Like many of you, I have the great fortune to hear the views of lot of people in my travels around the world. But truly I must say that hearing my own CEO – Microsoft’s Steve Ballmer –speak, on energy, is particularly special. As you might imagine I have had the privilege of hearing Ballmer speak many times over my career but he continues to amaze me in his ability to connect to an audience with energy and passion that few others can generate. And Steve delivered again last week at CERAWeek, the annual energy conference hosted by Cambridge Energy Research Associates in Houston, Steve and Dan

Steve was the keynote speaker at the Wednesday dinner for an audience of approximately 1000 executives from global integrated and independent oil & gas companies, national oil companies, refiners, power generators, investor-owned and municipal utilities, coal companies, renewable energy companies and government officials. Daniel Yergin, IHS CERA Chairman and Chairman of CERAWEEK, served as the host to Steve’s presentation and discussion, which focused on three themes:

1) The future of technology including smart devices, natural user interactions and cloud computing

2) How technology is first seen in the home and how it will impact the energy industry

3) Sustainability

Considering that worldwide power demands will double by 2035, due to economic recoveries, developing countries’ growth, and the anticipation of millions of electric vehicles, the utility industry’s task is to find affordable ways to fuel homes, offices, factories, vehicles, schools and cities. As Steve pointed out, Microsoft’s task is to deliver the technology that will make this possible.

Indeed, Steve shared the Microsoft view on where we see technology heading, highlighting how it’s already being used in our personal lives, and sought to spark new ideas on the opportunities Microsoft will present to the energy industry. Steve centered his discussion on the idea that information is no longer bound by the constraints of a single device or location and the ability of cloud computing to combine the power of intelligent devices like personal computers, smart phones and even electric cars with the accessibility and breadth of the Internet and the security of the enterprise datacenter.

Steve used the Xbox 360 Kinect as an example of what happens when smart devices and the Internet come together. Kinect is a sensor that understands a person’s movements and speech. Many of you have probably either experienced or seen Kinect in action. I have one in my living room and it brings a whole new dimension to interactive entertainment. In a Kinect video game if you jump, your character onscreen jumps. If you tell the Xbox to pause during a movie, it’ll pause. If you wave your hand to look for a song to play, the onscreen choices will scroll by. If you want to talk to friends in different cities, simply invite them to join a discussion in your living room. If you want to watch a movie, choose one from an online library. No controller, remote, or training needed. It’s truly a transformational system that will evolve and go far beyond the gaming and sports-related activities we see today. As soon as the product was released innovative entrepreneurs have found ways to hook Kinect to their PCs and create new application utilizing the sophisticated camera and sensing system in Kinect.

Steve went on to talk how Kinect is the result of years of research in Microsoft’s lab. In fact, in the next few months Microsoft will give software developers new tools to design software for Windows 7 PCs, for the next generation of applications that will take full advantage of the capabilities of Kinect. I think it will be an amazing to watch the innovation that results.

So what does this have to do with energy?

Think about the possibilities of using Kinect in substations, power plants, nuclear facilities or oil platforms, where workers, engineers and managers will be able to use the power of Kinect to manipulate three-dimensional models with easy precision using words and hand gestures, at a new level of intricacy that is not available with the clumsy-by-comparison keyboard?

Steve went on to talk about how the energy industry is on the leading edge of what technology can do. He noted how there's a lot of data, a lot of visualization, and a lot of collaboration already occurring in the Power & Utility and Oil & Gas industries, amongst and across company boundaries and to some of the most remote parts of the world. Examples include using the cloud to integrate an entire ecosystem of service providers or capturing intellectual capital and insights of experienced engineers who are nearing retirement and sharing their knowledge with a new generation of employees via tools they are already used to using, like search and social networking. SteveB

Steve discussed the current business environment for Oil & Gas and Power & Utilities companies, and elevated the notion that whether you’re talking about digital oilfields or smart grids the central feature is data, data and more data. The challenge to using the data to enhance profits will be to securely access all the data using tools to update, visualize, and understand it, and then make smart and fact-based decisions quickly. Advances in communications and collaboration as well as massive data aggregation and business intelligence on smart devices are all capabilities that we are focused on today with a wide range of industry partners and customers. His examples included the work that some of our customers are doing with power trading applications where customers have moved to the cloud because they had difficulty scaling conventional IT in order to determine spot and futures markets for buying and selling power. Now they are able to scale the computing power they need to run complex trading simulations and have reduced processes from days to hours. Another story that Steve cited was the work we’ve been doing with Baker Hughes, which has more than 50,000 employees in 80 countries helping oil and gas operators make the most of their reservoirs. This work includes complex simulations that consist of hundreds of thousands of calculations. These simulations used to take nine months to build and run and now we have reduced that to less than 30 days by moving to Windows Azure, our operating system for cloud computing, and using computing resources hosted by Microsoft in our Microsoft datacenters.

Steve mention the work that we are doing in Oil & Gas and Power & Utilities with our reference architectures MURA and SERA and how these initiatives form the foundation of our efforts to bring innovations mentioned above to the energy industry. We were very pleased to have several of our key partners that support these architectures -- such as Alstom, AspenTech, HP, IHS, and OSIsoft – join us at this event.

I could go on and on about Steve’s presentation and discussion with Dan Yergin. It was an exchange to remember. You can view the full transcript of Steve’s speech here but the words on the paper are a tiny fraction of the content of Steve’s speech and don’t even begin to reflect the power and passion that Steve brought to the stage. But, as luck would have it you can view the full video of Steve’s speech here. Enjoy! – Jon C. Arnold