Wednesday, May 21, 2008

Steve Ballmer of Microsoft visits Kyiv, Ukraine

Yesterday I took the opportunity to hear Steve Ballmer, CEO of Microsoft, address a select group of Microsoft's partners and customers in Ukraine. The vist was part of his whirlwind tour of Central & Eastern Europe. His tour got off to a somewhat messy start in Budapest, with a disgruntled student -probably a Mac user :-) - hurling a few eggs at him.

Ballmer made no major announcements, unless you count offering to send the 14-year-old son of a Kyiv businessman a free Xbox game. It was a "thank you" in return for the boy's question (conveyed by his father to Mr. Ballmer) as to why Microsoft charges for some Xbox content that Sony's Playstation provides for free.

He received several questions regarding Microsoft's plans to open an R&D center in Ukraine, to which he made no commitment, saying that where Microsoft open centers is driven by 1.) adopting them through acquisitions; 2.) the quality of a country's university system; 3.) the country's education system to churn out LOTS of math, science and computer graduates. Although it appears that Microsoft plans to open an Innovation Center at Taras Shevchenko University in Kyiv.

Ballmer came to CEE to highlight the fact that is Microsoft's fastest growing region - even bigger than China - and it's importance to the company. Microsoft is facing even more stiff competition in its developed markets from Google, Apple and RIM particularly in mobile devices like MP3 players and smartphones. Microsoft, like elsewhere, is still the dominate player in business and desktop software in Ukraine but, here too, it is coming under increasing competitive pressure. Although anecdotal, I think Apple is catching more Ukrainians' attention, both in the computer and mobile device market, due to the iPhone.

My feeling was supported today when I saw this sign over over a shop in Kyiv's main street, Khreshatyk. This sign must have gone up in the past month or so. The funny thing is that the iPhone isn't officially offered in Ukraine yet, but many of the devices have been brought in and hacked illegally. Apparently supply is ample enough for this shop to advertise tech support for them openly.

That said, while I give Apple credit for being the first to introduce a very cool touch navigation user interface and sleek, attractive device, I think 1.) the hype is fading quickly, and 2.) competitors, including those running Windows Mobile, are quickly introducing their own touch devices. I think Apple once again was on the cutting edge of innovation, but the iPhone's market share growth will quickly slow and likely decrease unless it really gets serious about being in the phone business.

And the friend with whom I attended the Ballmer talk said that her company is switching to Blackberry, even though they will have to switch mobile operators and phone numbers to do so. Why not switch to devices running Windows Mobile?

But, unfortunately, the thing that stuck most with me about Ballmer's talk was his reference to Ukraine as "the Ukraine", which is like nails across a chalkboard to most Ukrainians. And he said it about 20 times during his hour speech. Its a language and cultural subtly that is a common mistake by foreigners, but by putting "the" in front of the country's name indicates that it is a region of another country (i.e. Russia) and not an independent country. Russia still calls Ukraine's statehood into question today, so it still very much a live issue here. Someone should have briefed Mr. Ballmer about this prior to his talk.

A more minor and entertaining faux pas was when Ballmer, as many of we Americans do, finished a couple of sentences with "blah blah blah". Phoenetically, that word means "whore" in the Ukrainian and Russian languages. Difficult to warn someone about that one.