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Microsoft’s CEO: Chicago needs startup growth anchor

Head Computer Science Dept. U I Champaign Rob Rutenbar venture capitalist J.B. Pritzker Microsoft CEO Steve Ballmer audience before Ballmer

Head of the Computer Science Dept. at the U of I Champaign, Rob Rutenbar, venture capitalist J.B. Pritzker and Microsoft CEO Steve Ballmer in the audience before Ballmer talked about why Chicago is the new hub of technology, at 1871, a co-working center for digital startups in the Merchandise Mart. Wednesday, March 6, 2013 | Brian Jackson~ Sun-Times

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Updated: April 8, 2013 7:28AM

Microsoft CEO Steve Ballmer praised Chicago’s tech startup companies Wednesday, but he said Chicago still needs a viable “anchor tenant” to really get on the map.

He described Groupon as still emerging and said Motorola Mobility is in flux, suggesting perhaps someone in the audience could be that “anchor tenant.”

He said Chicago has the necessary ingredients of first-class universities, venture-capital companies and an attractive quality of life, but needs one or two large companies that have “made it” in the tech field.

“There is an unprecedented opportunity for startups and developers around the world and particularly in Chicago with new Windows devices,” Ballmer said after he toured the tech hub 1871 at the Merchandise Mart.

Ballmer spoke to a standing-room-only crowd of 250 at the 1871 tech hub. The audience ranged from hoodie-wearing young entrepreneurs to Mayor Rahm Emanuel, billionaire tech venture capitalist J.B. Pritzker, venture capitalist Kevin Willer, Viewpoints Network CEO and entrepreneur Matt Moog and Chicago’s Chief Technology Officer John Tolva.

Ballmer said Microsoft’s hometown of Seattle — Microsoft is headquartered 13 miles away in Redmond, Wash. — relied on Boeing Co. as its “anchor tenant” in the early days to boost its startup community into a viable business presence. Decades later, Boeing moved its headquarters to Chicago.

In separate responses, Moog and a Groupon spokesman disagreed with Ballmer’s assessment of Chicago’s startup legitimacy, though Moog conceded that Chicago has yet to produce “an internationally known star” on par with Google, LinkedIn and Twitter.

Nevertheless, Moog said Chicago has more Fortune 500 companies than most other cities, and serves as a solid base for the tech startup community here. Fortune magazine lists Chicago as tied at No. 5, with St. Louis and San Francisco for the number of Fortune 500 companies headquarters. The top four were New York, Houston, Dallas and Atlanta (tied for No. 3) and Minneapolis

Moog, who started his career at Microsoft doing sales calls with Ballmer, said he would have liked to have heard more details about Microsoft’s strategy to better compete with Apple and Google.

Groupon spokesman Nick Halliwell said Groupon remains one of the largest companies in Chicago and it’s growing. Groupon employs 11,394 people worldwide, including 2,000 in Chicago.

Ballmer envisioned bursts of innovation in cloud computing, data visualization and refashioned user interfaces, and cited Microsoft’s latest successes: The new Windows 8 has sold 60 million licenses; Windows’ app system has four times the number of apps in the Windows Store today than when the system launched, with 120 million apps downloaded since Windows 8 launched in October; and sales of Windows Phone 8 have quadrupled, with the Windows Phone Store offering 130,000 apps.

He also described Microsoft founder Bill Gates’ early panic that the company would go bankrupt in its startup days. Gates tracked every penny spent on yellow legal-sized note paper, Ballmer said.

Ballmer took no questions from the media or the audience, and said nothing about the European Union on Wednesday fining Microsoft $732 million for breaking its promise to provide Windows users in Europe a choice of rival web browsers.

Nihal Advani, founder and CEO of travel recommendations site Georama, said he signed up for Microsoft’s BizSpark program for startups to take advantage of the free and discounted tools, including cloud hosting and Windows 8 platforms and app-design assistance. BizSpark provides the software licenses and design and development tools to privately held, early-stage companies less than five years old with no more than $1 million in yearly revenues.

Advani, who launched the site in July and who works out of the 1871 co-working center, said he has long been a fan of Microsoft’s products, and uses Bing Maps, Bing news and Bing search application programming interfaces.

He said he will rely on Microsoft’s cloud platform to ensure that his company, which helps travelers plan, book and share their trips, grows quickly without encountering glitches. Georama is developing its own app, raising money for extra search advertising on Bing and Google, and working to get its recommendation service on major airline and hotel websites.

“We see that Microsoft can help us in so many different aspects,” Advani said. Georama employs three full-time and five part-time workers at 1871.

George Burciaga, CEO of Elevate Digital, is counting on Microsoft’s touch-screen technology, which debuted last year with the Surface tablet computer, to ramp up how people interact with the company’s kiosks, or what Burciaga calls “interactive displays.”

The kiosks are set up at 64 sites throughout Chicago, including Navy Pier, Soldier Field, Water Tower Place mall and 900 N. Michigan shops, to let people take and share photos, and find local deals, transportation, restaurants and events.

Elevate Digital is working with Microsoft to deploy Windows 8 in the kiosks in the next few months. The operating system will let people email their photos, travel maps and other kiosk-app information to their smartphones and mobile devices.

“No one else has deployed the Windows 8 platform in an outdoor setting or in a high-trafficked area,” Burciaga said. “We’re pioneering bringing it to people at street level.”

Elevate Digital employs 21 at its offices at 200 S. Michigan Ave.

Major Chicago corporations and the city of Chicago are Microsoft clients, too.

United Airlines Chief Information Officer Bob Edwards said the airline uses Microsoft’s development tools and operating systems to run its website and mobile applications.

United Airlines’ travel app, which customers download for free, lets fliers book flights for United and Continental Airlines, check in for flights, see which seats are taken and get updates on flight status, among other things.

“Instead of having to (write computer) code in different formats for the web, for airport agents and for agents in our reservations system, Microsoft’s tools let us build one app and use it in many places,” Edwards said. “That’s critical to keeping costs low and being quick to market.”

The city of Chicago has adopted Microsoft’s Office 365 Government Cloud to consolidate email systems for its 30,000 employees.

Microsoft employs 250 at its local offices at the Aon Center at 200 E. Randolph, which houses one of 12 Microsoft Technology Centers nationwide. The company employs another 200 in total in Downers Grove and Bloomington. It also operates stores at the Nordstrom-anchored Shops at North Bridge, 520 N. Michigan Ave., and at Oakbrook Center mall in Oak Brook.

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