Steve Ballmer: Washington Software Alliance 20th Anniversary

STEVE BALLMER: How about congratulations for our 21 innovators? (Applause.)

I’m the only guy who got a song that’s more than 20 years old. Actually, I don’t know about the rest of you, I kind of knew the songs until about ’97 and then I stopped knowing them at about ’97. I figured, oh man, I’m getting real old, I can’t even track pop music anymore.

It’s a pleasure to be on stage here today and have a chance to talk at this event. I have to say it was kind of fun to walk down memory lane. I hope it was as fun for most folks in the audience, although I almost felt like at the end that my job was just to sort of start a chant: 20 more years, 20 more years, 20 more years, because in a sense that’s what it’s all about.

We can look back, you can be happy, you can be excited, you can think about all the great things that happened, but the thing that brings us together, the thing that keeps WSA kind of alive and thriving, the thing that drives the innovation from the kinds of folks who are on the stage, the kinds of folks who are in the audience is the opportunity to continue the incredible journey that has changed and will continue to change the world.

I get up and make a lot of speeches and I always say one thing that people sort of just nod and blow off, but I’m going to say it again and I’m going to tell you, don’t blow it off, because it’s the biggest thing I’ll say all day. I think the next 10 years will bring more positive innovation and advances from software than the last 10 years, from technology than the last 10 years. People listen to that and say, oh yeah, of course, Steve, right, blah, blah, blah, blah, blah.

But think about it. In particular with the kind of KTel records view of the last twenty years that we just got, but — and I like K-Tel records, that was not a shot, Kathy — (laughter) — no, but think back. Ten years ago, truthfully, most people in the world didn’t have cell phones. Ten years ago, very few people relatively speaking in the world had PCs. Ten years ago, most people didn’t know what the Internet was. That was the state of society 10 years ago.

And to say 10 years from now that the world will be more different from today than today is from 10 years ago, I consider that really in a sense a bold pronouncement.

The next question I always get is, OK, well, then tell us what the world is going to look like, Steve, in 10 years. And I first say, no, that’s Gates’s job, not mine. And when that doesn’t quite work, I say, look, the truth is most people 10 years ago couldn’t predict exactly what the world would look like now. Most people could guess about some technology that would be important. And the key thing isn’t necessarily to be able to say I see how big the market is, I see exactly how things will play out; the most important thing is to be able to say I’m going to make some bets on something, some technology, some opportunity, some sphere of human endeavor that deserves to be, can be, will be transforming, and then bet on it and stick with it and be relentless, tenacious, tenacious, tenacious, stay after it, be smart, don’t blow the resources early but just keep on going and going and going.

Because the truth is most of us in the aggregate can probably correctly call something big that will be different 10 years from now: e-commerce, the way advertising gets done will be different, the way people work will be different, the way businesses think about connecting to their customers and partners will be different; the range of things that will be different is quite enormous.

And so in a sense I think the thing I want to mostly talk about today or mostly leave you with today is this notion of optimism about the future.

At Microsoft we like to talk about our mission, but really the mission for our industry is enabling people and businesses throughout the world to realize their full potential; blah, blah, blah. (Laughter.) No, really, truthfully, when I started at Microsoft, I thought this companies-having-mission stuff, I was really cynical about that. And we wound up with this mission statement for many years, a computer on every desk and in every home. Most people don’t actually know how that mission statement came about; I’ll tell you the secret today.

I’d been at Microsoft about six weeks. I dropped out of Stanford Business School — I thought I had anyway — to come up here and I wasn’t sure why I was here. I thought maybe I dropped out of Stanford Business School to come be the bookkeeper of a 30-person company and that was a little scary to me, frankly even more scary to my dad.

And so I went out to dinner with Bill Gates and with his father and Bill was saying, “No, no, no, no, Steve, you’ve got to stay, you’ve got to stay.” And I said, “Oh, come on, blah, blah, blah.” “Steve, you don’t get it. Some day there’s going to be a computer on every desk and in every home and we can be part of that.” And that wound up being something that actually meant something to a lot of folks at Microsoft and maybe even more broadly in the industry.

And this notion of enabling people and businesses throughout the world to realize their full potential, that is also something that is pretty unique for the information technology industry. Does the banking industry say, “We’re going to enable people and businesses throughout the world to realize their full potential”? I don’t think so. How about the retail industry? Doesn’t work. Automotive? Education? Education is the one industry that I think can aspire to add value to society the same way all of us can, because what we do, information technology in its essence is an enabler, it’s an enabler of people’s creativity, it’s an enabler of productivity, of expression, of communication, it makes the world smaller, it helps knit people together and it has this incredible and huge benefit.

And those opportunities, if you really think that our collective mission is enabling people and businesses throughout the world to realize their full potential, if you really take that seriously, that mission will be unfulfilled 10 years ago. There could be nothing but a huge sphere of things that all of us can get after and not only all of us but all of the folks who want to come along in the future, start companies, develop new technologies, build new businesses. I think there are opportunities out way into the future.

The hardware industry, and I guess WSA now is an equal opportunity association, hardware and software, but the hardware industry is going to do its job. Moore’s Law is going to continue throughout this whole period of time — more processing power, more storage, more bandwidth — and it will really be the innovations of software that sit on top of it that can fuel things and drive things.

I had lunch yesterday with a guy who’s chief financial officer at Applied Materials, not a company I know super well, but they basically make 60 or 70 percent of all the machines that are used to make all the silicon in the world.

And we sat down and I thought I was there to sell him a little software and try to get him to renew a contract and blah, blah, blah, and he sat down and he said, “Look, I’ve got to make sure the number one thing that needs to happen at lunch happens right up front. I have a request.” I said, oh man, we’ve got a bug, what’s the guy going to request. And he looks at me and says, “Look, you guys, not Microsoft, you software guys, you’ve got to keep it going on. If you keep it going on, if you keep coming up with the new things that people can do with computers, we’ll do our part, we’ll give you the chips. But it takes the innovation that comes from the software guys to really make this stuff valuable and important. So whatever you’re doing, you guys try to keep it up; whatever the rest of your partners and the industry is doing, keep it up, because that’s really the key.” And that’s kind of my top message to folks here today.

People say is it a good time to start a software company; maybe there aren’t going to be many software companies in the future, there’s industry consolidation, Oracle buying PeopleSoft, blah, blah-blah, blah-blah.

The truth of the matter is if you really can step back, and I’ve tried to do this recently, I think the software industry structure has been about the same the whole time I’ve been at Microsoft. There have been a few mega-players, there has been a solid but not huge mid-tier of good companies, big companies, global companies, and there have been thousands and thousands and thousands of small companies and startups.

The names all change, the mega players of today were not the mega players of 20 years ago. The midsized companies of today are not — and when I say midsized I’m talking about big companies, billion, two billion of revenue, but they’re not the same guys as the mid-tier companies of 20 years ago. And certainly there’s been a lot of change in who’s a startup and who’s a smaller company.

But if you go out 20 years, 10 years from now, I think we’re going to have about the same industry structure. There aren’t going to be thousands of mega players but there will be some, there will be a good sized middle tier and thousands of smaller companies.

Now, who will be in each tier, who knows — who knows? I can’t say we’ll be there. I can say I’ll give the best part of my life, the part that my kids and wife don’t get will go into trying to keep Microsoft in that mega tier, but it will take hard work and ingenuity and focus and a willingness to innovate and a willingness to listen to customers to keep us there. But there will be a few mega players and I’m sure some of the mega players will be different 10 years from now than are there today and the same thing at the mid-tier and certainly there will be change and swirl and innovation amongst the smaller companies in our industry.

If you assume that view, now is as good a time to be in our business as any time at least in the 24 years that I’ve been in the business: incredible technical opportunities, incredible opportunities to change the world, incredible opportunities to start businesses.

And so when the WSA folks said, why don’t you come and speak, that was really the number one thing I thought probably makes sense for me to share. Microsoft is just as pleased as we can be to be part of this kind of dynamic industry. Most of the folks in this audience we think of as partners in some way, shape or form, because our industry is an industry born of partnership.

I think it’s incredible what’s happened here in the Pacific Northwest and specifically here in the state of Washington. The prediction about our industry being bigger than Boeing, I never would have believed that 20 years ago either. I’m kind of with Eddie Carlson on that one; it’s pretty amazing, it’s pretty phenomenal.

But starting with the incredible resource and facility that we have here in the form of the University of Washington and what’s going on there in electrical engineering and computer science to the fairly vigorous and healthy startup community to the work that WSA does, the work we all should be doing to try to keep our schools very, very high quality — there’s an initiative on the ballot I’d encourage you to take a look at, I.884, big deal — (applause) — we all need to make sure that this stays a place where people will do the kind of vibrant innovation and vibrant work that’s given us all the opportunities that we’ve had to build businesses and really grow and thrive as a software industry.

So I too want to congratulate the Washington Software Association or, sorry, WSA, on 20 years but more importantly I want to challenge Kathy and the WSA on the next 20 years, the next 20 years of helping really to funnel and fuel and channel and provide a network of support to the incredible innovation that I know is going to come out of innovators here in the state of Washington.

Thanks, everybody, very much. (Applause.)