Ballmer and Gates defend Microsoft outlook.

 
 

Anyone who has seen Microsoft’s seamless, touch-based Vision of the Future was likely still reeling with enough stars in his or her eyes to unquestioningly soak up the optimism CEO Steve Ballmer expressed at the company’s annual shareholders meeting on Tuesday. The shareholders themselves, it seems, felt more concern than optimism. After Ballmer delivered a glowing report of the company’s synergistic growth from the cloud to mobile devices, many stockholders vocally worried about the company’s capital allocations and stagnant stock price.

One of Microsoft’s key technological advances, according to Ballmer, has been 45 percent growth in its entertainment and device division, with almost $9 billion in resulting revenues. The Xbox is becoming an entertainment hub for families, he explained, sharing anecdotes from his own life and remembering a time when people thought Microsoft was foolish for pursuing a foothold in the gaming industry. That foothold has turned into near global domination, with the Xbox console leading the U.S. market and poised to lead the international market in the near future, he said.

Xbox’s game-changing Kinect system, said Ballmer, was the result of collaboration across many divisions of Microsoft; he responded to a shareholder question about splitting the company to increase its value by saying that Microsoft does not invest in things that are “idly independent.”

Ballmer also discussed Microsoft’s recent acquisition of Skype and its partnership with Facebook, perhaps in an effort to assuage shareholders questioning the company’s large cash balance on hand. According to The Wall Street Journal, Microsoft has $57.4 billion in cash on its books. The catch with paying out that cash to shareholders is that 89 percent of the money is invested abroad, and subject to taxes if repatriated.

After a few questions on capital allocations, the normally silent Bill Gates put the lid on the discussion by explaining that the most important thing to be done in increasing Microsoft’s stock value is to focus on profit stream and building new products of high value. The choices in paying out those profits are less important than maintaining the company’s ability to take big risks by beefing up its balance sheet, he explained.

The shareholder meeting was held the day after Warren Buffett announced a $10.7 billion investment in shares of IBM (giving him a 5.4 percent stake), citing the company’s ability to execute its strategy and its fair treatment of stockholders as motivating factors in the deal. IBM stock has risen 28 percent in 2011, and this investment is Buffett’s first foray into technology. Microsoft stock, trading at just under $27 a share, has remained relatively stagnant over the last several months.

2016 Tech Impact Awards: Tech Impact Champion

2016 Tech Impact Awards: Tech Impact Champion

Congratulations, Ed Lazowska!
| FROM THE PRINT EDITION |
 
 

WINNER:
Ed Lazowska, Ph.D.
Bill & Melinda Gates Chair in Computer Science & Engineering, University of Washington

When Ed Lazowska arrived in Seattle 39 years ago as an assistant professor, both the University of Washington and the region were very different places. In computer science, he was the newest of only 13 faculty members. The region’s tech industry largely consisted of Boeing, Fluke and Physio-Control. Microsoft at the time was still a dozen people in Albuquerque. 
 
Today, the UW’s Computer Science & Engineering Department rivals Stanford’s and Carnegie Mellon’s for attracting tech talent and major research — accomplishments that Lazowska helped bring about. As the university’s department chair, his effort to recruit leading data scientists included personally reaching out to Amazon CEO Jeff Bezos, who provided $2 million from Amazon to endow two professorships and personally met with researchers. A decade after leading fundraising to build the Paul G. Allen Center for Computer Science & Engineering, he is doing so again to build a new CSE facility that will help double the center’s capacity.
 
“Our job,” Lazowksa asserts, “is to provide socioeconomic mobility for bright kids in this region.”
Driving opportunities through research remains his passion, as his own studies in high-performance computing, multicomputer processing and big data science have proved. An early technical adviser on the formation of Microsoft Research and a member of two national advisory committees on science and technology policy, he has promoted private and public investment in “engineering things that one day in the future will be used in game-changing products.”
 
Lazowska believes big data and cloud computing “lie at the heart of 21st century discovery.” He helped found and now leads the UW’s eScience Institute, a cross-campus partnership that helps scholars in fields such as astronomy, biology and sociology take advantage of data analytics to enhance their research. Given the region’s far-reaching cloud expertise, Lazowska says, “This is an area that Seattle has the potential to own.”
 
Lazowska’s other initiatives include promoting K-12 STEM education and gender diversity in the UW program. He champions the notion that all students should study computer science to cultivate the “computational thinking” skills needed for the new century.
 
Lazowska marvels at the region’s transformation into a place “with distinctive and innovative activities in the broadest range of areas.” With his trademark enthusiasm for the UW and the local tech sector, this celebrated educator, researcher, adviser and booster has played an important role in that transformation.
 
Previous Tech Impact Champions
Tech Impact Champions are chosen not only for their achievements in technology but also for championing the region’s broader tech sector. Past inductees in Seattle Business magazine’s Hall of Technology Champions, previously called Lifetime Achievement Award honorees, are:
  2012: John McAdams, former CEO, F5 Networks
  2013: Jeremy Jaech, cofounder, Aldus and Visio, and chair emeritus, the Technology Alliance
  2014: Steve Ballmer, former CEO, Microsoft
  2015: Tom Alberg, cofounder, Madrona Venture Group