Speech Transcript – Bill Veghte, ESC West

MR. VEGHTE: What were going to do together, over the next hour or so, is talk about where the marketplace is going.And its fun. Independent of the roles and responsibilities of Microsoft, its fun because we as an industry, whether it be PC or embedded, really are at a point of transition and flux.And its exciting for me to speak here today in support of ESC West and I think CMP Publications is putting on a great show.

So let me talk quickly about what were going to do together.It is an amazing time, and Im going to characterize what that amazing time is in the context of embedded hardware and of software.Im going to talk about the evolution of the embedded marketplace and the inflection point that we are around here together.Im going to talk about where I see the opportunities, the challenges to get there, and, on the basis of those challenges, the bets that together as an industry we make.

So lets talk about the amazing times.When I think about the amazing times, theres so many different ways of characterizing it in the context of processors and MIPS, in the context of storage and the context of display and LCD technology, in the context of bandwidth and pipes.Im only going to focus on three, because I think that they are fundamental and critical to the embedded marketplace and how we evolve and drive it together.A gentleman last night was talking about the emerging debate whether Moores law will continue and persist.I absolutely believe that it will continue and persist.If you think about where processing power was 10, 20 years ago, and then you extrapolate another 10, 20, and 30 years, its truly amazing to think about the cost of the MIPS, and how much processing power were unleashing to solve the customer problems that you all are delivering and enabling the solutions.I dont know how many of you read Bill Joys article in Wired Magazine this spring, but it was a very interesting article and I highly recommend it.He underscored the continuation of Moores law.Its actually difficult even to imagine saying 20 years from now youll have a processor thats a million times more powerful than the one we have today, a million times.And of course the cost on the basis of that drives down, and as you have that the question then becomes how do you consume all those MIPS in a leverage and enabling way.So processing power is one of the things thats amazing, has been and will continue to be.

Storage is another. Obviously there are a variety of types of storage, whether it be flash or hard discs with movable parts, but storage capacity has been increasing about 2x every 12 months in the hard disk space and we continue to see that unabated.Why is that interesting and relevant to us as an embedded set of solutions, as a marketplace?Because of the ability to access more and more data.That storage may be on the device, it may be in the cloud, it may be on a PC, but that storage continues to then expose a plethora of data.Think about it — what does 10 terabytes represent?10 terabytes represents an MP3 library of every song thats been written in the 20th century.It represents an MPEG2 video library of more movies than are in Blockbuster today, for $100.

But the most significant change, in my opinion, in these amazing times, and the change that will drive this inflection point, is connectivity and bandwidth.The cost of bandwidth in the United States, in Europe, in the Far East is declining precipitously.The size of the bandwidth is increasing dramatically and in a variety of ways, whether it be fiber or LAN or broadband or wireless.I dont think any one of those solutions dominates.I think the point is that there are a variety of pipes and a variety of speeds with a variety of flexibility.But wireless, as an example, is an incredible enabler.As we move from things like IRDA to Bluetooth, to 80211B, to 80211A, the flexibility that that engenders and that higher bandwidth is amazing.

So, were in midst of amazing times. What does that mean for us collectively in the embedded marketplace, and how do we relate to it?To answer that question, I actually think its fun to go back and look at where weve been and how this marketplace unfolded.If you think very generally about the first generation of devices, those devices were very single-function.They were proprietary and yet programmable.Programmable around a specific limited application, a specific limited application that was not connected.But those embedded devices were broad, they were broadly utilized in huge, huge numbers.

We move now to the second generation, and in the second generation those numbers continue unabated but something happens, those solutions start getting connected.The solutions start relating to other devices.They start driving data up and down the network and around the network.They start having integration with backend systems.The programmability starts being richer and there becomes a broader mix of in-house and commercial.The hardware pollinization that happens starts to happen across industry and across architecture.The investment though continues to be around the creation of a device, and device bring-up coupled with a simple, narrow, fully focused standalone application.

And now we come to where we are today.We have multiple industries that are increasingly becoming commingled both from a hardware architecture perspective and from a software perspective.The traditional PC marketplace, what does that mean?Does that mean X86, does that mean PCI graphics, does that mean Ethernet, does that mean PC card or Cardbus? No. Does it mean a set of solutions for a general purpose client and a general purpose server?No, it doesnt mean that either because those architectures are being applied to single function devices as well.Whether it be a tethered Internet appliance or otherwise.What does the embedded marketplace mean?It means connectivity.It also means single function, but a function that is connected into the demands of the applications and services.So increasingly these two spaces converge and pollinate and drive each other.And as that happens we come to this inflection point.

This inflection point is where we move to the third generation of embedded devices.An inflection point where the use of stand-alone devices continues aggressively.But we move to a point where customers and solution providers are demanding richer, more intelligent devices.Devices that are connected, devices that expose and export data, devices that create and deliver a rich set of applications and services.The trick in all this though, as we move through to the third generation of embedded devices, is its really about challenging our imagination.It is actually quite mind-boggling to think that in the not too distant future a processor thats a million times more powerful will be comparable in cost to what we have today. Its just boggling.

When I talk to some of you and I talk to customers and partners, what does it mean when you assume connectivity?When you assume wireless access, or you assume a high-speed pipe.What does it mean when you assume that you can leverage lots and lots of cheap storage on the network or in your device?What does it mean when you assume that your device and the devices that it interoperates with are programmable at the hardware level and at the software level?What does it mean when you have lots and lots of rich applications and services?Its a whole new ball game.The solutions, the differentiation which your partners and customers are demanding are very, very different.That doesnt mean that they wont continue to demand faster time to market, higher return on investment, or more productivity across their entire environment.It isnt simply now about a single device in a single space, its about relating that device across their entire landscape.Its about software, software, software.

So, challenging our imagination to assume bandwidth, to assume storage, to assume a rich fabric of programmability.How do we think about that and how do we relate it across devices?In this chart I was trying to characterize a couple of things.One is that you have a landscape and taxonomy of devices that we together have to collectively relate to.Its not just about the PC or an embedded device, or for that matter a server on the LAN, or a server thats on the Web in the sky thats serving up HTML and ASP pages.Its about the relationship and the interoperability between those to drive a killer set of experiences.

Let me talk about those killer experiences in a user context. But as Im describing these, theyre readily extrapolatable to any industry segment that youre targeting and that we think about together.Thinking about entertainment or communications or productivity, how do those experiences relate across devices today?Incredibly poor, incredibly rudimentary.How do I take my email or my contacts from my calendar?How do I take my Internet Explorer favorites or my music playlist?How is my music playlist related between my desktop PC, the server in the sky, the my music player in my car, my music player in my entertainment system, my Walkman?I cannot do that and if I can do it, I can do it in the most rudimentary simple fashion. But when we are able to solve that as a collective industry, when were able to provide an entertainment experience or a communication experience or productivity experience that transcends the device and that transcends location, we will have taken a quantum leap as an industry in enriching peoples lives.So it is about a constellation of devices that relate and interoperate in a very rich seamless fashion to expose data.And as a result of that it drives the creation of a set of services that enable from a hardware perspective or from a software platform perspective. Its about creating the platform, the fabric.But then its a set of applications and services that build on top of that to expose and export that and enable that for the user.

How do we achieve connectivity, driving a rich set of applications and services enabled by the interoperability of data, and interoperability that transcend the device and the context of the user?We talked about the history of the embedded marketplace, weve talked about the fact that were in an inflection point.How are we going to establish and enable this interoperability, how are we going to fully take advantage of that connectivity, those MIPS and that storage?The first thing in my opinion is its about establishing the virtuous cycle.Its about establishing a virtuous cycle of hardware, of software platform and of applications and services that accelerate each other, that push each other so that it is about hardware demanding generalizations and device abstraction from the platform.Its about applications and services demanding access to the capabilities of the hardware, its about applications and services demanding languages and programming tools that enable the quick and easy development of applications and services to take advantage of voice, to take advantage of multimedia, of video of audio etc.So first its about establishing that virtuous cycle where each party is pushing the other and it accelerates and we move faster and faster and faster.

Its about the hardware capacities increasing.There are some very, very hard engineering challenges associated with increasing the processor, storage and DSP that I characterized in this earlier slide.We need to continue to push the envelope to deliver on that.We need to continue to enable and deliver the bandwidth and the pipes whether it be Bluetooth or 80211B, whether it be XDS cell, or cable modem, whether it be fiber or Ethernet.We need to drive down the cost of that silicon and we need to excel and drive down the cost of creating and maintaining that pipe.

Display services, I think, are also critically important both in the resolution and in the cost.Input and output mechanism, speech being naturally used to input data and communicate with the device.That means very high quality microphones, it means audio codecs, and DSPs, graphics rendering so that you can continue to evolve and drive the user interface in the richness of the video presentation.So the hardware capacitys increased leveraging a broad array of hardware architectures and manufacturing capacity and capabilities.

The worlds getting smaller, the industries are becoming more intertwined.Its no longer fair to say theres the PC industry and the embedded Industry.Its taking the most efficient and best elements of each one of those and relating them to the business solutions that youre delivering.As that happens, we together create an explosion of smart devices.Smart devices that assume connectivity, that demand and create and enable rich applications and services.And to do that they demand more and more from the software.

So lets talk a little about the software and the underlying software platform.Because increasingly there are tremendous demands put on that software platform.Its a platform that must be manageable, and manageable means both fully remotable and scriptable, and manageable means the ability to update locally and remotely.It means richness.Richness in the audio and the video capabilities of the platform.Richness in how capable it is in rendering HTML and DHTML and XML.How does it export and expose XML schema?How does it export and expose security?What is the infrastructure in the software platform to enable that security.For a variety, through a variety of levels.How does the platform enable and expose to applications and services the user state.Whether it be user state in the context of preferences, user state and context of data that theyve created.

Notification and messaging is also critical.Adaptable user interface, adaptable to take common elements of experiences they move from device to device, but also utilize and take advantage of the unique attributes and applications of that device.Whether it be on the basis of resources, display surface or bandwidth available to it.Support for new users and machine modality.So, moving from a world where its very character based, or maybe keyboard or mouse, but to speech, to handwriting. In addition, as you think about that software platform, its about connectivity.Connectivity is a key catalyst here.Connectivity to announce the existence of the device and the attributes of that device as well as to discover the device.Discovery from other parts of the network and other devices.How does that data synchronize and relate.Its a very hard problem and N-way sync between arbitrary devices and the server in the sky.

Quality of service, one of the most exciting and challenging things about wireless is that youre in a world where the connection is very, very intermittent.And as you think of those devices moving in a variety of pipe contexts, the quality of service interfaces become critical to communicate up the stack to the applications and services, connected or disconnected.And what the speed of the pipe is.Data interoperability, so the ability to take and efficiently and quickly move the data around from device to device, server in the sky, to server in the LAN, to client device.

Reliability and scalability just have to be a given, reliability seven days a week, 365 days of the year.Scalability so that as you choose and deliver solutions as the capabilities of that device increase, whether it be processing power or storage capacity or display, etc, the underlying software platform can scale with the capabilities of the hardware and corresponding demands of the applications and services that you or your partners create.

But you can have all this great functionality, you can have all this connectivity, but unless its exposed through a set of programming languages, through a set of tools, its not useful.So its not only about the functionality but its about the interfaces that enable the development of applications and services.But its about the ability to take these underlying software platforms and create, and to have a tool set that enables the easy and rapid development of those applications and services.Its now more than just about device bring-up, its about device bring-up smoothly moving into the creation of a platform and the creation of applications and services on top of it.So, you have richness of the platform, you have programmability, and now you need to have the flexibility.Because at the end of the day, one thing that is absolutely true about the embedded marketplace is that there are a plethora of solutions and marketplaces out there.So its about taking these core underlying software building blocks and enabling the flexibility for a solution provider in the transportation or defense or telecommunications or healthcare or industrial automation space to apply their unique vision of the marketplace, and take those core software building blocks, and deliver a platform of their own.So, its the ability for them to create and assemble these building blocks in innovative ways and then create a platform for developers, to easily and quickly create a SDK, and DDK that lets them differentiate and that lets them deliver innovative solutions based on their unique needs.

So you have the hardware, you have the underlying software platform, and then its about the applications and services.When you think about the customers, the customers and the users are thinking increasingly about the applications and services that are delivered.And those applications and services have a couple of key elements in my opinion.First, its about those applications being able to announce what they have and discover what exists around them.Announce and discover in the context of the backend data, to databases sitting buried in a data warehouse somewhere, to PCs, to other client embedded devices, to servers on the LAN, to the Internet and to the intranet.So the ability for those applications and services to relate across that whole fabric, — to push and pull data, to mine it from other sources or to push it out to other sources.

Somebody asked me the other day to give an example of a prototypical application or service in this new world.And actually one that I actually think is pretty close to it is Napster.Napster assumes connectivity, it announces but also discovers, it pushes data as well as pulls data.So pushing and pulling, announcing and discovering, now all those applications and services have to create and enable a sense of context.Enabling that context both on the user, in the device, and also on the location.

The next generation of applications and services will demand and enable audio, video, adaptable UI.Theyll demand and enable natural input, for both handwriting and speech.And if theres one characterization of these next generation applications and services that I would make, its that theyre going to keep changing.Theyll be constantly updating, evolving and adapting.

So, we talked about these amazing times, we talked about how those amazing times relate to the embedded marketplace.We talked about the opportunity that is before us and the challenges to get there.At the end of the day we as an industry are now at an inflection point, and it comes down to how we collectively place our bets.Do you assume connectivity, and at what bandwidth?Do you enable connectivity to other devices, to the Internet and to backend services?How do you take advantage of the processing power that is out there, take advantage of and deliver new modalities in machine and user interaction?How do you utilize XML schema or user state, how do you drive and engender and enable data interoperability across devices and across the network?How do you make your devices and solutions that you deliver for your customers adaptable, self-configuring and context aware?And probably most importantly, relative to the investments that you make, how do you enable what applications and services that you enable and deliver?How should you expose those to the network and to the Internet?What services and applications would your devices need from the network?At the end of the day its how you invest your resources, how you differentiate and enable in the marketplace, in hardware development, in software platform development, in applications or in services.Are you about integration or are you about innovation?

We are at this inflection point, its here and together its up to us to accelerate that transition to that third generation of embedded devices.Its about challenging ourselves to accelerate it, and create this community of Web-connected devices.The challenge is really about a challenge to our imagination to think about things differently, creatively and aggressively.Thank you very much.