Steve Ballmer: University of São Paulo

Remarks by Steve Ballmer, CEO of Microsoft
Sao Paulo, Brazil
April 28, 2010

STEVE BALLMER: Let me first start by thanking the director and thank the USP for hosting us all today. It is really for me a thrill to have a chance to be here, talk a little bit, get a little bit of feedback, questions, answer, maybe show you a couple things you haven’t seen before. So, I am honored for the opportunity.

I happen to notice up here upfront some of the Microsoft student ambassadors here at USP. Thank you all very much. If you’re ever confused about anything that has to do with us, find one of these fellas at the front. They look like, oh, fellows and ladies here at the front. It’s great to have some diversity in the Microsoft student ambassador group. (Laughter.)

I thought I’d talk to you a little bit about some of the things that are exciting to us from a technology perspective. There’s so much coming, so much that’s going to be done. And whether your field happens to be computer science, electrical engineering, some other field of science and engineering, or even the humanities, understanding and just having a glimpse of how much information technology is going to positively impact society, business, economy, jobs, is probably a reasonably good thing.

Small show of hands: How many of you are majoring or focusing in on computer science? Electrical engineering? Some other math and science field? Business? Engineering — I mean, law? (Laughter.) Something else altogether? Do we have anybody in something else? OK. Well, it’s just great to have the chance.

There’s a movie — there should be probably a movie made in the year 2010. There was a movie made when I was in high school actually with Dustin Hoffman called “The Graduate.” And in this movie there’s a scene, which if you’re my age is a famous movie scene. Dustin Hoffman just graduated from college, where some of you will be very soon I’m sure, and he’s preparing to get married, and he has to be with the father of the woman he is soon to marry. And the father looks Dustin Hoffman in the eye very seriously and says, “Son, I have just one word for you: plastics.” (Laughter.) What did that mean? So, we watch the movie, we find out that the whole future of the world as seen in 1968 is going to be determined by the new technology, plastics.

Well, here we sit in 2010, and for this group I have just two words for you: information technology. (Laughter.) That’s where the future is as we sit here in the year 2010.

And it is in a sense a weird and amazing thing. I started at Microsoft 30 years ago. The Internet was really invented 40 years ago, 50 years ago. It was first implemented in 1971. Actually when I was coming to college they had just installed the first of one of the nodes outside of the Department of Defense on what became the Internet.

And yet here we sit all these years later and we look out five years, 10 years, 15 years, 20 years, we see incredible innovation.

We use the word “the cloud.” Our industry likes to keep changing words. But the cloud essentially relates to the next generation way in which we connect people and information and devices together. That’s about what it refers to.

Technically you could say it’s the next generation of innovations that we’re going to see in microprocessors and the Internet, which have been these two amazing gifts that were invented that have created — or enabled, I should say, so much innovation.

Now, you’re saying, OK, I get it, I get it, the guy is kind of excited, there’s a future, blah, blah-blah, blah-blah, but just to bring it really clear so that you can imagine where I think the world wants to go, we have a little video I want to show you. And this is not one of these things where, hey, look, this video will never come true. This is a video of things I think are going to be possible within the next five or 10 years, and hopefully a lot of them will be powered by great engineering, great ideas that come from students in this audience at USP and, of course, from around the world. So, why don’t we roll the video, please.

(Video segment.)

STEVE BALLMER: Three years, five years. OK, some of it might take 10 years, but it’s not going to take any longer than that.

I’ll give you a way to — anybody watch a TV show — I know it’s on in Brazil — called 24 with a character named Jack Bauer? (Laughter.) He’s a terrorist fighter or something. When that TV show first came on, I was sitting watching it with my wife, and she said, oh, this is ridiculous, you’ll never be able to do the things with technology that this crazy Jack Bauer does.

She and I were watching it again this year, and she said, wow, all those things Jack used to do we sort of do ourselves now in our everyday life.

So, if you’re ever doubting we may see some of this stuff come true in the next few years, you ought to think, it’s just a little story to capture and take with you.

Certainly at Microsoft we’re investing in this future. Our company will spend about $9 billion in research and development just in the next year. There’s no company on the planet in any field that’s spending more. But we’re spending because we believe.

If you just go through some of the things that you saw in the video, just think about a doctor being able to use essentially a special camera that brings to bear information from the Internet with the medical image that he or she is taking a look at.

The girl in Thailand talking to a girl who speaks English via a virtual videoconference with real time simultaneous translation going on.

The ability to literally update the entire pricing structure in a store with a push of a button or tailor the price specifically to the customer who you’re talking to.

Science. Science. Just think about science. Climate, the environment, very much on many of our minds, and yet we do know the world needs to use more power. The only way for many people who are poor today to really have richer and better lives will be through the consumption of more power.

So, while we need conservation, we need great science to invent new materials, new ways of generating power that are environmentally friendly.

The fastest way it turns out to speed up scientific exploration is to use technology to model the real world in the virtual world.

So, all of these things are going to come about, and the key anchor innovation for the next several years is really this thing that we refer to as cloud computing.

So, I tried to define it a little bit, but let me give you a sense of some of both the opportunities and the innovations that must be created in order to have this vision come alive. And hopefully whether you’re a computer scientist or somebody looking to use information technology, these ideas will help you find your way forward.

First, before I get onto the specifics of the what, let me talk about the how. The more we use the cloud, the more we use the Internet, the more we change data and exchange it, and have people manage and get involved in the management of the world’s information, the more opportunity exists, the more opportunity exists for a software developer living in a small city in Brazil to create an exciting innovation and market and distribute it around the world, or for a young journalist all by themselves to create a blog, which gets popularity and which makes them money every year.

I sat down with the leading bloggers in Germany. Now, a blog is not as big a business as a newspaper, but for these bloggers they’ve gone from making nothing from their journalistic skills to making 100,000 euro per year. It’s an exciting source of opportunity creation.

On the other side it also creates a new set of responsibilities. With the information of the world in the cloud, the importance of security, privacy, data integrity, reliability, that all increases. And to me that looks as much as anything like a set of software problems, creating the next generation of technology that helps people protect the privacy of their information, if they want to. There are actually people, probably even some who are students, who will say, I would willingly tell more or offer more information about myself if I get better value, better prices, and better services. There’s other people in the world like me who just don’t want any of their personal information available to anybody. There will be innovation that enables that range of choices. Our industry will create it.

So, the entire commercial framework, not just for the software business but for all businesses which are essentially digital in nature — movies, music, software, books — the entire commercial opportunity set is going to change and create new opportunities in many, many different ways.

No. 2, the cloud learns and helps you learn, and take action. This is interesting. Today’s software, today’s information technology is static. It’s out there, you use it. Maybe a company like ours, we run some surveys, we collect some data, we change it.

In the future, many, many more times the cloud will watch what you’re doing, with your permission, it will understand what you’re doing, and it will get smarter about how to serve you; or it will watch what the entire world is doing, and it will apply that knowledge to serve you better.

A simple example: We’d had a spellchecking utility built into Microsoft Word for a long time. It’s very good, it’s very good. But it wasn’t cloud enabled. When we came out with our Bing search service, we essentially built a cloud-enabled spellchecker, because when you type into the search engine, one of the first things you want to do is have the search engine correct your spelling if it’s wrong. And now you have literally millions and millions of people misspelling the same words, we know that in real time, and the spellchecking facility is better. The cloud learns and helps you learn. That’s a trivial example.

Let’s go to sort of better examples. You go out five or 10 years from now, are we really, really like we do today, going to say search flowers and get back a bunch of links?

Or even more interestingly, I was recently trying to do a little research. You probably do this a lot for school projects. I wanted to understand health care, who pays for — I was trying to understand it in the U.S. It’s hard enough to understand it in the U.S., it would probably be impossible for me to also understand Brazil. But how do you understand how much money does health care cost per year, why can’t the U.S. government afford more, how much of it goes to older people, younger people, people who are near dying, people who are earlier in their lives? How much does the U.S. spend compared to other countries?

Today, that is many hours of searching. Tomorrow, through all of our innovation, I literally will say, “Show me health care spending per person by country, by age, by phase of life.” And the computers will all figure out what that means. They may give me five different answers — not five different answers but five different choices of what I intended.

So, this notion of statistics and learning, that’s a very new notion in information technology. We refer to that as machine learning, the machine statistically gets smarter every day.

We have some technologies built on that, but one of the interesting things is how does the cloud learn more? It can learn about you, it can learn about others. We even see, for example, the ability to learn from cars and trucks and buses.

One of the projects we’re doing now is working with one of the major transportation companies to embed cameras and sensors on their delivery trucks, so that we can get a constant update on what the world looks like, and feed that back so we are learning from sensor data about the world, buildings, new construction, new roads, et cetera, without having to in a very expensive way send people out.

So, the cloud learns and helps you learn, and hopefully actually take some action. When I type flowers five years from now, it ought to make it really easy for me to buy some flowers, not find a bunch of Web sites, and blah, blah, blah, blah, blah. So, learn and take action.

No. 3, the cloud enhances your professional and social interaction. When I’m not talking to students, I wind up spending a lot of time talking about professional interaction. How does a lawyer and a banker and a landlord and a tenant, how do they come together and collaborate on a new lease or a financing agreement? Today, they run around, they have meetings, they e-mail around lease documents that are always out of date.

I bet if I asked the rector about some of the things that we find in the legal system, I know it’s true in the U.S., there’s a lot of documents floating around, floating around. We need to improve that as a process.

In our personal lives it’s almost easier to see. We started with just phone calls. We added e-mail, text messaging, social networking, instant messaging. The world of how we communicate with one another continues to evolve and improve.

We have a technology now that we’re going to enhance the end of this year in our Xbox system. Our new Xbox system will have a camera and a microphone that sits on top of your TV set, and it recognizes you. You come into the room, it sees my face, it knows it’s me. Hi, Steve, what do you want to do today? And I’ll say, Hey, let’s watch the World Cup match. I know the final will have to be between Brazil and somebody here pretty soon. (Laughter.) For purposes of today let’s just assume it’s Argentina, just to keep it close to home. (Laughter.) I say, I want to watch the finals, Brazil-Argentina. And it says, hey, Steve, I remember that one of your good friends is an Argentinean; do you want to watch with your friend Paolo? And I say, sure. And it puts us together. We’re both watching the match.

When I start going, yeah, it shows that to Paolo. It doesn’t even have to show him — if I don’t want to — him to see how depressed I am, it might just figure that out and show him an unhappy face. (Laughter.) It can do it. I can yell at the TV. It’s just flashing that real time to Paolo in Argentina. And when finally Brazil wins at the end of the match, and I sit there, and boom, it will actually take a soccer ball and boom virtually kick it at him across the Internet — or across the cloud I should say. Enhancing your professional and social interaction. And some of this stuff is really within the next year or two years.

For purposes of today I don’t want to show you something in the next year, I want to show you something that’s coming in the next few months, and something that is quite popular here in Brazil. We thought we’d give you the first preview of the next version of the Windows Live Messenger software. Brazil is a particularly intensive IM and social networking culture, and so we thought we would do this special today. It’s the first time we’ve shown this stuff outside Microsoft.

Caralina from our team here in Brazil is going to join me onstage and have a chance to do a little demonstration. So, please welcome Caralina. (Applause.)

(Demonstration not translated. See online demo here.)

STEVE BALLMER: If the next few months are that good, just think about the next few years.

I want to give you just two more things to think about in terms of advances that will be enabled, and the first actually relates to the machines we use: computers, phones, TVs. They’re going to get smarter and smarter and smarter, lighter and lighter and lighter, easier to use, easier to use, bigger when you want them to be bigger.

The rector was mentioning that he wants to at some point take a look at this building because it’s been the same since he was a student here. And I guarantee you there will be a big digital screen. It will have the kind of technology that I talked about, it will be smart. It will be able to see you, recognize you, let you videoconference with others.

The devices that you saw in the video at the beginning, those are smart devices. We need the imagination, the creativity of hardware people, software people, application people to invent them.

This is one of my favorite new gadgets of the time. This is a Sony Vaio notebook. I don’t know if I’ll be able to show this precisely, but just so you get something of a sense, it weighs a pound, a pound and a half. It’s a full PC, absolutely a full PC, at a pound and a half. Try to do that with your notebook at home. It’s a little pricy right now, but the prices will come down certainly, and we’ll see more and more capability, full computer capability, lower prices, lighter in your pocket, on your lap, and in your living room.

The last thing I want to have a chance to talk about is kind of the underpinnings, the real technical underpinnings. The cloud is a place where we learn a lot about designing a new class of applications. The highest sort of capability applications in the world are actually Windows Live, Google, and Yahoo!, and now our Bing. They take more power, more datacenter, more computers, more storage, and more networking capacity, because they have more users than anything that was written before.

And from the experience the people like us who build the core software that you would develop on, and the core hardware that would be used to build the next generation applications are all changing.

Today, if you write an application, whether you’re one person writing the application or working in a larger team, you write your application, then somebody has to figure out how to install it on a bunch of computers, and then somebody has to figure out what to do when you want to add servers because you have more users, and then you want to update the software frequently, and then you want it to be used by people in Europe, but you really don’t want to have to buy more and more bandwidth, so you want it automatically running out of a datacenter in Europe. There’s so much complexity in the technical infrastructure relative to what we want to do in the cloud.

We’re changing the software to make that simpler, evolving, for example, our Windows Server product into the cloud.

The people who build the hardware, who used to build servers and then built racks of servers, are now building literally full datacenters that come in shipping containers. And not only is that a full datacenter, but in the old days you’d pay for these expensive fans and all of this expensive cooling equipment, which was all bad for the environment.

Now you just plug in a garden hose, just a small garden hose, and that is enough water to cool down this incredible shipping container full of storage, computing, and network capability.

That’s why I say the cloud drives server advances, and that’s also helping to redefine the cloud. The cloud isn’t just what we run or Google or whomever. You’ll also be able to think about my piece of the cloud, and how do I handle my piece of the cloud, how do I even go so far as to own my piece of the cloud.

So, there’s a lot of innovation coming around the gamut. At Microsoft we’re building a number of key products: Windows, Office, Windows Live, SharePoint, Windows Server, SQL, Bing, Xbox. But as we build all of these products, they’re all making the transition to the cloud.

We like to say internally on the cloud we’re all in. Every product is being engineered or has been engineered for this new world. We fully and completely believe.

And I fully and completely believe that this will also enable a new round of innovation in various fields, and a new ability for startup companies and innovators and entrepreneurs around the world to come into business.

There’s a lot of great technical talent here in Brazil. I was talking to one of the ministers in Brasilia this morning, and he was saying we’ve got such great technical talent, which I agree with, in our universities, but we haven’t had quite as much of the entrepreneurial startups as we would like to see over time.

In the world of the cloud the ability to build these businesses and scale them around the world will be much easier. And I expect to see a lot of fantastic work coming out of entrepreneurs here in Brazil. We have our own now small development lab working in some of the key fields I talked about here in Brazil. And certainly you can count on our company to be investing in training and technology transfer, in services, designed to support you and all of the software developers and consumers and businesses here in the country, and at the same time, given that we know there’s a digital divide in the world, we all need to contribute to help narrow that by investing in education, community outreach, to bring all citizens with us. That’s our belief at Microsoft across that digital divide.



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