The US$3.3trn cloud computing opportunity – Steve Ballmer

5 Mar 2010

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Technology is the gift that keeps on giving and cloud computing is one of those gifts, Microsoft CEO Steve Ballmer last night told students at the University of Washington as he outlined his vision of where the cloud is going.

“I don’t know if we’re always going to be talking about the cloud, that’s a word that might last three years, five years, 10 years, then it’s said the gift will keep on giving,” Ballmer told students as he outlined his vision for the future of cloud computing.

It’s a US$3.3-trillion opportunity that Microsoft is super-charging its efforts to capture but the key is machines that can learn and provide users with more than just a few blue links to a search. The cloud has to learn and add value.

“So, the real thing to do today is to capture what are the dimensions of the thing that literally I will tell you we’re betting our company on, and pretty much everybody in the technology industry is betting their companies on, US$3.3 trillion dollars, or whatever it might be globally, industry all bet on this incredible transformation around the cloud.”

Cloud computing in the next 10 years, according to Microsoft CEO

Ballmer outlined key principles he believes will shape cloud computing in the next decade.

“First principle, the cloud creates opportunities and responsibilities. Now, that sounds like some blah, blah, blah, business term, blah, blah, blah. It actually is a whole statement about a range of innovations that I think we are seeing and will continue to see where there are literally new software investments that create new business models, new opportunities to start and form businesses, because of commercial software infrastructure that’s never existed before, but also creates opportunity and responsibility to the user to protect the user, to protect their privacy, protect their confidentiality.

“And while these are all social issues, they’re also all technical issues and invention issues, and innovation issues. So, as we think about the cloud as an opportunity, I think a lot about the things that people have done. The ability for literally any small creator to create a piece of content, create a piece of software, to have it available instantaneously anywhere around the globe is fantastic.

“But, as we start to see more and more advertising infrastructure to support those small creatives, we see the invention of things like the App Store, where Apple has done a very nice job that allows people to monetise and commercialise their intellectual property.”

Support for creators of software

He said he expects to see more development occur in the area of catalogues and the commercial infrastructure to support a whole new generation of software creators and other varieties of intellectual property.

“Open source has been kind of an interesting phenomenon. People said, ‘I’m willing to participate in the creation of software essentially on my own time, and for free’. And yet with the advent of these new commercial infrastructures I’m sure some of the inventors who participate are now going to be able to ask, how do I monetise, how can I get economic value from the incredible innovations that I get a chance to create.

“The world is still not a perfect place, instead of in terms of the commercial infrastructure. Yes, you can create a webpage and put on an AdSense ad. There are some things that you can do. But, we certainly haven’t fulfilled the sense, the opportunities to create technology that empowers the creator. That is an aspect of the cloud that I’m excited about, a dimension of the cloud that I’m excited about.”

Online privacy issue

On the subject of advertising, Ballmer said people get nervous in terms of privacy. “And that’s why I think we have to talk about the opportunities and the responsibilities. The responsibilities for creators, for business people to respect the consumer, to build technologies that really do allow the user to be in control. We had this huge internal debate inside Microsoft when we came out with Internet Explorer 8 with a feature called in private browsing.”

He said that the privacy challenge is one that faces companies like Facebook. “How you let somebody describe technically user interface-wise, how do you describe who you are, and what you want to protect, and who you want to protect it from. The amount of great IQ that’s got to go into that problem here at the University of Washington, at Microsoft and elsewhere, is really quite high.”

He said that as a large operator, Microsoft has to take a lead on privacy and make sure there’s vibrant and healthy competition amongst all companies that provide commercial infrastructure.

“Second dimension of the cloud: The cloud learns and helps you learn, decide and take action. If you ask most people what is the internet, as opposed to the question we chose to ask, what is the cloud, if you ask most people what’s the internet, they’re going to tell you it’s a place where lots of people and companies are all out there virtually. It has something to do with the creation of a virtual world.

“The world is a large, complicated place. So, the first thing that got built to help people navigate were essentially directory services, search services. People built tools to help you navigate and find information, pull it all together, et cetera. And yet, we’ve got to go further than that. The cloud, the internet, the cloud needs to learn about you and it needs to keep learning and figuring things out about the world that has been described virtually.

“It’s great to know about 83 million websites on the planet, but if you’re actually trying to find something specific, I’ll put my hand up, as part of the US healthcare debate I decided I should actually understand what we spend money on as a society. Try that one out for size. Pick any search engine you like and go give it a whirl. You’ll get a bunch of links, you’ll find a bunch of data, you’ll probably try to cut it, copy it, paste it, but you won’t be able to just sort of describe it, maybe like a simple, little chart that you would like to see populated. How much money do we spend on healthcare, how much of it gets spent on older people, younger people, poorer people, richer people, people in the last year of their life.

“It’s only about eight numbers, there happen to be eight numbers that you can’t learn by following the public debate. But, there were eight numbers that I felt as a citizen I ought to know. But, the ability of the cloud to actually learn from all of the data that’s out there, and the ability of the cloud to learn from me what I’m interested in is not what it will be two, three, four, five years from now.”

Steve Ballmer on ‘machine learning’

Ballmer said that machine learning as a science is one of the hottest aspects of computer science today. “When I type ‘flowers’ into a search engine, I’m not really interested in 10 blue links about flowers, I really want to buy some, and maybe even at the best price. And, you can walk through the many things that people do, and how do we provide the tools and technologies? And it’s not just a question of the search engine. We’ve got this product that I really love called OneNote, that lets you collect information from a variety of sources as kind of research tool. But how does it fit, and how does it play? Excel, I happen to be a numbers thinking guy, I would create that little healthcare thing as a little spreadsheet.

“I would want Excel to just go get that stuff from the cloud. And so this notion of learning, learning about me, learning about the world, making conclusions, and then helping me to decide and take action, I think is a very big idea,” Ballmer said.

“The cloud itself needs to learn. It’s got to collect new data. It’s got to sense new data. It’s got to represent the real world, and keep getting smarter and better, so that it can help me learn,” Ballmer said.

By John Kennedy

Photo: Microsoft CEO Steve Ballmer

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com