Steve Ballmer: Kiev Polytechnic Institute

Remarks by Steve Ballmer, Chief Executive Officer
Kiev, Ukraine
November 5, 2010

Editor’s note, Nov. 9, 2010 –
The transcript below was updated to clarify the names of some of the participants and to correct the spelling of Viewdle, a company mentioned.

STEVE BALLMER: Well, it’s a great privilege for me to have a chance to be here with you today. Frankly, there’s nothing I get to do that is much more fun than talking to students. Students are knowledgeable about the current technologies. Students are very curious. We’ll show you something a little new today, hopefully get you thinking a little bit about some of the new possibilities that perhaps some of you will go on to invent as you graduate and move forward.

So, for me, it’s a lot of fun to be here today, and I’m going to try to give you a little perspective on where we see things going, and I think we have a chance to take a few questions that were submitted before we got here. And I look forward to doing that as well.

The key theme I want to talk to you about today is this notion of what is called cloud computing, cloud computing. What does it mean, cloud computing? Really nothing very specific. Technology people, including me, we like to have these words that represent some view of the future. And if you were to go ask in any room of technology people, you were going to go ask four different people, what is cloud computing? Four different answers, I guarantee it.

But I’m going to try to help you at least understand some of the technology trends that I think are implied by the word cloud computing and why you might be excited to have a chance to be studying and graduating in a world in which cloud computing is coming about. With the Rector, we had a discussion about ways to try to bring maybe more cloud computing technologies and partnership between KPI and Microsoft. So, hopefully, soon we’ll be offering more of our cloud computing technologies here in the university.

Before I talk about what cloud computing really is, or what I want to strike as some important themes, I want to have a chance to talk about the fact that cloud computing, more than almost anything else I’ve seen in the last 10 years, really represents a next generation of opportunity for people who write software around the world.

Cloud computing, in a sense, talks about the merger of the best of the PC, the best of the phone, the best of the TV, of course the best of the Internet, and the best of corporate computing. But, why does this represent such an opportunity? Because we’re talking about a world in which we’re able to decouple the creativity of software developers around the world from the physical delivery of their intellectual property, of their software, and of the individual devices that they seek to target, phones, PCs, TVs, slates.

So, literally, part of the promise of cloud computing is that I can be a software developer here in Kiev, or in Donetsk, I was told there’s a lot of great talent in many cities across the Ukraine. But I can be a talented software developer; I can write a program; I can instantly publish it to servers around the world, and have my software distributed, and have people be able to take advantage on many interesting devices. And as I get more users of my software, you don’t have to be saying, “I have to build new servers in London, or in New York.” All of that gets managed automatically for you by the cloud.

A new device comes out. You may be able to take advantage of the latest PC or the latest phone, but because of the power of HTML 5 as a standard in the cloud, you’ll automatically get to talk to more and more users on more and more devices. So, in a sense, the cloud does represent a magical, magical opportunity to unlock the creativity of software developers and programmers here and around the world.

We will also, as software development people, have to assume a new set of responsibilities. The problems and issues of privacy and security, those will continue to grow and perhaps be challenging. And we ought to respect the important needs of businesses, and consumers for privacy and security. But the number one thing is opportunity, opportunity. There has never been a better time to be getting into the software and information technology business than right now. So, congratulations to all of you for having selected important careers and studies in the field of software and information technology.

So, what are the things that will happen in the cloud? Many different things will happen. But one of the most important attributes about the cloud, the cloud, the world out there, and the new applications we write is, the cloud actually understands much more about the world and will give us the resources as software developers and will give us the resources as consumers to learn and process much more about the world, and the world can, again, with our privacy, learn much more about us personally and improve our understanding.

You could say, well, what’s new here, Steve? I mean, there are search engines today. We have search engines. We can learn. We can look at websites, blah, blah, blah, blah. The truth of the matter is, today it’s still very hard to really learn about the world by turning to the Internet.

And so the real innovation, as we move to the cloud, is to make it simpler. Let me give you an example. This comes from my own personal life. About two years ago, the world economy went like this. Well, I’m the CEO of a company with about 85,000 people. And I was a little worried. What do we do? Do we reduce people; do we reduce a few people; do we add people because now is the time to press the advantage; what do we do? And I said how am I going to understand this, and I’m not an economic expert of any kind. But, I think I’m a little bit educated, and I took some economics when I was in university. So, I said, I really want to understand what’s happened in past times to GPD growth, as economies have built up too much debt.

I’d seen an article, actually, I think it was written by a Russian economist that predicted that once a generation, we get this kind of a collapse in the economy. It was sort of an inevitable thing that capitalism leads to too much debt, blah, blah, blah. Anyway, I wanted to see the numbers. All I wanted to do was have a little table that showed me, for a number of countries, GPD growth by year, and debt as a percent of total GDP at the time. And then I was going to try to decide whether this was a really bad economy, or just a little bit of a bad economy.

So, of course, it’s about Christmas time that I was doing this, and I wanted to let our analysts spend time with their families, and I said I’m going to go to Bing, my favorite search engine, Bing. So, I go to Bing, and of course I can do queries, and I can get all of this data. And I spent many hours, not because Bing didn’t work perfectly, but I had to go to many different websites, find them, copy the data, normalize the data because economic data is not done consistently, and, after about five hours, I called one of our analysts at home and said, “Please finish this.”

In the world of the cloud, we should be able to describe  I could describe what I wanted, simply. I could draw a picture. I could draw the spreadsheet, but the cloud couldn’t return to me. It didn’t learn  it didn’t learn enough. It knew how to find websites and Web documents, but I couldn’t just say make me a table of GDP growth, debt as a percentage of GDP by year, by country. The cloud is smart enough to do that. And in the world of the cloud, we will learn — the systems will learn. The applications that you write will be able to write against the whole world’s knowledge and information.

The cloud will also get smarter about us. We’ve been building into our products for years spell checkers — spell checker, not a sophisticated feature. But, a spell checker 10 years ago was built into a product like Word, and you would type, and it would learn about your spelling. Now, in the world of the Internet, the best spell checker goes to the Internet, and it has literally millions of connections, billions of connections with people around the world. And its ability to recognize common mistakes and get smarter about users and what they really want is higher than ever before. Also, the cloud lets us learn about the world and help people decide and take action.

Number two, that’s a new set of applications that you will build using the cloud as a programmable infrastructure. Number two, the cloud will help us continue to find people, connect to people and interact with people in different ways. Think of this meeting — this meeting is different than this meeting would have been 10 years ago. 10 years ago, this guy would have been sitting here with a video camera, and I would have known nobody would ever watch the video. They’d never find it. They’d never see it.

Now, because of the Internet, anybody who wants to will probably find the video of this lecture. But things aren’t the same. If I wanted to have this meeting without coming here physically, it wouldn’t be the same. Our technologies aren’t really good enough yet where it feels like being physically in the same room to use electronic technologies.
Today, we talk about social networks like Facebook and Twitter, and, yet if you really want to, let’s say a parent with a child that’s got some unusual medical condition. Do you want to find other parents who also have children with the same condition? You can’t just go to Facebook or go to Twitter. We don’t form those communities perfectly well.

The director shared some information with me in the meeting that we had today in paper. Well, of course, he could have e-mailed it — he could have given it in paper, but the truth of the matter is, he needs that material; I need that material; four other people at Microsoft need that material. Putting it in some place that’s private but shared on the Internet, not that easy today.

So, the ways in which the cloud will enable us to improve the way people connect with each other, communicate with each other, that is still in its early infancy. And certainly at Microsoft, we’re working on a range of technologies that will improve this, but I think so will you. You will be able to write programs that find and connect the people of the world.

Number four, the cloud is changing, and this is what most people mean when they say the cloud — the cloud to me is about the whole infrastructure that’s becoming programmable in the Internet, and on these devices. But one of the major advances is the improvements that are being made in server hardware and server operating system technologies.

When we started building our Bing search engine six, seven years ago, one of the things that was obvious to us is that we could not have IT people managing and administering every server. Bing has about 250,000 servers. We couldn’t have one administrator for every blah, blah, blah servers. We couldn’t afford to buy 250,000 individual servers — the cost and complexity, the slowness, how long it took to buy a new server, configure it, deploy it, how long it took to deploy new versions of Bing. We’re updating Bing all the time, all the time, all the time. Well, we needed a new model, a new model for how to build the hardware that combines storage and computing, and networking into one sort of datacenter, if you will, in a box.

We needed a new software platform where you could write an application and have it distributed and updated automatically by the operating system instead of by an administrator. I met with a number of startup companies here in the Ukraine this morning for breakfast. And they’re saying, “The cloud is great; it’s a world in which we don’t have to think about how many servers we need. We don’t have to hire people to set up servers, and copy applications, and manage virtual machines. We can work at a higher level, and we get more speed, more agility and more opportunity.” And that is because hardware and software in the server operating systems and databases is moving forward.

In our own case, that’s what we call our Windows Azure and SQL Azure technologies, Azure referring to the sky, the cloud, the blue, Azure. But, in English, nobody can say that. So, we say Azure. Windows and SQL Azure, referring to the changes we’re making as things move to the cloud.

I’ll give you an example of a piece of work that one of our customers has done, University Department of Oceanography at the University of Washington, which is near our campus. All of the oceanographic information that they’re collecting from the world they put onto a Windows Azure system in the cloud. Well, they had a major new set of data come in in a huge spike in the last year. That happened when there was a major earthquake in Chile. So, all of the sensors are now feeding huge amounts of new data. So, they were here, and then there’s a huge spike. Without the capability, without the agility, the flexibility that exists in the cloud, they can’t scale so that scientists can be immediately analyzing those results. And analyzing those results not just at the university in Seattle, but at any university  or any researcher that wants to get access to that oceanographic information anywhere in the world.

So, the cloud is changing the server and changes in the server are driving the cloud. Last but not least are the devices themselves that we use. How do PCs, how do the phones, how does TV evolve? Because some people will say, in the world of the cloud, all of the intelligence, all of the software moves to run in the server, in the cloud. I don’t believe that.

There’s still an important role for smart devices that can recognize me and my face, my touch, my writing, that can provide fast speed even when there’s slow connections. But we need more of a standard approach for these devices to communicate with each other. If you look, for example, at the work we’ve done in our new browser, Internet Explorer 9, we fully embraced HTML 5 as a standard, but we’ve made the Internet, the cloud, run faster on Windows PCs by using the power of the PC to run and the PC graphics systems to just run HTML faster.

If you get a chance at some point to see one of our new Windows Phones these devices have much local intelligence that they will use to see you, recognize you. One of the startups I met with today was a company called Viewdle here in the Ukraine, that has software that will intelligently let you recognize, just point your phone at somebody and it has the software to recognize your face, so who is that. Of course, privacy, blah, blah, blah, I don’t want to go back through that, but it’s very important.

One example I’m particularly excited about, in terms of these modern devices is a system we launched yesterday called the Xbox Kinect. Xbox, you could say, is our video game system. I think as we launch this new technology called Kinect you can think of it as a family entertainment system. Kinect is a new sensor that we have built for the Xbox. It’s got cameras. It’s got microphones. It recognizes you. It recognizes your body and its motions. It recognizes your voice. And it takes action.

Since we launched it just yesterday, we thought we’d actually demonstrate it for you live today here at KPI. And so to join me on stage and show you a little bit of the Xbox Kinect next-generation smart device, please welcome on stage Andrey Kalugin from Microsoft who will do a demonstration. Andrey.


(Demo segment in Russian.)

STEVE BALLMER: The amount of computer science you just saw is actually quite high. Recognizing face, movement, skeletal models of the body — really quite high. And we just chose to show you one game. You can imagine where we go in terms of using the voice, the body, the recognition of who you are and what you want in smart devices as a key to future innovation.

I’ve had a chance to spend all today here in Kiev. This is my second trip. I see an incredible amount of very smart, very talented people in the field of computers and computer science. I see a huge opportunity to make a difference. We at Microsoft have about 2,000 companies that we partner with in the Ukraine to try to drive information technology and innovation. We have, through partners here, hundreds, a few hundred people working for us, doing R&D through Ukrainian companies with whom we contract who are helping to build the next generation of products, like Xbox, and supercomputer solutions, and many others that we’re proud to have.

I just finished two interesting meetings in the last couple of hours before I saw the Rector. I had a chance to meet with the president of the Ukraine, who was talking a lot about the moves here to modernize and push technology and innovation, which I was impressed by. I met with the chairman of the Board of the Oschadny Bank, and I mentioned I was coming to KPI. And he said, “Tell the students that in addition to Ukrainian and Russian, they should learn English or Chinese also.” In addition to technology, because language, computer skills, these are some of the most important things that people will learn as they move forward. So, I promised Mr. Kozak I would mention that when I was here at KPI.

But the chance with these cloud technologies, and this move to the cloud, the chance to make a real difference, to drive things for every one of you, embracing computers as a life skill, I think, is amazing. And whether you live in Kiev, you live elsewhere in the Ukraine or elsewhere in the world, now is the time to get out and really drive the next wave of innovation in information technology.

The cloud is for you. I hope the Xbox is for you. But certainly it’s been a pleasure to have a chance to chat with you, and I’ll look forward to the chance to hear some of the questions that you submitted. Thank you all very much. (Applause.)

DMITRY SHYMKIV: So, Steve, thank you very much. That was fantastic as usual.

The questions, we asked students to presubmit questions; we got more than 70 questions, which we grouped in general, it was around 150. But, we’ve preselected a few which are interesting.

You touched Bing, and the competition between Google and Bing is very fierce. So, what is Microsoft doing to win on the search space?

STEVE BALLMER: Well, I don’t know if the competition is fierce or not. Google is very strong. And they need competition. Search, just like the browser, just like operating systems, just like servers, it’s an area where the greatest innovation is still in front of us. Until I can get answers to questions like the one I described to you about GDP, the search engine is not doing its job. When you type into a search engine, search engines are, like Bing and Google, they are brilliant in a way, and they’re not very good in a way. If I type in something like book a reservation for me on Friday, Nov. 12–13, 2015, I need a flight at the lowest cost from Kiev to London, you could type that in. The search engine will do its best to give you some data, but it won’t take the action for you. It’s not as good as a human being.

And yet, we think with the right knowledge and the right semantic understanding of the world’s information and of users and what they intend, with the right statistical learning engines to match user understanding, and some kind of semantic model of the world, we can put these things together in new and different ways.

So, we’re going to compete to build that next generation of technology and semantic understanding and machine learning, and we’re going to compete. Hopefully, we’ll compete fiercely and well. Certainly, we’ll also compete to provide different, more entertaining and perhaps more complete user experiences for people when they turn to a search engine.

Our initial focus is getting things right in just a few countries, but don’t worry, we’ll also get a great product here in the Ukraine as well.


You talked about the cloud. A lot of people who are already in the audience — some are working as developers; some working as IT support for a lot of companies in Ukraine. When things move to the cloud, what’s going to happen to them?

STEVE BALLMER: Well, that’s a good question, actually, a very good question. When we talk about technologies like the cloud that reduce human involvement with machines — today you could think of these huge datacenters, lots of construction jobs and then lots of people running around touching servers, fixing them, managing them. And you think of the next generation of the datacenter, there’s very little construction, there’s no people in the datacenter. A perfect datacenter will have no people in it.

You say, “Well, Steve, I thought I was coming to KPI to study to run around in datacenters.” I would say, no. That work, hopefully, will decline over time. But the skills that you’re building will allow you to add value and be an important employee and contributor in actually creating the next generation of applications that really empower businesses and people to get done what they want to get done.

What we’ve seen  sorry, Dmitry  what we’ve seen in our industries is that every innovation that reduces the need for people and human involvement, it doesn’t shrink the total number of people working in the technology business, it just opens up a whole new set of opportunities for people to innovate and add value in new ways.

I’ve been at Microsoft a long time. I don’t want to sound like an old-timer, but 30 years, and every five–10 years, somebody will say, “This technology is going to shrink the IT industry.” And yet, the number of people working, the value to society from information technology, so much bigger than it was when I came to Microsoft.

I’ll tell you a story. I was in school when Bill Gates approached me and said, “Come work at Microsoft.” And, he said, “Why don’t you quit school, drop out, become a dropout from Stanford.” Problem: My father didn’t go to university. I knew he wouldn’t like the idea. But I called my mother and father and say, “I think I’m going to drop out of Stanford University.” After a little bit of yelling at me, my mother said, “What are you going to do?” I said, “I’m going to work at a company that makes software for personal computers.”

My father said to me, “What’s software?” This is 1980. My mother asked an even more interesting question at the time, “Why would a person need a computer?”

Today, there’s people asking all of the same questions, and yet the opportunity to create value even as the cloud reduces and shrinks some of what we think of doing today. I guarantee you, if you went home and told your parents, I’m dropping out of KPI to do cloud computing, they’d ask you what is the cloud. And 30 years from now, you’d tell them, “See, Mom? See, Dad? I made a good choice.” (Applause.)

DMITRY SHYMKIV: Here comes my favorite. I read it. Mr. Ballmer, recently I’ve tried to follow you on Twitter, but I couldn’t find you there. When are you going to start tweeting?

STEVE BALLMER: I’m very  I have a Twitter account. I’m just very private about who I really am on Twitter. So, I’ll tell you what. Somebody  who asked the question, is the person in the room, by any chance, who asked this question, anybody? OK.

That means somebody is shy. That’s OK. So, what I’m going to do right now, just give me something you want me to tweet. I will tweet from KPI from my Windows Phone. Let me just bring it up here real quick. What do you want me to tweet? I love KPI, how’s that?

All right. I love KPI. Now, you know how to find me on Twitter.


STEVE BALLMER: Send, and everybody here, of course, I should have written Kiev Polytechnic because most people in the U.S. will think KPI means I love key performance indicators. But, you know the truth. Steve B. Microsoft up on Twitter.

DMITRY SHYMKIV: Steve, basically we have run out of time. We have other meetings waiting for us. Thank you very much.

STEVE BALLMER: To all the students and everybody else who has been so friendly and welcoming here at KPI, again, many, many thanks. It’s been my pleasure to be here today, and I certainly wish you all the best of luck.

Thank you. (Applause.)

PROFESSOR MICHAEL ZGUROVSKY: Thank you, Steve, for the bright event you have presented us today. In memory of your visit, of your lecture, let me make you a symbolic present. This is a lithograph depiction of Igor Sikorsky, who was our student, who was a great inventor, as well. And let me once again to send to you and to wish a great success in the future, Microsoft.




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