Remarks by Steve Ballmer, Chief Executive Officer
Issy les Moulineaux, France
October 7, 2010
STEVE BALLMER: Well, thanks. It’s a great privilege to have a chance to be here with you today. This is my third visit now with Microsoft Days in France, and I’m excited to share some thoughts with you, and hopefully some ideas, and technologies that you’ll be interested and benefit from using very, very actively.
I’m going to try to share a little bit of a vision of where we are, and where we’re going. And I want to anchor the discussion today really in this notion of the move to the cloud. I have a lot of opportunities to talk about the cloud. I talk with people in the information technology field, and everybody nods and says, yes, the cloud. We know the cloud. We understand the cloud. We get the cloud.
Try talking about the cloud to a business person. You get kind of a funny stare. I gave a speech about the cloud for maybe 30 minutes to a group of global chief executive officers back in May, and immediately after I was done, a hand goes up. Steve, it sounds very exciting. It sounds very interesting. But what is it? Where do I go buy one? I said, you don’t have to buy one today. But when your CIO comes and talks to you and says they’re moving to the cloud, that’s a good thing.
Why is it so hard to explain? Because I think as all of us understand, the cloud really represents a new model of how computing is going to get done. More than anything else, it’s a change to the way we build applications, the way we build devices, the way we deploy applications and devices, and a change to the kinds and opportunities we have to build exciting new applications. And in that sense, the cloud is not just a new business model where you rent applications and datacenter space as opposed to today’s world where you buy applications and you builddata centers.
I like to say that the cloud really has five major dimensions. First of all, that we have to recognize that in the change that we’re going through, there’s a lot of phenomenal new opportunity. New applications, opportunities to save money, opportunities to put information to work for people in new and important and different ways. I think all of those things are fundamental.
The cloud is also going to bring some new responsibilities. Responsibilities on all of us to work through privacy, information security, availability, reliability, support. We’re going to need new models on how to do all of those things.
The cloud is going to enable new applications, and new user scenarios. The cloud knows about all the world’s public data. And if we do the right work, we can turn data into an asset against which we all can program. And the cloud can know you, the user, again, with your privacy, your permission, it can know you. It can learn about you. It can learn about you at home, at work, on any device. And it can get smarter with the right applications in serving you.
I was trying to build a little spreadsheet just for myself about 18 months ago or so, during the middle of all the financial meltdown. And I wanted just to understand what GDP growth was in a number of countries compared to the amount of debt in those countries.
A very simple question. I was trying to figure out kind of how all these things vary, and come to some kind of a judgment about what I thought Microsoft should do with its expense base. It turns out, I could, of course, go to Bing, and make many queries, and find lots of data, and cut, and copy, and paste, and I could build that spreadsheet.
But, in a perfect world, there would be an application that opens that data up to being able to program. So, literally, I could just say, build me a sheet that looks like this. And it would go out and collect that data from the cloud. In fact, if I wanted to put our sales data, it should be able to collect the information from our own sales system. New applications that know more about the world’s data, and know more about you.
The cloud is also about opening up all of the world’s people to the applications and scenarios that we build in such a way that we can enhance our social and professional interaction. I think we had a chance to show you a little bit of Kinect. It’s got a new form of human interaction and connection. Social networking, Twitter, Facebook, we see new things. Even this meeting is open up for cloud reformation. I love being here. I would like it even more if we could enhance this meeting virtually, where you would say it’s as good to see Steve virtually as it is physically.
Now, actually, the truth of the matter is, you can see me, but most of you probably watch me up on the big screen. There’s an irony to the fact that I’m here physically, yet you probably watch the screen. And at the same time, the lights over you are set up in such a way that I can’t see any of your faces anyway, dark, bright, et cetera. We ought to be able to design technology that would make a virtual interaction even better than this physical interaction.
If you’re trying to get people together today to find all the fans of Britney Spears, yes, Facebook is a pretty good place to go. If you’re really trying to find all the people who have had maybe some form of cancer, and what they thought about, and what doctors took care of them, and who did they think did the best job, it’s a lot harder to create that kind of interaction.
We need to make the people and information of the world part of the way we write programs in the cloud. The cloud is actually driving us to improve all of our server technologies from networking, storage, computation, from the datacenter to the application development tools, and operating systems, and management software, things are being driven to be better because of the experiences we get from the cloud.
In our cloud services, we have huge datacenters. We need to take cost out of datacenter construction. We have huge numbers of servers. We need to take the cost out, the cost out of power. We update and deploy applications rapidly. We need to take the cost out of managing and deploying large numbers of applications to large numbers of servers. We can’t afford to have the same level of staff that we would see today in a corporate datacenter managing applications at cloud scale. All of those technologies, of course, would help drive cost and complexity out of the way corporate computing goes.
And, at the same time, the very nature of the improvements that we’re seeing, and the desire of our customers not just to move their own applications to the cloud, but some of these things you’re going to want to have in your own environment has caused us to create this notion of what we call the private cloud. And where is the private cloud, and how do we implement it?
We announced something last year, earlier this year, that we called the Windows Azure Appliance as we try to sort through how we take the architectural advances of the cloud, and to some degree allow you, or at least the bigger customers, to also operate those themselves.
The cloud wants smarter devices. A few years back, I think the theory would have been that as things move to the cloud, people are actually going to have less and less intelligence in their devices, and everything is going to operate in the cloud. We’ve seen exactly the opposite happen. We have smarter phones, but phones that are being built with the notion that says they’re going to plug into the cloud from the get go.
We see smarter and smarter PCs being redesigned around this notion of the cloud. What we’ve done in Internet Explorer 9 to speed up the cloud and integrate it with the smart Windows PC is such an example. We showed you the Xbox and the Kinect technology. You couldn’t do that with a dumb client. You can only do it with a smart client, but it’s got to participate in the cloud. So, our clients are being redesigned to be user friendly, easy to take care of and from the get go very cloud-aware.
Next week we get a chance to launch our Windows Phone 7 and the new Windows Phones I think are very good examples of this kind of next generation cloud-oriented, smart phones. We have an application model. I get a chance later today to go judge a little contest of some of the app developers here in France who have been doing applications for Windows Phone 7. We’ve got a new kind of a user interface that assumes that what you really want to do is focus not just on applications, but actually on the people and data that’s most important to you. And so we’ve re-pivoted the user interface consistent with some of the things that we think are possible in the cloud. It’s very different kind of user interface.
And you’ll see us bring these to market. They all look the same, same applications interface, same marketplace, same user interface, but beautiful and brilliant hardware that comes from a number of different industry players, like Samsung and LG, and HTC, and others. And I hope you’ll share some of our enthusiasm for Windows Phone 7 as you get a chance to take a look at it over the course of the next weeks and months.
I talked about Internet Explorer 9 and what we’re trying to do to essentially optimize Internet Explorer to be the best place to do things that are of the cloud, and of Internet standards, but really integrate with a rich client device. And to show you a little bit more of IE9, I want to invite David Rousset up on stage. He’s going to show you just a little tour of IE9 and some of its power and some of its speed.
DAVID ROUSSET: Thank you. (Speaking French.)
STEVE BALLMER: I think there’s a lot to appreciate in the advances that we’ve made in IE9 and I hope many of you download the beta, use it, and understand why we’re excited, both from a standards perspective, from a user interface perspective, and from a performance perspective on where we are and why it should be your everyday browser. If you take a look at the specifics then in that overall context of the cloud, and devices optimized for the cloud, I want to talk a little bit about Microsoft services, cloud services, targeted at our business customers.
Whether it’s the work we’ve done in CRM Online, or together with partners and bringing ERP solutions to the cloud around our Dynamics product line, the work that we’ve done with Office and our business productivity online services, e-mail, collaborations, communications. We have some stuff in early trial. Windows InTune, that provides online identity and online client management. And, of course, our platform as a service, Windows and SQL Azure, which we have launched and now we see actually a lot of exciting new applications being built by independent software vendors, as well as corporate customers on that infrastructure.
We have about 250,000 partners throughout Europe working with our cloud services and we actually have seen really quite a range of adoption by customers. Here’s a list of just some businesses that have started the move to the cloud with us. You see a number of global names. You see names of companies who are, of course, very large here in France. I’ll highlight just some of them so people understand. Global names like Starbucks, GlaxoSmithKline, McDonalds, 3M, local names, Manpower, Beaudoin (ph), perhaps one of the biggest pieces of work we’re going here in France is the move of Alstom to the cloud, which is proceeding right now at over 60,000 desktops.
I had a chance yesterday to spend some time with the Siemens folks in Germany. They’ve built an application on top of Windows Azure that they use to help their field service engineers download and manage the software that they use to update healthcare equipment in the field, certainly a mission-critical application that’s been built on top of the Windows Azure system. And so whether it’s marketing or field service, distribution or logistics, we see customers embracing Azure as a platform service, and then building their information worker infrastructure using the business productivity online services.
We have over 40 million users moving to the cloud, and over 10,000 different entities, corporations, governments, who have used Azure in order to build next-generation applications.
Rather than just have me talk about it, I thought we would bring one of our French business partners who all of you will know, who writes applications, who has started the process of moving to the cloud and just ask a few questions. So, please join me in welcoming the CTO of CEGID, Jean-Louis Decosse to the stage. So, tell me what cloud services are you using?
JEAN-LOUIS DECOSSE: CEGID is a software and hosted services provider and we use our own public cloud services like infrastructure service and, of course, software as a service. But, we have a wide range of on-demand application, and we seriously look at Azure platform tools and environment.
STEVE BALLMER: Why would a company like CEGID, you’re very successful, you guys have got a great footprint in the ERP business, et cetera. Why would you look at the cloud?
JEAN-LOUIS DECOSSE: We believe that our applications fit very well to the cloud paradigm, scalability and elasticity, for example, we can go from one to 10,000 users in a day. Security, of course, and all of course, also, easy online deployment. So, we are interested to open up our private cloud to new services in the cloud, new services in applications through something like a hybrid cloud, or public cloud. For us, it’s very interesting.
STEVE BALLMER: And as you’re thinking this through were there things you were nervous about, or critical factors you had to evaluate?
JEAN-LOUIS DECOSSE: A lot of critical factors. First is our business model, we have to mange our business model and the question, of course, is very pregnant for us. So, what is the facility or complexity to develop on the Azure platform? So, it will depend on the technical skills, and the level of our development team. So, the second point is important.
So, a point of concern is our customer’s satisfaction, and for us performance and security issues are a key point. That’s a key factor for us, three key factors.
STEVE BALLMER: As you looked at Azure, what did you like about it?
JEAN-LOUIS DECOSSE: Azure replies to all those critical factors for us for the moment. Azure is not I’m sorry, Steve – an exclusive choice (ph) for us, but it replies to all those factors. For example, business model. Business model, Microsoft provides the clear and precise technical metrics, flow, queries, storage. So, we can manage your business model. So, developing for and around the Azure platform is very easy for everyone who knows correctly the framework, .NET framework. It’s very similar to ECF, and so on. And when you are familiar with the development Internet platform, it’s very easy. It’s even simpler in certain cases.
And some point is around our customer satisfaction, I would say and it’s depiction, as long as they respect basic Azure architecture, and the principle, and simply best practices that provide also guarantees that guarantee security and performance. And for our customers it’s very important.
STEVE BALLMER: Key benefits you are expecting, so I know where or how we have to help deliver?
JEAN-LOUIS DECOSSE: Yes. We expect a better value for our customers. That’s the first point. The second point is for us, it is very, very important, it’s a major point, it’s predictable vision, and predictable cost, because we have a business always growing, but we need to have predictable costs. And so we need to rely on a very secure and future approved platform, and we think Azure could be a good choice. This allows us to concentrate on our core business. Our core business is to develop as a specialist in software product, and to provide the best application for our target markets.
STEVE BALLMER: Great. Join me in thanking Jean-Louis Decosse from CEGID. (Applause.)
JEAN-LOUIS DECOSSE: Thank you, Steve.
STEVE BALLMER: I think, as all of us sit here today and contemplate the opportunities presented to us by the cloud, we can spend a lot of time saying, wow, it’s different. It’s risky, it’s bold, there are places to go, things which we know today may not apply as much, and we need to go learn new things. Products which we built need to be upgraded and changed. So, it’s a world of great opportunity, but it’s also a world of some challenge.
Our job at Microsoft is to help you confront those challenges, and to invest successfully in technologies that will let you capitalize and really bring the future of the cloud to life in each and every one of your organizations. We’re certainly all-in, 70 percent of our engineers are working on things which are specific to the cloud. We have 15 years of experience of running cloud services that are helping us drive new products to the market for you in the cloud. We’re committed to making the infrastructural investments that will give us great performance and latency, and responsiveness to our customers here in France.
We have a $500 million data center investment project going on in Europe in order to assure that capability. So, we’re, as we like to say, all in on the cloud. We are investing heavily, we’re here to support you, and certainly we wish you the best luck, and we’re here to provide you the best opportunity for success in the cloud.
Bon chance, and thank you. (Applause.)