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Video, Q&A with Microsoft CEO Steve Ballmer on policy, cloud computing and leadership

Microsoft chief executive Steve Ballmer met with The Washington Post Monday for a wide-ranging interview that touched on the software giant's cloud computing strategy, its struggles in the smartphone market and its public policy priorities.

When it comes to cloud computing — , which takes software off the desktop PC and moves it to networks of data centers accessed via the Internet — Google may have the edge in consumer apps, but Microsoft is winning with big company clients such as Starbucks, General Electric and Accenture. On the platform level, Ballmer said Microsoft has a leg over Amazon for customers who want a private and customized infrastructure.

Analysts say, however, that Microsoft has made some recent missteps in the mobile device market, particularly with its ill-fated Kin smartphone, which the company decided to kill earlier this month. Ballmer says that tablet computers — or slates — and better Windows mobile 7 phones will come out in coming months and be the real test of the company’s future.

Ballmer was in the Washington to speak at Microsoft’s annual global partners conference, where he drove home the importance of the company’s bet on cloud computing to an audience of 9,500 at the Verizon Center. Earlier Monday, the software giant said it was launching an trial run of applications on Microsoft’s Azure platform that Dell and Fijitsu are taking to market.

During his interview with the Post, Ballmer also talked about the company’s policy goals, which include securing better enforcement of patent law as well as obtaining some clarity from regulators on how the government plans to oversee the cloud computing market.
In the paper, we ran a short excerpt of the interview. Here is a longer, edited version of our conversation.

Q: Seems like a tough time to get people to buy more technology. How does the economy pose a challenge to your cloud strategy?
A: The economy has a lot to do with a lot of things, but not this. The inevitability of the cloud is absolutely clear. When and how is not 100. percent clear. The preponderance of our partners are moving with us. Some partners may move slowly, and maybe a few won’t even move with us. But the new guys jumping into the fray are saying, "Hey this is new opportunity."

Q: What’s your value added compared to Google or Amazon?
A: There are different parts of the cloud market. We can act like they are one thing, but they are not. There is the app infrastructure in the cloud, hardware infrastructure and applications. At the applications layer is primarily Google, and we are just beating these guys almost every time.

Q: With what, Office in the cloud? Consumers love free Google apps.
A: With the bigger customers, we are doing well. Very very well. Their offer is incomplete, and they haven’t factored in a lot of things that are important to customers, like security and compliance. We are just way ahead, which doesn’t mean we can get lazy in any sense. 2010 is really important. We have a wave of stuff for cloud that follows. We have a consistent offer on the desk and from the cloud — that is important.

Q: How about Amazon, they were ahead on this and how are you going to pitch yourself to someone on infrastructure?
A: If you are really trying to design new applications for the cloud infrastructure, Amazon doesn’t do it. Amazon has no notion of a private cloud effectively. That really hurts because people aren’t prepared to say I’m going to put my mission critical apps in cloud today.When you ask a federal customer and you’ve got to run the Census system on the Amazon infrastructure, that’s just not going to happen.

Q: But no one really seems to be winning the public/government client yet. Los Angeles is on Google, but that’s an exception.
A: There are plenty of smaller applications in the federal government, it is not one monolithic body. Hopefully what the fed(eral government) will allow is the distinction between data sensitive apps and not. In the case of e-mail, you are seeing [federal] departments willing to move to non government-specific versions of the cloud. They seem open, but we’ll see what happens.

Q: What are your biggest priorities in Washington?
A: Number one is clear: We would like to see better global enforcement of intellectual property laws. If we are going to do our fair share and the industry is going to do its fair share for the president’s desire to double exports, that will involve the federal government. That is particularly true in China, where the protections are the weakest.
Number two, we need to get clarity on a set of issues related to the cloud. I’m not trying to preach a point of view. Whether its government or private use, there are issues surrounding things like privacy.
Then there is another set of issues: people trying to reform patent law, which we think great, as long as its form sensible. Immigration, the list goes on.

Q: How much care about what’s going on at the Federal Communications Commission and net neutrality?
A: I myself have talked to Chairman Julius Genachowski a few times on various issues. But I’m not sure, in confines in which they are driving, it affects our business much how the specific issue gets resolved. It’s not one of ones I’m so concerned (about) ... the range of outcomes will probably be okay for us.

Q: You said several slate, or tablet, computers and smartphones are coming out in the next few months. How did you fall behind, and how will you catch up?
A: We have a form factor, where we need to push with our hardware partners and silicon partners: the slate platform. Windows runs Windows apps. The key is that we actually have software technology now to drive the integration of software, hardware and silicon.
It’s a little different story for phones., I’ve said this many times before: We missed. We just didn’t execute well. Now we are jamming hard. We’ll sell millions of units this year, but we’re not where we want to be. Relative to a lot of guys, a lot of guys have done a lot of nice work. But with Windows Phone 7, we are back in it. And those devices will ship within the next months.

Q: How do you make Microsoft, now 35 years old, more entrepreneurial? A couple of people told me recently the culture for many is to just survive and protect their job. Doesn’t sound very inspiring.
A: You want a company that’s driven, doing good work. You want a company that is perfect — but hardly any company will be. You want a company that is not only trying to be perfect but is resilient when it makes mistakes. That is important. Hopefully you are right every time, but if you aren’t, do you have a toughness and ability to stick to things?
You want people who are in for the ride. If people are in it for a simple life, I wouldn’t join a tech company. I want employees who are all in, with the tumult.

Q: What business leaders do you find interesting, inspirational or talk to for guidance?
A: I don’t think (that is) appropriate to some degree. But, I talk to people who have been in trouble and that is a great opportunity. I talk to a lot of people. Mark Hurd of Hewlett Packard does a good job. Jeff Bezos of Amazon and Mark Zuckerberg of Facebook are definitely interesting. Jeff Immult of GE and Jamie Dimon of JP Morgan Chase as business leaders and I have a chance to learn from our partners like Michael Dell.

Q: What did you find interesting about Zuckerberg?
A: He thinks long-term, despite the fact that it is an emerging startup. He talks about meta issues and he and Sheryl Sandberg [Facebook's chief operating officer] do this with every business decision each day.

By Cecilia Kang  |  July 13, 2010; 12:01 AM ET
Categories:  Microsoft , VIDEOS  
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I just want to toss Angry Steve and Kool-Aid Steve in a room with a couple of forks and a slab of raw meat and see who walks out at the end of a month...

It's sort of a toss-up who's more self-interested, but neither of them do very well at the putting American citizens interests ahead of their own greed thing.

Oh I know they'll blather on about shareholders, but that's witless drivel and everyone knows it.

Posted by: Nymous | July 13, 2010 6:23 AM | Report abuse

He sounds so much more sensible in your video than he does on stage rallying the troops or in sound bites. It is like he can turn off the mask and just talk. Next time I might to know more about exactly what he wants in each of those things -- patent reform, immigration reform (H1-B visas, I guess), etc.

If I heard him right, he is saying sales of numbers of products are the same in the US and China but revenue in China is equal to that of the Netherlands. Interesting.

Posted by: Bitter_Bill | July 13, 2010 7:19 AM | Report abuse

Microsoft has always been late to every advance in computing and then used its monopoly to gain dominance. (Windows Apple, the internet browser(Netscape), Phones(everyone). In this case, thats not going to work and thats why you see it floundering. Like AT&T before it, when it had to really compete after it lost its monopoly it couldn't. Its been making substandard software and equipment for years. The phone is just another of example of we'll build it they will buy it. They are in for a rude awaking.

Posted by: ceg12345 | July 13, 2010 9:29 AM | Report abuse

It is beyond frustrating to see the direction Microsoft is now going when they refused to talk to me years ago when I proposed the very same concept. Yes, they used to welcome entrepreneurial ideas. Not any more. I have been trying to show them a concept for three years now, one that would make them number one in the internet world, but no one ever listens. Sad.

Posted by: panamacanuck | July 13, 2010 9:34 AM | Report abuse

Ballmer is a corporate toad, and no chance of become a prince - Thus you have Microsoft brain frying the world one pathetic product at a time - one plebeian mind at a time. Corporations like MS see their existence as a struggle for control and dominance to better themselves not in serving humanity.

Posted by: kendi | July 13, 2010 10:05 AM | Report abuse

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Posted by: nicelucci00 | July 14, 2010 9:00 AM | Report abuse

Microsoft always was behind the ball, but under Bill Gates they knew how to execute. There is a reason why Windows became dominant. I'm sick of all the whiny crybabies trying to come up with all kinds of pathetic excuses and rationalizations as to why their favorite pet OS didn't succeed.

But now with Gates gone, they have monkey boy who couldn't lead himself out of a paper bag. Unless they get new leadership (like how Steve Jobs turned Apple around when he came back), Microsoft will slowly bleed to death.

Posted by: bendan2000 | July 14, 2010 7:47 PM | Report abuse

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