A: Will there be great HTML5 apps? Yeah. If you look at phone apps, they're pretty lightweight. And it's well worth the effort. We have a bit of a cross platform approach, but we'll be the first to tell you to optimize for Windows and Windows Phones.
Walt: Does Silverlight run on Android or the iPhone?
Steve: It certainly doesn't run on the iPhone! My guess is if it did it would be blocked! That's just my guess!
A: I don't know that there's one approach. We won't allow ourselves to be constrained in our thinking. We appreciate the benefit of working with partners, but we were prepared to do what we did with Xbox.
A: We're doing work in Windows. Our partners are doing work on the hardware.
A: You don't give advice to your competition... I just wish them good luck getting lots of experience.
Huge laughs on that.
A: Let me put a line between the two. They have nothing to do with one another. Are there hackers everywhere in the world including China? Professional hackers? Yes. Do you think any large government is trying to look at what people are doing on the internet? Maybe, I don't know. I'm going to guess it wouldn't be unique. We're going to have to protect ourselves from this stuff. I didn't find any of that all that interesting. As it comes to the issue about what you can and can't show, and if you'll take orders from the Chinese government. If you're going to do business with someone... we have a few thousand people there, I'm not going to put them in harm's way. You have to comply with their laws in that country. All countries have different views about what is acceptable... we joined a coalition, we don't take things down outside of China, and we let people know what we did take down in China. That's responsible, and we're not putting people in harm's way. When I was kid, we dealt with things like this during Apartheid in Africa. We read a book and it asked what was the best way to deal with something like this? Stay, go, or stay and be a part of a reformation... I think that's the way to do it.
Steve: We'll have different devices with different input. It's not the most common thing, but we have people right now using Windows devices with a stylus. I think people want to be able to do those things.
Steve: That is what we have... the question is how extensible?
Ray: I can't say where it will go, but we're trying to figure out the best way to get information to users. It's something we'd like to experiment with letting people use it in some ways like that, we're letting people tap into maps...
Steve: But rarely when you search do you want to search... you're not trying to see a list of websites. You need to do something. You need to take an action. You don't want to 'find websites'. If we can help the user take actions more quickly, that would be a great breakthrough.
Walt: You're calling someone else a behemoth?
Steve: It takes one to know one!
Walt: Last time we talked about search, you used this forum introduce Bing. How do you think you're doing?
Walt: He gets it.
Steve: Why have two? Then why have Android? That's not an aid!
Walt: What about Chrome?
Steve: What am I supposed to think about it?! They're saying 2, 2 -- but they're not even in one! What am I supposed to say?! Ask them!
Walt: Well we invited Eric...
Steve: And then you get this WSJ picture of me... I look like I'm about 90 years old. And stiff!
Whoa, Steve is going for it!
Steve: On the phone, they're a real competitor.
Steve: It could be. The internet was designed for the PC. Then optimized for the search engine... then there's the smartphone, and people say, I'm not a phone, how do I deal with that. I think people give Apple a lot of credit for dealing with how to deal with that. But maybe it gives other people clarity of view to not have a PC side.
Steve: They've done a great job of coming from nowhere. They have a following that's interesting. They've done their best work on the browser. It's what really distinguishes their phones from the competition. They're a good competitor.
Steve: You know, I live in this country, so you get a skewed view. They're knocking it out of the park everywhere else. They can deliver a good product at a good price to remote parts of the world. But I think on the software side they're trying to get their act together. We collaborate with them.
Steve: They're a good competitor. People don't realize how good a job they've done with the consumer side. They're not just an enterprise company. Everyone has vulnerability.
Walt: What's there's?
Steve: Their platform is less robust than anyone in the market. And yet when it comes to people who want to communicate vigorously, people love them. They're number one in this country.
Steve: These are two separate things -- we had an employee who wanted to retire, and that extra layer just didn't make sense. On the phone side of the business, we learned the value of excellent execution. We were ahead of this game, and now we're not. We haven't fallen off the planet, but we're not where we should be.
Walt: What do you mean about execution?
Steve: We missed a cycle. And I want to be more involved in leading the people who are making these products. We have new talent, we had to do some cleanup, we did it for Windows, and we're doing it for mobile. And excellence in execution is also part of the equation. Good news for us, there was bad news, but we're dealing with the fact that we're not at the front of the pack. Who was the leader three years ago? Six years ago? You had Motorola, SE... they're not where they were. The market is pretty dynamic and that's an opportunity. We have to execute.
Steve: They had a heck of a quarter.
Walt: But c'mon...
Steve: They're not going away. Our cars will get bigger and sleeker and faster and better... but they're still cars.
Steve: They built what they could build when they could build it. Is it a flat device? Well yes, but then you plug it into a dock when you need to do more typing on it. The ad from our competition in 3 years won't be Mac vs. PC, it will be whatever this new device is versus the PC. It's obvious that they're moving in that direction, the Mac will keep its 3% marketshare... and the race is on.
Ray: I think there are going to be appliances, in our living rooms, there will be handheld devices. Our role is to drive out complexity and make these simple to use. Productivity and creation experiences are inherently additive. Consumption experiences are subtractive -- both will coexist.
Steve: Yes, but I think the bulk of the market will be multipurpose.
Walt: Will it look and act like my Windows PC?
Steve: You'll have a range of devices, there will be different looks. Some people will want the comfort of Windows as you know -- some people might want it to be more customized. We're very well suited with what we have today, we see opportunities coming up ahead. It's going to be competitive. There's going to be a lot of competition around form factors. We'll work with partners on building form factors with Windows, and on smaller screens Windows Phone...
Walt: There's Android... that's going to be on tablets.
Steve: Well we saw a bunch of small netbooks that had Linux on them about a year or two ago -- they didn't sell real well.
Walt: But you cut the price of XP.
Steve: They didn't sell well, why should I give someone else an opportunity?
Steve: Of course it is. If you ask an average person what is this, they'll talk about what it is, what it does... I had a guy try and take notes on one. There's a saying -- to a man with a hammer everything looks like a nail. We have our hammer, and they have theirs. I see our competition trying to eliminate products out there's that haven't been popular and try to push a new product that might be more popular.
Steve: You'll pay and 80m Chinese people won't this year. If they paid, you wouldn't have to.
Walt: Well there were controversies...
Steve: We had controversies, but we don't have a business model dependent on it! We have competitors out there that, for better or worse, that's their business model.
Steve: It is... think back 5 years... the cookie debate? The hardest thing is that users didn't know what the cookie was. How do you recraft dialog with the users so they understand what they just said someone could look at?
Ray: Well you have to ask who is in control of the data? If the user is in control you have a lot less problems.
Steve: You want to put the user in control, that's the right thing to do, but you end up with a complexity level that most people don't want to deal with. Looking at our next Live or IE steps, getting the UI right is an innovation challenge.
Ray: Well right now we have ActiveSync in most devices people have here right now. And sync is hard, but it's straightforward as an engineering task if you know that the server side is private and yours. What's happening is unusual now because we're spreading our personal data all over the web. It's easy for us to conceptualize how to do it, but what we all want when we think about long term record keeping, how are we going to agree as an industry on what meta data to use to track this. I don't think everything will end up on one site.
Whoa, Walt -- have you read our Continuous Client piece?
Steve: I think the obvious guys. TV will be an interesting place to play. And of course we always have what's coming out of the open source community. Firefox...
Steve: Well the trends are good for us. But there's always troubles in the trends. We're moving from a world that's good for us to a world that's even better for us. There are guys who say we'll play the game differently, so we get a new class of competitors. Now we have these new competitors in areas where we've been strong -- it's our job to out innovate them, out hustle them.
Steve: You'll get cheap devices, but the experiences people want will be products with a reasonable CPU, reasonable storage, graphics... it's all about getting a little smarter on the client.
Steve: Well everyone in the industry is going to be doing a lot of code on the client. When people say they love HTML5, they're saying they love how their code on their devices runs HTML5. Everyone has a different way of saying it. But the world we're talking about is "smart cloud" talking to mostly "smart devices" -- apps that execute locally, but are controlled or seamlessly integrate with the cloud.
Ray: I can't remember a time where it's been so exciting with so many transitions. We've got everyone and all devices connected on the internet. Everything used to have its own APIs, now we're coming together around standards. At MSFT, I've been saying 'forget about how you viewed things before, and repivot to how people are using them now' like in the case of Office.
Steve: I would say developed world, things have come off the lows. Our industry is even MORE REVVED UP! We've got a lot of product cycles going on. Consumer market is coming back. We're starting to see some comeback in business spending... what's the famous expression... burn me once shame on you... burn me...
Wow, Bush moment!