Remarks by Steve Ballmer, Chief Executive Officer
May 26, 2011
STEVE BALLMER: Well, thanks. I want to thank Vinayak and I want to thank the CII for the opportunity to speak here today. I want to thank everybody who attended. I know it’s a little crowded, so I really appreciate both the turnout and the patience if you didn’t get a proper place to sit.
I have given speeches in this room before, and it’s actually a great room, it’s just not a huge room. So, we’ll continue to work on that.
I do have some affection for this particular hotel. My first trip in India was 28 years ago, and I had a particularly long and difficult flight, took about 36 hours, but I stayed in this hotel. It was sort of this mirage, oasis of good feeling. So, despite all that, I’m very glad to be here, and I’m glad to have a chance to be with you.
What I thought I’d do today is talk a little bit about some of the big trends that we see changing in technology, try to explain a little bit why they’re exciting and what we’re doing at Microsoft to try to take those opportunities and shape them into products and services that will help consumers and businesses around the world. I want to talk to you a little bit about some of the things going on, particularly on the leading edge here in India, and somehow all in the middle of that, of course, we’ll show you a short demonstration that hopefully will prompt new ideas, thoughts that will be useful to you as you move forward.
Coming to India is always extra special, because it is a unique country, perhaps in many ways, but in the technology industry there really is no country like India. There is no country that is a bigger exporter of talent, people, services, software, than India.
And so I know that when I come here, I almost always talk to people who I would call kindred spirits, people who live, eat, breathe and sleep the technology in a way frankly that you just don’t find in any other country. So, it’s fun to have a chance to be with you, and fun to have a chance to share some of the future trends.
Let me start with the big technology trends, and we broke them up into four different categories that I think are important for you to understand. All of these in some senses you could say stem from the cloud, but the word cloud means so many things to so many people I’m not going to call them all cloud transformations; the word is almost too big.
The first thing we’ll point to is the change in user interface. The way in which we interact with technology will become simpler and more human over the course of the next two, three, four, five years, simpler and more human. And when I say technology, it could be a phone, it could be our TVs, it could be PCs, it could be slates. In a sense, thinking about those as all completely different makes no sense in the year 2011.
The way in which you would make a small device that fits in your pocket natural is different than the way you might make a big device that’s at the end of your living room feel natural, might be different than something that you hold in two hands, but the evolution is going to be more and more in the direction of working the way people work.
Just think about touch for a minute. Between touch phones and slates and what’s going on, somehow the notion of touching things, it’s not going to replace keyboards, it’s not going to replace mice, and yet it’s opened up a whole new level of accessibility to computing and advanced computing experiences to a new wave of people in a new set of ways.
We launched in November what we call our Kinect sensor for the Xbox, and this is a sensor that’s got cameras and microphone built into it. And you put it on your TV, you set up your Xbox, and you can wave at it, it recognizes you. You can essentially touch it without having anything in your hand, because the sensors recognize your hand, and can project and let you point to something on the big screen. If you’re playing a game, let’s say a table tennis game, and you want to hit the ball, you just hit the ball. And the sensor is smart enough to recognize and project into cyberspace the motion that you made.
So, voice, computer vision, touch, these are all fundamental natural user interface technologies, which will be very, very important.
Avatars, let me comment on avatars. Avatar is sort of a concept that most people, particularly of my age, think is a little goofy. An avatar is a little cartoon-looking character that runs around on a screen and represents you.
You can say, why would I ever need an avatar, I don’t need that, and yet if you really wanted to convene a virtual meeting in cyberspace, you’d need, we would want some sort of digital representation of your body to take and join a virtual cyberspace meeting or event or conference. We can get at this stage almost photorealistic in your avatar, which means you can have a virtual agent that projects and represents you in the online world.
Now, most of you from the business world will say, hey, not anytime soon, probably not, and I think you’re probably wrong, it will happen faster thank you think, but at least for those of you who are parents and you think about your kids online and their safety, you’d probably prefer that an avatar represents them than that they themselves and their image are represented. We’ve got some new exercise games for our Xbox Kinect sensor, and certainly my wife has told me she prefers to have her avatar represent her in the morning rather than her virtual image. It sort of avoids a bunch of makeup early in the morning before she joins her virtual exercise class. So, you get the sense of a direction that we can go with much more natural or human user interface.
The second area is natural language, and I probably ought to find different ways to tease these apart, but even if the computer can hear your voice, recognize your image, transform it and project it, we want the computer to understand you and your intent and what you want to do and take action.
Computers don’t do that very well; people do. I can tell my assistant, “Get me ready for my trip to Delhi.” What does she do? She looks through my schedule, she sees who I’m seeing, she gets all of the trip reports from visits to those customers, she calls up all the speeches that I need to give that have been prepared, and she downloads them onto my laptop so I have them available for the flight to Delhi.
Now, the truth of the matter is if I was to type or speak into the computer, “Get me ready for my trip to Delhi,” it wouldn’t know what to do. In fact, there’s almost nothing you can tell the computer to do without learning the computer’s language, lingo, intent: file, open, this, that. What is this menu, what does that mean?
We sort of all like search engines. Search engines are the first thing that you can type anything into, and at least the search engine will guess what you meant. Now, it often guesses wrong. Whether it’s Google or Bing, it often guesses wrong. Over 50 percent of the time people hit the back button immediately after they get their search results. And even if you get a search result, what you get is a link to a piece of information, you don’t actually get to command the computer to do something.
Here’s an easy one: “Print my boarding pass.” Print my boarding pass, nothing could be simpler. All you need to do is check my calendar, find out when my flight is, go to the website of the company who I’m flying with, and execute the print command. And yet the machinery and infrastructure to hook those things up, to understand you and to understand what’s available for applications and data and contacts on the Internet is still quite low.
So, this notion of natural language, natural user interface will continue to shape the devices that we use, and the ways in which we interact with them.
The third key — and some of these things, frankly, you couldn’t do without the cloud. We’re not going to be able to understand you and the world just by having an environment that is isolated from the cloud. The cloud is what facilitates some of these transformations.
The third thing I’ll highlight is the ongoing change in the hardware infrastructure. When I got to Microsoft 31 years ago, Bill Gates was trying to pump me up, and I didn’t know what I’d gotten into or why I was there, except I liked Bill, and I got a little depressed actually. A month or so after I arrived at Microsoft, I said to Bill, “I think I might quit.” “Steve, Steve, you don’t get it, Steve.” “What don’t I get?” “The microprocessor is a form of free intelligence, and all we have to do is put the right software with it.”
Well, it was kind of the software guy’s way of recognizing Moore’s Law, this notion that computers were going to get faster and cheaper and better over time at an unbelievable rate. Today, it’s still working. Processors and storage and networks continue to come down in price, increase in capability, grow in power.
One of the big things over the last few years is not only are these things getting more powerful, but you can apply that power in new ways, so that we’re getting more and more miniature devices, phones as a good example, that are powerful enough to do enough.
So, the ongoing evolution in chips and computer form factors means things will continue to evolve.
I look out in this audience, and I’m happy to say I see some phones, I see some laptops, but I see something else very analog. A lot of you still have paper with you, paper. We have yet to deliver as an industry a device that’s better than paper. Just take that as a simple proxy for a need for innovation in chip and form factors as we move forward.
Last but not least is the cloud itself, and the cloud really relates to this notion of using the Internet as a programming surface, not just as a place to publish Internet content.
Generation 1 of the Internet was we write documents and we publish them. Generation No. 2 of the Internet was a little more interactive: people, email, social networking, commentary. Generation No. 3 is we really think of the Internet as a big programming surface in which you can very easily write and deploy a new application, and those applications can take advantage of much more of the data about people and the world that’s available on the Internet at large.
Take, for example, let me give two examples from our work around Bing. We started Bing about four or five years ago, and the same would be true of Google, the guys we compete with, but when we started, we said this thing is going to have to scale globally, we’re going to have to literally know about hundreds of billions of various websites and documents on the Internet. We said we will literally have millions of servers some day involved in our Bing search service. We couldn’t possibly create that application the way we create enterprise applications in your datacenters today.
You know, there’s a rule of thumb. Every IT guy has one. For every N servers I need another IT guy. For some guys it’s 100, for some guys it’s 10. If you’re going to have millions of servers, that’s a bad rule to have.
We needed a fundamentally different way to create programs, so that the software would handle the magic of managing the hardware itself, scaling out, if a machine failed you forget about it, because you’re treating it like the cheap, inexpensive computing device that it really is.
So, there’s a new way of writing software in the cloud, and there’s a new kind of application, probably best emblematized by what we’re trying to do with our partnership between Bing and Facebook.
We launched a service in Bing last week where when you search for something, we show you what your friends are thinking. So, you’ll get to see right in your search results whether your friends like or don’t like what they thought about the various establishments. Let’s say you type, I don’t know, Spanish restaurant, and depending on whether your friends have had an opinion, whether they’ve been there or not been there, it’s mixed right in the search results. We’re starting to bring together an understanding of all the world’s people and all the world’s data into new classes of applications that people can use in new ways.
So, some of the key technology things going forward I think are captured in what I just had a chance to talk about.
At Microsoft we’re taking a look at all of these industry trends and say, OK, how do we make exciting things possible for consumers and businesses based upon those technologies? How do we help technologists automate and operate their applications more quickly? How do we take the kinds of things that we’ve done for Bing in the cloud, and give them to the broad technology industry? How do we give consumers and businesspeople the ability to learn new things, consume the information in new and interesting ways?
When the economy fell apart — what was that, two and a half years ago now — at least the U.S. economy fell apart, the banking system, it was a nervous time. Me personally nervous. And I’m sitting there saying, geez, I wonder how bad this could get. And all I wanted to do was take a look at what has happened historically when economies have huge debt as a percentage of GDP, what’s happened over the new few years to GDP recovery, et cetera.
Now, that’s simple to say, and I just wanted to type it into the search engine and have it go find that, but instead I was cutting, copying, pasting, putting things into Excel just to understand something relatively simple and straightforward. We’re working in our tools in Excel, in Bing, in the things that we’re doing to help you both professionally and personally to learn and consume, analyze and take action. One of the areas that Vinayak mentioned was some of the public issues that are of great importance. You talked about water quality and water safety. One of the most important things that we think we can teach the next generation of systems to do is really model the physical world in the virtual world. You want to model the environment, you want to model water quality, you want to model the flow of chemicals and disease and bacteria through the world.
It turns out that in this new world where you can store massive amounts of data, you can actually analyze, simulate and model from that data in new ways. Whether it’s medicine or economics or geophysics or the environment or energy, the chance to use these tools in new ways we think is quite remarkable.
Create and collaborate, create and collaborate. That’s kind of where we grew up with Word, you could say, creating pretty little documents that you would print and share with others. And then you started emailing them. And now the truth of the matter is most of what you want to do never gets printed. It gets consumed entirely electronically. What’s the next generation of expression that people will want to have in this world?
Enjoy and socialize. We talk a lot about social networking and what’s going on there. We see this through the lens of our Xbox LIVE service. We have over 30 million subscribers who communicate, talk to one another, joke with one another, play games with one another, watch television together; just some of the kinds of scenarios that we’re trying to enable.
I get asked, “Oh, you bought Skype; why did you buy Skype?” Well, we think the opportunities in helping people enjoy, socialize, and communicate remain amazing, and we want to put together the things people want to do to communicate, say go to family meetings, reunions. We want people to be able to do that in the cyber world at work and at home, and Skype we think will help us accomplish that, particularly for people in their personal lives.
I’d like to whet your whistle with two things briefly. I’m going to show you just a little bit of a video to show you some of the work we’re doing with Windows Phone 7 against some of these scenarios, and a little bit of what we’re doing with our Kinect sensor, and then we’re going to do an in-person demonstration of the future of communications. So, let’s roll the video, please.
STEVE BALLMER: From your phone you’re throwing balls at your friend in cyberspace, who’s sitting there physically struggling to keep up with the mass, but doing the best he can in this case, and literally having camera and video recognize and take appropriate action. Very natural user interface, involves multiple devices, only possible through the cloud.
You can start thinking about new form factors, and the ability to connect all of this up between you, your employees, your customers, your trading partners, and many, many others. So, please dream with us, if you will.
I want to turn now and have a chance to talk a little bit about the ways, the products that Microsoft is doing to try to bring these things to life. Obviously, Xbox and the Kinect sensor have been important to us. One of the major next steps forward is to take that same technology that’s in Kinect, and hook it up to the PC. We see a lot of interest in people in commercial applications. I saw a demonstration of a technology, for example, that would let a surgeon be able to with hand gestures control the presentation of CAT scan and other image data in a surgical room without ever having to leave and go to a screen or a terminal.
We certainly have had people talk about what you’ll do on remote platforms, and the ability to put very low-cost technology to monitor and track physical motion and what’s going on came up in the context of an oil platform in the North Sea.
I talked a lot about Bing. We had a chance to show you Lync. Obviously, we didn’t show you Skype today, but one of the keys, as I said, is to let the whole community if about 200 million people who use Skype today to be able to talk to people at work and vice versa, to have you be able to count on integration with your corporate systems when you’re working inside the enterprise, to count on the security inside the enterprise, but then to be able to reach out in some of the same kinds of scenarios with your customers across Skype.
We’re pushing hard in the productivity space. We’ll launch our Office 365 cloud service, which gives you Lync and Exchange and SharePoint and Office and more as a subscribable service that comes from the cloud. That launches in the month of June.
We’ve done a lot of work on infrastructure for building this new type of cloud application that I discussed, Windows Azure and SQL Azure in the public cloud. Many companies are saying, I can’t go to the public cloud exactly yet or I can’t go for all of my applications; we have too much concern about privacy and security and reliability.
And so to bring some of the same advantages of the management, low-cost of management and deployment of applications in the cloud back to the enterprise datacenter we’re pushing very hard with our virtualization technology, Hyper-V, to let you build Hyper-V private cloud datacenters.
Windows Phone, we announced a new release yesterday, come out this year. Certainly, our partnership with Nokia is an important step forward with us. Obviously, they have a very big presence here in India, and this will be a priority market for us. But the key there really is to not only innovate in the software, but to work together over time to also work on next generation hardware innovations with them.
Windows 7, it’s hard to believe it’s only a year and a half since Windows 7 shipped. There have been roughly in that time 500 million new PCs that have shipped with Windows on them. The bulk of those, not all, but the bulk of those have been based upon Windows 7.
So, despite the fact that we know we’ve got some work to do, we want to put Windows on ARM. We announced at the CES conference that we would move to new low-cost chips outside of the Intel and AMD world. We’re working on sort of touch-optimized devices with Windows as we move forward. This year, there will be another 350 million PCs that get sold, despite the fact there will only be maybe about 30 or 40 million of these next generation slates.
So, we’re in a race. We’re doing not that badly frankly, pretty well in that race, but the race is on to continue to push Windows to a variety of new form factors.
So, across the board we’re trying to leverage those technologies to deliver services that deliver on the kinds of scenarios that I had a chance to talk about.
There’s a lot of work that we’re doing here in India with customers and partners on a leading edge basis. One of the ones our guys were most excited to tell me about is a cloud application that’s known as SportingMindz, M-I-N-D-Z. It’s used by the Indian Premier League. I guess the Royal Challengers are a user. But it collects real-time information about cricket matches, literally many, many terabytes of data, images, videos, statistics, brings it all together. It’s accessible on the road by the players, by the coaches for analysis, for commentary.
I said to the guys, really, is it really that sort of data-intensive an application? And all they could say is, “Steve, you always forget how serious we are about our cricket.” Every stitch of information needs to be stored and managed and analyzed. And I said, “Peace, peace, I believe, I believe.”
But it gives you an example, that’s the kind of thing you would probably never set up in a private datacenter, because you’re pulling from matches all over the place, you want the data available for multiple teams, and it really is a high scale, high storage type of application.
There are a lot of other interesting things going on in the cloud here in India that we’re excited about that we’re doing with a variety of our customers. Here’s a list of some of the partners and customers that we’ve had a chance to work with.
I’d probably highlight one, which is the Adhunik Group, and let me give you a quote from Mr. Sanjeev Kumar, who’s the chief information officer for that company.
“As Adhunik embarks into new markets for growth, we believe we need to embrace cloud fully and leapfrog into the future. We’re betting on Microsoft cloud solutions, which provide choice to transform our organization.”
All of these customers are working on a mix of our Azure cloud service and the predecessor to our Office 365 service that we called Microsoft BPOS.
Super interesting, super vibrant times. For us actually getting our cloud initiatives going in India fast is as important as getting them going anywhere in the world. We know that if the development community here really gets imbued with these technologies and building a next generation of applications, those are going to be important not just to our customers here in India, not just for water analysis and safety and public, but private applications, but will also be used to build applications from India that literally people will be using in markets around the world.
I’m excited to have had a chance to talk with you today. I’m very pleased that the CII gave me the opportunity.
We have struck a theme for ourselves that we say, “Be What’s Next.” Whether you’re Microsoft or anybody else who’s a customer or a participant in the industry, the key to life in terms of technology is to looking forward, understanding where things are going, and trying to get there before anybody else or at least fast enough that you’re driving forward relentlessly.
You have to be what’s next. You have to build compelling new experiences. You have to think through what your users in your companies, what your customers are going to demand from you, and then use information technology in order to be able to get there.
This cloud computing phenomenon will drive growth, it will enable businesses to use IT more productively, and it will enable growth in the IT sector.
Here in India alone there’s 1,300 companies that are what we call ISVs, companies that build applications. There’s over 1.4 million people in India whose profession it is to write software, software development as a profession. There’s over 11,000 systems integration firms based here in India. And we expect and predict that there will be over 300,000 new jobs created in the next five years alone in India as a result of being what’s next in cloud computing.
I certainly look forward to, and I know the Microsoft team here in India looks forward to the chance to work with the firms in this room and many, many others to bring the benefits of cloud computing to the IT industry and to the businesses here in India.
I thank you so, so much for your time. We have a number of our best customers here in the room throughout India. So, to all of you I want to say thanks, and again many thanks to the CII for this opportunity. (Applause.)