10 Oct Ballmer speaks out on convergence, Vista, Google, and Microsoft's vision
Orlando, Fla. – The computing world is moving in the direction of a merging of four computing models, according to Microsoft CEO Steve Ballmer.
Questioned by Gartner’s Yvonne Genovese and David Mitchell Smith during Gartner Symposium/ITxpo 2007, Microsoft’s chief executive fended off criticisms of Vista, addressed the company’s competition with Google in the online advertising space, and said it is working to make possible the convergence of these four computing models – the web, the desktop, the enterprise in terms of manageability and compliance, and devices like mobile computing.
“There are advantages of each model to mix and match between applications. Everything will not be thin client… the world we aspire to will bring the best of all of these models together. How that proceeds will be different in the consumer world as opposed to the business world,” he said.
In the enterprise space, he said people want software to be easier to take care of, they want software to self-update whether its in desktops or data centers, and they would like the desktop to self-manage. “Making that more seamless is a top-level requirement we keep hearing from our enterprise customers,” Ballmer said.
While Microsoft is confident of its position in three of its four models – software and desktop computers, the enterprise, and devices and entertainment – even Ballmer admits to being “number three” in the online advertising space (behind Google and Yahoo). To play catch up, Microsoft has made investments both large (Seattle’s aQuantive for $6 billion) and small (Madison’s Jellyfish.com for about $50 million).
Genovese asked, “When will Microsoft differentiate themselves from Google?”
Ballmer took issue with the notion that there was little difference between Microsoft and Google, citing differentiation in certain verticals and interfaces. “I feel well differentiated in productivity and the workspace,” he said.
Ballmer said that he doesn’t recall saying, as was widely reported, that Microsoft anticipates that 25 percent of its revenue will come from online advertising within the next decade, but he acknowledged the company has a lot of work to do in search and advertising.
Whereas 10 years ago the company primarily was focused on Windows, it now needs strategies in all four of its core businesses, and it is transitioning from the Bill Gates era with visionaries in each area, including Jay Allen in devices and entertainment. In addition, Ballmer assured the audience, estimated at over 6000 attendees, that each of the four business models would embrace third-party innovation.
Gartner’s analysts asked, “How is the vision at Microsoft evolving?”
“Our strategy and vision are changing. We started as a software company; we focused many years on the desktop, and then broadened to the enterprise and now to the Internet.”
Microsoft will also continue to invest heavily in technology with productivity, enterprise, and desktop applications. “There are synergistic at the center… We will do with more with Ray Ozzie and Craig Mundie under my auspices,” said Ballmer
He also defended Vista from criticism by Genovese, who said her 13-year-old daughter saw a lot of value in the new operating system, but that she still prefers Windows XP.
Like her daughter, Ballmer said end users appreciate the value Microsoft put into Vista, including its security features, but the company has learned to be cautious about promising dates and schedules. “The real issue isn’t whether there is value,” he said. “The real issue there is we have some things we’d like to see in shape first.”
“Fewer device drivers were available when we shipped,” he said. “The same is true for applications and changes for security. We have to take care of some of these issues. We have Service Pack 1 now in beta.”
Consumerization of IT
Gartner’s Genovese and Smith questioned Ballmer on in the intersection of consumer devices and technologies and the challenges that poses to the enterprise.
Ballmer said Microsoft is perhaps, “the number one company in the world to have benefited from the consumerization of IT. … We believe in it, we have lived it, and we hope nobody else will do unto us as we have taken from others before.” He said that can be seen in instant messaging adoption and collaboration, noting that there is a template in Microsoft’s SharePoint that allows organizations to do wikis.
“In many ways, one of our challenges is to continue to drive on the consumer side, make progress, and move that to the enterprise side,” Ballmer said.
Is Microsoft making progress?
Asked where the progress is with Windows 2007, Ballmer reacted by saying, “Microsoft has had a phenomenal year in terms of what we’ve delivered.” He said the new office suite has a more accessible user interface, and he noted it was launched along with 33 other products that were built around it, including a new version of SharePoint that has achieved the fastest market acceptance of any product Microsoft has developed.
In addition, Microsoft is about to introduce an office communications server that provides real-time communication around the office environment and allows people to collaborate in new ways.
Gartner’s Smith probed, “Are you moving toward a model for a web-based approach or something else in next version of Windows?”
“We are doing that with Windows updates, and browser extensions,” Ballmer said. “You will see more real time extensibility through the cloud and richer clients. We want the best of web, mobile and the enterprise.”
“We will not snap our fingers and bring it out right away,” he cautioned.
Consumer versus enterprise focus
Blackberry users were consumers first fist, then IT. “We need to be able to enable to take consumer technology to make it easier to have agility in the enterprise and offer click to run… we need more manageability. Today what is permitted and logged in instant messaging is a big deal. We need to span consumer to IT demands,” said Ballmer.
More enterprise interoperability
Garner analysts reflected the concerns of their enterprise customers, quizzing Ballmer on why it is so challenging to integrate Microsoft with other enterprise systems.
“We may do deep partnership to get more value with SAP, we are doing that with Duet from within Office to explore information and do business intelligence,” Ballmer responded. “We have general interoperability in Biztalk, more interoperability for HIPAA, and will build more interoperability into our environment…. We need more horizontal interoperability partnerships… but partnerships with Oracle are a bit more challenging.”
Attracting employees to Microsoft
Smith questioned Ballmer on the next generation workforce at Microsoft, and issues it faces with students embracing a culture of open source, the changing ethos and way of thinking among younger employees. He asked, “When you hire at Microsoft, how do reconcile the open source mindset versus Microsoft’s more proprietary environment?”
Ballmer responded, “There are some people that are religious [about open source], that is not mainstream, our stuff versus OpenOffice… we encourage open source on top of Windows.”
“When we recruit we have same challenges today that we had 27 years prior at Microsoft… people 27 years ago had Unix skills, today they have Unix skills in terms of Linux. It is easy to recruit for our environment, but we do not get religious folks… and the are a small minority”
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