Steve Ballmer: Northern Virginia Technology Council

STEVE BALLMER: I am very excited to have the chance to be here. I think we were reflecting at breakfast, it’s been about seven years since I was last at the NVTC Meeting. I do remember it, though, very vividly, and it shared one thing in common with today’s session for sure. I know I was just off a red eye flight that time, too. (Laughter.) I’ve had the largest Starbucks ice tea made, and I know my caffeine is good. And hopefully my energy stays for the whole session, because I’m delighted to have a chance to be here.

Steve Ballmer at NVTC

Steve Ballmer at NVTC

April 18, 2012
Microsoft CEO Steve Ballmer speaks at Northern Virginia Technology Council gathering in Herndon, Virginia.

I always think this, I have not varied in what I’m about to say my whole time at Microsoft, and that is, it is a really fun, exciting, and interesting time to be in the information technology business. And it’s really quite remarkable. I think if you look back at the whole history of innovation, you won’t find an industry, you won’t find a technology that has done so much in such a compressed period of time as IT has done over the course of the last 50 or 60 years, and yet the pace and speed of new innovations, the new possibilities that are just kind of obvious, at least to folks like the folks in this room who live in this business every day, the opportunities to continue to innovate are tremendous.

I’m going to highlight a few things that we’re pretty pumped up about today that I think are formative, and will be big deals over the course of the next few years. We’re going to show you a core product, which is our Windows 8 product, which in some senses is foundational for us as we jump down this path, and I know Brad and I are going to have a chance to take some questions.

Any discussion of the future of technology has to start with what’s going to happen to the way we use computers? Just think over the course of the last 10 years how the shape, size, availability of computers has changed. When Bill Gates, and actually he threw out this line “a computer on every desk and in every home,” that was a line designed to get me to drop out of business school. (Laughter.) It worked. It worked. But today you’d have to say a computer on every desk, in every home, in every television, in every pocket, in every hand, in every meeting, in every whiteboard, in every everything in the world.

And the continued innovation in the form factors, and the places and ways that we access technology will change quite dramatically. Small example, I just finally got rid of the last two analog devices in my office. And the last two analog devices were pencil and paper. That’s gone. I have none. I have no pencils and no paper anywhere in the office. No printer, either, for the record. And I got rid of the whiteboard in my office.

The whiteboard was actually the toughest analog device to squash out. But we have these new partners who are building these new 81-inch essentially Windows 8 slates. We might not call them slates at 81-inches, but they make for great whiteboards with pen, and marking, and cloud replication. You just think about it and say, wow, the ways in which we will access technology, the form factors will change.

The big push to the living room is the thing that’s kind of upon us over the next year or two since most TV watching and kind of entertainment, if you will, is still relatively not interactive, and there’s a lot of innovation that will come in the way we relate and interact with the technology. Will our devices look at us and recognize us? Yes. How will we command them? Today, we still pretty much issue explicit commands, and fill out explicit forms. I can’t say to my PC, get me ready for the trip to D.C. And yet it’s a perfectly routine and predictable activity to go do.

Our search team will point out that one of the kind of most ironic things you can’t do on a computer today is say print my boarding pass. It doesn’t matter where you go type “print my boarding pass,” the search engine  search engines really wouldn’t like print my boarding pass on Southwest. Which Southwest did they mean? Print, search engines don’t do verbs well, they do nouns much better than they do verbs. And you say, why can’t we just simplify those activities? Well, the next few years holds that promise. People talk about big data. One of the best applications of big data is actually machine learning about you, what you’re interested in, what you might want, what you might mean, what the world might offer when you actually type the expression or speak the expression “print my boarding pass,” so an incredible range of innovation in terms of how, where, and when we access technology.

Also a big change in the way in which programs are written and then delivered to the backend, the cloud being the buzzword, the big buzzword for this is the cloud. And it should be, in fact, because we’re only still very early stage in the move to the cloud. Private cloud and public cloud, we’re about the only company in the industry that believes in both. You’ll get people who will do one or the other, and yet I think there’s really a role and a purpose, and I underscore that particularly here in Northern Virginia, where we’re going to have a lot more private cloud interest for a lot longer than we’re going to see maybe in some commercial sectors. But the revamp of technology to make it easier and more agile to create a new idea, and easier and simpler for users to have access to those new capabilities and technologies, we’ve barely scratched the surface. We’ve barely scratched the surface.

If you go back 10 years ago, people didn’t have their applications well structured. Kind of the move to the Internet forced people to rewrite and get the back-ends and the front-ends clearly separated. Over the last three, four, five years, people have been saying, whoa, we don’t really love our Web front ends that much. And people have been racing to do front-end applications that are different than just their HTML websites, whether it’s your Facebook presence, or your mobile application, there is still so much innovation in the way we build and architect, and the kinds of applications we write because of the cloud.

The other thing I’ll underscore is the number of new scenarios that are still to be worked in terms of real applications that we all use. I have gone paperless. I’m not kidding about that. And yet if you, despite all the talk of mobile computing, most of the time when I go actually speak to any group of people, including internal at Microsoft, they’ve got paper and pencils, and they print things out, and they lose notes, and they can’t share them very well. It’s kind of the way things are still done for notes in meetings.

We spent $8-1/2 billion to buy Skype. Why? Because we still think there are better ways to interact than the ways that we interact today. And it’s not just I want to talk to Brad and see his face, it’s how do we convene a meeting, how do we capture what we’ve done, how do we share a shared workspace, and have that be simple, and convenient, and easy for people to do.

But the list of application scenarios in which people innovate will continue to extend quite dramatically. The way we write and express ourselves is moving from text and documents to these rich multimedia expressions. That’s not finished yet. So, we see a lot of opportunity for innovation in a lot of areas.

In our own particular case, and I’m going to invite Ryan Asdourian from Microsoft to come on up stage and join me, but in our own case, the innovation had to start with a re-imagining of what Windows itself looked like, whether it’s for machine learning, natural user interface, new form factors, new applications, even the move to the cloud, and if you look at the work we’re doing in Windows Server 8, we’ve been re-architecting for public and private cloud.

So Windows 8, which will launch this year, we think of in our own minds, and we talk with you about, it’s Windows re-imagined for this new world of tablets and phones and cloud, and machine learning. And I’m going to have Ryan just take a few minutes and show you a little bit of Windows 8, and some of the things we’re doing around it on the phone. Please welcome Ryan.


RYAN ASDOURIAN: Thank you. All right. Well, I’m just thrilled to be here to get to show you guys Windows 8.

Now, I’ve got a bunch of PCs over here I’m going to take you through. You’ll be able to follow along on the projector to see what I’m doing.

All right. Now, here I’ve got my Samsung tablet and as I fire it up I see my lock screen. This is one of my favorite pictures that I customized it with. And what you see right as I fire this up that I get a lot of information right at a glance, without even logging in I see my next calendar appointment, I see my mail, my messages. And let me go ahead and log in and as I do if I just swipe up I’ve got a picture here of me and Steve and we’ve got similar haircuts, so I built a picture password around this. I no longer have to actually use an alphanumeric password to log in. I just go ahead, I’m going to touch his head, touch my head, I’ll gesture down my shirt, and look at that, I’m logged in, nice, quick and easy.

So, what you see here is the new start screen. It’s fast. It’s fluid. All the tiles that you see there they’re alive with information. They’re rotating with all sorts of information and I can customize this just how I like it. So, I can just take one of these, I can drag it around, I can move things around, to however I like them.

Now, because I also have a lot of information one of the things that I can do is I can zoom out here and I can go ahead and kind of organize these. So, I come here quickly, just come over here and name this group of a bunch of games I’ve got. So, I’ll just go ahead and name that really quick. So, it’s easy to stay organized and really customize this the way I want.

Now, as I said and you can see, the applications are giving me a bit of information. But, if I want to dive into one of the applications to see even more let me show you what that looks like. I’ve got my Bing finance app here. I’ll go ahead and fire that up, and what you see is I immediately have this full-screen immersive app. I can quickly scroll around, see lots of information and I’m inside of this app.

Now, anywhere in Windows what I can do is I can swipe in from the right, and this brings up my system command. I can get back to my start screen right here by clicking start, or I’ve got a couple of charms, search, share, I can access settings. So, that’s by swiping in from the right. I can do this anywhere in Windows, or if I swipe in from the top, or I swipe in from the bottom, I get application commands.

So, this is how I can navigate around with commands that are specific to the application that I’m in. So, if I go ahead and I click news, I’m taken into that section. Now, if I swipe in frrm the left I can just quickly go ahead and change applications that I’ve got, or I can bring a bunch of them open and quickly change into them. So, it’s really easy to move around quickly in Windows. I go ahead, bring me back to the start screen here.

I just showed you one app, the Bing finance app, and really apps are at the heart of Windows 8. All the ones you need are built in. To name a few, we’ve got mail, browser, calendar, people, photos, music, video. And all the ones you want are right here in the Windows store.

I go ahead, this is the Windows Store right here. Now, Store is a compelling part of the developer value proposition. The store is going to run at the scale of Window. And that means when a developer writes an app they can target the entire base of Windows, over a billion people worldwide, hundreds of languages. Now, you can buy an app in over 200 markets and do it in your local currency. And businesses also will be able to go ahead and create Metro style apps for their employees.

Now, right now as you can see right here, the store is populated with a number of free apps for you to try. Now, one of the things we know today is that people use a number of different PCs, PCs at work, PCs at home, and what’s unique about Windows 8 is they’re all cloud-connected, meaning you’re connected to the people, the files and apps on whatever device you’re using.

SkyDrive is Microsoft’s cloud service that I use to keep all of my personal documents, pictures, and things. It’s a virtual hard drive. So, I can store my files from anywhere and I can access them everywhere. I’ve got here on my start screen a SkyDrive Metro app. I’ll take you into that really quickly. This you can see a lot of my personal pictures and documents right here. Now, let me show you one of these things here, I’ve got my engagement party right here and it quickly brings up a bunch of pictures I’ve got here. So, I can go ahead click into one of these, here’s a picture of me and my mom. Now, another great thing about Windows 8 is how these apps talk to each other.

So, if I bring out my system commands here and I hit the charm share, what happens is it knows that I may want to send this through e-mail. So, to send it with my email I just go ahead. I’m going to email this to my mom and you see how mail comes in nice and quickly. It brings it up, it makes a link to my SkyDrive and I just hit send. And I’ve emailed that really quickly and easily to my mom.

Now, my mom loves getting pictures from me. And she loves seeing where I’m going, what I’m doing, all that stuff. So, if you’ll indulge me for a second I’ve got my Windows Phone right here. This is a new Nokia Lumia 900. Just hold down the picture button, I’m going to just smile for my mom, take a quick picture, show her I was here and prove I was actually doing some work in D.C. Now, my Windows Phone, as I’ve kind of showed you is I’ve shown you some tiles on here. This also has tiles right there. The tiles are alive with information and it really puts the people and the content I care about most right at my fingertips. But, that’s for another day.

Let me take you back to Windows 8 here. You know, Windows 8 will run on a range of devices. And you see a couple that I’ve got over here. We talked a lot about consumer experiences. I showed you some of those. However, it’s also about building content and what you can do for business. Because it’s Windows and it comes on a range of devices, it gives businesses what they need, security and reliability, and employees what they want, sleek, beautiful hardware.

Now, this really helps address one of the challenges that I see organizations are facing with consumerization of IT. Right here I’ve got the Windows 7, Dell XPS 13 Ultrabook. It’s shipping today. It’s thin. It’s light. It’s powerful and it’s got long battery life. The best part, it’s ready for Windows 8 on day one. Now, I’ve loaded it here with the Windows 8 consumer preview. This is the same start screen that I showed you over there. It’s got my apps, my settings and my content. It’s all in the cloud, so it’s followed me to this PC. Now, we’ve designed Windows 8 for hybrid environments. That means it can run the Windows 7 apps that I had on Windows 8. And I can take my Windows 7 hardware and I can use it to run Windows 8. And before on my tablet I showed you what that’s like with touch. But, Windows 8 is also designed to work great with a mouse and keyboard. I can easily move around here. I can go ahead I can bring up the charm. And I can also use this to see the applications I’ve got open. I can quickly switch between them, and move around very easily.

Now, we also make it easy to navigate between the fast and fluid Metro UI that you see here and the desktop that you’re familiar with. I’ve got my desktop tile right here. I just click this. It brings up my desktop. Now, you really get the best of Windows 7 here with enhancements. Now, I talked about SkyDrive before, and I talked about my contents following me. Now, when I open my files, I’m going to go ahead and open this up, and you see I’ve got my documents, my music, my pictures my videos, but I also over here on the left have a link to SkyDrive. I showed you SkyDrive in the Metro app, but here I actually have it as a file folder. So, I can see some of the pictures that I had before, my engagement party here, there are the pictures, but I also have my SkyDrive camera roll. And because my phone is connected to SkyDrive, as well, the picture hat I just took right here, right on this PC, because all of my devices are Windows and connected to the cloud, they all stay connected.

So, that’s a very quick glance at Windows 8. It’s about a spectrum of beautiful hardware, filled with Metro style apps, and it’s all cloud-connected, it’s great for using at work and at home. Windows 8 really delivers a no-compromise experience. It works well with touch, and it works great with a mouse and keyboard. It gives me the mobility of a tablet, and it gives me the power of a laptop. And it’s full of great new apps, while giving me support for all of my existing apps.

So, the Windows 8 consumer preview is out today. I encourage you to go check it out. Thank you for having me up here, with that I’m going to hand it back over to Brad and Steve.

STEVE BALLMER: Just because we have an audience it’s one of the things I’ll highlight to reimagine, because we have an audience of developers, all of eth new applications that Brian had a chance to show, they’re actually just written in HTML and JavaScript. They don’t look like Web pages, but for the skill sets hat are building up, which I know is important here in this community, it’s built and re-imagined around modern technologies.

BRAD ANTLE: Thanks, Ryan. That was a great demo and a great preview, and a great place to start with our questions. Just so folks know, we did take questions in advance from folks. Hopefully you saw the email. We did get some responses and appreciate that. We factored them into the questions we’re going to pose to Steve here. So, with Windows 8, what do you think about the growing demand for tablets and Microsoft. What are Microsoft’s plans to address that market?

STEVE BALLMER: Well, he said holding up a tablet, certainly there is a market for a lot of different style of devices. People want devices with mouse and keyboards, people want devices that are very high powered, and people want devices that they can use comfortably and conveniently on the go, touching, reading, consuming, whether you’re lying in your living room and want to watch a movie, or you want to be on Twitter and Facebook while watching television with the family, or you’re sitting in a meeting like this with all of your meeting notes all browseable, everything roams through the clouds, full access. This is Windows 7, but I have full access to every application, Word, Excel, PowerPoint, OneNote, our CRM system, et cetera.

In my own case, I happen to think the pen is an important addition. I’ve already made a couple of notes today of things I need to follow up on. I just write them the same way I would on a document, and I take it with me. Instant on, convenient, and this is really a slate that was designed for Windows 7. As Windows 8 comes to market later this year, you’ll see a new class of hardware that’s thinner, lighter, may run the ARM processors that we’ve announced we’ll support with Windows 8. So, this tablet thing is obviously very important.

On the other hand, there are set issues people can’t address today with tablets. People do want to be able to be productive and consume. That’s a bit of an issue in today’s environment, because there is no mouse, there is no keyboard, there is no pen. There are no productivity applications, most are fairly lightweight. There is a set of issues around manageability and security. The current generation of tablets don’t generally measure up. They’ve improved. We know the competitive environment there very well, yet they don’t have the range of security and management capabilities that Windows does.

If I lose this, I’m not worried. I’m really not, because I know it has Windows security on it. It’s managed by our IT department. It’s encrypted with BitLocker. I would be upset. Since everything is roaming in the clouds, maybe not even that upset. Half of what’s on here roams, as Ryan showed, through the public cloud. And the half that’s got our financial results that we’ll announce this afternoon we roam that through the private cloud right now. (Laughter.)

BRAD ANTLE: So, Ryan gave us a brief glimpse at the Windows Phone, which as I mentioned to you at breakfast, I saw it the day it was released on The Today Show with Kourtney Kardashian showcasing it. I’m sure because of that it’s gotten a lot of attention. So, how do you think the phone is faring?

STEVE BALLMER: I think the Windows Phone probably is the product where I’d say we’ve done the best job ever relative to sales in our history. You can always, in your own mind, rate any product you sell, this is one of our great achievements, this was just OK, and then you can look at the sales data. Windows Phone I think is nice in a variety of dimensions. If you compare it to Android, Windows Phone really is a platform. It runs one coherent set of applications, and I think that’s very important. If you look at what we’ve done for management and security, that’s important.

If you look at the UI, for all of the hype and fighting going back and forth between Apple and the Android community over who copied who, nobody has ever said with Windows Phone we copied anybody, because we do have a different approach, big Live Tiles, not little seas of icons. In fact, I rarely  well, I can live almost entirely off the top screen. I’ve got my notes from this meeting all pinned. I can see those. Stock quotes that I’m going to need. I’ve got a group for my family. I get any kind of tweet, Facebook notification, email, anything changes with my wife or kids, it posts and shows it right here. I’m not drilling in to go see that. It’s just a different kind of an approach to UI. So, I think we’ve done a great job, and we’ve got a lot of work to do to breakthrough in what is now a very competitive market.

BRAD ANTLE: That’s great. We look forward to seeing more improvements and that phone in more places.

So, you mentioned cloud in your presentation, and obviously in Northern Virginia cloud is a growing technology opportunity and issue really for our customers and the community in general. Where do you think Microsoft is headed in the cloud environment?

STEVE BALLMER: Well, you know, we pushed in from a corporate perspective; we pushed in the cloud sooner than anybody. We pushed in with some earlier product that we now have packaged and put together as our Office 365 offering for email, for communications, for sharing, for productivity. We’ve seen incredible uptake on that offer amongst our commercial and some government customers, frankly, around the globe.

And, typically, I would say when we compete we don’t lose with that product. There are places where our competitors will show up. We don’t show up. But we’ve been doing very well.

On the other hand, there is still a lot of work to do. At the core infrastructural platform, we believe in kind of a hybrid cloud. Many of you are going to want to run things in your private cloud. Many of you are going to be happy to run some things, but not everything, in the public cloud. And all of you are probably going to insist on some level of common management, common security, common directory between your public and private clouds. And what we’ve worked on with Windows Server and Hyper-V on the one hand, and our Azure offer on the other, what we’ve done by having Office 365 in the cloud, but with common directory and based on servers that you can deploy in your environment, is we’ve actually facilitated this move to the cloud on what I might call your own terms, public and private, here and now, and things that may strike you as being secure enough and practical enough in a few years, but today feel like you should still have behind your own firewall, and in your own management.

BRAD ANTLE: You’ve been making more investments in Virginia, and it was announced not that long ago about the Virginia data center that was being stood up. And clearly important to the cloud, what can you tell us about the innovations and some of the technologies that you guys are putting in this new data center?

STEVE BALLMER: Data center technology is moving at an extremely rapid rate. The guys who are really pushing it the hardest, actually, are the public cloud providers, consumer and enterprise clouds. So, it would be us, if you just take a look at data center size, Google has the largest data center today on the planet. We’ve got someplace between 1-1/2 and 2 million entities in the data center. We’re between a half a million and a million. We’d be the second biggest. And there’s probably another three or four that are over 100,000 units in data centers. And you say, can you manage that kind of a data center the same way you can every other? The answer is no.

The second question is can you even build data centers at a competitive rate? We need to think of data center capacity as being almost real-time available, not a two-year cycle to get into a new data center.

So, what it means is the way you design containers of compute, the way you think about cooling, the way you think about power, we actually measure our data centers in power consumption, not the amount of terabytes, or the amount of MIPS. The data centers are all measured in power. And the question is what kind of power can we get at what expense level? How do we reduce power consumption for the footprint we need to put in? How long does it take? Does it take a month from the time we own land? Does it take two weeks? Does it take a year? And all of the kind of most modern thinking of that went into the Boydton Data Center here in Virginia.

We use only outside air for cooling, and we use about 1 percent of the water that are used in traditionally designed data centers. I think the data center here in Boydton runs off of primarily hydroelectric power. There’s been a lot of buzz in the last day or two. I’ve certainly gotten about 60,000 pieces of spam from people who want to remind me that data centers should be clean, and energy efficient, and certainly that was a critical part of the design between us, the work we did with the state, the work that we did with the power company here to make sure that that’s a really first-class data center in all senses.

BRAD ANTLE: So, some other things about Virginia, obviously a lot of folks have been attracted to Virginia for a number of reasons. What else attracted you to Virginia and the Boydton area?

STEVE BALLMER: You want to have proximity to the customer, because at the end of the day latency does matter. You want to make sure you have great access and connectivity to fiber optic backbones. That helps. And you want to have stable and affordable energy sources. The fact that there was hydroelectric power available in the state is advantageous.

In some senses, for data center site selection, given that we’re trying to drive down the number of people in the data center, what you’re really optimizing around is the infrastructure, power, bandwidth, et cetera, that’s available, and the speed and sort of simplicity with which you can do construction. And the State of Virginia, Boydton, were absolutely fantastic choices for data center location in that regard.

BRAD ANTLE: We’re certainly glad that you choose Virginia to locate.

So, let’s move to a term that’s gaining a lot of popularity around this region and that’s big data. It means different things to different people, but I think we all agree that big data is a problem. Even in our own computers we’re constantly running out of space. So, one of the benefits of the cloud is obviously to be able to access and analyze large amounts of data. What’s Microsoft doing to help organizations access and understand all this data so they can make better decisions?

STEVE BALLMER: Yes, I think we have a number of initiatives underway, all of which are relatively important. No. 1, we are a leading edge user of big data, which means we are developing an experience base and a technology base, which we can then turn around and offer to customers in general. Where are we building that? As much as anything in our own cloud services. Who has the most data in the world to use? It’s Google. It’s Bing. It’s a variety of these services. And so the infrastructure to collect that data, to process that data, to let people analyze and manipulate that data, we’re at the leading edge.

We’ve done a lot of work in our SQL Server product for the case where you really want structure around the data. One of the big data issues of choice is how much will be structured and unstructured and you’ll see us move to do both. In our Azure cloud service, for example, we’ve embraced Hadoop as part of the access path to unstructured data in that world. The new capabilities we’ve built into our SQL Server product 2012, that is shipping actually right now, are phenomenal in terms of what they allow for analytic capability. The way we let you get into it and look at that data with tools like Excel and SharePoint is very valuable. And yet we haven’t scratched the surface.

Just take machine learning, machine learning is really how do you take a lot of data, process it and make it useful. My favorite case study on this is one that was handed to me by an enterprise account that people will be able to relate to in Las Vegas known as MGM. And they say our problem when people are in Vegas isn’t to get them to come back it’s to make sure they spend every dollar they’re willing to spend, and then maybe one or two more, and they spend it all in our facilities.

So, every time you are buying a drink, every time you’re putting your little frequent flyer card into a slot machine, they’re trying to collect that data, process it, compare it to all the other people who have been to Las Vegas who they know, and then print you in real time exactly the right offer that keeps you spending money in an MGM facility, as opposed to one of their competitors. The only way to do that isn’t by having people do back end analytics. It’s about having the computer learn the behavior, still have people be able to do some analytics, but real time you’ve got feed that next offer. So, we’re building up the infrastructure for our customers to be able to collect that data, have the machine learning tools to process that data, and serve that kind of need.

BRAD ANTLE: I didn’t think Las Vegas needed technology to take my money, but it sounds like they’re finding better ways to do that, too. Communications is another key capability of organizations looking to technology to help enable. You touched on it briefly in your comments. But, it’s a huge opportunity to drive cost savings and better collaboration. You’ve obviously invested in Skype. You mentioned hat. You have a new technology called Lync, and what are the implications of a technology like that to us?

STEVE BALLMER: Yes, I think most folks, if you haven’t taken a look at our Lync product, most people would say Lync is Skype for the enterprise, it’s probably the fairest way to think about it. And one of the key reasons we bought Skype is to be able to cover your life so that you can communicate with the kind of security and tools that people need and want when they’re at work, and still be able to reach out across your company boundaries to your friends, to your family, to your partners, to your vendors, to the people that you need to touch who are not inside your business environment. And where we’ve been driving with Lync is to be a backbone capability that really lets you do business productivity, communications with great ease.

I will tell you it absolutely will morph the way you work, if you’re in more than one location. The need to get together drops dramatically and it’s not just because I can see you, it really is this notion of meeting notes, white boarding, how many people can you see, how quickly do you switch between speakers, can you decide who you want to look at. I mean, there are so many things that you really need to get right, which aren’t that important, frankly, when I talk to my son in his college dorm room, but which are very important when you try to be productive at work and communicate well. Certainly, there are just a number of things.

BRAD ANTLE: That’s great. You also mentioned, talked a little bit about security. You carry your tablet around and you have important data like earnings that haven’t been released. And so you place a lot of trust in that device and in security. Information is going everywhere and Microsoft is facilitating that. So, what do you think about the security implications in the longer term and what’s Microsoft doing to help organizations manage that?

STEVE BALLMER: I think the let’s sort of stipulate a few things. No. 1, security is very important and probably more important kind of in the milieu in which you live than in many others. Maybe it shouldn’t, but I think your constituents are more sensitive to it. That’s No. 1.

No. 2, we will have security problems in this world the whole time all of us are alive. They may move more and more from being random hackers to deliberate attacks, issues of national security and financial fraud and theft, much more than they have been in the past. But, bad guys are not going away and the attack factor of attacking information systems is going to grow not decrease in importance. What that means is the pressure on companies like Microsoft to do excellent work in this area is only going to accelerate, and the pressure on everybody in the IT industry to use technologies well, to secure information is going to grow.

I think the whole model of security is also going to flip. What most of us have done historically is say, I’m going to protect my organizations, which primarily means you’re going to protect a set of devices which represent your organization. The more people really push on this consumerization of IT, I bring my device into work and I expect corporate information to come with me, the more it’s clear that the key is not protecting the device, it’s to protect the information, every time a piece of information moves you want to make sure that the things that let you protect it isn’t just your ability to completely control the device, but it’s your ability to control the information.

Take a technology that we have in our Office product today called information rights management. I can put policy on any document and any email message on who can see it, who can forward it, who can reply to it, who can copy it, and how long that information stays around before it gets deleted, or aged out.

Well, I really need to have that on pretty much all information in my life, if we’re really going to move to a world where we can’t trust either the people we send to, or we can’t trust the devices on which the information is stored or secured in the way we have in the past. This is a technology we deliver today. It doesn’t solve all these problems, but it does highlight the issue of, we’re all really here to protect the information more than we are to protect even the physical devices, which we’ve gotten pretty good at doing today at least for Windows class devices.

BRAD ANTLE: I think that’s really going to help as we become more global in our practices. On the other side of the house, also security, the cyber threats, something that our government is obviously paying more attention to, and certainly on the top of mind for many of our customers. Certainly something Microsoft is working many issues in that arena as well. Can you talk to us about cyber security, and Microsoft’s approach?

STEVE BALLMER: There really are the things we do, which I would say is someplace between a half a billion and a billion dollars a year in R&D that essentially is about security. Getting key certifications like FISMA, and our Office 365 product, those things are very important to us. They are necessary, but none of this is actually sufficient. You also need good working relationship between the IT community and the security experts responsible for these matters in government, not only in the U.S. but around the world. It turns out cyber security threats do tend to be global in nature. Some of them are states, like nation states versus nation states, some of them are private individuals versus business, private individuals versus nation states, and being able to have a framework for appropriate data interchange is important. With no specifics, let’s just say we’re very active in that kind of appropriate lawful interchange.

BRAD ANTLE: I know we’re running short on time, I so wanted to get a little more open-ended question, so what would you like members of NVTC and our community to know about Microsoft that they may not already know?

STEVE BALLMER: Well, somebody asked me a couple of times, do you travel much? I used to travel a ton. I was gone probably close to 100 nights a year. I have an Excel spreadsheet where I track it, so I know that was true. I travel a little bit less right now, because since Bill Gates has moved out of full-time activities at the company, I wind up spending disproportionately a high amount of my time with our R&D teams. So, it means I sometimes wonder whether I’m completely in touch with what’s going on. It sort of kills me, because by nature I like to get out and see, touch, feel.

But the thing I know that we’re doing that’s the biggest thing we’ve ever done, really it’s the biggest thing we’ve done, we can go back probably to the launch of the PC, is this re-imagination that we’re doing around Windows 8 and the re-imagination that we’re doing around the cloud. And the way we land our new Office product, Office 365 and Windows; the way we embrace new form factors; new processor architectures; new programming paradigms; the cloud as a fundamental citizen; new scenarios like meetings, and notes, and reading; I guess I probably said it about 10 times today, but that move and those applications or systems as emblems of this shift to the cloud, and our ability to be a good steward for our partners and customers; that would be the thing I would underscore.

And let me do a small survey, how many of you have actually touched and used a machine running Windows 8, either a tablet or a notebook? (Audience response.) Then I feel good about having underscored the point. We are still T-minus about N months, where N is less than 12 from shipping. But, I would be remiss in not saying that that’s the most important thing for me to talk about, because we’re re-imagining Microsoft around the re-imagination of Windows 8.

BRAD ANTLE: Steve, thank you very much for joining us this morning. We appreciate your comments.

STEVE BALLMER: Thank you all very much.

(Cheers and applause.)


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