CAIRO: If you’re looking for someone to give a speech and leave the whole room impressed, upbeat and beaming with optimism, Steve Ballmer, CEO of Microsoft Corporation is your man.
Although he says some people might regard him as a pessimist, he prefers to see himself as a realist. In his speech to hundreds of IT businessmen, Ballmer said he will continue to be optimistic about the IT industry, despite the economic crisis.
“Yes, we will be down, [our industry] will contract to some degree. We’ve had to flap up our expenses and revenues in our industry and company are reduced, yet the pace of technology innovation is going to continue, he said in his speech, entitled “The New Economy: How Microsoft is innovating and helping you save money? last week at the American Chamber of Commerce (AmCham).
Ballmer is one of a few businessmen who think the economic crisis is “amazing. Although no country is affected by it like the other, he says all will suffer the same global economic issues, whether it’s tourism, foreign direct investment or domestic production and economy.
“We’re living through what I tell our employees is really in some sense a once in a life time event, he said.
“There are very few economics contractions that actually are a result of a contraction of the total amount of debt or leverage which is being used in the world economy, he explained. In the US this has happened four times in the last 200 years: 1837, 1873, the Great Depression in 1929 and now.
Nevertheless, this economic crisis is quite different than others. “I think it is likely to lead to what I call a reset of at least the US economy. We are not going to go down and then go back up [like in previous situations]; this time we will go down, and then we will start growing again, he said.
He explains that the economic growth in the US during the last five to 10 years has come not just from productivity and innovation, but also from taking on more debt. Now, the mission is to reduce this debt, which rules out future economic expansion through borrowing.
This in turn will have a consequence on consumer spending by decreasing the amount of money people and businesses spend on IT and its accessories. “[Since] 50 percent of capital investment in US businesses goes into IT, obviously contraction in capital spent is a material consequence for the IT industry. So we will see a shrinkage . in most countries, in the size of the IT sector, he said.
Despite the downturns, the pace of technology innovation is going to continue. “Things are going to slow down but progress, improvement and power will move on, and what that means for somebody who cares about software is the opportunity to create amazing new software, change the way we think about technology and how we use technology, he said.
“You really will, over the next five or 10 years, talk to your computer, and it will understand not only the words, it will know what you meant, he believes.
The top three
At times of stress, businessmen need to look at their pressure points and deal with them. Ballmer identified three primary concerns about IT that most business leaders feel should be addressed: the cost of IT, time it takes to implement new IT solutions and availability of information.
“IT should be less expensive and I think every industry should feel the pressure to deliver more value at a lower cost. And with IT being a growing percentage of corporate budgets, that’s an important pressure point.
“It takes too long to implement new IT solutions, how many times have people said we’ve got a new product idea but it needs a little IT support? Then you’ll hear it takes generally a year to implement that capability.
“And the availability of information, I don’t care who it is, if you go ask any business leader if you have the information you need to make decisions, there’s a lot of frustration, he said.
“We all have to take appropriate action on the economic side, on the cost side, but we have to continue our new ways to improve our business, to optimize revenue and to introduce new products, he said.
Prior to the event, Ballmer and Prime Minister Ahmed Nazif signed an agreement “to further the utilization of ICT tools in developing e-government services, as well as introducing ERP systems for the first time in the transportation sector and in the health sector, Minister of Communication and Information Technology Tarek Kamel announced at the event.
The accord entails that Microsoft is committed to reinvest 25 percent of the total value of the agreement in innovation centers as well as establishing further information technology investments in Egypt.
“Our commitment together also re-expanded to working together in developing mobile applications uses. . We think that we have a wonderful opportunity for collaborating together in Microsoft’s innovation center together with the mobile operators as well as with the Internet service providers in the region, Kamel said.
Kamel explained that Egypt’s mobile industry sees one million new subscribers each month, one of the highest growth rates all over the world.
“Just last year we had four million new mobile subscribers using the Internet over these three operators existing in Egypt. We believe that this is a wonderful platform for investment and for working together in search engines using Arabic applications and Arabic software, not only to serve the 44 million subscribers in Egypt but the whole region, he said.
Kamel reassured the audience that although Egypt is not immune to the financial crisis, the ICT sector has grown by 15 percent in 2009.
“We’ll base our development on stimulation of the local market that is still growing and will grow within the next couple of years and is providing investment opportunities not only for the Egyptian local players but also for multinationals as well, he said.