Ballmer “everywhere I go I see paper and pencils; there is still room for innovation” #ebg

briefcase-largeI attended an EBG (Electronic Business Group, an influential French e-business Think-Tank) conference on Nov 8 in Paris, at which Steve Ballmer was speaking. It has taken a while to process my notes but here they are at last, sometimes answering my questions about the future of Microsoft, sometimes not. However, undoubtedly, Ballmer has managed to captivate the massive audience in the small theatre room of the Espace Pierre Cardin at the Heart of Paris, France. Ballmer was interviewed by EBG’s founder and Secretary General, Pierre Reboul. Steve Ballmer is also a member of the board of directors of EBG.

There has been a great deal of questions asked about the future of Microsoft lately, with regard to their apparent inability to cope with the mobile market (even by Gates’s own admission). However, it would be wrong to think that Microsoft has lost the War even though it may have lost a few battles. As a matter of fact, the software giant from Redmond, Wash. is still very strong in many areas, including Business Cloud, enterprise collaboration (more than 70% market share with SharePoint, not to mention yammer), home gaming with the very successful Xbox platform, and of course, Microsoft office which is, like it or not, still broadly used, despite a flurry of free more or less open source office suites which are available from the Internet. Yet, Microsoft’s business models are challenged, office is slowly turning into a pay per use model with Office 365 and Windows 8 is just about coming back to life after a much awaited 8.1 facelift a couple weeks ago. So where is Microsoft headed? That is the question. Let us see what Steve Ballmer, the current CEO who is soon to retire, has to say about this, even though he has  managed to evade quite a few questions…

Right after the introduction , Steve Ballmer answered a question about the newly released surface 2 tablet. “Surface 2, is the evidence that Microsoft is moving from regular PCs to becoming a device company” Steve Ballmer explained, therefore confirming the impression is that many analysts had had, after the announcement of the purchase of Nokia, or rather as part of Nokia as Mr Ballmer explained a few moments later.

Does that mean that Microsoft is going to stop working with OEMs? “I would say something different” Ballmer said. “We continue to work with OEMs, but we will produce more devices”. Microsoft is definitely choosing a different path from Apple, its model seems to be far more akin to Google’s, even though its business model is a lot different.

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Ballmer with EBG’s Reboul on stage in Paris

“Everywhere I go I see paper and pencil there is still room for innovation”

Reboul said that Microsoft’s surface 2 was a good device yet, he wondered, “how do you make this a bestseller?”

“You want a different value proposition” Ballmer explained. “This device is meant to make you more productive; it is better than just watching movies.” Besides, a “continued stream of innovation is required too. Every meeting I go to, we still come across paper and pencil” Ballmer pointe out. We see a lot of opportunity for more innovation”. I couldn’t agree more with that. 10 years ago, I used to take notes using handwriting recognition off my iPAQ mini tablet. Now this is something which is no longer available, and I am still longing to find a good technology which can free me of paper and pencil and let me take notes naturally in a handwritten manner together with intelligent character recognition (ICR). After all, it used to be possible 10 years ago it should be now too!

Back to Windows 8: it was launched with a bad buzz, now a new has version just been released. What do you think?

As to sales, we have sold over 100 million units in a year : that’s pretty good!” Ballmer said. “Sales have been pretty good, but regarding consumer PCs there has been an impact with low end devices and we are working on this with new devices” he added. Sales have been better that the feedback in essence. “Regarding feedback, it has been more average” Steve Ballmer said. “Some like it, some not. There is a lot of diverging feedback. But what we did with was pretty bold. We’ll continue to move forward. Still, with enterprise customers, windows 7 is still most popular”.

What is the border between mobile and desktop? was Reboul’s next question

“There are no rigid borders” Ballmer said. “Phablets [a cross between tablets and phones] exist. People are moving from one device to another. We even make an 80 inch table you can hang on walls. There are no firm lines between devices.” he said.

photo by idownloadblog via the Verge > read on at http://bit.ly/ms80inchtab

What changes in Microsoft’s business model

What of Microsoft’s legacy licence-based business model? Is Microsoft forced to move to the SaaS model. How will they make money out of this? “The future of software is to be delivered as a service” Ballmer confirmed, “be it for b2bor b2c. Office 365 is already the number one SaaS application in the world” he added. But is Microsoft making as much money from this as it used to? “Services are small in revenue but they are growing rapidly and we are hoping for increased in the numbers of seats? Our revenue stream is still dominated by software licences, but things will change in the future” Steve Ballmer added. “For business customers, the best value is to go for online services” he added. “Also for consumers but some customers like to buy software licences once and for all and be done with it!” as the recent hoo-hah about the all SaaS version of Adobe Creative Cloud demonstrated (sample here).  Here I’m not really convinced on how all those revenue numbers will add up, but time will tell.

Nokia : what did you buy exactly?

Another question I had was about what Microsoft had actually bought from Nokia and what they intended to do with it: “Nokia has a lot of pieces” Ballmer said. “We didn’t buy maps, nor base stations for networks, we bought the phone business and the tablet business”. This also means that Microsoft now has two tablets! Surface and Nokia’s. Ballmer dismissed that issue altogether: “eventually, we’ll have two tablets (the deal is not yet approved), this is not a problem” he added. Time will tell again if having two aspiring products is enough to compete with 2 established leaders like Apple and Samsung. Surface 2 seems to be a nice product though, the concept is cool, and I’d really like to have a tablet which lets me work on my blog posts from cradle to grave … that is as long as both the apps and the hardware are up to scratch. I haven’t yet switched back to windows for mobiles but who knows, never say never…

Social strategy for Microsoft

Social is an area in which Microsoft has been either very successful (B2B) or very unsuccessful (B2C, despite the fact that it used to have a leg up in that game with MSN a long time before Facebook). “We are a player in certain parts for social networking” Ballmer confirmed. “We have a very successful offer with Yammer, and Skype, we are part of the social fabric” he added. Ballmer stressed that even Internet giant Google is struggling in that space. “Google has tried a bit but struggles against Facebook” alluding to Google+ even though it is now picking up a lot, mostly through the authorship and communities features, and I would not be surprised if things changed in the long run, in favour of Google. “Yammer has a free model. Once the IT department wants to add control then they go for the pay version” he said. It should be remembered that both Yammer and Skype are acquisitions.

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Gaming

Gaming is one of the very successful spaces for Microsoft: “Xbox is one of the most exciting experiences” Ballmer said. “The emerging model is freemium gaming but there will still be a model for hit games where production costs are huge. Both of those models are promising for the future, but they are for different kinds of games. Casual gaming will focus on freemium” Balllmer said. “The new Kinect sensor is phenomenal. It can even spot a finger moving” Ballmer said. “It will be used for games in which gamers shoots bows and arrows for instance” but there may be future applications for businesses as well. “The future will be the projection of the user IN the game” or even a show he added.  Imagine being able to kick a penalty kick in lieu of the player in the field? As more innovative features like these will be added, there will be a new space for costly games, but also “ a lot of the freemium models will start casual and grow serious”, even though “Microsoft’s games are for serious fun” Ballmer added.

Microsoft, innovation and its future (unnamed) CEO

Microsoft is a big company and it will be even bigger after Nokia’s acquisition has been ratified. “Ther are 100,000 employees at Microsoft before Nokia, there will be 130,000 after” Microsoft’s boss said. “There’s room for innovation at Microsoft. At R&D and also from the bottom up. Good Innovation is a good mixture of bottom up and top-down. Good success doesn’t come all from the bottom”. Ballmer joined Microsoft in 1990 and is planning to leave soon. “I love Microsoft” he said “but I have made my decision.  I want to have an active life outside of Microsoft. We are pivoting on devices and services, and it’s a good time to make the transition now. When we have a new leader we’ll have a new leader. I don’t know his name and I wouldn’t disclose it.” There has been rumours that Microsoft’s new boss would be Nokia’s Steven Elop but Ballmer didn’t comment on that.

Ballmer’s plan isn’t to retire though: “I wouldn’t retire and fish, I would scare the fish. I want to study, travel, look after the local basketball team, be part of boards of directors… I’ve got many things I’d like to study before I retire” he concluded.

Storsimple’s Ursheet Parikh battles against “cloud washing” and redefines cloud computing with Hybrid Cloud strategy

note: this piece was originally written for the Orange Business Live blog

On November 15, after Zscaler, we visited Storsimple, provider of Hybrid Cloud technology. Ursheet Parikh is one of the 2 co-founders and the CEO of Storsimple, a promising start-up operating in the storage domain, based in Santa Clara, Calif.

Storsimple started in May 2009, at the bottom of the depression, after exceptional reception from the VCs. Prior to this, Ursheet was working at Cisco and before Cisco.  Storsimple is pioneering In-bound marketing, as opposed to top-down marketing, because they want to be acknowledged by their peers above eveything.  All engineers in the company have a 20+ years of experience in the storage industry, and having 15-20 of such people is according to Storsimple’s CEO a recipe for success.

Their approach has been very conservative, starting with a beta with a few customers and they are now planning to go live by the beginning of 2011. They have the financial backing to do this and they make sure that all the customers go through the beta test in a very thorough fashion. There are no small vendors left in storage and therefore, Storsimple is walking on eggs and thinks that they should build a business and not just a product, and they don’t want the start-up to finish when the initial product is delivered.

a cruisade against “cloudwashing”

Ursheet’s favourite word of the year is “cloudwashing”. He says that almost anyone is trying to sell stuff labelled as “cloud computing”, and “cloud washing” happens when vendors are selling things labelled as cloud computing when their solutions have nothing to do with it; yet, cloud computing is really important if it’s not trifled with.  For most CIOs, their budgets is a subset of revenue and IT can only do what its budget can achieve and this is why cloud computing is so appealing to IT managers. Enterprises need to embrace cloud computing just to stay in sync with competition. So much so that Urshreet thinks that the leaders in that space in a few years won’t be the equipment manufacturers but service providers like Orange Business Services. “A new set of players delivering IT as a service are cropping up and they will come to the fore”, Ursheet said.

different levels of cloud computing strategies … plus a new one

CXOs have different options in terms of cloud computing strategy depending on their requirement:

  • SAAS, for which apps move to the cloud
  • PAAS (platform as a service), for which apps have to be rewritten
  • Public cloud compute with vendors like Amazon EC2
  • Public storage with Amazon S3 for instance
  • Private cloud technology, with vendors like EMC Atmos

all of these strategies have issues (re. slide above) and Storsimple is adding an option to that list with what they call their Hybrid cloud strategy, which in Ursheet’s mind is addressing the full spectrum of the requirement, from core services and security to the end-user. Yet, Storsimple is not working against storage nor cloud service providers, Ursheet Parikh added, on the contrary;  it is aimed at providing a front-end interface to these vendors’ hardware and cloud solutions.

the problem: data explosion in the data life cycle

Collaboration has become a must if one wants to avoid the explosion of the amount of content and the amount of copies of files that exist. De-duplication is helping but it doesn’t necessarily solve the issue Ursheet said: even with de-duplication, companies still back up vast amounts of data and move them around across servers. This is what is called “content communism” i.e. that no one wants to know what is there and no one wants to clear the data. What Storsimple is doing is to analyse the working set, put that in local storage and use central storage for the rest. Now, the challenge with cloud computing usage are integration, performance and security.

the solution: hybrid storage by Storsimple

with hybrid storage in the Microsoft enterprise environment as seen by Storsimple can be summed up in a few points:

1. instant provisioning is made available,

2. the storage disk is made available straight from the user’s desktop, as a separate network iSCSI hard drive but instead of being in the private cloud of the client, it is stored centrally,

3. Storage performance is managed centrally by Storsimple through tiered storage (SSD, SAS and Cloud), weighted storage layout and real-time de-duplication.

One of the most striking function offered by Storsimple is that which goes by the name of “Cloud clones”. Storsimple Cloud clones are snapshots of current data changes and are stored in the cloud, as if some kind of mirroring, but not in real time. This is making backups and disaster recovery (DR) far easier and less complex according to Storsimple’s CEO. Snapshots can be done every 4 hours (whatever frequency clients want) and data is saved centrally on the cloud every now and then. This operation is transparent for users and is not wearing on the performance of each individual desktop. Clones can be launched overnight in case users or enterprises prefer to do so. In terms of Cloud acceleration, there is a home-developed algorithm to optimise local storage vs. central storage and include compression so as not to put the burden on the user.

Pricing is done only on hardware capacity (ingested content, so you don’t pay for the compressed footprint but for the uncompressed one), all the functionality is included. The end result is an average 80-90% cost reduction for clients.

Sharepoint

Ursheet concluded by saying that this solution is very well suited to Sharepoint too, mainly when it comes to solving the huge storage issues related to Microsoft’s online file sharing service. Archival online is also possible, therefore putting an end to this “content communism” issue highlighted above, thanks to compression and remote data retrieval.