Steve Ballmer at Gartner ITExpo

I spent the day at Gartner’s annual showcase event in Orlando. The buzz today was around Microsoft’s Steve Ballmer comments to the audience. In keeping with the tone of Florence during the Renaissance, and all the recent Apple and Google announcements, he promised more rapid innovation - some delivered short term, others longer term “All of our major businesses can have a short-twitch capability every six to nine months to a long-twitch capability. We can't make customers wait three to four years for things they need every few months”

In the Gartner Scenario keynote on Monday, there were ominous notes about software spend “Like bloated bureaucracies, automatic investment in the software status quo can overshadow and choke future business success….software has become a “third rail” threatening anyone with the temerity to touch it”

So, when asked about Enterprise Licensing he commented “It used to take two years of post-graduate education to understand our licenses. It's down to ninth-grade now."

Somebody should have asked him when he would price products at high school levels rather than Yale or Harvard levels. In fact, he told the audience Microsoft only makes up 1.5% of total IT spend! Given current Microsoft revenue, for that to be true the IT spend denominator has to be around $ 3 trillion – which means he is adding all costs related to to software, services, hardware, telecommunication, internal IT staff and the kitchen sink. Well, in that case we need to increase the Microsoft numerator also. Let’s add up the TCO of Microsoft products – the training costs around them, the services around them, the help desks to support them, the regular patches and upgrades, the hardware upgrades they require  – and you would get closer to 15% of IT spend.

Nice to see Microsoft focus on more rapid innovation. Steve, you made your investors happy last year with the cash dividend. Make your customers similarly happy. Issue an Innovation dividend like I wrote last week.