Ballmer: IT may help reset the economy

Microsoft Chief Executive Officer Steve Ballmer has acknowledged at the company’s Public Sector CIO Summit that information technology, like the rest of the economy, faces challenging times.

“Clearly for all of us in this country and around the world the change in the economic environment is job No. 1,” Ballmer said March 4. “It doesn't matter whether your field is finance for IT, the impact is profound.”

However, he added that the outlook for IT was not as bleak as for some other sectors and that IT may be part of the answer to resetting the economy.

“The economy is going to be reset at a different level and it will then be propelled by what are essentially the fundamental drivers economic growth – productivity and innovation,” Ballmer said. “The top driver of productivity gains in the American economy over the past 10 or 15 years has been investment in information technologies.”

“Will there be a slowdown in technology innovation in this environment? Will the pace at which new things come subsided dramatically as venture capital dries up?” he asked. “I think the quiet answer to that question is ‘No, really not.’ ”

Ballmer noted that Microsoft’s $9 billion research and development budget is being cut this year and he does not foresee cuts in future years. “The returns may not be as good in the short run, but the drive is going to be there,” he said.

Although Ballmer struck an upbeat tone, he did not have much by way of new technologies or products to tout to public-sector chief information officers attending the meetings. He predicted more movement toward cloud computing and better integration of existing software and hardware.

Other presenters highlighted Microsoft’s new Surface product, a camera-driven interface that allows users to manipulate data with gestures that was introduced at last year’s summit. Ballmer indicated that Surface is just the first step.

“Literally, you will have whenever and wherever you want access to the people and the information of the world on any screen,” he said. “This will not be just a projector. This will be an interactive touchscreen, or a screen that is voice commanded.”

By far the chord struck most often at this year’s summit is it that of finding ways to cut costs, primarily through virtualization and cloud computing.

“Our private-sector customers are all dealing with the economy pretty much in a straightforward way, which is that they are quite concerned about cuts,” Ballmer noted. “For our public-sector customers it is even more complex. There is new money coming in, and I'm sure you’ll continue to feel that ‘do more with less’ pressure.”