Speech Transcript – Paul Flessner, Microsoft Exchange Conference 2002

ANNOUNCER : Ladies and gentlemen, please welcome the Microsoft Senior Vice President, .NET Enterprise Servers Group, Paul Flessner.

(Applause.)

PAUL FLESSNER : Good morning. Welcome to MEC 2002.The first thing I want to do is thank each and every one of you for taking time out of your busy schedules and coming down to Anaheim to hear all about .NET and the great things we’re doing. We appreciate it again. We know it’s time away from your schedules and know that’s hard and appreciate your support, and hopefully we’ll get you some good learning to take back and make you more productive on your jobs.

Now, these keynotes can be kind of tough sometimes. You’ve got to be careful and it gets to be kind of a balance between kind of a Super Bowl halftime show, you know how those are, how if you’re trying to do too much and you don’t remember what’s going on and what you’re supposed to be listening to. So we run a little risk and we’ve got an awful lot going on this morning, a lot of product announcements, some new strategy announcements and some pretty cool stuff.

But the good news about it is that you’ve got the rest of the week to go and get some depth on it, go get the follow-ups. So I apologize if we just give you a teaser today, but that’s kind of what this is about to help you get kind of the big picture of what you’re doing and then you can kind of drill in over the next couple of days on the topics that you want.

Now, there are two things I want you take away from this talk in this next hour or so, and say we do understand that each and every one of you are very much focused on lowering your total cost of ownership of your systems. That’s very much at the heart of what we have to do every day in support of you. It’s a Microsoft value proposition that we take very seriously. I know we certainly can do better at it and we will work hard to do better at it every day, but it’s important to me that all of you understand that we focus on TCO because we know it’s one of the primary ways you’re measured honestly in your jobs every day. I was in IT for 13 years before I came to Microsoft and I know that honestly you don’t get the right to speak at your company until you really have proven yourself that you’re in it and motivated for the business not for the technology, so that you’re focused on that TCO every day.

And after you’ve earned that right to speak and you’ve proven that you’re really focused on TCO, the next opportunity you have is to really add value to the business. And I’m not saying that in a flippant way; I mean very specifically I think you can add business value in three fundamental ways, and they all happen around getting connected, getting connected to your customers to increase revenue, getting connected to your partners to cut costs and increase profitability, and getting connected to your employees to improve productivity and empower those employees. And that’s what being connected is all about.

Getting connected, we’ve been pushing hard around getting connected through something called Web services, which are a set of open standards based on XML to get you connected, and .NET is Microsoft’s implementation of Web services.

So if you get those two things, we’re focused on TCO and adding business value by being connected, utilizing Web services, utilizing .NET, Microsoft’s implementation of Web services, I think we’ve accomplished quite a bit.

OK, so we’re going to stay focused on that and now I’m going to kind of jump in and go through a few slides and then we’re going to do some demos and some product announcements and all kinds of good stuff.

So a lot of you have lived through this industry for a while; I know I have for over 20 years now. And there’s really something we’ve focused on every day and that’s productivity. What we do in IT helps drive businesses forward in terms of productivity. Productivity increases profitability. Profitability makes stock prices go up. It’s a good, virtuous cycle.

But productivity doesn’t happen without technology; we’ve seen that. We were pretty proud of ourselves when we introduced our mainframes, took them out of the laboratory, did great batch billing systems with them, all kinds of important stuff to help businesses grow that first level.

Then we connected our employees, right, and were able to get not just batch billing but also online order entry and customer service optimization, so we really were able to get our businesses online.

Then we took that to the next level and we distributed computing power out, out into the field, out closer to the customer, put more in control out in the customer. This happened with AS400s and mini computers, VAC, and certainly the PC and the PC LAN.

But that increased complexity, right? There’s no question that when you have a distributed computing environment it’s more complex, it’s harder to manage, it’s harder to deploy but there was a lot of value in that and we gained productivity.

But overall we built pretty much discrete systems, right, a billing system, an order management system, an inventory system, customer service system and it was difficult to get those systems to talk and work with one another, but they were important and they gained productivity, so we put up and did our best.

Then along came this thing called the Web. OK, now we have an opportunity to connect those systems. Without high price value added networks we can actually use this broad network through Distributed Name Service to get everybody hooked together, but we were faced with what do we do with our systems. We have these standalone systems, but you don’t throw away and rewrite because of a technology change; you only do that prompted on a business change, and we’ve got to get these things to work in the Internet.

So we did things like we put HTML frontends on, but, man, trying to get synchronous systems to work in an asynchronous world was difficult, and we’ve had increase in complexity.

But overall it’s been a good thing. Productivity certainly kept pushing out there but probably a little higher cost of complexity.

Now what we really want to do is the next step, a real programmable environment across the Web, so something we call Web services, Web services enabled through standards, right? You kind of look down on this slide, there’s an awful lot of opportunity for us to really gain productivity, but, boy, complexity can go up. When you’re trying to run an environment where you’re loosely coupled with systems that you may not intimately know, don’t have a direct API call in, so you’re trying to do discovery, you’re trying to connect to systems outside the firewall, and what Web services is really focused at is trying to make this environment a much easier environment and try to help pull that complexity line down.

And that’s what we’ve got to do, get everything connected — customers for revenue, partners for profitability and employees for empowerment, and that’s certainly what .NET is about, and that’s what we’re going to talk more about today.

Now, our product line has had to follow this curve, too, right? We’ve certainly started out pretty simple, an operating system as a great tool to build great Windows applications, graphical user interface. Then we added on a mail system, hooked it in with Office to give you good collaboration and a database, and then kind of this explosion in opportunity with e-business and greater levels of connectivity required and workflow systems and the environment really began to get more complex.

As I said before, our value proposition at Microsoft is to try, and I’m not claiming victory on this every day, but to try hard to make sure that we can flatten out that complexity line through something that you may have heard us talk about but better together. We should be able to make our platform integrate well with our system software and our applications. We should be able to do better management, better security, better diagnostics, better serviceability and those are things that we’re very much focused on as we go forward.

Certainly we can do better. As I said, we’re not claiming victory in this space but it’s something we’re going to invest a lot of time on.

To prove that point you’re going to get an announcement at the end of this presentation today about three products that we shipped today and how we’re going to do much tighter integration with those products and actually combine them into a single product going forward for the customer.

We talked about getting connected and it takes a broad platform to make that happen. You don’t wan to buy a database or buy a development tool; you really want to but a platform and make that platform work very much at a low cost of ownership, and you want to run your application. It’s business value for your business.

So you don’t want to think too much about all that technology underneath. What you really want is that stuff to kind of be there and not seen or heard and make your application shine and work very well, and that’s our job.

And getting that connected on a low total cost of ownership to a myriad of organizations is what we’re about and that’s what we’re going to talk about. We’re going to talk about other systems today. We’re going to have a little section on people, devices and other organizations. We’re going to talk about the design points that we’ve taken with our systems around TCO and also around getting you connected with XML Web services.

So first I do want to talk just a few minutes about TCO and talk about what we’ve done in Windows .NET Server in the next release of Exchange in terms of making it a very, very cost effective platform.

As I said previously, comprehensive is something that you’ve got to have in order to have a full platform for the execution of your applications in this rich environment of devices and mobility and people in other organizations, and that’s something we’re going to focus hard on.

Dependable: OK, dependable, quality, right? Absolutely something we’ve got to focus on.

Security: We had a big awakening as an industry, which we’re going to talk more about on what we need to do and be aware of in terms of making the system dependable.

And manageable: I talked about distributed systems; they’re harder to manage, they’re harder to deploy, and we’ll talk about some advances that we’ve made in terms of manageability and the big opportunities we’ve got going forward.

So just a few minutes on Windows .NET Server. This is a big release for us, a major release in many ways. Group Policy management, very quickly; many of you have said, look, I want to lock down my systems when I deploy them. I want that system to run in a production operational environment even though it’s distributed. We’ve added over 160 new settings to group policy management to give you opportunities to lock down your desktop, such as (making it possible that) Add/Remove Software can be removed so customers can’t do that. You can remove the Run command. You can really try to lock those systems down to your configuration in the field.

Windows Resource Manager, the ability to manage CPU and memory by application, okay, so that you take care of an application and kind of fence it off. If it starts to do a runaway on you when you don’t want to, that should raise an alert. If you want to schedule it to get more resources during a certain time of day you can do that. This is an incredibly important feature in this era of new greater and larger SMP configurations on the Intel platform. You get into these machines of 8-way, 16-way, 32-way and coming 64-way machines, you really want to run multiple applications but you don’t want one runaway application to kind of take over. Some do hard partitioning, some may want to run in a single bigger instance but be able to partition off resources by process.

Error reporting: I really do believe we have a breakthrough in quality with this error reporting, and let me talk just a minute. Our experience with Windows XP as a desktop, some of you may have seen or even had the experience where you just had that popup. We call it Dr. Watson internally, but it’s a little popup that (says) an application failed, would you like to send a report to Microsoft. We actually get those, I promise, sometimes a lot of them in a single day.

And over our first several months of experience with Windows XP we found that 80 percent of the reports were caused by 1 percent of the problem; it’s not the 80/20 rule, it was the 80/1 rule. Five bugs generated 80 percent of the reports. It so happens that all five of those bugs were in drivers, software drivers.

So we really were able in that case to get out there and work with those driver vendors, and get those drivers repaired and then drive to the next level. And, boy, you should just see how quickly that curve flattens out.

Going forward, this technology is in all of our server products. It captures certainly any interruptions that are in our code. It can also capture interruptions in your code. If you don’t want to send those reports to Microsoft, we’re working on giving you a server that you can capture those reports, you can do your own analysis and then decide which ones you want to forward onto Microsoft. But the fact that we know now real time and in our products where we have symbols loaded we can actually get down to the line that failed in the code and we know exactly how to get in there and change that.

So will that make the quality of code go up? No question. We’re seeing that experience already in the beta program of Windows .NET Server. So we really believe that’s going to help us take things forward in a big way in terms of quality.

Active Directory: We heard it a lot. You know, guess what, we reorg, we make changes to our organization so we put in a domain rename and a schema redefine. OK, we put in cross force trust transitions so in these complex, large organizations where you have multiple forces in your directory you can actually get trust across.

We made a lot of improvements in terms of performance, about 2X in add, update and authentication, in terms of 2X performance in high-speed networks, so a lot of work has gone into the directory.

Clustering: We’ve moved up to 8 node and more importantly we’ve taken away the requirement to reboot when you add or delete machines from the cluster.

Security: I’m going to have a separate slide on this, and again a huge amount of work has gone into this release about security. The server will be delivered to you locked down in the most secure mode and it will be your conscious decision to back off those settings, and a whole lot of work has also gone into the code.

And storage: Storage is a very exciting area. Storage is something that everybody has to take and spend a lot of time on. It’s critical to backing up your core data. You need to do that online. You need to do it in a fast way. And we’ve got these advances in SAN technology, which can give you incredible flexibility and power to store huge amounts of data. And we worked hard with our partners to bring you some very sophisticated storage technology for the Windows platform to not only do better backup and recovery but also better visibility into a SAN that’s configured for Windows.

And right now I’m going to bring out Keith Hageman to talk to you a little bit about some of those advancements and some of the partners we’ve worked with to make that happen. Keith?

KEITH HAGEMEN: Thank you, Paul.

PAUL FLESSNER: How are you?

KEITH HAGEMEN: Fine.

PAUL FLESSNER: What do we have today?

KEITH HAGEMEN: Well, I’m incredibly excited to be able to announce two new sets of APIs that we are enabling and enhancing in the service storage architecture within the Windows .NET Server 2003 product. These API sets, the Virtual Disk Service and the Volume Shadow Copy Service, enable us to help our customers solve many complex problems and also manage their enterprise storage needs today.

Many partners are already actively developing solutions to take advantage of these services and those partners include Adaptec, Brocade, EMC, Fujitsu, Hewlett-Packard, IBM, LSI Logic, NEC, Storage Technology, UNISYS and Ziotech.

And for today’s demonstration purposes I’m going to be showing a backup solution capability for the Volume Shadow Copy Service. Behind me here on the array I have two arrays of HPVA 7100 storage array in the white rack and in the black rack I have an EMC Clarion CX 400, which is a recently announced product by our partners at EMC Corporation.

And for today’s demonstration I’m going to be creating what we call a Shadow Copy, which is a single point in time consistent data image of the volumes that reside in the Clarion product.

As you can see on the screen up here, I have SQL Server running under load, taking approximately 1,500 transactions per second and what we’re going to do is take a Shadow Copy of the data and make that data available on a secondary server. I have a very simple script that I’ve created that I’ll start that will work with the storage array and SQL Server with almost no impact to the SQL Server and you can watch the performance monitor to make sure during the taking of the snapshot we’re using the capabilities.

Now, these storage arrays have hardware snapshot capabilities in them that we’re being able to utilize fully with the Windows product. And the advantage that we have is that we actually work with SQL Server in this case who can roll its transaction logs by its IO during the taking of this snapshot and then flush the IO that’s queued up so that it’s the high fidelity backups that are available and can be backed up on secondary servers.

So the Shadow Copy is actually then completed on the production server at this point.

PAUL FLESSNER: So we set up the Shadow Copy on the second set of disks and we’re ready now to any changes that start to occur will be frozen so that the backup system is a point in time when we can start backing it up.

KEITH HAGEMEN: That’s correct.

PAUL FLESSNER: OK.

KEITH HAGEMEN: Now, I’m going to move to a second machine on this side of the stage, which represents my backup machine where I don’t have access to the data and I’m going to actually run a second strip on this particular machine that will now interact with the Volume Shadow Copy Service, the hardware provider in order to expose the Shadow Copies that I created on my production server at that single point in time. And again we get full consistency, high fidelity backups or data that’s available on this machine that I can do any operation that a user would want to do, whether it’s a backup operation or actually attack the information and do data mining kind of operations.

So the benefits here are, of course, that the Volume Shadow Copy Service let us actively participate with the hardware providers and the storage arrays and the SQL Server applications.

And at this point the Shadow Copy has been exposed, surfaced and we’re now attaching the Northwinds database and I can actually bring up the SQL Server Enterprise Manager and drill in and show you that Northwinds now is fully online and available inside this machine, and the tables have all of the data available that you can do any kinds of operations that you want.

And as you can see from Enterprise Manager at this point all of the data is now fully available on the secondary server, using the snapshot capabilities of the storage arrays.

PAUL FLESSNER: Excellent. So now you can back that up and have very minimal impact on the primary server.

KEITH HAGEMEN: Absolutely.

PAUL FLESSNER: Excellent.

KEITH HAGEMEN: Thank you.

PAUL FLESSNER: Thank you. Appreciate it. (Applause.)

That’s certainly important technology for mission critical applications where you need a high fidelity, high bandwidth backup and keep your system online and moving forward.

Now, I want to talk just a few minutes about
“Titanium,”
the next release of Exchange, and the work that we’ve done in this concept of better together to make sure it integrates well with Windows .NET Server. And we do fully leverage all the technologies you see on this slide, the Active Directory, clustering and storage.

The Active Directory: We’ve done a lot of work over the last several months to tune the Exchange system to be more resilient to fluctuations in the network with Active Directory. If you have some other application that starts banging on the directory, Exchange, when it was trying to get access would sometimes be blocked and we’ve done a lot more work around caching that gives you more predictable and resilient performance.

We’ve also talked about that previously that you get cross-force trust. Well, now you can also get across-force global access lists, your address book can get across into the other force as well.

Synchronizations have been greatly improved so when you add someone to your address book that it gets quickly propagated across the network.

Clustering: Exchange will participate fully in the 8-node clustering capability. We continue to encourage active/passive clustering for Exchange at this point in time, but again that becomes much less costly, down to 12 percent in terms of backup hardware required if you have an 8-node cluster.

And storage: We just saw a great example.
“Titanium”
will be able to do the same kind of thing that SQL Server just did, participate in a full transactional backup at points in time so that you will get a good high-speed online backup.

Performance and server consolidation: Tomorrow Rick Devenuti will be on this stage — Rick is the CIO of Microsoft — and will talk about all the advances that we’ve been able to make in our data centers in Redmond in consolidating and the performance that we’ve gotten with the
“Titanium”
release and Windows .NET Server.

We’ve already gone through a pretty significant consolidation of servers from about 35 servers, e-mail servers down to about 10 with Exchange 2000, and now we’re going to start to look at all of those servers that are out in the field and start to pull more of those back to the central data center because of the greatly decreased requirement on bandwidth with the Outlook 11 combination with
“Titanium.”

We’re going to demo in a few minutes Outlook 11 but the big breakthrough in terms of performance is the ability to go all the time against the local store with kind of a background process propagating the mail down so there’s much, much fewer connections to the server.

MOM, the management pack for Exchange, will be shipped inside
“Titanium,”
a lot more capability to do this monitoring and alerting, hopefully early warning so that you can avoid any kind of serious problem.

We’ve said all along that wireless is a key part of our business, not a separate business in many ways. We want to extend the experience that you’re having on the servers and you clients out to the devices. That’s what your customers want and demand. And we’re going to integrate that technology in as a part of Exchange 2002 for the capability to get out your PIM type information.

And security: Spam, virus protection, big deals in today’s world, and we’ve made several changes in the API. We’ve given you an API that can block what we perceive to be dangerous attachments coming in, an API to go out and be able to get real time blacklist companies access to mail so that you can look for Spam before coming in, and several other APIs to help you be more efficient and effective, and one in specific is that we will give you an opportunity to actually look at the mail before it goes to storage for virus protection, not look but do virus scanning. So again, a lot of work in this area to make Spam and virus protection a top priority.

We don’t do all that by ourselves. We’ve got some very important partners that we work with and depend on deeply for the full messaging solution with Microsoft, and these partners are listed , and we want to thank them and all of the others that participate in the Exchange environment to make sure that our messaging systems are secure going forward.

This will be a continued major investment area for Microsoft both in Titanium and beyond as we understand that we want a secure ability for our messaging environment both from a Spam and virus protection perspective.

Trustworthy computing: The industry kind of went through an awakening, as I said, when we had these security attacks in terms of our systems over the last kind of two years. Our platform is no more vulnerable than anybody else’s. There are lots of statistics out there that show the number of vulnerabilities by system. We do have a broad install base. Over 50 percent of the servers out there installed are running some form or some edition of Windows. So if you’re a criminal and you’re looking to make a name for yourself through these attacks, these security violations, you go after the big surface space.

Now, we’re not in denial. I’m not saying this isn’t our problem. We know it’s our problem and we took it very seriously and we took very concrete action to address it with this security stand-down. This is work that we initiated inside Microsoft and said,
“Look, this thing is out of control; we’ve got to take a deeper look at this, we’ve got to train our people and we’ve got to understand how we can do a better job.”

So in a period of about 60 days we trained over 10,000 developers — that’s dev, test and program managers — what to look for in code, how to go about writing more secure code. If any of you have had the opportunity, Michael Howard wrote a good book, Writing Secure Code . He’s a program manager in the Windows Security team. This isn’t just Microsoft; this is something that you’re going to have to participate in, too.

It’s hard stuff. It takes time. But we did train the people and right after that we thought we were going to take about 30 days to go through out code; it ended up being 60 to 90 days in some cases where we literally went through every line of code and looked for opportunities for security vulnerabilities and ways that malicious and vandalism could get in. We also do all kinds of clever things that I’m sure you folks have thought about, too: Honey pot servers where you just put a server on the network basically set up to look and see what people who just sniff the environment for URLs to make trouble on, how they look at them, what they do, and maybe sometimes we report that to our authorities when they pursue that.

But we have taken this very, very seriously and we will continue to take it seriously. This isn’t a program; it’s a process at Microsoft. We get it now. We think about it. It’s part of the release criteria. We have to make every release more secure. We’ve invested a lot of money, over $100 million. It had a lot of benefit. I believe that the products that have had that investment will just be coming to market now. Certainly we’ve been getting some of that work out in service packs, but Windows .NET Server is the first major product for Microsoft that has all of that work rolled into it, and we believe it will be certainly our most secure operating system.

The industry over the past 12 months, I read an article somewhere, over $8 billion in writing and trying to secure systems over the last 12 to 15 months, so this is a big investment by all of you; we understand that. It’s also a big investment by Microsoft and we’re going to stay at it and hopefully create the most secure platform in the world going forward. That’s certainly part of our promise around TCO.

Scalability: This is such a fantastic story and a fantastic story for the entire PC ecosystem. You see two things going on here. One, you see the hardware continuing to improve in performance and you also see the software, both Windows and SQL Server in this case learning how to take better advantage of those machines.

Now, if you look there’s kind of two generational things going on here. The 1998 number, my guess is I don’t have this data with me, but my guess is that’s probably kind of a four-proc machine and then you saw the jump to the 8-proc and then probably another generational jump in hardware. You’ll certainly see a generational jump from the 61,000 number in 2000 to the 141,000 where we go from 8-way machines up to 32-way machines.

Those two machines, the 141 and the 165 numbers, the 165,000 transactions per minute, 32-say processing machines with 32-bit. The big number that’s just out, okay, is a 32-way machine with 64-bit, much more memory. It takes lots of memory to keep those processors well fed.

But you can see that cost curve, how dramatically it’s come down. It jumps up a little with the new generation of machine where we have to learn to tune and keep those processes well fed when you’re running at 100 percent, and then starts to drop off as we get that tuning correctly.

So this virtuous cycle certainly is a benefit to all of you in this room as you’ll be able to enjoy much, much more high scale systems on lower total cost of ownership and lower cost hardware.

So getting systems connected, right, this is a big deal. You guys face this every day. I talk to lots of customers. Gee, you know, we’re in the early phases of designing the system, we love it, we’re excited, we talk about features, we talk about speeds and feeds. And then they go away and I see them a year or two later and I ask them how it went. And they say,
“Well, we love the system; it’s in, it’s doing great. But, boy, it’s trouble to get connected to our ERP system, our CRM system.”
Getting things connected is difficult.

Well, for a long time we didn’t have a much better answer than the rest of the industry, which is EAI, use Gateway’s, use kind of these fragile APIs to get connected, difficult to upgrade not always good response back, just not always designed for that kind of infrastructure.

And honestly that was one of the reasons, that and just a lot more flexibility and programmability was why we pursued this Web services strategy. From the design point if you make the systems open through open protocols you can do some tremendously valuable things in the industry and give that code base a much, much longer lifecycle.

Lots of customers ask me, well, how should I get started with Web services, what’s the first thing I should do? Well, study and understand and learn, but there are probably three choices you have in your systems. You can kind of rewrite the entire system, which nobody does based on technology. You certainly do based on your business, so I don’t advocate a rewrite. You can write your own wrappers where you intercept the calls or call-outs or whatever protocols are in and out and write those in a Web service. Or you can use the technology from Microsoft called BizTalk Server, and many customers are doing that certainly today.

BizTalk Server has had and enjoyed a very rapid adoption cycle, fastest growing EAI product, but the big deal here is that let BizTalk handle some of that fragility in those APIs into your older systems and then talk Web services and XML out the other side.

BTS is a very interesting product in that it does through-the-firewall messaging, it does EAI and it has the capability for workflow. Those may seem like an odd combination but honestly when you’re doing any one of those three you look for the other two at some point in the implementation, which is why that technology is not three products and it’s why it’s more tightly integrated into one.

We have had to do a lot of hard work to get adaptors put together across the industry. We’ve got over 300 adaptors available now, which is certainly something that you look for, a standards-based architecture from the very beginning and a lot of vertical industry support from the chemical industry, pharmaceuticals, finance and high-tech manufacturing and we’ll continue to work with vertical organizations to continue to drive better integration in those industries.

Process innovation around, as we said, workflow and orchestration and continuing to pursue standards. Rolling off your tongue there, the BPL, Business Process Language for Web services, is a standard that we worked with BEA and IBM on, and we’re kind of finalizing that, and we’ll submit it to a standards committee very soon, to just help get business process automation better instantiated into the industry around a standard set of language. We’ve got XLANG, IBM had theirs; we’d like to get a standard so that we can all work together and take that forward.

There’s no backup plan at Microsoft around Web services. We’re not confused. We’ve heard it from customers for a number of years. You want to be open. You want to be connected. That’s great business value for you. So there’s no hedging our bet on this thing. All of the products that have had a chance to have a generational introduction since we got on this strategy a couple years ago have native support today. You see that list. And the products that haven’t had a big generational release you will see integrated in the future. Web services toolkits available for those today and you’ll see some demonstration of Exchange integrating with other platforms as well.

A couple of customers, you saw these in videos, depending on when you got your seat. Honeywell has a big portal that they’ve put together. They were going through acquisition. Seven different businesses, seven different authentication and profiling systems; wrapped that up into one utilizing Web services and feeding seven different back-ends and now a more calm evolution towards integration on that back end, but very successful, saved over $500,000 in development time and a great time to market story.

Travelers with their Glass claims business, a difficult thing to coordinate across their vendors, their claims processing and actually filing a claim and payment. They’ve put together a Web services system hooking those things up, greatly reduced their time to get the claim processed and payment and also made it much easier for the customers to get access to the claim processing system.

And 7/11 with their inventory management system and a big performance gain that they had in a system that they replaced that was written in J2EE.

So some good real life stories there.

Now, in terms of getting connected, Microsoft has always believed and still continues to believe that when you buy an operating system you should be able to build an app. Everything you need to build that app should be in the operating system. We’ve never asked you to buy an application server because from the beginning we believed that it was better integrated, better together integrated into the operating system.

The .NET Framework, everything you need to build great Web services are built in to our operating system. The mobile controls so that you can extend your applications from your server to your client out into mobility is a very cool set of controls that actually allow you to see what the device UI looks like on your development work station and formation your messaging for that device so that you get it correct.

COM Plus, your investment going forward, the ability to wrap that with SOAP headers, so that you can participate in Web services.

IIS 6: You should go to a session on IIS. It’s been basically rewritten, natively supports ASP .NET, much more performance, process isolation, health monitoring, process recycling, supports up to ten times more sites, over 20,000 sites per box now. We put a huge investment in IIS in this release and I think you’ll find and be very pleasantly surprised. Kernel mode caching, a lot of performance enhancements across the board there.

UDDI: With this proliferation of Web services; you’ve got to go find them, right? So we’ve given you a place in the operating system to publish and bind to services that will be out on the Internet. You can use this just inside your domain or you can publish them on the Internet.

And TCPIP version 6: We’ve all run into the DACP servers and the loss of functionality you get through that. We’re just running out of IP addresses. It’s time to put V6 out there. It will eliminate that problem with many, many, many new addresses and we’ve got to get started somewhere and this goes into Windows .NET Server.

Now we’re going to do a demo. We talked about Web services toolkit and what we’re doing to integrate in Exchange, Titanium as part of a Web service and get it hooked up to other systems and I’m going to ask Mark Adcock to come out and he’s already out and show us what we’ve got. Mark.

MARK ADKOCK: I snuck out while you weren’t looking.

So, OK, I’m really excited today to give you a technology preview of a new managed API we’re working on in the Exchange Server Group called XSO. Now, a managed API gives you all the benefits that you get with the .NET infrastructure and things like the CLR or the common language runtime. So when you’re building your applications using things like Visual Studio .NET, the building of that application becomes simpler and more intuitive, giving you faster time to market.

So a lot of you are now currently developing your applications using things like CDO and DAV and MAPI and in the future you’ll also be able to use XSO to add contextual collaboration to those applications by integrating Exchange data and server functionality right there.

One of the other great benefits with XSO is that you’ll be able to do this in a remoteable fashion, so this means that you won’t have to run your applications on the Exchange server like a lot of you do today.

So an example of this might be a sales force automation application where we would take into account a sales person free and busy time before scheduling them on a sales call. So that’s one example of extending a line of business application.

The other one I want to show you today is some integration we’re doing within Microsoft with an application that we call Travel Port. Now, Travel Port is a third party contracted travel provider application and it allows us to book all of our air, hotels, cars, those kinds of things, and we’ve extended that using calendar and task information.

So let me jump right into it. I’ll move fairly quickly through the first part of the demo since it’s mostly Travel port. So I’m going to go ahead and book a trip and select my dates here, I’m going to go to Dallas, and the return date. And Travel port has contracted and negotiated pricing and things like that. And I’m not sure I’m going to take this trip, but the flights look pretty good. It’s a pretty good price. I’m going to go ahead and add that to my travel plans. In other words, I’m going to hold the seats but not pay for them, and you can see that my ticket is not purchased.

And I’m going to go ahead and add a room, so I’ll be staying in the Dallas area right there are the airport, and again I’m not sure so I’m going to go ahead and add that to the plan. And you can see now that I have a hotel added, again it’s not reserved.

So at this point since I’m not sure I’m going to go I’m going to go ahead and save this information. And when I save it, this is when XSO is kicking in. And if I switch over here to Outlook, you may have noticed that suddenly the dates became bold, the 15th through the 22nd, and a task was added. So let’s take a look at this.

So if I go to the 15th, you can see that XSO has placed a calendar object right on my own calendar based on my logon credentials. If I look at that, you can see that the appointment is marked as tentative because I haven’t confirmed the flights, I haven’t purchased the ticket yet, but all the details are in there so I haven’t had to cut or paste anything.

And if I go back there is a task that’s been created that will remind me to go ahead and purchase this ticket. So travel policies usually allow you to hold seats for about 24 hours. This should fire appropriately and give me enough time to actually book that ticket. And I can even get back right into the Travel port application right from that task.

So before I do I’m going to revise my return date really quickly. I need to come back a little later. And you’ll see I get a flight on the 25th, and I’m ready to buy that now. So I’m just going to do the flights right now and worry about the hotel a little bit later, because that’s a great flight, and put in my credit card. Don’t write that down anybody, OK?

OK, and, of course, I always read the rules and restrictions before I ever buy a ticket. Everybody does. And I’m going to go ahead and purchase that. And you’ll see in Travelport, now it shows that information for my ticket as now being purchased, and if I switch back into Outlook you’ll see that XSO has already extended the duration and you’ll even notice the color coding has changed a little bit. If I drill in a little bit, you’ll see that now because I’ve confirmed that flight XSO has marked me as out of the office. Of course, we could do anything we want with that appointment. The ticket is purchased, right, so everything looks good there.

And you’ll also notice that the task disappeared from the task pad. So because I purchased it, XSO said,
“Hey, you’ve already done that, you’ve purchased it, so I’ll mark that off for you.”

But we’ve done one better and what we’ve done is added a couple of contextually sensitive tasks in to remind me to call the airline and reconfirm my flight and reservation. So now none of the task packages are active but if I take a little wider view you can see that I’ve got those tasks right there. If the airline offered something like Web check-in we could easily provide the URL to jump to it.

So I know the million-dollar question for a lot of you out there is, when can I have my hands on XSO because this looks really cool, and what I can tell you today is we’re actively working with all of you folks out there, our customers and partners to define this and develop it now. If you’re interested in this I’d encourage you to stop by the development booth in the Ask the Experts area and we’d like your feedback on it. And what we’re doing is we’re working hard on it, we’re really excited about this and we’re going to work to ship it as soon as we can after we ship Titanium.

So that’s it. Thank you.

PAUL FLESSNER: Excellent. Thanks, Mark.

MARK ADKOCK: Thanks, Paul. (Applause.)

PAUL FLESSNER: People, empowering people, not overloading them with information but getting the right information to them at the right time; it’s super critical in what we do and I’ll tell you today with instant messaging and all your mail and business intelligence there’s an awful lot of information coming at people.

So what we want to do right now is have another demo to talk about some of the things that we’ve done in Office 11 and Outlook Web Access and Exchange and obviously Windows .NET Server to make this a much better and richer experience for all of your knowledge workers. I’m going to bring Jensen Harris out right now to talk to us a little bit about that. Jensen.

JENSEN HARRIS: Paul, thanks for having me.

PAUL FLESSNER: Well, it’s my pleasure. What have you got today?

JENSEN HARRIS: Well, I’m going to show for the first time to the crowd here at MEC Outlook 11.

PAUL FLESSNER: The first time ever!

JENSEN HARRIS: The first time ever in public.

And Outlook 11 is part of Office 11, which is going to ship in the middle of 2003.

So there are two major visions we had when we started Outlook 11. One of those was to redefine the mail experience. I don’t know about you guys, but I get a lot of e-mail. I spend a pretty significant portion of my time every day doing e-mail. And one of the things we know is that people who have Outlook spend more time with Outlook than they do with their spouses. And so anything we can do to make Outlook, the time people spend with Outlook more efficient is a productivity win.

So the first thing you notice if you look up at the screen and look at Outlook is this is not your father’s Outlook. We have really redefined the mail user experience. So the first thing your eyes are attracted to is this pane over here, which we call the reading pane. Now, the reading pane is a really great place to read your mail. We know that people spend most of the time in Outlook reading mail and so we wanted to make it more intuitive, we wanted to make you have to switch Windows less and show more of the data on the screen.

You’ll notice it’s laid out like a piece of paper. Well, this is because it’s a paper-like experience and it helps you retain information more easily that takes advantage of some Microsoft e-reading technologies.

But another thing, if you don’t believe all the mumbo jumbo that the e-reading team says about paper-like experience and why this helps you read your mail is also a more efficient layout.

So if you look here I have about three and a half paragraphs of text that I can fit on the screen. And if you look at my e-mail list you can see the last message I can fit on my screen is this one from Ellen.

Well, if I switch back to the Outlook 2002 default view with the preview pane on the bottom you can see that now I only get a paragraph and a half of text and, in fact, I have to scroll down about four messages to get to the one from Ellen. So this is a more efficient layout. You can put about 40 percent more data on the screen.

PAUL FLESSNER: I didn’t believe it until you showed me, but I do believe you now.

JENSEN HARRIS: You have to believe science. (Laughter.)

So the second thing I want to show is the new mail list here. So you probably when you came to MEC looked through the many guides to figure out which breakout sessions you want to go to. And what we didn’t have is just a huge jumble of information there, right? We split it into groups; here’s Tuesday’s session, here’s Wednesday’s sessions, here’s Thursday’s sessions. Well, there’s no reason why we can’t apply the same methodology to e-mail.

So here we have mail that’s sorted by receive date, which is normally the way we sort mail, and you can see Outlook’s automatically intelligently applied groupings. So here’s today, here’s yesterday. I can actually collapse these if I want to get it out of my way and see that there’s mail for Monday and Sunday, last week, two weeks ago; I could go crazy with this, three weeks ago.

So the cool thing here is that this helps you find your mail as you scroll back through your lists, but I didn’t do anything fancy to set this up. In fact, anytime I sort my mail, to show that this is true, let me sort mail by size. Any time I sort my mail we apply an intelligent grouping. So in this case I’ve applied size and we show the very largest messages at the top, we show large messages below that, et cetera. So any sort I apply we apply the intelligent grouping there, and that’s a feature we call arrangements.

So when we spent a lot of time in dark usability labs at Microsoft, as well as visiting some of you guys watching you use Outlook, the one thing that we saw the most was that people did three things when they were reading an e-mail message. The first one you know, that’s delete it: Get it out of my face, I don’t need to see it. The second one is reply to it: Yes, I’m coming to lunch, let’s do it, buy the company, whatever you do. The third thing is I don’t have time to respond to it right now but I know I need to, or I don’t have the information, or I have to run off to a meeting.

So there are all sorts of ways people deal with the situation today. So there’s Mark as Unread guy, right, you’re going to fool yourself into thinking you haven’t read it. There’s drag it to my task list guy. There’s underscore, underscore, to-do list, put all my mail in there. There’s clean inbox guy, delete, delete, delete, make my inbox the task list.

So we wanted to come up with a really easy solution to this problem and we call it quick flag. So here’s a message that I’ve received. It’s about Egypt and I don’t receive much mail about Egypt in my line of business. So I know I need to look at this again but I don’t have time right now. So what I’m going to do is just come over here and singleclick, and this is applied what we call a quick flag. It’s a red flag to this message. I also could have hit the insert key on the keyboard. And this makes it easy to scroll through the list and find this message again when I need to. So that’s sort of cool, right?

The even cooler thing, I’m going to switch over here to my navigation pane and you see we have a folder called For Follow-up. And what For Follow-up is, is a virtual to-do list of all the flagged items across my entire mailbox, always up to date, put in one place. So immediately I flag the message and here it is ready for me to come back to it when it’s time. When I’m done with this I just come in here and click it again and it will leave the list, and you see if I go back to my inbox we even say what date it was completed on.

So for follow-up there’s a special kind of folder in Outlook 11, which we call a Search Folder. A Search Folder is essentially search results that act, well, just like a folder. So there are three of these that we ship in the box so you don’t even have to do anything to set up. One of them is for follow-up. A second one is unread mail, so this is all of the unread mail across my mailbox. And again we’ve applied an intelligent group, which is the folder that the message is actually located in. A third one of these, I don’t know about you guys but I’m constantly going over e-mail quota and one of the things I constantly have to do is go clean up mail from my mailbox, get this message from the Exchange Server, not going to receive mail, all the rest.

So I go to my large messages smart folder, and this has found all of my largest messages across my mailbox, huge, very large. I just take this huge thing — in fact, I can take the whole very large and huge group, if I want, and drag that whole thing into deleted items and I’m done; those things are gone.

So the Search Folder is any search query you can imagine creating in Outlook you can create with the Search Folder.

So I don’t have time to show you like all the new mail user experience right now, because this is just a teaser, like you said, but we think this is really going to revolutionize what people think of as a premium mail client.

So that’s one of our vision areas. A second one is rethinking the Outlook infrastructure. So I don’t know about you, but occasionally the network might be a little flaky or I take my laptop just running Outlook out of a place where there’s connectivity, in some places there’s no connectivity. And Outlook doesn’t always behave the way you might hope. Occasionally you might see 20, 40 error messages come up, something like that.

Well, through a new technology that we call Cached Exchange Mode in Outlook 11, as Paul was saying, we actually drizzle down messages and run Outlook off of your local machine. So whenever there’s bandwidth available, Outlook will go get messages. When you have a fat pipe, like a LAN, Outlook will bring down headers and bodies. When you have less bandwidth, like a modem, Outlook will bring down just the headers and let you mark the mail that you want.

So it’s really intelligent bandwidth use and it makes the user experience consistent, because when the network goes down or you switch between networks, Outlook stays up. You don’t lose any productivity, you don’t lose any of your data.

Now, this whole demo has run in cache mode, run locally off the machine. So although I’m connected by a network cable backstage, if there was a monsoon, earthquake, a tsunami, any other problem backstage, my demo would still run just fine. And to show that, I’m going to switch to the calendar and show that even though I’m running locally, I have the ability to go to the server, if I have a connection available, to do things that require server access — Free/Busy lookup, managing your rules or opening another Exchange user’s calendar.

So we now have the ability to actually just open up other people’s calendars side by side in Outlook and you can see just by clicking these boxes I’ve actually gone out to the server, gotten those things and showed inside of the frame. (Applause.)

PAUL FLESSNER: It’s always a client thing that gets the applause.

JENSEN HARRIS: That’s great, and it’s the colors, too, you know.

PAUL FLESSNER: Colorful server, yeah.

JENSEN HARRIS: People like color.

So this is Outlook 11. It’s really the most ambitious and important version of Outlook we’ve ever undertaken. We have three sessions that you’ll find in the mini guides that start with Outlook 11 and I encourage you to go see those.

PAUL FLESSNER: So get to the next thing. I’m excited about that.

JENSEN HARRIS: OK. So one of the advantages of having built Outlook 11 at the same time as the Exchange team was building Titanium is that we’ve been able to work together. And as you said, people are working to consolidate servers more and more, and so bytes over the wire and speed is really, really important.

So all this works great against your existing fleet of Exchange servers, but if you add
“Titanium”
to the mix we actually reduce bytes over the wire by at least 50 percent, so that’s a really huge win for scalability and for consolidating servers. (Applause.)

Another benefit, as I minimize Outlook to build anticipation, is that we’ve been able to develop a new Outlook Web Access with Exchange
“Titanium,”
and I’m going to bring that up now. And as you can see this looks very familiar. The same workflow that you can use, quick flag, the preview pane on the side, the new reading pane, search folders all work in Outlook Web Access for
“Titanium.”
So we think this is really great. It’s an important thing because Outlook Web Access is a companion for Outlook 11.

There are a couple other cool things I want to show you about Web Access as well. So one of them you notice a tantalizing task button here and, yes, Outlook Web Access does support tasks now. Another thing that you notice is a rules button and you can also manage your server-side rules. So if you have a rule to move to a folder you can do that as well. (Applause.)

And I don’t know about you guys but I don’t always spell all of my words correctly in my e-mail messages. (Laughter, applause.)

PAUL FLESSNER: That’s it; no more client demos in the server talk. (Laughter.) Hey, that spellcheck is on the server, I want you to know. (Laughter.)

JENSEN HARRIS: I didn’t even tell them we had spellcheck; they just applauded when I said I spelled my mail wrong. (Laughter.)

So this is Outlook Web Access and we’ve made end user improvements in it, but at the same time we’ve made infrastructure improvements to Outlook Web Access as well. It also has much fewer bytes over the wire compared to Outlook Web Access from Exchange 2000. But if you’re really in a pinch on the road, at the airport and you need to get your mail, get to your calendars as quick as you can you can choose a startup to use a basic experience that we used to call the down level experience. And while this doesn’t have all the features of the full-featured client it lets you get to your calendar in a minimum amount of time, so we think these are really great improvements to Outlook 11 and Outlook Web Access.

PAUL FLESSNER: I think they’re great, too. Thanks a lot, Jensen.

JENSEN HARRIS: Thanks a lot, Paul. (Applause.)

PAUL FLESSNER: How many times have you been giving a presentation and you get that little toaster that pops up that says,
“Bring home a gallon of milk”
? It’s kind of an embarrassing thing if it happens when you’re presenting to your boss. Instant messaging, over 30 percent of business clients today have some sort of instant messenger that’s not secure. It’s becoming rapidly an important part of the business infrastructure, as well as advances in real time video and videoconferencing, especially in an age of potentially restricted travel at times.

So
“Greenwich”
is a codename for a set of technologies that we’re going to be pursuing aggressively and pushing into the platform around real-time communication and collaboration, making it secure, making it a part of the infrastructure and making it something that you can continue to depend upon for your knowledge workers as very much a statement of direction today and we’re going to continue to invest a lot of technology or a big investment, development investment for Microsoft to continue to push this technology ahead.

We’re not going to talk about today when this is going to ship, but it’s very much the next generation of what we want to do is more tightly integrate this technology into the platform, much more robust, encryption, authentication, a very secure instant messaging for business kinds of conversations, so that’s a future to come.

Now, the devices: Again, a critical part of what’s taking us to the next level of productivity in our industry, the proliferation of devices is impressive. You hear it every day. It puts demands on what you do to make sure that the devices get connected into your entire infrastructure. You want that server experience to client out to device to be very similar and that’s honestly what we’ve worked hard and taking a comprehensive look at our mobility strategy at Microsoft to provide that for you.

It’s difficult today to put all this stuff together, multiple operators, multiple devices, difficult to actually know how to get the development out and push it out to the client, difficult to get things formatted. There’s an awful lot of technology that goes in to seamlessly extending your experiences for your applications out to the device.

And we know we had to make that easier, so with a little help from our friends, today we’re proud to announce Mobile Workplace Solutions. This is done in conjunction with three partners, Accenture, Cap Gemini, HP and AT & T Wireless, to bring you a full set of solutions around mobility and getting your devices plugged into your environment.

It incorporates the technology of Windows CE, Pocket PC, smartphones, laptops. All that technology will be extended and made available in your environment so that you can get the rich access and experience on your devices.

Working with these partners, helping them understand what needs to be done and getting them training and allowing them to build specific offerings is absolutely the next step in mobility.

We’re also announcing today support for a new Pocket PC device through AT & T, yet another supporter of the Windows CE environment. This Pocket PC will be made available through AT & T and will participate in one of the workplace solutions that we’ll demo in just a few minutes.

So we’re very, very pleased and excited to announce the partnership with these three worldwide vendors to help bring to all of you an expanded experience for mobility and devices to all of your applications.

There are actually eight different offerings that the partners will be coming forward with initially into the marketplace. Accenture has five: Sales Force — for sure many of you have faced that one; Field Service — very similar, making sure that you can get out there and make real time changes or do what you need to do to get the problem resolved; E-mail PIM, Internet Access, Data Access, a great set of solutions by Accenture.

Cap Gemini has a customer up and going, BT Industries, manufacture and service of forklifts. They’ve already got 800 users up, moving to 1,500 very quickly; again, a mobile field services solution.

And Express Services for AT & T Wireless’ Work Ware. This is a partnership between HP and AT & T on their networks to give good provisioning, which we’re going to demo in just a second, and also plug into their e-mail and PIM infrastructure.

So again we’re honored to be able to announce this today and work with these three partners to extend mobility, making it easier to use for all of you.

Now I’m going to bring out Craig Dewar. It’s starting to feel a little like that Super Bowl halftime show, isn’t it? We’re going to try to make sure again you can go through and see all this stuff in more depth, but Craig is going to give us a demo of Carlson Hospitality and some provisioning I think, aren’t you?

CRAIG DEWAR: I am indeed.

PAUL FLESSNER: Excellent. Well, let’s see.

CRAIG DEWAR: Customers today who are deploying mobile devices need to be able to provision, configure and manage those devices remotely. We’re going to take a look at an over-the-air configuration tool that was built by our partners HP Services and AT & T Wireless as part of their Mobile Work Ware solution. And this is being used and supported today by customers like Carlson Hospitality.

The idea behind the application is to give administrators a simple tool that they can use to define first time device configuration, and there are four key areas that you can control. The first one of those is how your devices will synchronize with Exchange and in this particular case we’re using Mobile Information Server to synchronize with Exchange 2000. But, of course, that same synch capability is also built right into the Exchange Titanium release.

Now, not only can you control the content types that get synched, like e-mail, calendar and contacts, you can also control the volume of that content. So, for example, here I can set up how my users will get their e-mail, how much of it they get, do they get attachments by default. This is really key because you want to keep a tight control over how much information is going across that cellular connection for cost reasons.

The second thing you can put into your initial configuration is software distribution. So you can push out third party applications or internal line of business apps that you’ve written yourself.

PAUL FLESSNER: That’s a big pain point for customers today, the provisioning.

CRAIG DEWAR: It is indeed, and we’ll actually provision this device shortly using the set that we’re building.

PAUL FLESSNER: Great.

CRAIG DEWAR: The third thing is VPN. As these devices need to reach back behind the corporate firewall and access your important information you don’t want your users to have to try and set that up themselves. You want the right settings pushed out at the beginning.

And finally we have favorites, so our intranet links and our Internet links for our users are right on that device for them.

Now, once I’ve built this configuration file I go ahead and publish it to a secure external Web site. And what happens from this point forward is anytime AT & T Wireless sees a new Pocket PC Phone Edition device owned by my company come up and register on their network they push that first time configuration message out to the end user.

As an administrator you can also send out updates if you want, a one-time update to either new or existing devices, and you target that by the phone number that that device has.

So that’s as easy as it is on the setup side for the admin. Let’s take a look at the device side and see what an end user experiences.

Here I have the Siemens SX56 device that Paul was just talking about. This was announced today by AT & T. It will be available in retail shortly. And I know that a number of you here at the MEC are participating in a program with AT & T where you’re using these devices while you’re here.

So let’s go ahead and see what the end user would experience. And for this particular example, I don’t know how to configure my device. I’ve just got it out of the box, don’t know what to do with it. I turned it on and it’s registered with the network, and AT & T has pushed out this configuration message to me that tells me I have a new config file available.

I think I’ll hit and read that message and you can see that there’s a link contained in that message. All I have to do as an end user is go and click on that link and it will go ahead and connect me and take me to a Web page that offers me my configuration. The device, of course, does know how to connect to the Internet out of the box.

So now I go ahead and download that configuration and it will actually install all the settings that we’ve built up on the PC before automatically onto my device. You could see it’s prompting me to enter my network credentials.

Now, because we’re going to synchronize with Exchange we do need to provide these credentials, but the good news is that’s the only thing I need to know as a user, my username and password and hopefully I do know that.

OK, so that’s it; my device has been configured with any software that’s been sent to me. It can now synchronize to my Exchange Server. It has my VPN settings and all my favorites supplied.

So let’s go ahead and synch. That’s how easy it is to configure and set up a device out of the box with Pocket PC Phone Edition and Mobile Work Ware from HP Services and AT & T Wireless.

Thank you.

PAUL FLESSNER: That’s outstanding. Thanks, Craig. (Applause.)

That’s certainly something we hear over and over with customers is that getting these devices, software deployed on these devices and managing them is a big deal and you can see with this partnership, HP and AT & T, that’s certainly a solution available to make that happen.

Now, with the big demo, Kevin Collins, kind of the mother of all demos this morning, is going to show you an actual ISV application where kind of all of this is connected together and he’s already out on stage ready to go. This is our last demo and it’s a big one.

KEVIN COLLINS: Glad to be here, Paul. We have a really cool demo to show today that’s going to be a real-world customer application that takes Microsoft technologies from the mobile device all the way to the Microsoft back-end server and integrates in with the backend Oracle database.

So what I’m going to do is just switch to an architecture slide to kind of show you and set this up for you. So the application that we’re showing is a multiple listing application for real estate agents. This is a shipping application in a v 1 form, but what we’re going to be demonstrating is a version 2 product of this. What this version 2 product is going to be taking advantage of is the Pocket PC 2002 Phone Edition device, which we’re going to be demonstrating on the AT & T phone that was just announced, and it also works on Voice Stream and Verizon Pocket PC 2002 Phone Edition devices.

We’re also integrating other key technology that was just recently shipped from Microsoft. One is Microsoft Notification Services that ties in with SQL Server 2000. This is something that’s going to allow us to get SMS messages down to the device and we’ll explain this later in the demo.

Another key technology is the .NET Compact Framework Beta 2, which is allowing us to have a toolset that can target applications to the device that’s very similar to what you have on the desktop today.

The third or last is something that’s very near and dear to my heart, and that’s SQL Server CE 2.0, which is storing the data on the device and doing application synchronization with the backend SQL Server.

So what I want to do is we’re going to actually go do the demo on this and before I do that we’re going to set it up where I’m the real-estate agent and you guys are the buyers. So you’re going to help me make some of my commission payments so I can buy some stuff. But before we do that what I need to do is switch over to a Web form. And on this Web form what we’re doing is we’re going to set up something using notification services where I the real estate agent can get notified while I’m on the road when new houses come in, so when new information comes in from that backend Oracle database into SQL Server it will trigger off information that will go to notification services and send me an SMS message.

So what we’re going to do now is we’re going to switch over to the actual demo and we’re going to go ahead and start this off. The application that I’ve used is for St. Augustine, so I’ve already done some prep work. I as the real estate agent have purchased the software from the local multiple listing agency, I’ve put this in my cradle, which is attached to my desktop computer, and did an initial synch of a SQL Server CE database down to the device. This database and this application is about 25 megs in size and it’s for the St. Augustine, Florida, area.

Now, what’s nice about this is I know you guys are looking for winter vacation homes and I’m going to be here to help you purchase some of those.

So the first thing that we want to do is we want to go in and we want to do a general search. So this brings up some search criteria, and you guys look like you’re into the high range of houses, so let’s just go for the high end, because I’m going to get a bigger commission check, your kids are going to be happier with the winter home out there in Florida.

So let’s bring this up, and right now what we’re going to do is search the criteria of SQL Server CE and we’re going to bring up a list. Now, I happen to know there are some lower-end homes in just the $1 million price range that I think would interest you, so I’m going to click on this, and what we’re going to do now is SQL Server CE is going into the background and bringing up all of the key information.

Now, you can see also that I have a little mail message that came up here. This is something that when I set that subscription we got a new notification in from SMS that said,
“Hey, there’s a new listing on there,”
so we’re going to save that for a little bit later but I just got an SMS message on the device while I’m wireless.

So from here we can see direction information on how to get to the house, remarks and my favorite thing is calling up the mortgage calculator. Now, I know everyone, the stock market is down but a good thing to look for is investments in real estate. So for a mere 5 percent, for $56,000, you can have your initial investment in some really nice houses and it’s only a $7,000 payment a month. (Laughter.)

Now, just think about it, the stock market has gone down and real estate is still there, so I’m trying to get the commission check here.

PAUL FLESSNER: You sure you’re not working a little real estate on the side?

KEVIN COLLINS: Well, actually afterwards this is real data, so if people want to buy stuff afterwards you can see me. (Laughter.)

So you’re saying what does this get me? You know, I’m spending $1.1 million on a house. Let’s look at the picture. You saw how fast this came up. This is showing rich integration with .NET Compact Frameworks and SQL Server CE. We’re getting a stream of information right from the back-end SQL Server CE database. Also it’s showing the rich capabilities of multimedia that we have on the Phone Edition and Pocket PC device, so this is really cool.

PAUL FLESSNER: We’re giving you that all-important turbo feel.

KEVIN COLLINS: So you guys saw the house. I saw some of you complaining, saying, you know, it’s not on the water. So let’s go in and look at this SMS message that we got. Here we just got an SMS message, a little bit more pricey house. You know, most houses in Florida are going to be on the water, so what we want to do is just close this down. And remember, we’re on the road. I’m out showing you houses right now; we’re not connected to anything on our desktop.

So what I want to do is, we’re going to go back and return to the search criteria and we’re going to start a synch. So, on the synch you can see some interesting things happening here. One, the application has tight integration with the Phone Edition device and we’re automatically calling out on GPRS, so this is application that we did ourselves, not using an integrated application to do this.

While this is synchronizing, what I’m going to do is switch to the architecture slide and just explain some stuff that happens here.

First, after we set up the subscription we got an SMS message that came down. You saw the little toast come up on the device as we were doing the demo, which is telling us that there was a new real estate listing.

Now what we’re doing is synchronizing the SQL Server CE database with the back-end SQL Server 2000 database. This is coming down through IIS down to the device.

Now, we’re bringing down picture information and while this is synching we use compression. So between IIS and the device we’re using compression to get that data down fast. GPRS is only about 19.2 so we need to optimize on that.

So if I switch back to the application, I can see now that I’ve successfully synched in 24 seconds, so I’ve brought down all the data in 24 seconds.

So now what we want to do is we can see, okay, we’ve got to publish our changes in here. What I want to do now is re-query the database. So I can see before I had 17 rows, now I have 18 rows of information up here and this happens to be the new real estate listing that we saw.

Now, let’s hope that this is a hit for us and it’s on the water, because I saw a lot of people with kids, they want jet skis, it’s going to be on the water. So we’re going to bring up the multiple-listing information, and let’s just see if this matches the criteria.

Wow, three-story house, nice pier, jet ski for the kids; I’m thinking there’s some commission money in this for me.

PAUL FLESSNER: Hang on to your wallets.

KEVIN COLLINS: Hey, we’ve got a taker, so let’s call up the agent. Let’s look at some other integration that we have here. So the application for the real estate agent, I can just click on this and it’s going to automatically kill off the GPRS connection and start calling the agent. So this is tight integration again with the application, and this lady is going to kill me because I’ve been practicing on her phone number all weekend long. (Laughter.) So this guy back here, I need to sell for her.

So, Paul, what we’ve demonstrated here was tight integration with our new toolset, notification server, SQL Server CE and tight integration with the Phone Edition device to provide an enterprise class application that ties into other back-end servers.

PAUL FLESSNER: It looks great. Thanks, Kevin.

KEVIN COLLINS: Thanks a lot. (Applause.)

PAUL FLESSNER: The last section we want to talk about is getting connected with businesses, a huge opportunity for all of us, again cutting costs and increasing profitability. It takes a lot of technology to make this happen. Web services is certainly well positioned for that but it also takes a lot of other technology inside the firewall to do that as well.

And to make some of our more exciting announcements today we’re going to invite out a gentleman named David Kiker who runs our e-business at Microsoft. David.

DAVID KIKER: Morning, Paul.

PAUL FLESSNER: Welcome. Well, let’s hear about e-business.

DAVID KIKER: Can I have the clicker?

PAUL FLESSNER: You can have the clicker, yes, you can.

DAVID KIKER: Thank you very much.

PAUL FLESSNER: Now you’re in charge.

DAVID KIKER: That’s where I like to be. (Laughter.)

So I’m going to take the next few minutes to talk about e-business products from Microsoft. Now, e-business is all about connectivity. It’s about companies and governments getting access to their data, their knowledge, their process and making it available for their customers, their partners and their employees.

Now, if you’re going to have that much information going to that broad and diverse an audience, you’re going to need to have a dynamic Web site, one that’s personalized for each of your customers or partners or employees who come to the system. And on that Web site you’re going to need to be able to update the content rapidly, and that’s exactly what Microsoft’s Content Management Server application is all about.

I’m happy to announce today the next generation of Web content management and that product is Content Management Server 2002. Content Management Server 2002 has got a lot of great features. I just want to highlight three of them for you today.

First of all, it has an enhanced authoring experience. You can actually publish content directly from Microsoft Word. You never have to leave Microsoft Word, and when you do publish that content it goes through the same workflow cycle as if you were updating the content directly on the Web.

We have development support for our developers that’s exactly what they’ve asked for. It’s directly integrated into Visual Studio .NET so you can take advantage of all the Visual Studio .NET features. You can take advantage of source level debugging, source code control, take advantage of some of the great new features like ASP .NET.

It’s a standards based interoperable system, so if you want to federate content from your Web site you’ll be able to do a Web service and send that XML to any other Web site that’s interested in that content. In addition, you’ll be able to import information from other Web sites through XML.

Content Management Server 2002 is already in production in a number of sites and we expect general availability before the end of the year.

In addition, tomorrow during Rick Devenuti’s keynote, you’ll be able to see examples of how Microsoft is using Content Management Server 2002 internally to increase the productivity of our own systems.

So with Content Management Server 2002 we’ve now finished the 2002 releases of the e-business server products: BizTalk 2002, Commerce Server 2002 and Content Management Server 2002.

So I’d like to take just a moment to reflect back on how we got to where we are today with e-business server products. We built, based on Windows 2000, a set of e-business products that gave our customers exactly the kind of experience they needed to build e-business applications.

So if you think about the individual products, BizTalk 2000 with its native support for XML was arguably the first .NET product from Microsoft and it gave the customers the capability to reach out to their business partners with B2B integration, it gave them the capabilities to get access to their own data and their own systems through enterprise integration, and I think most importantly and most exciting it gave them the ability to orchestrate Web services and other applications together to do real business process automation.

Commerce Server allowed customers to have transacted Web sites to exchange goods and services over the Internet.

Content Management Server allowed our customers to build dynamic Web sites to get content out to their customers and their partners and their employees.

So those lines of products gave us a very firm foundation for customers who want to build e-business applications.

With the 2002 line of products we have great new .NET functionality built into those products: managed code, VS .NET integration, building on top of the CLR, integration with ASP .NET. This is an environment that’s much more productive. It’s an environment that’s easier to use, that reaches out to a larger knowledge set of people.

So the real question we have now is with that in place where do we go next. What’s the next step for e-business servers from Microsoft?

I’m very happy to announce that that next step is a single integrated set of e-business technologies, which we’ve codenamed
“Jupiter.” “Jupiter”
is an integrated set of e-business components building on our existing e-business products. Oftentimes when customers have a choice of an integrated product and standalone products, they feel like they’re having to make a choice between a pure play best-of-breed application or the OK functionality you might find in an integrated product set. With
“Jupiter”
our customers won’t have to make that choice. We have the advantage of building this integrated solution on top of award winning, best of breed e-business products, so we’re going to be able to deliver an integrated experience that’s also best of breed functionality.

So I want to take just a moment to talk about some of the themes that you’re going to see in the
“Jupiter”
environment. We’ve talked about integration. I’m bringing together the e-business products I have into a better-integrated environment but the integration doesn’t stop with the e-business products. We’re moving into other products at Microsoft as well. For example, we’re going to have tight integration with SharePoint Portal Server, tight integration with SharePoint Team Services for collaboration, integration with Office, integration with Exchange, integration with SQL, truly the kind of better together experience that Paul was talking about.

The next step of connecting your systems together there is then true interoperability. We need to improve the interoperability story we have and we’re going to be able to do that through standards based next generation Web service standards, standards like WS Security, standards like WS Transaction. And as Paul was talking about earlier, the Business Process Execution Language from Web services, which is a standard from IBM, Microsoft and BEA, gives the opportunity for businesses to exchange information and do real cross-business processes or workflow.

That leads in very smooth to the next major theme with
“Jupiter.” “Jupiter”
is all about business process. It’s allowing companies to really specify how they want to run their business their way, their company’s business processes. And that theme is reflected through all of the components that make up the
“Jupiter”
product. In content services, for example, you’ll have workflow that’s based on that business process for doing approval workflow. In commerce services the order handling pipeline is now just like any other business process, with a full set of tools and customization available to you.

One of the things I’m excited about is the focus that we’re putting in
“Jupiter”
on the user experience. We already talked about the 2002 line of products and their deep integration with VS .NET. We’re just going to continue to improve that developer experience in
“Jupiter.”
But there are other user audiences that we also need to focus on. An IT pro may be more interested in managing or deploying or maintaining an application rather than just building one, and so we’ll have nice integration into MOM, Apps Center, the native management capabilities of Windows to allow that audience to be served.

And maybe the thing that’s most exciting to me is the support that we’re going to have for the knowledge worker, the support we’re going to have for the business user, letting them get real access to their business process directly from their desktop, directly from Microsoft Office, so they’ll be able to participate in a workflow from inside Microsoft Outlook. They’ll be able to monitor a real time business process, understand how insurance claims are being processed or how orders are being handled at their Web site from inside Microsoft Excel. They’ll be able to extract that data, grab that data, use all of the features of Excel. So we’re really bringing the business user into the e-business experience. It’s about business process automation the way companies want to do it.

So how do you get to
“Jupiter”
? It’s actually a very easy story. You start with our 2002 line of products and we’ll provide an upward migration path to Jupiter when it becomes widely available in 2003 and 2004.

I really appreciate this opportunity to give you a glimpse into the future of the e-business products from Microsoft and into the future of e-business in general. Thank you very much.

(Applause.)

PAUL FLESSNER: Thanks, David.

DAVID KIKER: Thanks, Paul.

PAUL FLESSNER: All right, in closing I want to thank again all of you for coming. One thing we’re committed to and our promise to all of you is no surprise: sales, service, support, product; all those things we know we have to do a better job in making sure that we communicate with you every day and it’s events like this that help us do that and again we appreciate you coming.

Product quality: We’re making a huge investment in terms of quality. The security stand-down was a tremendously valuable experience for us going through looking at all the code and we’re going to continue to invest in things like error reporting and Software Update Service and all the things that we need to do to make sure that we get the quality products out to you that you deserve.

And the two points that we really tried to impress upon today: Getting you connected for greater business value and absolutely every day paying attention to total cost of ownership.

That’s it for today. Thank you for your time and thank you very much for your business.

(Applause.)