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Past Symposium/ITxpo
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The Ballmerang – Microsoft CEO Addresses Licensing, Pricing and Much More Thursday, 10 October 2002 View the Webcast Questioned by Gartner analysts Tom Austin and David Smith on Wednesday, Microsoft CEO Steve Ballmer discussed his company's licensing agreements, debated the practical price points of Windows software packages, addressed customer expectations and satisfaction, and theorized about the direction in which technology is headed. Of course, the Symposium/ITxpo 2002 Mastermind Keynote presentation also included — to the enjoyment of the thousands of attendees in the packed main conference ballroom — hijinks and laughs that are common whenever Microsoft's most high-profile and energetic spokesman steps on a stage. Mr. Ballmer revealed that Microsoft is doing a "full relook" at its end-license agreements. The software giant is considering both per-device and per-user licensing. He also said the proposition of lowering the cost of Microsoft's bundled Windows software to spur PC sales is not practical. "If Windows was $20 or $25 less, I don't think a $475 machine would outsell a $500 machine so radically that it would have us taking the precipitous action you talk about," Mr. Ballmer said. "It would prevent us from investing in and pursuing continued innovation." Mr. Austin, Gartner vice president and research fellow, asked if Mr. Ballmer saw Microsoft over the next three to five years introducing a "dramatic, profound innovation, a big change in technology, or rather would it still be a case of a lot of little changes over time?" "Let me rephrase Tom's question," Mr. Ballmer told the audience. "Besides the fact that you're going to totally revolutionize the user interface (his reference to Microsoft's .NET technology), besides that, what else is new, Mrs. Lincoln?" On another subject, some Cisco Systems shareholders recently expressed concern about ways in which the Chinese government has used Cisco products to deny citizens free speech and privacy. Mr. Austin wanted to know if Mr. Ballmer shared those same concerns about Microsoft products. "How do I answer that? That's like the old question, 'Do you still beat your wife?' " Mr. Ballmer said. "Cisco has no clue about what the Chinese government is doing with their products. No one does. So, do I want to help the evil guys? No, no, no! Do I know how to stop the evil guys? No, no, no!" Meanwhile, Mr. Ballmer expects continuing PC demand and although growth will be slower, he sees opportunities in the home and developing markets. He said Microsoft will continue to invest in the consumer market even as the company struggles to increase profits. "The consumer market is important," he said. "The big reason the PC became so big in the enterprise market is because it was so popular with consumers. So we will continue to focus and invest in both the consumer and corporate markets." That led directly into a prank by Mr. Smith, Gartner vice president and research area director. "Down here at Disney, another consumer device that we've found is this," Mr. Smith said, pulling out a toy called the Ballmerang, a ball that returns to the person who throws it. The audience roared. "What kind of value do you see this adding to consumers?" Mr. Smith asked. "The Ballmerang? Fascinating!" Mr. Ballmer exclaimed, peering down to read the package. "Do not use without proper eyewear…Recommended for children 3 years and over…Made in China using Cisco routers." Once the audience quieted down, Mr. Austin segued to another topic, asking how Microsoft was addressing customer expectations and concerns. "When we under-perform, the fallout, the negative fallout, from that kind of performance is worse than it's ever been," said Mr. Ballmer, who started at Microsoft in 1980 as the company's president. "Years and years ago, when we were more of the cute Microsoft, this wasn't as big of an issue, and the bar was down here. But now, the level of expectations has raised the bar way up here, and we need to always ask ourselves, 'How do we raise the level of customer satisfaction and customer connection?' " During these harsh economic times, Mr. Ballmer and Microsoft cofounder Bill Gates are also asking themselves, how do you keep your employees happy? "During the dot-com boom, it was sometimes difficult to keep people focused on the long term. They weren't going anywhere, but sometimes it was difficult to keep them motivated," Mr. Ballmer said. "Now, I'm sure everybody, including everyone in this room, feels like we're in a 'blah' period for technology. I'm going to tell everybody here, as I keep telling all of our people, ten years from now, technology will be very different, and the level of value that technology brings to business and society in ten years will be much different. "We have to stay upbeat about the long run even if the short term is a little pessimistic." Whether the outlook will be more positive or just as pessimistic in 12 months, Mr. Ballmer said he would be at Symposium/ITxpo 2003 to give conference attendees an update on his company and the technology industry. Mr. Austin and Mr. Smith traditionally ask hard-hitting questions, as they did Wednesday, but Mr. Ballmer said that never deters him from appearing at Symposium/ITxpo. "I schedule my whole calendar year around this Gartner event," he said. "I will be back." John Allen Gartner Staff |
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