Microsoft is adjusting to a “new normal” with levels of demand for information technology that may be permanently lower than in the past—but it will still vie aggressively with competitors such as Apple for the dollars of consumers and enterprises, CEO Steve Ballmer told an audience in Boston today.
In a rare visit to New England, the famously competitive Microsoft exec met with a group of local technology-community leaders assembled by the Massachusetts Technology Leadership Council at Microsoft’s own New England Research and Development (NERD) Center this morning, then headed downtown to give a luncheon speech to the Boston College Chief Executives’ Club of Boston.
Ballmer said he was optimistic about the prospects for economic recovery, but he said the country, and especially the computer and software industry, have reached a plateau in which IT expenditures by both consumers and enterprises are likely to stay 15 to 25 percent lower than they were before the recession began. “We see stability at this stage and the chance for real growth, but it’s a tough climate,” Ballmer said.
He noted that much of the U.S. economy’s growth prior to the recession was built on debt, and as that debt is gradually unwound, “we are going to have to generate more productivity and innovation in order to drive more job growth.”
Fortunately, Ballmer said, there’s still plenty of room for innovation. Holding up the paper on which his speech was printed, Ballmer exclaimed, “this is Gutenberg-generation technology! Our industry has a long way to go.” Within five to 10 years, he said, computing devices will be as flat and as flexible as paper, and all aspects of business and entertainment will grow more connected and interactive.
Ballmer also predicted that software will gradually take over more and more of the mundane aspects of information gathering. “When I say to my secretary, ‘Get me ready for my trip to Boston,’ she has to go to the same calendar, look at an agenda, go to all the websites of the customers I’m visiting, download data about them, go to the CRM software…why can’t I have a computer do that? It’s not rocket science—it is within the realm of the possible.”
Microsoft will invest $9.5 billion this year on research and development to tackle problems like this one, Ballmer said. And about 700 of the company’s R&D personnel work in New England, he noted, counting both NERD and Microsoft’s offices in Beverly, MA.
“For Bill [Gates] and I particularly, going to Harvard in the 1970s, I’ll tell you, the world of computing was route 128 and DEC,” Ballmer said. “There is still a lot of talent in this area, because of Boston College and Harvard and MIT and all the other universities, and there is also a fine culture of
