Steve Ballmer: Information Technology Decision Maker / Dev Event

Remarks by Microsoft CEO Steve Ballmer
Paris, France
October 2, 2008

STEVE BALLMER: Well, thanks. It’s fun for me to have a chance to be here with you today, to share a little bit of a view of the future, talk a little bit about some of the opportunities of the present, and really have I hope a good and rich dialogue.

It’s very interesting. This is new technology. I’ve never — it’s okay, actually I get it. Normally these things have two buttons, forward and back, green and red. This one has yellow and blue. I’m tempted to push one, but I won’t.

I want to start by sharing some of my enthusiasm for technology and what we have to expect over the next several years. I think that everybody in this room brings kind of a deep love, passion for information technology. That’s what attracted you to the field.

One of the interesting questions to ask is, where do we go from here? Are we going to have more, better, faster, newer, cooler over the next 10 years, or is life going to kind of slow down? The good news is the pace of technology development, in my opinion, is only going to continue to accelerate.

Now, some people say, whoa, my company can’t absorb that much new technology, and that’s probably true, but I think it’s important for the industry to drive forward in a way that people can adopt when they’re ready, and yet at the same time that new advances continue to come very much and very quickly to the market.

The last 10 years, just think about that for a minute. In the last 10 years — okay, let’s try that again. In the last — that was green. I thought that was always a good color for forward. But anyway.

The last 10 years, just think about it. No cell phones. Ten years ago, most people didn’t have a cell phone. Ten years ago, most people didn’t have a PC. Ten years ago, most people didn’t know what the Internet was. So, a lot has changed.

And yet when we think about the things that are changing in the next 10 years, you can get really excited. In the next 10 years the computer should understand not only our voice but our intentions. In the next 10 years literally any surface, whether it’s as thin and light as a piece of paper or a screen or a table, you’ll be able to have a high quality digital screen embedded in almost any surface, and be able to communicate with, interact with, and access the people and information of the world.

Hardware: Hardware is going to keep getting faster, better, cheaper. We have one small issue: Moore’s Law in its traditional form will break. The old Moore’s Law we always thought was every 18 months we get twice as much performance at half the cost. What’s happening now — at the same cost rather. What we get today from Intel, from AMD is twice as many transistors, but we can no longer use the transistors to make the processors run faster, because the processors are running too hot. There’s no way to cool them. So, instead of giving us faster processors, we’re getting more processors, single core, dual-core, quad-core, eight cores. And we’re going to have to innovate in the software, in the operating system, in the tools, in the compilers, in the applications that we write and you write to continue to take advantage of that hardware power.

The digitization of the world will continue. We talked during the dot-com boom about how all commerce will be e-commerce. We got partway there, but there’s still so much of the world’s commerce that can move online.

The world’s content — newspapers, magazines, television — will all move into an — advertising — will all move into an online format.

Voice calls, video calls, meetings, videoconferencing will all move to be delivered with intelligent software to intelligent devices over IP networks.

And all of that technology advance really presents an opportunity for all of us in this room to build new IT solutions that help our companies move forward.

Now, I know and also recognize there’s constant pressure to reduce and contain IT spending, and I think that pressure is more likely to increase over the next year or two, because of some of the economic issues certainly in the U.S. and increasingly in some other countries around the world. There’s going to be more economic pressure on IT, not less.

So, while we’re helping you propel all of these advances, it’s also very important that we’re doing the work to help you not only maintain and manage but actually lower the cost of application development, deployment, and operation.

One of the technical areas that I think holds the most promise, both to help you increase your agility in bringing new capabilities to your companies, but also to help you reduce the cost of the solutions that you deploy, is the phenomenon that we refer to as software plus services. Some people like to say software as a service, some people like to say cloud computing, some people like to say grid computing, on-demand computing. Essentially I think everybody really means about the same thing. How do we move to a world of distributed computing where the application can run or the scenario can run partly in the Internet, partly on corporate servers and partly on PCs and phones, and things can run where they run best, where they run cheapest, where they’re most available?

I don’t think everything is going to move to be in the cloud with just dumb clients. I don’t think everything is going to move out of corporate datacenters because of concerns about privacy, reliability, and availability. But I do think we’re moving to a new model of computing in which software essentially has to morph and change so that it can be managed more simply and accessed more readily over the Internet.

Our vision as a company then is to create seamless experiences that combine the magic of software with the power of the Internet across a world of devices, and very few other companies would say this. Some companies would say it’s all about the Internet. I agree it’s about the Internet, but it’s more.

Some companies will tell you we focus in on mobile devices or PC devices or we do enterprise software. We will tell you we think the way to get there is with a holistic approach where this magical thing called software, transformed to a world of software plus services, allows us to bring this vision to life for you.

In some areas we’re strong: PC operating systems, productivity applications, business infrastructure, SharePoint, SQL, Windows Server, Exchange. In some areas we’re new with products like Windows Mobile, an emerging area for Smart Phones. In some areas we’re tiny like we are in the area of Internet search, but we’re working hard to innovate, to challenge, to move forward; we have a lot of opportunity to progress. And yet I think it’s really combining the best of these themes that gives us a chance to be a unique partner for all of you in the audience.

With that then as kind of the objective, what are really the elements of moving to a world of software plus services? We need to have a platform, an operating system, if you will, that runs in the Internet. Just like we built Windows for the PC, Windows Server when we wanted to enter and provide the world of enterprise computing with solutions, Windows CE and Windows Mobile for the PC and the TV, we’re building a new version of Windows that we’ll announce this month that essentially provides computation, storage and management facilities that actually live in the Internet.

Around .NET, .NET in the browser through Silverlight, .NET on the desktop, we’re moving to a new world in which applications can be built seamlessly with one skill set, the .NET skill set, from the Internet to the datacenter to the PC to the browser to the device.

We’re evolving .NET and Windows so that you don’t have to choose between the limitations of the browser, but the ability the browser gives you to just click and run an app, to the model of the PC, rich applications, very well integrated, but with an overhead process for installation and for deployment.

We’ve moving as we move to this world to enhance our platform. One of the things we’ve certainly all learned with the Internet so far is it provides unique opportunities to help people connect with one another. While that may have always been an opportunity in the enterprise too, this notion of social computing and the social graph as fundamental infrastructure of a platform — who are my friends, how often do I contact them — that kind of information we want to make available to all applications, whether they happen to be social networking sites or even business infrastructure — who are my colleagues, colleagues of colleagues.

On my Facebook site I do mostly just silly personal things, and yet we want similar kind of infrastructure to support important and serious business collaboration.

We can’t leave behind rich user interface. There was a day when people said, no, no, no, no, everything is going to move to thin client computing where all the intelligence is in the datacenter or in the Internet and all we do is send HTML around. And yet I think we see as phones get smarter and smarter, as PCs get smarter and smarter, people actually want to take advantage of all of the intelligence on the client. You just don’t want to have all of the overhead and hassle of the management model we have for PC desktops today, and so we move down that direction.

Business models will evolve. Some things will become ad-funded, some things will be licensed, some things will be subscribed to, but there will be new and flexible approaches for people to receive value in return for value delivered.

Microsoft’s strategy is to approach the cloud with a platform that is symmetric to what you have in the datacenter — SharePoint and SharePoint Online, Exchange and Exchange Online, Windows Server, Windows in the cloud, SQL Server, SQL in the cloud — so that you have essentially one programming surface between the two environments. The cloud may occasionally get ahead of the server, the server ahead of the cloud during this initial period, but we think it’s very important if you want to be able to think flexibly in a way that maximizes value and lowers cost for you where things go, we absolutely have to have a symmetric system.

Today, a number of those offerings — let me just go back for a second. A number of these — whoops, back, back. There we go.

A number of these offerings we already have available even in advance of having Windows in the cloud: SharePoint Online, Exchange Online. These are already services which you can take to the Internet cloud through services that we provide out of our datacenters today.

I talked about the need for the rich user interface. That needs to span Windows and the browser. We had a chance I know as I was coming in to show some of our .NET technologies in the browser in the form of Silverlight. I hope you agree that’s very rich visualization technology. It proves the point on why you want to run software locally, not just up in the Internet cloud.

One question I get asked is, what’s the foundation on the client for all of this, and, of course, for Microsoft the answer is Windows. We will support browsers, browsers that are not Microsoft browsers. We will have technology that runs browsers on other operating systems. But yet the richest and best PC experience will be on Windows and builds from the work of Windows Vista.

We’ve been in market with Vista for about 18 months. We have 180 million users, mostly on the consumer market, but that’s been ramping up very nicely in the enterprise market.

We made some decisions to enhance security in Vista that caused incompatibilities. The device drivers, the applications are now migrated. We need to help you as corporations migrate your own applications.

But we think we have gotten what we designed, the most secure version of Windows ever. We’ve already got final designs done for the next version of Windows. There won’t be any incompatibilities. So, we want to work with you now to get your applications tested, compatible. And whether you choose to deploy Windows Vista or the next release, you’ll know you’re doing work which is important and valuable as we move forward.

With that as kind of the sort of long range bigger idea, I want to talk a little bit about some possibilities in the here and now.

Microsoft this year will release about 100 different upgrades or new products and services.

One of the areas I’m most enthusiastic about our innovation is in the area of business intelligence. Between business intelligence and what I might refer to as enterprise search, we, all of us can help answer one of the biggest issues that’s on the businesspeople in our company’s minds, and that issue is, how do I get the information I need to make a decision.

Most CEOs when they meet with me, that’s the top question they talk about. I can’t find the information or I can’t manipulate it in a way that lets me get the insight to make a decision.

And between what we’re doing in enterprise search and the work we’re doing in business intelligence, in Excel, in SQL Server, in an add-on to SQL Server that comes to us via the acquisition we made of a business intelligence company called DATAllegro, and our new PerformancePoint suite of business intelligence tools, we think we can do a lot to help you provide those kinds of tools to the people in your organizations, particularly as those things get married in with our SharePoint Portal infrastructure.

But rather than have me just talk about it, we want to show you a short video of one of our very good business intelligence customers, their experience, what they’ve learned, what they’ve done, and that’s the insurance company AXA. So, let’s roll the video, please.

(Video segment.)

STEVE BALLMER: I hope that gets you a little bit of a feel of some of the exciting things that people are doing with the business intelligence platform.

I want to turn now to this notion not only of letting you do more but do it more cost-effectively. Certainly virtualization technology is one of the most significant opportunities to help you take costs out of configuring, deploying applications, and managing them in a datacenter.

With the launch of our Hyper-V product, supporting Windows Server and Linux, with our new System Center Virtual Machine Manager management tools, very well integrated with MOM and the rest of our System Center product line, with the very low price and attractive offering that we’ve put in place, we think we give you now a toolset that allows you to bring the benefit of virtualization to most of the servers in your datacenter.

Today, under 5 percent of the world’s servers are virtualized, but because we build off a familiar platform, we’ve integrated the management tools and we’ve dramatically reduced the price versus anything on the market today, we think there’s a unique opportunity.

We understand many of you will be using VMware and their ESX software, so we’ve built into our management tools the ability not only to manage our own virtual machines, but also to manage the virtual machines of VMware.

So, we think it’s a technology that’s in place to help you consolidate servers, reduce costs, take out operations headcount that would otherwise be very, very necessary in the datacenter.

This is an exciting year for us in terms of our enterprise software line. I had a chance to talk a little bit about enterprise search and business intelligence and virtualization, cloud services and social computing. I’m not sure where I came in the program, but I see this nice RoundTable camera sitting here, which if they haven’t demonstrated I’m sure they’re intending to do. But some of the things that we’ll facilitate for audio conferencing and videoconferencing this year with products delivered in the next month or two I think you’ll find absolutely stunning.

And as a company certainly we are in both the consumer market and the enterprise market. But despite what you might read in the newspapers where people are only interested in the consumer market, the wave of innovation that we’re bringing, based upon the trends that I talked about at the beginning, the wave of innovation for the enterprise market has never been better, and our team here in France and around the world has never been more equipped with the technical specialists, the architects, the solution specialists, the support people to help bring these technologies alive and to make them important and exciting in the businesses in which you’re all a part.

This has been kind of a fast run through a lot of topics. It’s been a pleasure for me to have a chance to talk to you. Time doesn’t permit today, and I feel bad about that, a real question and answer session. So, I’ll tell you my e-mail address: [email protected]. Something on your mind, send me a piece of e-mail, or, Mark, what’s your e-mail address: [email protected]. We’re all interested in hearing from you. Thank you very much. (Applause.)