the cloud; it’s the new paradigm. An application that can deliver from the cloud to a world of devices, and use a much richer what we call natural user interface. It would be natural for me to be able to say, “next slide,” and have the computer recognize it. It would have been natural for me to be able to say to my computer before this trip, “Get me ready for my trip to Taipei.” I say that to my secretary, she knows exactly what to do. I say it to my computer; maybe it will go do an Internet search and manage to find out that Taipei is in Taiwan, but it’s not going to solve the problem of bringing me my schedule, the customer records, the briefing documents. And yet we are developing software that is getting smart enough to recognize what you mean just the way a human being would, and that’s part of what we call the natural user interface, a computer that learns from you, that understands with you, that grows with you, three screens and a cloud.

In this environment from the consumer’s perspective and the business perspective, not the technologist, there’s going to be a number of things that change and evolve. The way we think about productivity, business productivity, student productivity, scientific productivity, teacher productivity, doctor productivity, that’s going to change, because our ability to get the right information to the right people at the right time is going to continue to be enhanced and improved.

Creativity: More and more of what we want to do to express ourselves, we express ourselves on the computer. We write e-mail, we create Web sites, we blog, we create our own videos and publish them to our friends. We need to enhance creativity in these scenarios.

The way we communicate and collaborate — I’ll admit we are having an old fashioned meeting today. I always love coming in Taipei, but I hope 10 years from now, if I was available on a large digital interactive screen, I could see you just like you were here and you could see me just like I was here, but I was home in Seattle — (laughter) — ah, you laugh but that’s the future of what will be possible. Even if we’re still visiting, we have to talk about how we transform the way we communicate and collaborate.

The way we socialize, it’s great to meet with people, but it’s not always possible. This is a big week in the United States: World Series baseball. (Laughter.) I’m traveling the world. I woke up this morning in my hotel room. You know, my sons, they’re going to watch the World Series baseball game. I’d like to watch with them from my hotel room. Can’t do it. Can’t just turn the TV on and talk to them. That’s going to be possible in this world of three screens and a cloud.

The way we consume media, books, newspapers, music will continue to evolve.

Ten years from now, there will still be traditional media companies, but we’ll be consuming media in totally different ways.

Barry and I are always talking about what is the device that you can carry with you that really would be as good as the newspaper is today, but have all the world’s information and video, all of it available to you right there in your digital hands that’s convenient and flexible for consuming media.

Games: We think of games as for teenage boys primarily today, and yet the ability to amuse and provide interactive opportunities for older and younger people, for men and for women will continue to grow.

Search, research: I think a lot of people have a hobby to learn, people like to grow, study new things. In this world of the Internet and three screens and a cloud, that continues to get easier and easier.

Small story: My last name is Ballmer. My father is an immigrant to the United States from Switzerland. I wanted to know what does the name Ballmer mean. So, in the old days very difficult; in the new day I did an Internet search. Then it turns out I made a speech where I explained what the name Ballmer meant. Then I got e-mail from a bunch of people around the world who disagreed about what the name Ballmer means. (Laughter.)

But in another world I would have no ability to do that research, to learn, to grow. It’s fun, it’s interesting. I gave you my personal example, but we all have our own personal examples.

And yet today things are still too hard to find. It’s still too hard to compare, to look and compare various categories on the Internet.

We have a new thing we’re doing in our Bing search engine that we call visual search and visual galleries to try to help make life easier when you want to get information and then compare and understand things, which is common.

And obviously people continue to want to do research and then commerce, buy things, pay for things. You can say we’ve already achieved that goal, and yet there’s still a lot of transactions that don’t happen digitally.

So in this world of three screens and a cloud we should focus in on the underlying technology, yes, but we can’t forget what the consumer expects from us in this world.

Our commitment is to invest in a variety of ways. Our company is investing in the software for the PC, the phone, the server and cloud, the TV set. We’re investing in some of the core scenarios and applications. We’re building off of the popularity of Windows PCs, 1 billion Windows PCs around the planet, the popularity of Windows Servers, and yet there’s so much more to do.

The heart of what we will invest in is R&D. Our company will spend $9.5 billion in R&D this year, more than any other company on the planet, and we will spend that so that we can give you innovations like our project Natal camera that recognizes you, so that we can give you products like Windows 7, so that we can bring to market the next generation of cloud technology which helps you integrate the Internet and the data center technologies. We will invest because we have faith and confidence in the opportunities to innovate that I described.

Taiwan is a leader in the innovation we’re talking about. I said it but now is an important time. In a time when business is a little tougher, we all have to remind ourselves of these opportunities. And I particularly speak now to our partners here in Taiwan and I say, let’s keep driving this together.

If you look over here against the wall, you have from our partners doing business, making computers, producing computers, designing computers, selling computers; you get a range of innovative hardware that people are bringing to market, and you can just go over afterward and look. And this is just a segment of the innovation. We’re not even showing you some of the things that are being done with PC technologies today to change, to revamp the way people watch television and play games. You should look at some of the great work coming from companies here in Taiwan.

Over the back wall we show you some of the next-generation Windows smartphones, powered and running on incredibly exciting hardware and software designed by our partners here in Taiwan.

This country is a leader. Keep investing, be patient, stay persistent, I say to our partners, and not only will the country continue to lead, but our industry — I think the gentleman from DigiTimes said it very well when he was doing the introduction, we wouldn’t have low-cost, high-availability computing today if it wasn’t for the work of companies in this country, and let’s keep driving the three screens and the cloud together.

I’m going to spend just a minute now talking a little bit more specifically about the cloud. I’ll try not to get too technical, but because I’m in Taiwan, I will feel like I can be a little more technical than I would in any other country, because we have so many people who care about these kinds of innovations.

When we talk about the cloud, one of the first questions people ask is, how is it really different than the data center? You buy a bunch of servers, you put them together; that’s a traditional data center. The modern technology of today is to then go virtualize that data center, to enable the hardware to be used much more cost-effectively, to drive higher availability.

But as we think about the world of the future and the world of the Internet, when you look at Web sites like Windows Live or Bing or Google or Yahoo!, they’ve actually been designed not to run on individual servers, but really to run on collections of servers. You think from the start of managing a whole workload running anywhere in the world as opposed to designing an application that’s really focused on a single machine.

And so when we talk about the cloud, we’re talking about reengineering the way the operating system works and the way the application works so that from the start you can write an application and it can run just as easily on 5,000 machines in four different geographies as it can on one machine in one data center. That’s Internet meets data center computing. That’s where the security that we expect in the data center meets the kind of availability we expect on the Internet.

Now, mostly when the world talks about cloud computing today, we talk about services that are run on the open Internet by companies like Microsoft or Amazon or other competitors.

We also need to facilitate what we call private clouds, so that if you’re a bank, you can have your own cloud with your own technology. If you want to be part of the public cloud you should be able to, but if you have data that you want to keep even more confidential and secure, we need to provide that same underlying technology.

So, as we talk with partners here in Taiwan, we’re not just talking about designing machines that can be bought by Amazon or Microsoft or somebody else, but really designing almost a box that you can deliver to a customer that is a cloud. The box isn’t going to be as small as a server, could be as big as a refrigerator, maybe it needs to be as big as a shipping container, but a cloud will come in a box, and it’s important that that cloud be able to participate and share with other private clouds if it wants to, but it’s a fundamental change to hardware design, software design.

These things are being designed from the start to be very power efficient, which is super important relative to the global climate issues that we face today, super cheap to run.

We think once you buy a private cloud, you plug in the electricity, you plug in the Internet connection, and you walk away from it. Not a lot of people, not a lot of management and administration; you throw them up where they make sense, where power is cheap and available, where Internet connectivity is good.

So the cloud is the future, and yet there’s still a spectrum between the cloud and the way we think of today’s traditional data center.

Let me just transition to a few more remarks now in general about IT.

I hope my enthusiasm for the future of our industry, powered by three screens and a cloud, is clear. I think the IT industry is going to be fundamental in its ability to create productivity enhancements and innovation in all industries, in government, in health care, and in education. But the IT industry itself is going to continue to grow.

According to a study done by IDC, an industry analyst group, they think that there will be in Taiwan alone between now and 2013, 71,000 new IT jobs created, 600 new startup companies, and there will be a growth in IT spending of about 2 percent in a world in which maybe GDP will be growing 1.3 percent per year.

The Microsoft partners we think will have 162,000 jobs, just the partners of Microsoft here in Taiwan.

So, we’re optimistic that not only will our industry create value elsewhere, but that our industry will create jobs and growth and opportunities for entrepreneurs, for startups, and for employment, which I think is incredibly, incredibly important.

Certainly I see a very bright future ahead. We’re investing in that future, we believe in that future. We know that there are many, many companies here in Taiwan who share that vision, who share the enthusiasm, who say, hey, look, when we all get together again in the year 2019, and we look back and we say, wow, how has the world changed, look at what you can do with technology, you’ll pull a device out of your pocket, immediately it will lock in on and use the screens and technology of the world, we’ll say, do you remember how crazy it was in 2009 when we were sitting in the audience with our pencil and papers making notes? We now have our light and thin interactive screens.

You’ll have these guys who take these videos — there’s always a guy taking a video now when I make a speech. Ten years ago, nobody watched the videos. (Laughter.) Today, because of the Internet, people watch them a little bit. Ten years from now, you’ll just make a note on your little interactive digital screen, one of your three screens and the cloud, and as soon as you make your note, “Steve wasn’t making any sense here, can you take a look at this, JT,” boom, it will immediately broadcast that to whoever you want it to, it will take them directly to the PowerPoint that was up, it will take them to exactly the point in the video that I was speaking, they’ll iterate back with you. Then I know these video guys have good jobs where really we’re taking advantage of technology to transform the way things work.

So, 10 years from now when we’re together we’ll look back and say, hasn’t our industry changed, hasn’t this vision of three screens and a cloud been important, and hasn’t Microsoft, in conjunction with its partners in Taiwan, really been critical in driving it forward and moving it forward.

So I am incredibly excited, and so as part of that then today, to invest in that future, to drive that future, based around three screens and a cloud, we are announcing and signing a letter with the Ministry of Economic Affairs, to open a new Microsoft Software and Services Excellence Center here in Taiwan.

The focus of the center, three screens and a cloud. (Applause.) Because we need the capability to really work with the ODM partners, the OEM partners in Taiwan on what the devices will look like, not only the screens but the cloud. We need the capability to work with partners here not only on the hardware but also on the software.

When I met with the president earlier today, he was remarking about how important it is to get to what I guess he’s calling “intelligent Taiwan.” In an intelligent Taiwan there’s got to be a focus on software and services, which the cloud can enable, just as there’s been a focus on hardware and manufacturing and hardware innovation. And Microsoft wants to be a major participant in driving those technologies with our partner companies here in Taiwan.

So, we announce today the opening of this new Microsoft Software and Services Excellence Center in partnership with the MOEA. We’re very excited about it, and it represents part of our commitment not only to Taiwan but we know if we really want to drive three screens and the cloud, we’re going to need your help in making that a reality.

Thank you all very much. It’s been my pleasure to be with you today. (Applause.)

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