This morning Microsoft CEO Steve Ballmer spoke at the London School of Economics on the subject of Seizing the opportunity of the Cloud: the next wave of business growth. Well, that was supposed to be the topic; but as it happened the focus was vague – maybe that is fitting given the subject. Ballmer acknowledged that nobody was sure how to define the cloud and did not want to waste time attempting to do so, “cloud blah blah blah”, he said.
It was a session of two halves. Part one was a talk with some generalisations about the value of the cloud, the benefits of shared resources, and that the cloud needs rather than replaces intelligent client devices. “That the cloud needs smart devices was controversial but is now 100% obvious,” he said. He then took the opportunity to show a video about Xbox Kinect, the controller-free innovation for Microsoft’s games console, despite its rather loose connection with the subject of the talk.
Ballmer also experienced a Windows moment as he clicked and clicked on the Windows Media Player button to start the video; fortunately for all of us it started on the third or so attempt.
Just when we were expecting some weighty concluding remarks, Ballmer abruptly finished and asked for questions. These were conducted in an unusual manner, with several questions from the audience being taken together, supposedly to save time. I do not recommend this format unless the goal is to leave many of the questions unanswered, which is what happened.
Some of the questions were excellent. How will Microsoft compete against Apple iOS and Google Android? Since it loses money in cloud computing, how will it retain its revenues as Windows declines? What are the implications of Stuxnet, a Windows worm that appears to be in use as a weapon?
Ballmer does such a poor job with such questions, when he does engage with them, that I honestly do not think he is the right person to answer them in front of the public and the press. He is inclined to retreat into saying, well, we could have done better but we are working hard to compete. He actually undersells the Microsoft story. On Stuxnet, he gave a convoluted answer that left me wondering whether he was up-to-date on what it actually is. The revenue question he did not answer at all.
There were a few matters to which he gave more considered responses. One was about patents. “We’re better off with today’s patent system than with no patent system”, he said, before acknowledging that patent law as it stands is ill-equipped to cope with the IT or pharmaceutical industries, which hardly existed when the laws were formed.
Another was about software piracy in China. Piracy is rampant there, said Ballmer, twenty times worse than it is the UK. “Enforcement of the law in China needs to be stepped up,” he said, though without giving any indication of how this goal might be achieved.
He spoke in passing about Windows Phone 7, telling us that it is a great device, and added that we will see slates with Windows on the market before Christmas. He said that he is happy with Microsoft’s Azure cloud offering in relation to the Enterprise, especially the way it includes both private and public cloud offerings, but admits that its consumer cloud is weaker.
Considering the widespread perception that Microsoft is in decline – its stock was recently downgraded to neutral by Goldman Sachs – this event struck me as a missed opportunity to present cogent reasons why Microsoft’s prospects are stronger than they appear, or to clarify the company’s strategy from cloud to device, in front of some of the UK’s most influential technical press.
I must add though that a couple of students I spoke to afterwards were more impressed, and saw his ducking of questions as diplomatic. Perhaps those of us who have followed the company’s activities for many years are harder to please.
Update: Charles Arthur has some more extensive quotes from the session in his report here.