Steve Ballmer: Open Door Keynote

Steve Ballmer, Chief Executive OfficerRiyadh, Saudi ArabiaNov. 2, 2010

STEVE BALLMER:

Well, thanks. It's a great honor and privilege for me to have a chance to be here with you today to share a little bit some thoughts about where things are and where things are going, and share some of my enthusiasm for the opportunities for all of us in the IT industry to really drive forward, to deliver amazing solutions, and to have an amazing impact.

We all, everybody in this room, we all picked an industry that I think is particularly wild, dynamic and exciting.

You know, the computer was invented 60 years ago roughly, 60, 65 years ago, and yet we sit here in the year 2010, and if you look at the next five years, the next 10 years, I think there's going to be more change, more innovation, more positive forward motion because of IT than at any time in history, which after 60 years it just implies that we've all picked a really wonderful, wonderful place to work.

I want to talk to you about some of the big changes that we see coming technologically, and what we're doing at Microsoft in our products to help you realize and take advantage of some of the big opportunities that are in front of us.

We talk a lot about the cloud -- the cloud, the cloud, the cloud. In a sense, you can almost ask, what is the cloud? Everybody talks about it, and I bet if I asked five people to stand up and give a sentence about the cloud, we'd get five different sentences is my guess.
And that might be OK. Our industry has a way of like picking buzzwords to get excited about, and being imprecise about what they are, and yet the phenomenon in aggregate is really as important as our industry says.

Well, to me the cloud refers to four or five different innovations that are all going on at the same time, and each and every one of them has the opportunity to have really a remarkable impact on society and our industry.

Whatever those opportunities are, the first thing we've got to remember is the cloud will create new opportunities, because somehow the ability to build software solutions, to get those globally deployed, to have those solutions do things that people couldn't anticipate in the past, that's fundamental to the cloud. I mean, literally if you could write an application sitting here in Riyadh, and immediately have it be globally discoverable, usable, scalable to people anywhere in the world, that's a beautiful thing.

The cloud also brings with it though a new set of responsibilities. There's no question about that either. I'm going to talk about public clouds and private clouds, and blah, blah, blah, blah, blah, but suffice it to say that when we speak of the cloud, we're talking about putting more than ever important information in electronic format, and making it more accessible. And that implies a responsibility on us as a vendor and on all of you as IT professionals to put even more attention into issues of security and privacy and data integrity than perhaps at any time in the past.
So, the cloud will bring new opportunities and new responsibilities, but the cloud will be built on two foundations.

No. 1, the cloud really is, as we say, about new server advances that are powering the cloud, and new things from the cloud are powering the server.

The cloud brings together Internet computing, data center computing, mobile computing, PC computing, into one mixed whole.
If we think about some of the advantages of each of those models, they're obvious: the ubiquity of the mobile, the richness of the PC, the control that we all have over our servers and data centers, and the ability really to have a global footprint that comes from the Internet.
So, how do we bring the best of those together? That's the cloud. And on the back end that's a big deal.
Today, as we all build applications, we think about building those things for servers. If I go to anybody in the audience, they say, OK, I've got to build a new solution for my company, it's going to be a new e-government application -- I was just some public sector customers -- we're going to build a new e-government application, one of first questions will be, how many servers do we need? Do we need a new router, how does the switch work?

A lot of the thought process that goes into building and deploying an app is really about how you do configuration and deployment and update and management and operations. The degree of complexity that comes, because in today's server world the data center and the network are very tied to the application, and that means a cost of complexity and agility, a lack of agility.

About five or six years ago, we started building our Bing service, and the first thing we found out -- because Bing now has about, I don't know, 300,000 servers in it -- is we couldn't have developers thinking about their own servers. We couldn't have people -- and we change Bing five times a day; we're propping new releases. You simply can't manage that kind of environment unless you can separate these things. That implies a new way of thinking about data center design, hardware, network, compute; it implies a new way of writing applications.
So, the cloud really is about not just a new business model for applications; it really relates to a whole new architecture in which we get dynamic data centers where the applications and the data centers themselves are abstracted.

The cloud is also about new devices on the front end. Whether it's where we and others are going with smartphones, whether it's about the shifting definition of a PC to embrace new data types, whether it's about the move to embrace Natural User Interface in devices, devices that you can touch, talk to, they recognize you, "Hey, Steve, I see you, welcome, welcome back home today," you're going to get a new class of smart device that's more natural, that learns about you, that moves with you and embraces you.

The cloud is also about new applications, applications that can think about not just specific people and specific data that lives inside your application, but the cloud is also about turning all of the world's people and all of the world's data into information sets against which we can write programs.

Let's say you want to get a community together of parents who are interested in some childhood disease. That's not easy to do today.
Let's say you want to get together a group of people who are working on a lease, maybe a tenant and a landlord and their bankers and their accountants, and you want to operate securely on a document. That's not easy today.

Let's say you want to write a program that goes through -- I don't know, since I'm in Saudi Arabia, I'll pick an example from the oil industry, but it goes through and analyzes what's happened to oil prices at various times based upon, I don't know, what the level of debt was to GDP to various countries in the world, since that's been a crisis of late.
I actually tried to do this not with oil prices, I tried to do it with economic growth, and you can search, you use our Bing search engine, you can find all of it. Maybe you can use the other guy's search engine, too, and find it all. But you can't write a program that just goes out and gets the data for you, and puts it in a simple spreadsheet the way you would want it to work.
So, the cloud is about new applications that use the data and information about people that lives on the Internet, it's about a new architecture for the back end to write applications, it's about new client devices, and of course it's also about a new business model. It's about a business model where you can rent, if you want to, capacity as opposed to buy capacity.

We have a number of government customers in the audience. Government customers say, hey, look, we don't want to put all of our data in the cloud. I agree with that, and that's why I think it's very important, and we've announced the notion of something we call private clouds, so that you'll have a Windows Azure system in the public cloud, and then you'll also have a Windows Azure appliance that our customers can buy to have their own private cloud systems.
So, when it comes to the cloud we like to say we're all in, whether it's Windows or Office, whether it's Exchange and SharePoint, whether it's Bing and Xbox and Windows Phones, the PC. When it comes to the cloud, I would say everything we're doing, every product, Windows goes to the cloud, and you see that in what we're doing with Internet Explorer 9, you see that the way Internet Explorer 9 shows off the best of the PC, but at the same time embraces Internet standards. You see in in what we're doing in Windows Phone, which we're going to demonstrate in a minute. You see it in the new Xbox 360, and the way it uses the cloud to know about me, recognize me, and connect me with my friends. You see it in Bing, you see it in Office, you see it in our Windows Server and SQL Server products, and the way we're moving them to the cloud with Windows Azure and SQL Azure.

One of the most important products from us, and one of the emblematic products on the client side in terms of embracing the cloud, is Windows Phone 7. There's no question that I wish we had not run into a couple of difficulties and that Windows Phone 7 had been perhaps a year or so earlier, but Windows Phone 7 is a fantastic product.

< Windows Phones really are, as we like to say in our marketing, they really are a different kind of phone. They really are phones that let you, at a glance, connect with the people and information that is most important to you in life. It builds on this concept of looking at the people and information of the world as something that you draw in and make relevant and personal, and the user interface on every device.

Windows Phone applications are starting to come to market, even though we've only been a week or two in delivery. We see a range, now thousands of applications being developed using familiar Visual Studio tools.

Windows Phones have a diversity of hardware. You want a keyboard, you can get a keyboard. You want a big screen, big screen; little screen, little screen. You want a nice set of stereo speakers, you can get that. It's not one size fits all like it is with some of our competitors; and at the same time, you write an application for one Windows Phone, whether it's from LG or Samsung or HTC or Dell, or anybody else, that same application looks, acts, and behaves just the same across all of the Windows Phones that you might buy.

ABDUR RAHAM: As-Salāmu `Alaykum. No, I need actually more. As-Salāmu `Alaykum.
AUDIENCE: Wa Alayka-as-Salam.

ABDUR RAHAM: So, it's nice to be here actually. I really thank everyone to have the time to attend the Open Door. And I'm actually being honored to show you Windows 7 and our innovation with Windows 7.

With Windows 7 we get an opportunity to take a fresh look at how people use their phones, and really we asked ourselves two simple questions, really simple questions: How we can make a phone that focuses on the individual -- that's you, that's everyone here -- and also that makes tasks easier. That's one. The other question is actually how we can deliver great experiences that make your life easier.

Very simple questions, do you agree? Yes or no? Agree? Very good.
So, with those kinds of questions, we actually came up with a phenomenal result. That is what we call Windows Phone 7. Windows Phone 7 has a smart design that makes your life easier, and does exactly what you want with your phone whether for business or personal self.
And at the same time, we built something called Windows Phone hubs that get you integrated experiences that focus on the most easier and the most important tasks in your life.
So, to start off, you know, you can see like at a glance I can see what's happening on my screen. I've got a number of missed calls, I've got a number of e-mails, I have like three e-mails to check every day, and I have SMSs and everything. So, I can actually take a look at this you-know-what screen, and know what's happening with my phone.

Once I unlock, here you go, a smart design, a stark screen that actually focuses on you, not your manager or not your whatever. It's actually about you. It's actually things that really is important for you. You can see how smooth it goes with you. It just, you know, romances as it goes.

You can see, for example, the things that here you can see in this; that's me, that's my card, and that's what's happening on my social networks, all of my friends around and so on; very easy, very smooth.

What's very important is that we're not just stopping there. We are actually doing more than that. We're building what is called Windows Phone hubs that's all about the most important things in your life.

So, let's take one, People hub. I think this is the most important thing if you are using a phone. So, with People hub we get all your contacts. And not only that, it actually goes beyond the contacts and connects to all social networks that's available within your network.
So, if I go to People hub, for example, you can see that what's new, whether it's my, it's my friends, it's my family, or my business colleagues and everyone. I can do a search, and this is where the contextual search comes in. And more importantly, if I am communicating with Wa-El (ph), because he's delivering this keynote with me, demo, so I can actually click on Wa-El's contact, and I can see every detail about Wa-El, whether it's coming from Facebook, Windows Live, any other network as well.

Once I go there to linked profile, that's one contact, multiple linked profiles, I can see that Windows Phone discovered that Wa-El is part of my Windows Live network, would you like me to actually suggest to link it to this profile. So, it's just a tab and here you go, it's there.
I need an applause. (Applause.) Yes, exactly.

That's not the whole story. Going back to, for example, another Windows Phone hub, Pictures hub, I believe everyone here uses their phones to photo, to share photos and so on.
So, what the Pictures hub does for you is not only taking photos, but actually includes the entire collection. Everything you use in your life that is called a photo would be there. So, if I go there, it's actually every single photo in my phone, every single photo that's out there in Facebook albums, as you can see, and every single photo that's out there in Windows Live.
And if I'm interested, for example, to go through this nature album, for example, I can quickly go through the pictures, and I can see every single comment on those pictures coming from Windows Live, coming from Facebook, or any other social network you would be interested in. So, it's smooth and easy.

One last Windows Phone hub, and that's actually not everything, but the Office hub. You would like to create documents, edit documents, share documents, and also synchronize documents with everyone that's in your surroundings.

So, with Office hub you get every single note that you're interested in, and synchronized with Windows Live SkyDrive. That's what we'll be talking about in a minute.
If I go, for example, into this company address, I can see rich text and notes, with pictures, and even voice, and directions to the company address. More importantly, if I go, for example, if I'm interested to show work on a Word document, it's just a matter of typing in that document, and seeing what's happening with this document. And what's very interesting is that it's really a richer experience. I can go through the outline, and click through the different titles and headlines in my phone, in my document, and I can see every single comment that's been posted, whether from my side, or while Kathleen was actually editing this document just two days ago.
Not that only. As I told you, you can synchronize documents to SkyDrive, but also you can take your SharePoint, corporate SharePoint, completely offline if you're interested. So, you can see, for example, these documents are coming from SharePoint, fully synchronized. I can make them available offline for editing, and everything. So, you can see those documents, and I can actually connect to multiple SharePoint sites as well.

That's pretty much it. It's just all about this smart design that focuses on you as an individual, and your tasks, and it's about the Windows Phone experiences that gets you the most important things in your life.

Thank you. (Applause.)
I would like to invite Wa-el to come and show you some stuff about what we're doing with the cloud, and consumer Windows Live products. Wa-el.
WA-EL: Well, sorry. Thank you.
What I would love to show you today is, what does cloud concept mean for a normal end user. And I thought the best way to show that is to take you on a tour in our new Windows Live experience. So, let me start by looking into Live.com. And please, people in this audience, if you like what you see, please don't be shy and just give us random applause on whatever you like to see.

So, let me take the first thing on this page. So, you can see on this page, because I'm already logged in, you can see this page is customized for me, reflecting my style. I've changed the background, the colors, the themes, and the picture. So, what we have here is a navigation that will take me to all Live Services, and I can see what's going on in my Hotmail, SkyDrive, Messenger, and Office. By the way, stay tuned; I am going to show you a few services from these later on in my demo.
So, let's see what do we have in the mid-section here? So, you can see my Hotmail highlights, and I can see all my incoming e-mails, what's new, upcoming birthdays, and at the same time you can see at the right side my Messenger friends. These are contacts, and you can see these are people from my MSN and my Facebook. So, I can start chatting with them at any time.
So, I think that's really cool. What is even cooler is the second section, which is the social part. If you look at which is my favorite part, actually this is the part actually where I can connect live to multiple social networks. In this case, I'm connected to Facebook and LinkedIn. So, what you actually get is all these status updates, videos, pictures, coming from both networks, and they're combined in this one place. And I can be up to date on what's going on on these networks actually. And I think this is really, really a cool feature. What do you think, guys? (Applause.)

OK. So, let me take you to Hotmail, and show you a few e-mail tricks there. It seems that I have an e-mail from my friend Abd-Rahman Sufani (ph), and let me just open the e-mail there. So, Abd-Rahman actually took a trip last week to Singapore, and he wrote an article about that. So, he wanted to get my opinion about it. What's really cool about Hotmail is, because Abd-Rahman sent this document through Hotmail, it will automatically, as soon as I open this document, it will automatically use the Office Web Apps, and open it on the browser.
So, this is actually what you're going to see. If you remember from Abd-Rahman's demo, this is actually the same document that you saw on the phone, but this time you're seeing it on the browser. It has the same format. It's giving the rich formatting, with everything, with the pictures and everything. But that's the easy part.

You know that lots of companies actually, today, on the cloud, they are doing this. But you know what's really unique and cool is, if I click on edit on the browser, I get this. I get a full, rich editing ribbon on the browser without having a client on my side. (Applause.) I can start actually typing here and change the format, do everything I want as if I am on my PC actually. Let me click here to save.

So, basically, if I am traveling, I can use my phone, or if I'm in an Internet cafe, I can use Office Web Apps, and edit this document on the browser. So, let me but is sending an e-mail, actually sending a document through an e-mail, the only way to share documents? That's not the only way. Let me show you another service in Windows Live, which is SkyDrive. So, let me take you to SkyDrive here.

So, SkyDrive is basically a service that will give you 25 gigs of storage where you can put all your files, pictures, videos, whatever you like on this storage. Also, you can share these documents there. Let me show you something that I've already did. This is an article that I've already uploaded. And I've invited some friends to edit this document with me. So, I don't need to send an e-mail, actually, I just give them permissions to do that. So, let me click on edit on the browser.

So, this is an article about the intellectual property, which is, by the way, something very important for us. Keep in mind that you always get the genuine software. So, still, you can see this nice fidelity Arabic document, where I can just start editing on the fly from wherever I am. But still, if I would like to have the full, rich editing experience, I would still love to do all of my editing and tracking on Microsoft Word, right. So, did you guys love what we did on editing documents?

So, if you liked that, you're going to love what we did on pictures. So, let me go back to Abd-Rahman's e-mail. One more last feature I would love to show in Hotmail is the ability actually to look at attachments without the need to download them, actually. So, if I click on the picture here, I can actually navigate through all of these pictures without actually downloading them. And this is nice and cool feature, actually. (Applause.)

One more last thing. Abd-Rahman actually is asking me, he knows that I have attended the wedding last week, and he wants me to send some pictures. One problem, though, I and most of you keep all personal photos at home, at home PCs. So, I don't bring them in my working life up here. Luckily, I have installed on my machine here our Windows Live Essentials, and basically what a Windows Live Essential is a package of a couple of software that comes with Movie Maker, MSN Messenger, Family Safety which provides you safe family browsing, and the Live Mesh, and the Photo Gallery. So, what I'm going to talk about is the Live Mesh. And the Live Mesh is a software that will allow me to synchronize devices between so I can add my home machine, I can add my working machine, and I can add my phone, and I'll synchronize all of that using SkyDrive.

So, what I'm going to do here is, I'll access my home machine, actually. I've already synchronized my home machine on SkyDrive, so I can access the wedding pictures from my home machine directly as if I am accessing it here locally. (Applause.) So, these are the pictures from the wedding.

One more cool software I want to show you is the Photo Gallery. And the photo gallery is one software that will allow you to share, organize, and edit your pictures. So, if you can see if I select a couple of pictures here, I'm just one click away from sharing these pictures on my favorite social network, such as SkyDrive, Facebook, Flickr, whatever I like. And that's also a nice cool feature. What I would like to show you is the face recognition, actually. So, the Photo Gallery actually can recognize faces, and will tell you you need to tag those people, actually. So, you can see who are these people and you can start tagging them.

So, what's next? So, the more you tag people, the more Photo Gallery actually will get educated and even will suggest names for you. So, it's not only recognizing faces. In this case if you look here Photo Gallery already understands that this is my grandfather, because I have already tagged him so much it's asking me, is this your grandfather, and it's, yes, please confirm. Yes. (Applause.)

One more cool feature, one of the limitations that I have on my camera, I couldn't take a wide-angle picture. So, I have this big group of people, so I take these two pictures, actually. I took this first picture and the second picture, and I couldn't actually fit them all in one picture. But, what is actually really a nice cool feature here, if I selected the two pictures here, click on create, create a panorama. So, what Photo Gallery will do is, we'll take the two overlapping pictures and create a stitch out of them, and this is what we'll actually get. (Applause.)

This is the first picture, second picture, and this is the last picture, and still the face recognition, all that stuff, works. So, with this we already reached our end of our tour. You have seen Windows Live. You have seen the social part. You have seen what did we do with documents, with e-mail, with the new Hotmail, all that stuff. What I want to really, or what I want you to do today is to log into Live.com, and start using these services today, because this is cloud for you, and this is cloud for everyone. Thank you very much, and I hope you enjoyed the tour. (Applause.)

Back to you, Steve.
STEVE BALLMER: I have to say, I'm going to also recognize cloud's grandfather at this stage forward. We were trying to do a couple of things there. I talked about the cloud, the cloud, the cloud, the cloud, the cloud, and we're all IT people and can get enthusiastic about what the cloud permits. What we just had a chance to show you is what the cloud permits, a new class of device, a device that thinks as a smart device from the get-go. We had a chance to show you some of the new kinds of applications that you can build once you assume you have the cloud back end. The cloud helps us do recognition. The cloud gets smarter. The cloud is a place of storage.

We have customers moving with us today to the cloud. The cloud is not something just for the consumer, or something for the future. We have 10,000 customers who have moved with us to the Windows Azure cloud. We have 40 million users who have signed up to work with us with Office in the cloud. The names of companies we're working with include big names. McDonalds, Nokia, Starbucks, Siemens, Philips; these are not small companies. They're committing their collaboration and the communication environments with us to the cloud. They're writing mission-critical applications for marketing and field service, working with us in the cloud. So, the cloud phenomenon has really taken off today.

Here in Saudi Arabia we have a number of good partners that we've worked with on public and private cloud solutions; with Mobily, a tier-one mobile operator, we've worked on data and hosting solutions in the Kingdom. We've established a data center in partnership with them here in Saudi Arabia, where they're hosting Exchange and our Lync unified communications technology, and CRM.

With Exa, a breadth hoster here in Saudi Arabia, we're doing work that is similar, but also even more in the CRM arena. With the Saudi Post we are working on solutions to provide cloud-based e-mail services for consumer and businesses alike. So, the cloud is taking off. We have solutions that customers are embracing on a global scale. We have partners who have cloud data centers that we are working with whose data centers are hosted here in the Kingdom of Saudi Arabia. And it will be our great honor and our great privilege to have a chance to work with all of your organizations and companies to help you get to the cloud.

The cloud presents us all with the bright future. It's not cloudy, so to speak, in the world of the cloud. And we hope you'll come with us. If we can help please let us know. I'm SteveB@Microsoft.com. If you want to follow up via e-mail I'd love to hear from you. It would be wonderful. I think we're going to have a chance just because of time to have just a few of the questions that you submitted, but I look forward to hearing from you after the fact on e-mail. And so Samir is going to come up and we're going to take a few questions. Thank you very much.
SAMIR NOMAN: Developers, developers, developers.
STEVE BALLMER: Developers, developers, developers.

SAMIR NOMAN: What are Microsoft's strategies for Windows Phone developers? This is a question that was given to us by Adris Zavar (ph) from Neshum (ph) Insurance.
STEVE BALLMER: We have tools available for free today; just go to Microsoft.com, or do a Bing search. You can download a Windows Phone toolkit that lets you build Windows Phone applications. It gives you an emulator so you can test them and run them right on your PC, and of course, Windows Phones available in Saudi Arabia in December of 2010. (Applause.)
SAMIR NOMAN: Another question from Fareed Shanowi (ph), from VNS. Is cloud computing anything new, or is it just a new name for hosted services?
STEVE BALLMER: Excellent question. Cloud to me is something new. It does include some of the same concepts in hosting, but hosting was about taking the existing environment and sticking it on the Internet. The cloud is about re-architecting the way you build applications to be fundamentally more agile and lower cost. And if you look at our Windows Azure system, that's what it does.
The cloud isn't just about moving things into the Internet, it's about enabling a new class of applications that know more about the data and people of the world. That's different than hosting. And the cloud is about a new class of device, not just the existing devices, but we're taking Xbox, we're taking Windows Phone, we're taking Windows in new directions to use the intelligence on the back end in new ways. That's the distinction between just taking a server and hosting it in the cloud.

SAMIR NOMAN: How can cloud computing help businesses in Saudi?
STEVE BALLMER: I think cloud computing can help businesses everywhere be more agile in application development, be more cost-effective and help better connect with the customers, or citizens in the case of e-government, that you do business with.
SAMIR NOMAN: OK. And as a final question, what differentiates Microsoft from other companies who are already offering cloud services?

STEVE BALLMER: There are two kinds of cloud services. There's cloud services for the consumer and for the business. And I'll focus a little bit on both. When it comes to consumer cloud services, I think the work that we're doing we've got good competition, we've got competition primarily in the form of Google. But, if you look at what we're doing with Bing, if you look at the way we're partnering and working with companies like Twitter and Facebook, that Google is not, if you look at the work that we're doing to push forward the kinds of things people want to do for personal e-mail, photos, collaboration, I think we're really stretching and pushing some advantage, clear advantages versus Google.
If you go to the business side of the cloud, there really are two components. There's what we've got with our Office 365 cloud service, where frankly the competition is probably Google, but they're not close. They don't have the experience we do. They don't have the number of customers we do. They don't have the capabilities we do. They don't have the security that we do. You can look at it, but I feel pretty confident that we're way ahead.

The other aspect of the cloud for business is the cloud as a platform for building applications, Windows Azure and SQL Azure. There the competition probably looks like Amazon, maybe a little bit Google, and Salesforce.com, a little bit VMware, a little bit IBM. All of our competitors will either tell you to just do the private cloud, or just do the public cloud. And the truth of the matter is, the best strategies, the strategies that are really going to help you build applications with greater agility, and yet still be able to have when you need it the privacy of the private cloud, you need to have a model that fits in both.

VMware and IBM will tell you they can help you build from scratch a private cloud. We'll sell you a private cloud in a box. Google, Salesforce, Amazon, they'll tell you everything has got to go in the public cloud, which I just think is a non-starter, not just for government customers, but for a number of our private customers, commercial customers, with their important mission-critical data.

So, I think we're quite differentiated in having a strategy that spans both. And thinks at the platform level, not just at the infrastructure level. But, I encourage you all to check it out.
SAMIR NOMAN: Thank you, Steve.
Thank you all.
STEVE BALLMER: Thanks very much. Enjoy the rest of the conference.
END