Transcript: Microsoft CEO Steve Ballmer: Perpetual Optimism and Concern Over US Education

This transcript is from a PodTech.net podcast at:
http://www.podtech.net/home/technology/1386/microsoft-ceo-steve-ballmer-perpetual-optimism-and-concern-over-us-education

Guest: Steve Ballmer - Microsoft Corporation

Steve Ballmer - Microsoft Corporation
Well thanks; thanks very much to the center. I very much appreciate that the kind introduction as well as the invitation to come here this evening. I do have to say I was a little bit skeptical -- and the Senator said, “Why don't you come for a technology conference dinner on a Friday night?” Now, I know, technology people; and then came the punch line it's black-tie -- black-tie Friday Night Tech; and I thought it would be the Senator and three or four other people and myself. And to see so many people here and out, and for this event I think it's just fantastic and really quite a testimony to the work UTC must do, that so many people have so much enthusiasm, and frankly, quite a testimony to all of the great stuff that's going on in technology in the state of Utah. I encourage everybody to really look at the programs that were handed out.

I was going through the Hall of Fame inductees, - most of them, not all; most of them came from the information technology in computer business; and it is amazing -- absolutely amazing, what a profound influence on the business side, on the technology side, on the research side, that folks from the state of Utah have had on our industry. And that speaks volumes to a lot of good things that must be happening in the state. I knew Utah didn't have a huge population; Center (ph) and I were talking though; it's perhaps even a little bit smaller than I anticipated, and all of that speaks I think, probably the quality of the university system, what's going on, and the fact that there's been a real strong technology base here for quite a while. For me it is particularly fun; that Jim Kajiya is being inducted into the Hall of Fame tonight; its great to see a Microsoftee in that group - not to take anything away, Dinesh, you want to come work for us, that would be good too - but it is just a great honor and privilege for me to have a chance to be here on this particular night. I am going to talk a little bit about essentially why I am excited about what's going to happen out of the technology industry over the next ten years. If you stop and think about it, the last ten years have been unbelievable.

Ten years ago, these are true statements, most of us didn't have a PC -- that maybe not technology council members, but world at large; most people didn't have a PC, most people didn't have a mobile phone, which might come as even more of a shock if you think back statistically, and most people in this room probably didn't know much about the internet yet. And here we are ten years later, and its just been this amazing decade of advancement and technology moving forward, and it's enabled so many other great, new, incredible things, changing the way people communicate, collaborate, the way people expect to see information, the kinds of things that you can have access to literally anywhere in the world. And yet, we look out the next ten years and we sit here -- at least at Microsoft, we're probably more excited about the next ten years than the last ten years. Most of the world's communications, most of the world's information, most of the world's commerce, most of the world's information is still not in digital form; it's not moving around, it's not passing.

Think about your last trip to the doctor; if you want a case in point. The largest industry basically in the world is healthcare, and yet healthcare has barely begun to see the benefits of IT and what IT can bring in terms of quality of healthcare, service, etcetera. So, we look out and we say, the next decade will be a decade in which all of the world's transactions and information will be digitized. The next ten years will really be the decade finally when you can talk to your computer - and you might say, why the heck would I want to talk to my computer? The truth of the matter is, it's nice that your computer can recognize your voice, it's even more important, but in the next decade your computer will recognize your intent. Get me ready for my trip to Utah; now the truth is, I should be able to just type that into my computer and it should load everything I might ever want to read to prepare for this event. Why shouldn't it? It knows where I am going; it's in my schedule -- all of the information of the attendee list was all emailed to me -- it's all out there.

It knows who's on the board of this institution if it wants to go take a look at your website. It could pull down all of the bio's, all of the customer records for those of you that anybody -- Microsoft thinks should buy something from us. I hope there is a few of you in the audience tonight -- and it could get me ready for that trip if it understood my intent. And you take just an example like that and say, how much more value would we able to get out of technology with these kinds of advances? We just went through a process we call our Quest process where essentially, we try to describe what do we think the world looks like technologically in ten years? And then we get a chance to ask; are we making the right investments in research and development to get there? And when we started this, I said to Bill, what are we going to have? - Four, five things on the list? Bill said, “No Steve, it will be closer to a hundred;” I said I don't know that I could parse a hundred of these things. So, we settled; he won, came back with 70 of these things -- 70 ways, and I'll just give you a couple of examples -- reading and writing. Today, most reading and writing still goes on paper; that will not be true in ten years.

Some people immediately get nervous; so, what about the books, what about this, what about that? All that information is going to exist but there are improvements that can happen in the process; everything you've ever read is online; all of the notes that you've ever taken, every annotation you have ever made.You want to share out what you were thinking, you can just circle, send, e-mail, get feedback. See the guy right there? Gentleman there with the video camera? Hello sir, how are you? That guy does not have a great job in my opinion; I don't want him to get offended here tonight, but he doesn't have the greatest job. Why do I say that? I have given a lot of speeches, I'm sure Senator Hatch has, and other people in this room, and yet I have never met anybody who ever looked -- except for monkey boy -- who ever looked at the video tape of any speech I have ever given. So, these videos, they get taken and taken and taken -- and I am sure they will be up on a website -- with great respect to UTC, I know they'll be out there, and probably nobody will watch them.

If instead in this room, basically that video was being beamed over a wireless network -- if you had very small, very thin, almost paper-like screens that could receive that, if you could mark your notes on them, and your notes were literally synchronized to exactly what I was saying, what was -- oh, Steve didn't make any sense, oh! I like that point. If you wanted to share it out during this kind of a discussion with a friend or a colleague that should be possible. These kinds of things are in the future of our industry over the next ten years. The technology is cool; I have to say. It's going to continue to flow, it takes software innovation from the kinds of companies represented around the room, and it takes hardware innovation. The basic process of what's called Moore's Law, which essentially says we're going to continue to get more power at lower prices and that's going to continue to happen. So it's really just the imagination of entrepreneurs like the folks in this room that will enable these things to go on.

When we got started -- at least when I joined Microsoft, I have been at the company about a month and a half - and I thought I had made a mistake; I dropped out of business school to go join this friend of mine Gates, and I thought I literally had dropped out of Stanford Business School to be the bookkeeper of a 30-person company. My father really didn't think that was very good. He was an immigrant to this country, he thought you got to get all the education you can and… So, after about a month-and-a-half, I went to Bill and said, “Look, I'm leaving; I think I should go back to school.” And Bill got his father; he always brought his father along on the tough sales calls, his father was 6 ft 7”, and you didn't want to ever say no to Mr. Gates, so they took me out to dinner and I told Bill what the situation was, so he says, “Look, Steve, you really don't get it; 'We will put a computer on every desk and in every home'.” And that became the mantra for our company; that basic idea got me to stay; I appreciated that a lot, but that would up really being a mantra in some sense for our company, and in a way, for a good part of our industry.

Today, we talk about empowering people in businesses throughout the world to realize their full potential; and that sounds a little mushy, you don't see technology in the mission statement, but yet I think it's a mission statement that not only applies to our company, but really to the information technology industry at large. We, all of us, in the industry have the unique opportunity to positively impact the world. Information technology is a grand enabler of human creativity, of human productivity. It helps make the world a smaller place by what it enables in terms of communication. And that is a -- we're living in a middle of a once in a 400-year opportunity. Obviously, none of us was around when Gutenberg first came up with the Printing Press, but it was big deal. The Industrial revolution was a big deal; but yet I think when people look it what happened sort of, in the years between 1,000 and 3,000, the information revolution is really unique -- and we all get this amazing opportunity to participate. I'm going to stop at this point mostly because I know I think I have outlived the small welcome on my opening remarks and have a chance to take some questions, answers, discussions.

If we don't get to something that's on your mind, I'm steveb@microsoft.com, and I'd love to hear from you after the fact people -- I could hear that sort of reverberation -- it turns out, people don't abuse you in sending you mail - small piece of advice I will give everybody; computers will abuse you - that's called spam, and we need good filters for it. People generally try to be fairly respectful. And I find I get more good ideas from customers and partners and more good leads, so seriously, if something is on your mind that we can get to, I would love to hear from you, and with that, I will say, thanks again - thanks to Senator Hatch for inviting me for the UTC, for having us, for all of you for attending, and let's take advantage of this unique opportunity to really positively impact the world. Thanks.

Host
Ladies and gentlemen - thank you, Steve Ballmer. We have a unique opportunity as Steve indicates for some questions here now. So, there's a microphone here and another over there and we'll ask for anybody who cares to go from there… Oh! Here George, let me just offer this to you.

George - Audience
As things evolved over time, how have you maintained a competitive culture? And going forward with the new competitive threats -- they have changed for you guys over the years. How do you maintain that competitive growth culture? How do you maintain a culture where you can attract the best and the brightest?

Steve Ballmer - Microsoft Corporation
I think in the sense that it is super-important for any of us in the technology business to committing ourselves, to getting the right people and enabling them -- and both of those are important. It's not just about attracting or retaining people, it's about enabling people. At our place, I think we have a lot of emphasis about the new things that are possible. What's possible? Why aren't we doing the new things? Is there something new we should be doing? Push, push, and there is kind of a relentless desire to continue to find the new frontiers. In a sense, we are happy -- not happy -- we are prepared to go ahead and even get into opportunities in markets and innovate when were are not first, because we almost have as part of our culture, this sort of irrepressible optimism that somehow we will come up with new great ideas.

Senator mentioned Zune -- I kind of like Zune though -- I may have to think about that. Senator mentioned the Zune product; most people won't try something like that. Number 2, we are coming in later to the market -- we are going to really have to push ourselves to be creative, to be clever, to be innovative, or we are not going to get any traction. And yet, at Microsoft the culture is far more -- of course we have to do it. We have got to get after it, we have got to push ourselves; and yeah, it's about competition, because at the end of the day, we want people to use our stuff which probably means they are picking our stuff versus somebody else's. But, it's about this desire to sort of create the things that people love -- and whether it's kind of work Jim does in research, the kind of work our development folks do, it's a big deal for the folks we hire, and that sort of feeds on itself over and over again. And I will bet some place in our 71,500 people, you will somebody who doesn't share that because that's what happens in bigger companies; but you still have to kind of drum it in and remind people about it fairly regularly.

George - Audience
Okay.

Female Speaker - Audience
I have a question here. With all due respect -- over here…

Steve Ballmer - Microsoft Corporation
Yes Ma'am - got you.

Female Speaker - Audience
I realize this is not Microsoft's area of expertise, but for somebody who is in technology, who travels a lot -- I'm CEO of a biotech company - we often want to be able to take things from the computer and put them into a hard copy. And when you are traveling, that is impossible to do; and I just throw that out, although computers are great and it's great to send things by emails, there are ways where you want to have things where you can just look at them and write out (ph) them.

Steve Ballmer - Microsoft Corporation
And I'll tell you; we know there is lot of people who agree with you, and hopefully, we're still right ten years from now, there is a lot of people who agree with me because I think there is advantages to both -- no, I mean, they are -- look, most folks, if I didn't force myself, there are things I prefer to read on paper, I am not going to -- whether it's the quality of my eyes, the glare on the screen, sometimes it's heavy to hold the laptop - there are things people want to consume in paper form. And so in essence, you say what are we working on? One of the key things we worked on for example in the version of our office product is, making it easier to create great-looking paper documents. With that said, the big long-term challenge is still to do as well as paper between us and guys like our partners at Hewlett-Packard, Shane (ph) in the audience and others, we have to push the state-of-the-art, so sometime, I hope in the next five, the next ten, the next fifteen years, you will be able to send me an e-mail and say, you finally won me over; screen beats paper. If we don't get there with our irrepressible optimism, we'll keep working on it.

Host
Steve, one more here.

Chris Johnson - University of Utah
Hi, Chris Johnson, professor of computer science at the University of Utah. One of the things that we have seen in the last few years is the decline in our computer science student enrollment even though many others think that computer science is where it is all at in the future. What are your thoughts on encouraging students and faculty to continue to work in computer science, and especially as we have seen, a decline in federal investments in computer science research?

Steve Ballmer - Microsoft Corporation
It is a big challenge in front of our industry on exactly the issue you talk about; and we have a number of things that we do and our industry does to try to encourage kids earlier in life to be interested in our field, and yet we still -- you're not the only one of course, we see declining enrollments in computer science everywhere in the United States. I think it's a combination of one factor that's not good and one factor that's probably not as bad as it seems. The fact that it's not very good is, I just think today that there career options in the US which claw away from engineering, and yet at the end of the day, I think a lot of the value in job growth is going to come from the invention of new things. So, we see more kids picking law and business -- I am a business guy, I but my hand up in the air -- and yet it chagrins me to see the drop in computer science enrollment in this country.

On top of that, after 9/11, Senator Hatch and I were talking -- it has been harder to visas to get people into the country -- that's particularly a problem not only in the industry, but also the kinds of foreign students that would have filled out computer science departments at your university and many others. The flip side of that is, a lot of people who might have been in computer science are actually in other sciences; and they are using the computers every bit as actively as they might have, but they are taking a look at what it means to use computer technology and bio-informatics or in engineering or in other applied sciences. And so in a sense, I think the total drop off may not be quite as bad as we think but there's a lot that needs to happen. Today 60% of the computer science graduates in the world are coming out of India and China; and I'd hate to see the US continue to decline as a source of our -- the talent we need in our industry.

Chris Johnson - University of Utah
Thanks very much.

Host
Mr. Ballmer, thank you very, very much.

Steve Ballmer - Microsoft Corporation
Thank you all.

Anchor
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