Ray Ozzie on Cloud Strategy and Washington Vs. Massachusetts: Takeaways from Tech Alliance

5/1/09Follow @gthuang

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really the case. Technology builds on top [of what was there before], and then markets flip. You have to do pattern matching with technology trends, what’s going on with the social environment, and how people use technology. Right now, the way I’ve been framing things, we’re moving to a world of ‘three screens and a cloud.’

For the user experience, we will all commonly consume solutions delivered to us in a coherent way—to something the size of a phone, a PC, and a TV. Yes there will be better devices, but there will be solutions that weave those things together, with the cloud at the back end. You can project where things will go for developers.

Lazowska: In terms of the cloud, how is Microsoft positioning itself?

Ozzie: Everything we’re going to deal with from here on in—and it has begun—we have to re-pivot to think not ‘what is the specific delivery device,’ but ‘how do you deliver it across these different devices.’ Microsoft Office is a PC product, but there are [broader] scenarios for productivity—editing, presenting something. The Web is for sharing. When you’re in meetings or a conference room, you have your phone with you. You can take a snapshot or record audio. Because all of them are cloud connected, they can all fit into the same scenario. Office people have re-pivoted—how is it best delivered across PC, phone, and Web? Eventually, everything we have will be appliance-like. The data or metadata appropriate for that device is on there. That represents a tremendous business opportunity for our partners and us. People will be less afraid of ‘what happens when I lose this device or drop it in a lake.’

Lazowska: I have a plethora of special-purpose devices—a phone, music players, Kindle. How do you think about different devices versus a generalized device, and new business models?

Ozzie: Some people in this room like to read on a Kindle, or the Kindle app on the iPhone. One is a general-purpose device, one is special-purpose. There’s an element of how you relate to the device [in a fashion sense], how you want to be seen and perceived. There’s a new business model associated with anything—certainly anything delivered digitally.

For news, the old business model is impacted. You used to have to wait to get the news, now you can get it all the time. For apps, now you can treat software like ringtones. It’s not clear as these new models come into play, whether the profit pool is equivalent in the new world versus the old world. It could be that the model is sound, but a it’s a new pool. If journalism is something we care about, we’re going to have to find a new way to support it.

Lazowska: There’s a question from the audience on how you think about the pricing of netbooks.

Ozzie: I’m not sure what a ‘netbook’ is. I think it’s an inexpensive laptop. The clamshell thing you get doesn’t look all that different from a laptop. What you’re observing is, as devices become more appliance-like, as people conceptualize them with more limited or vertical function, the price they’re willing to pay might be different from a general-purpose device. Many, many people use netbooks in conjunction with their PC. People are actually buying family packs for their kids, but they might still have the family PC at home. There are markets buying PCs now that we’d written off as the phone market. Where will things go? I don’t know, but conceptualizing netbooks as a different thing from a laptop—I’m not sure where that distinction lies.

Lazowska: Another question from the audience, on the impact of Web-based collaboration on intellectual property.

Ozzie: That’s a very broad question. Intellectual property is our lifeblood, and the lifeblood of many industries. The open source movement is based on strong intellectual property controls. Open source licenses are very precise in terms of the types of environments they want around the handling of their source code. We’re in an era, because of sharing, because we’re all connected, we can explore new models of creating intellectual property. Certain areas are really hard, and really profitable. Over time, we are in a stable state where there will be many, many businesses based on proprietary intellectual property, and they’ll sit side-by-side with open source. We have to focus on interoperability between the two.

Lazowska: Coming from the Midwest and Massachusetts, what’s your perception of the strengths and weaknesses of the Seattle area compared to the other regions where you’ve lived?

Ozzie: This is a wonderful region. Being here, I had no idea in terms of the lifestyle perspective, the natural resources perspective—it’s a wonderful place to live. In terms of the high-tech community, so much is shaped around university systems. The cluster of universities in Cambridge [MA], for instance. There are some dynamics. Here it’s the Eastside versus Westside. There’s a different feel. In Boston, there’s Cambridge, there’s [Route] 128, and [Interstate] 495. If a student is at a university in Cambridge, they’ll come to Seattle as easily as 128! Each region is really a subregion. But there’s a big opportunity here. The venture capital community is very solid. I think by communicating between different regions, we can do a lot.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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