Steve Ballmer: New York Business Launch of Windows Vista, 2007 Microsoft Office System, and Microsoft Exchange Server 2007

STEVE BALLMER: Well, thanks. It’s an honor and privilege for me to have a chance to be here today. I’ll say that rolling out these products is about as much fun as it gets in our business. To have a chance to do that with such a large and important group of customers here in New York is particularly exciting for me.

I will tell you a little secret. I was actually here in New York for the press rollout of these products, and there were about, oh, I don’t know, 60, 70 people sitting in a small, little room over at the NASDAQ, and that was kind of fun. But the press, you know, they’re kind of paid to be a little serious and contemplative and thoughtful. And we were doing one of the demonstrations, and it was really, really a good part of the demo, I don’t mind saying so myself. And I thought, how can these press people just not be excited, why aren’t they applauding? And one of the photographers just starts banging his hands, and he’s all wrapped up. He was the only guy who felt he could be uninhibited and let it go.

So, I want to encourage that kind of lack of inhibition today, because we’re going to show you some stuff that I think is awfully exciting, awfully interesting, and I hope you’ll agree at the end of the day should allow you to deliver a whole lot of value to the businesses that you serve here in New York and around the world.

It’s been about 10 years, a little over 10 years now since we launched Windows 95 and Office 95, and I will honestly tell you there is more capability in these releases, Windows Vista and Office 2007, than those releases. And I’m not sure we’re going to get quite as long a line of consumers lining up. You know, we live in this modern Internet shopping era, blah, blah, blah. But when you really want to talk about capability, depth of function, and products that are exciting and fun to use, the products that we’re going to showcase for you today absolutely meet that test. And hopefully you’ll be able to take a look at these things, evaluate them quickly, and get them really quite broadly in deployment inside the companies that you serve.

I’m going to focus today on the value that Windows Vista and Office 2007 and all of the products that go around them deliver into business customers. I’m not going to focus in on some of the great consumer stuff, and some of the new consumer-based applications and services that people are delivering. I’m back in New York again in another two weeks where we’re going to kick off and really deliver to the broad PC and consumer audience Windows Vista for that audience, and we’ll have more to say and more to show and more to talk about in terms of just flat-out entertainment and consumers and excitement at that time.

We started the development particularly of the Office 2007 release with some principles in mind about how work is changing, what does it mean, how are businesses evolving. And we built and designed our wave of products, including Office 2007 and all of its surrounding products, Windows Vista and its surrounding products, with a view towards how business is changing.

We did a lot of market research. We went out and really talked to businesspeople, conducting focus groups, statistical research, and time and time again a few themes came back. The overarching and most important theme is really the theme that we’ve tried to encapsulate in our advertising: businesspeople are really telling us that in today’s environment growth and innovation and customer service and smart operations are their top drivers, and the only way to achieve those kinds of goals is to empower the people who work for them and to empower their customers and suppliers to better interact with them.

And that’s where we came up with this notion of a People Ready Business. A People Ready Business is a business that really does recognize that employees are its number one asset, and says how do I give my people the tools to be more productive.

When you go further into the research and our analysis, we think there are four important pillars to helping empower a People Ready Business. You have to simplify how people work together. You have to let people communicate and collaborate and share information and process and the like.

You have to make it easier for people to find information and derive important insights from that information.

You have to help in this day and age people to protect and manage content and information. We do live in a world now of Sarbanes-Oxley, a world in which people have great concerns about their Personally Identifiable Information. And really letting businesses not only have access to information but helping them to appropriately secure and protect that content is very important.

And last but certainly not least, a People Ready Business is still a business that’s going to focus in on the cost and agility and efficacy of its IT operation and its IT factory down to and including the security, the reliability, et cetera of its systems.

That’s a People Ready Business. That’s the objective, the design point, if you will, we had for this wave of products that Microsoft Windows Vista and Office 2007 lead.

Behind all this there’s actually just a single powerful idea: People are the driving force behind business success, and we’re going to give and provide together tools to the employees of the businesses around the world to let them go out and really plumb the depths of that success.

What we’re doing then in that context is launching a whole set of products: Windows Vista in many forms, Microsoft Office in many forms. We have new releases coming of our Windows Mobile software, which powers some of the most exciting new Smart Phones in the world today, the Motorola Que, the Samsung Blackjack, the HTC Dash device. These are point of view complements to the Windows Vista and Office 2007 story.

We’re also bringing to market to support this People Ready vision and People Ready statement a set of server products that help feed the end user experience that’s driven by Vista and Office, a new version of our e-mail product, Exchange Server 2007, and a new version of our collaboration system, SharePoint 2007. These are the pillars around which we’ll provide technology for the People Ready Business.

And so while I’ll sit here today, and we’re here for the Vista launch, we’re here for the Office 2007 launch, there’s really quite a range of products that we’re shipping as part of this introduction, those servers, but we’re also shipping new enterprise editions of Windows and Office. There’s a new Windows Vista Enterprise Edition, not just professional but more capabilities for everybody; Office Enterprise Edition with even higher value, collaboration and workflow and connectivity characteristics; a high-end enterprise version of Microsoft Exchange, a higher end enterprise version of Microsoft SharePoint. And I’ll show you where some of the advanced capabilities come in, because it is my estimation that over the next several years many of you will say, we really want the enterprise version of Office, the enterprise version of Windows. There’s a lot of great stuff in the professional versions, the upgrades, from what we had last time, but we’ve added a whole new set of capabilities that I think many, many people will really appreciate.

In addition to this, and I’ll detail them later, there’s a range of other new client products and server products, over 33 products in total, that are available either immediately today that complement Windows Vista and Office 2007, or products that we’ll roll out over the next six months or so that really fill out a full value proposition for all of us to deliver value into enterprises around the world.

We’re going to talk a lot about business value, we’re going to talk a lot about collaboration, productivity, we’re going to talk a lot about workflow and content management, business intelligence, and blah, blah-blah, blah-blah, but at the end of the day for most people when you talk about Windows Vista and you talk about Office 2007, it all starts with the user experience. And it’s a little bit funny, because when you try to go make a business case inside a large organization people — and even we have a hard time helping you make the case, hey, this is just easier to use. With Windows Vista I can actually find all that information that I seem to lose all the time, so much more quickly. With Office 2007 I really can get full value out of this capability that I’ve had that many users will tell us they only think they get 20 or 30 percent from.

We’ve made amazing changes to the user interface of both of these products to not only make them more exciting but to let people get more done: the new Vista, what we call Arrow shell or look and feel, the new Ribbon user interface in Microsoft Office, which lets people find capabilities they never knew existed inside these products, more intuitive user interface, software that really works the way you work and lets you accomplish things in many fewer clicks than you could do before.

So before we go and really talk about all of the capabilities that tie Vista and Office into business collaboration, productivity, the People Ready Business, it does start with the end user. And Vista and Office will help everybody in your organization feel more connected, more empowered, and more able to do more things with their personal computers.

And to help make that point, I’d like to invite up on stage with me Cyril Sebastian. He’s a technology specialist working on our Office products, and he’s going to show us a little bit of these products. Cyril. (Applause.)

CYRIL SEBASTIAN: Thanks, Steve. Good morning!

So, in this demo I’ll show you how you can use the new user experience to multitask across different applications, to discover and use new and existing capability, and to reduce frustrating trial and error.

So, one of the great things about working in a Windows environment is that you can run multiple products and documents at the same time. But the more items you have open, the more difficult it becomes to find the one that you’re actively working on. With Live taskbar thumbnails in Windows Vista you get a preview of your document content so you can visually recognize that active window every single time.

But for most people you don’t use the mouse to hover the taskbar, you use the Alt-Tab keys to switch back and forth between applications. In the past, this was challenging because if you had six or seven Excel spreadsheets or Word documents open, they would all look the same with the same generic icon. So, in Windows Vista Alt-Tab also gets that live thumbnail preview.

So this is great in itself, but in Windows Vista we took it to a whole new level. We introduced Windows Flip 3D, which gives you the 3D experience, and it’s so easy to find your active applications. (Applause.)

So that’s great in itself, but it’s also easier to discover and use new and existing capabilities. And this is thanks to dramatic improvements in the Windows search functionality. So, search is a pervasive element across all the new releases, so no matter where you’re working you’re never very far from a search field.

So the Windows search engine actually catalogues content on your PC, so Windows knows where it lives before you ever decide to go search for it. Let’s take an example. If I hit the Start menu, I’m instantly taking to a search field. From here I can just type in the name of my application, which is brand new in Vista, and launch that right away. Or if I know the name of the document, I can type that in, and instantly I can go right to that.

So what we’re looking at here is another key improvement to the user experience across the core Office applications, called the Ribbon. The Ribbon replaces the old menu structures in the previous versions of Office with one that’s more focused on results rather than features and commands.

So rather than drop-down menus, which take up valuable screen real estate, the Ribbon fits neatly on top of the user’s core document content, and presents commands logically across a set of tabs. For example, the Home tab contains all your basic formatting commands. The Insert tab contains all the commands associated with inserting tables and charts and so forth. Some of your tabs contain galleries. So these actually present visual samples of the command results, so you see what they look like before you click it.

So, this is great in itself, the gallery that we’re looking at right now, but sometimes you actually need to see what your formatting change look like inside your document. So in the new Office System we’re introducing a great new capability called Live Preview. And so this allows you to see visually in your document in real time what the changes look like before you click on it.

So what do you guys think? How great is that? (Cheers, applause.)

So, one of my favorite features of Office is that when you work with document text you don’t have to leave, you don’t have to go back to the Ribbon to access basic commands like bold, highlighting, Italics and so forth. These are available, they sort of auto-magically appear right where you’re working when you highlight text. So this is getting to the notion of commands available when you need them.

And so this brings you to the next point, which is contextual commands. So, I’m working in my document here. I don’t have a table or a chart anywhere in sight. So I don’t need those table or chart related commands complicating my life.

So, watch the Ribbon up here as I insert a new table. Notice the Live Previews as the tables get set up right now. And as soon as I insert it, there are two new commands tabs on the top. These are commands that only show up when I need them. And when I step out of that table, they disappear, keeping my life simple and uncluttered.

So these contextual commands are another key way that we keep the interface in Office simple and easy to use.

So what you’ve just seen is across the new releases we’re making it easier for end users to multitask across different applications, to discover and use new and existing capabilities, and to reduce frustrating trial and error. Thank you very much. (Applause.)

STEVE BALLMER: That demonstration, if I had let him, he could have gone for an hour. We barely scratched the surface. The improvements both in Vista and in Office in the user experience are really amazing.

I’ll tell you just a small story, a true story, in fact. After using the beta of Excel for, I don’t know, maybe two weeks, three weeks, Bill Gates sent the Excel team a piece of mail. He says, “I love the new UI, the Ribbon is great, it’s great not to see things you can’t do, it’s great when things you can do become possible because they show up, it’s great that you don’t have to drill through all these menus. Everything you can do is sort of visible and apparent to you. It’s great, it’s great. And I like the new features you’ve put into Excel, and I especially like blah, blah, blah feature.” And the team wrote back and said, “Well, thank you, Bill. You’re so kind, you’re not usually so generous in your compliments, but we really appreciate it. But blah, blah, blah feature is not new. It’s been in Excel for, I don’t know, three releases.” (Laughter.) Bill writes back, “No, no, no. I’m an Excel expert. It hasn’t been there for three releases.” And they wrote back, “No, no, no, we are really Excel experts.” (Laughter.) It was at that point Bill had to say, well, I guess it really is easy to find the new features that you don’t know.

And really if you drill into Office, one of the number one things people tell us is, I’d love to be able to take advantage of more of the capabilities, I really would love to be able to do that. And Cyril just scratched the surface, but I think we’ve really made a significant breakthrough. And frankly we already see software vendors moving to embrace this whole new user interface approach.

Some people will say, oh, changes in the user interface, I like the old one, my people can’t take it. What we’ve found is that it’s usually less than 24 hours before people will say, I could never go back to the old user interface, I couldn’t tolerate it again.

And I think — just a small show of hands: How many people have used an Office 2007 release in beta form? How many people would go back? It’s a tough question to say what’s really on your mind. Just another small show of hands: How many people here have used Windows Vista beta or installed the production version? Okay. Great. Then I’m glad he didn’t spend the whole rest of the hour doing the demonstration for you. We’ve got a lot of users out there. But I think the level of innovation has really been quite amazing in that area.

I want to run through now some of the points that go beyond user experience and about beyond the individual, and really make Office and Vista part of the People Ready Business that really help connect people together, people to data, and people to your line of business processes.

The nature of work has really changed quite dramatically over the course of the last 10 years. Companies really are no longer islands. The amount of work that companies do at vendors and partners has exploded. Teams are distributed. It’s rare to find a team that’s physically located in one place. “The World is Flat” book really represents a lot of people’s reality, which means space, time, location, they’re all disappearing as boundaries inside businesses, and we have to give people the tools to collaborate and work together across time and geography and even organizational boundaries.

There are simple tasks: How do I schedule a meeting? How do we make that simpler for people? How do I get it to all come together? How do I let us all really look at common information? How many times have you gone to a meeting where somebody has said, what version do you have of the numbers? Oh, I have a different version. Oh. We need to give people the tools that really help them in real time stay very much in synch and up to speed.

To do that, there are kind of four things that we focus in on in this wave of products. We need to unify communications. Having voicemail and e-mail and voice and IM and video and videoconferencing all be complicated and all be separate does not make sense. How many contact lists, buddy lists, e-mail addresses, phone numbers, how many places do you need to manage that? If somebody you work with actually changes business or changes phone numbers, how many places do you need to touch and update? If you have two people you want to get together, one who can get to a videoconference link and the other can’t, how hard or easy should we make that process? And you’ll see a lot of innovation in this Office wave, including the new Office Communications Server and Exchange, that help with that.

How do we help people stay in touch and in synch with one another? There are techniques that are being pioneered on the Internet which we need to bring inside business walls. How as an executive do I manage or maintain a blog that lets my people keep in touch with what I’m thinking? How do we let groups of people author common databases in a wiki-like structure? What’s the role of RSS so as information inside your business changes it automatically synchronizes and tells your people, hey, there’s something new and interesting you ought to pay attention to? How do we allow people to set up ad hoc collaborations and workflow and document management? And how do we make this all easy as people roam with mobile PCs and with other mobile devices?

On top of that we also have a set of things that people want to do to better find information and derive insight from the information. Search is a core thing. People want to be able to search for documents, for e-mail. People want to be able to search for people: Who’s the expert in our company on this topic? And some of the things that we’ve done inside SharePoint really facilitate not just searching documents and structured databases and line of business applications, but also searching for people and for expertise.

In order to do this, systems have to be integrated. They need to be able to be pulled together. And the work that we’ve done particularly in Microsoft Office to support XML and Web Services is important.

Yesterday, I had a chance at the National Retail Federation show to announce a new collaboration that we’ve done with Teradata. Teradata builds probably the number one back-end decision support database for the retail and some other industries. They now speak XML out of the Teradata system, and now information can flow directly from that tool into Excel, because of all of the work that we’ve done in Office 2007 around XML support.

In the new SharePoint we’ve done a lot of work to make it easier for companies to publish information into portals, to provide business intelligence and connectivity to back-end data sources, including a new product that we’re launching that essentially is an Excel Server so that you can be running Excel calculations and analysis centrally as well as out on the desktop.

And last but certainly not least, we have a range of new technologies not only in the new Office but in some of the companion products, Microsoft PerformancePoint and others, that let you do rich visualization and reporting of information, so again people can gather the information and find appropriate insight.

What I’d like to do now is to invite Cyril to come back on stage and just wet your whistle again just a little bit with some of the new capabilities that you’ll find in communication and collaboration, and search and business intelligence. So please welcome back Cyril. (Applause.)

What do you have for us this time?

CYRIL SEBASTIAN: Well, Steve, by now we’re all familiar with what the new user experience looks like. So let’s use it and the other innovations to improve the way we work every day.

So, in this demo I’m going to play the role of a sales manager, and we’ll look at how I use the new Windows Vista, the 2007 Office System, and the new Exchange Server to quickly find and manage information, to simplify how I work with others, and to reuse existing content for greater productivity.

So, this sales manager, like most of us, spends most of his day bouncing back and forth between e-mail, voicemail, and the occasional trip to the fax machine. So, wouldn’t it be great if we could access all of these communications from the same location?

So, using the new releases, we can communicate with team members, customers, and partners from one unified inbox. And this unified messaging capability is accessible from the Outlook client, from the Web browser using Outlook Web Access, using a Windows Mobile Smart Phone, and brand new, thanks to Exchange 2007, using Outlook Voice Access, which is any old telephone.

Let’s take an example. Okay, so here I have a voicemail from one of my colleagues. Let’s take a listen.

VOICEMAIL: Hi, Pat. Would you put together the sales presentation for the Woodgrove Bank meeting today? Thanks.

CYRIL SEBASTIAN: So, I was able to take notes on this voicemail and listen to it right from the same inbox. So, what this allows me to do now is actually search for this voicemail as simply and easily as I search for anything else in my Outlook inbox.

So notice I do that search — and I think I ought to type it right. There we go. So, the voicemail came back, and the query gets highlighted right here.

So, what just happened? I got a voicemail but I also got a task in it. I’ve got to create this presentation for my customer. So, in the past, you could get your messages and flag them for follow-up, and that would create a visual identifier, but there wasn’t a formal task created out of that. In the new Outlook 2007 you can simply right-click this, and this will create that follow-up task.

So notice it just popped up in this new to-do bar here on the right. So, this to-do bar is a wonderful new additional to the Outlook interface. It gives you an at-a-glance view of your calendar, your upcoming appointments, and your tasks. So, when you flag something it also shows up in your daily tasks view, which is a synchronized view of your calendar and your tasks.

So, here’s that task, and what I’m going to do is just block some time off for it on my calendar. So, now I know that I have to spend some time and work on it.

So, I’ve checked my messages, got that task, and blocked some time off to work on it. So what’s left to do is go ahead and create that presentation.

So, I’ve done this a few times before, because I am a product manager. So I need to go ahead and find where that presentation is, but I’m not quite sure where I put it. So, I’ll use the new Windows search capability to pull up all of my documents that have to do with sales.

So, using Live Icons in Windows Vista I’m able to visually recognize all of these presentations that I’ve done in the past, so I can see the one that I’m looking for and choose that right away. And if I’m not sure, Vista will give me a live preview in the pane on the right, and I get to see the whole presentation without opening it in a separate application. So this is a classic example of Windows Vista and Microsoft Office working better together.

So, now that I’ve found this, I’m going to go ahead and open it up, and we’ll get to work on it.

So, as we saw earlier, using the new releases, we can focus on the substance of this presentation and not labor and spend too much time on graphics and formatting. So, this type of really visually appealing presentation used to take graphic designers, graphic design school, in fact, to create. But now something this powerful can be created by the most novice user.

Let’s take an example. This simple bulleted list here doesn’t really convey the message as powerfully as the rest of the presentation, which is very visual, but in a few clicks I’m going to transform this boring, bulleted list into something that has a lot more power. I’ll add a nice diagram, add some 3D rendering, change some color. In a few clicks I have a really powerful presentation. How great was that? (Cheers, applause.)

So, personal productivity is definitely simplified, but that’s not the only thing we’ve simplified. In the new releases, let’s take SharePoint, for example. SharePoint is a powerful knowledge management system. It allows you to share and retain institutional knowledge inside your company.

So me as a sales manager I want to do a product presentation to my customer, but the only thing I know about this particular product is the name, which is Orion 2007. So, what I want to do is research more about the product and possibly connect with the owner of the product. So, I’ll do a search in SharePoint, and now I’m going to get results back that are really across documents, Web content, but more importantly people. SharePoint is giving back to me results on people, and now this is sorted by social distance from me. I’ll go ahead and sort it by relevance. And I found that Laura Norman is a product manager for this product that I’m going to present soon. So, I’ll go ahead and click on Laura’s personal SharePoint site, and this gives me a lot of information about this person, what her roles are in the organization, who she reports to, contacts that we both have in common. So this is key information when I’m talking about collaborating with someone that I’ve never met before.

Another key addition on this page is a blog posting. So, Laura has just made a new blog post, and what she’s basically saying is she’s created some new slides, and she’s added them in her SharePoint slide library. So, let’s take a look.

So, this SharePoint slide library is a key way that you can share and reuse information that other people have created. So, in the past you’d sort of have to cut and paste slides from multiple decks, and kind of assemble them into one. Now you can go to one central repository and pull that stuff down.

So, looking at this, there are three or slides that I’m going to pick. And I’ll just go ahead and click copy to presentation. And now I’m getting a prompt that says, hey, if this slide ever changes, if the product manager makes a change to it, you’ll be notified. So that’s great. I’m going to click Okay, and now my presentation is really coming together. I have my diagram, I have this information from the slide library and so forth.

So, I’ve leveraged content from other people; what about that content that lives in your enterprise system somewhere else? So, SharePoint allows you to search for and display that content in those enterprise systems like Siebel, SAP, or Microsoft Dynamics, just as easily as though it was in your SharePoint intranet environment. Let’s take an example.

So, I’m going to do a quick search for my customer, Woodgrove. And these results I’m going to now filter based on customer. I’ll click on the Woodgrove Bank example, and this page that you’re looking at is assembled using a great new technology in SharePoint called the Business Data Catalogue. This is cataloguing information from that back-end system and displaying it for me in SharePoint. On the right I have an Excel spreadsheet, which is rendered in the browser using a powerful new technology called Excel Services.

So, now I can simply take a snapshot of this spreadsheet, because it looks like useful information to me, I’ll take a snapshot and bring it up in Excel.

STEVE BALLMER: And this data came not from some Web page, this data came essentially directly out of the sales system.

CYRIL SEBASTIAN: Exactly, it’s directly out of the sales system, and it’s in an Excel spreadsheet. It’s not a view of it, it’s the same Excel spreadsheet. And what does that mean? Now I have the ability to copy and paste this into my presentation very easily.

So now this presentation is really coming together. How easy was that? (Applause.)

So, we’ve basically assembled a pretty good looking presentation. I want to now bounce it off my team for review. And so one of the challenges that I’ve had in the past is when I want to meet with my team is scheduling has been kind of a challenge. How many people have challenges with scheduling? All right.

So, let’s go ahead and take a look at what we’ve done to improve that. So, I’m going to go ahead and create a new meeting request, type in my marketing team, because they’re usually good with presentations. And notice the new scheduling assistant that pops up. So, now using the scheduling assistant I get a list of suggested times. And this is based on people’s free/busy information. So I don’t have to figure out when people are free, Outlook and Exchange will figure that for me and tell me. So this is what we talked about when we say empowering people and simplifying how we work together.

So, in closing — (Applause.) So, in closing, what we’ve just seen is that using the new 2007 Office System, Windows Vista, and Exchange Server we’re enabling and empowering the end user to quickly find and manage information, to seamlessly work with other people in their organization, and to reuse existing content for greater productivity.

Thank you very much. (Applause.)

STEVE BALLMER: Should have another hour behind that, too, of detail. He could have showed you — there was so — no, seriously, so much. We didn’t really scratch the surface of where we go with voice over IP, we didn’t really scratch the surface of business intelligence and business insight. You did get something of a sense though of the improvements in collaboration and searching capabilities. And if you think of that as really just the tip of a very big block of capability, I think it will really give you something of a sense of just how rich this set of releases absolutely is.

I’m going to switch now and talk a little bit about this notion of protecting and managing content. I think this issue has exploded, as I said earlier, based upon kind of the environment we live in today, the regulatory environment, and societal environment, and it’s just amazing some of the things that are true.

There’s over 93 million records that contain sensitive personal information that have been involved in security breaches just in the last two years. That comes from privacyrights.org.

If you take a look at what we have done here with SharePoint, we have very, very much customized document management policies. People can define on any document, on any piece of e-mail, on any spreadsheet, on any file you can define access rights, and define periods of retention: This document will only stay here for six months, this document can be read by the following people but it can’t be printed, it can’t be forwarded. You can specify actions to take when the retention period expires.

We’ve built a set of capabilities in SharePoint to centrally manage documents and other information, and to protect and administer those.

Our new rights management service, which comes out in conjunction with Office 2007, allows this to work person-to-person. I can now send somebody an e-mail and on that e-mail I can define what rights they have with it: You, sir, can read and keep forever, but this gentleman, he’s not even allowed to print the document, let alone forward it, and by the way, it will self-destruct after one reading. It sounds a little space age, but you really want to be able to have that control over information.

In our Windows Enterprise Edition we’ve pioneered a new technology we call BitLocker, and BitLocker really encrypts data down on the disk in a hard-core way so that when people lose laptops, which they will do, you can make it so that laptop really cannot be cracked and important company information taken off the machine.

We have a new capability we call USB Lock, which specifies who can actually plug a USB drive into their machine and use it. I mean, literally today there are some IT departments where they put glue in the USB ports just so people can’t put in a USB stick and take valuable information with them outside the company. No more need for glue; that’s a matter of IT policy now. Imagine that!

But these are just some of the capabilities that we’ve built in to help you really manage content: documents, Web sites, information, assurance, retention, and rights policy. We’ve built electronic forms capabilities through InfoPath and a set of SharePoint back-end services so you can collect more information electronically, collect it accurately the first time, and protect it accurately the first time.

So many businesses still have so much effort involved in taking data that gets captured on paper and rekeying it. We can improve the overall integrity of all data by capturing much more information online; and then as I said, a variety of facilities for encrypting and backing up drives that will allow that also to be much more secure.

So as we move businesses in the direction of empowering their employees to use information, it becomes even more important that we also give businesses the ability to protect that information from intentional and unintentional loss and corruption, and we think we’ve done a very good job of that.

I’m going to have Jose Thomas from our team come on up on stage, and just give you a little bit of sense of some of the things — again we’re just scratching the surface, but some of the things that we’ve done to help protect and manage content in this wave of products. Please welcome Jose. (Applause.)

JOSE THOMAS: Thank you, Steve. Good morning!

So, by now we’ve seen how easy it is to find information and leverage existing content, but what if you’re responsible for managing content? How do you make sure you keep your content fresh and updated? How do you make sure you work with your peers to get their review and approval? What if your content is sensitive in nature, and as Steve mentioned, what if there’s intellectual property, maybe there’s merger and acquisition information there? And finally, how do you do this in a geographically dispersed environment?

So, in this demo I’m going to play the role of a senior business manager at Litware Incorporated. And it’s my responsibility to manage the Orion 2007 product line.

So, one of the biggest challenges that customers have told me about in the past was, you know, it’s difficult to manage content internally and then be able to stage that and get that out to the external facing site. So what you see here is my external facing, my customer facing site for the Orion 2007 product, and if I wanted to make a change, with a couple of quick clicks, I can click on Site Actions here, click on Edit Content, and then manipulate any of the content that I want here. So maybe I want to move this customer survey link up to the top so my customers can have access to that easily.

So, when I’m done with that, it’s very easy to go ahead and submit that for approval. So, I want to point out something that’s new here. On the top you’ll notice that the workflow toolbar has shown up. So now with SharePoint 2007 we give you the ability to do serial and parallel workflows directly in the browser window here.

So, I’ll click on Submit for Approval, and now the workflow engine passes that on to the content manager to approve it.

STEVE BALLMER: SharePoint 2007, in addition to being a portal and collab product, really is a rich content management, document management, and workflow product, and that’s at the heart of what Jose is showing here.

JOSE THOMAS: That’s correct, Steve.

So, moving forward, now that I’ve made that change to my external facing site, what is the experience that my customers will have when they come to this site? So, let’s say I’m a customer here, and I click on the customer survey link. Immediately you’ll notice that the InfoPath form loads up. And right here they can come out here and fill out the customer information.

Now, what you’ll notice that’s different and new here is InfoPath has loaded up in the browser. So I’m getting a browser representation of that rich form with all the pull-downs, the rich date picker, all the wonderful experiences that I’ve had in the InfoPath client before. This is one of the biggest pieces of feedback that we received from our customers, and we’ve delivered on it.

STEVE BALLMER: InfoPath is a part of the Office family that we introduced in the last round, and yet the feedback we got from people is, unless you can really build it into browser applications and help make browser applications richer for data collection the way in some senses that Flash makes browser applications richer for presentation, it’s not going to be useful. And so this is a major advance again in tooling to help support broad information collection.

JOSE THOMAS: That’s right, Steve.

So going forward, you’ll notice, by the way, workflow shows up all throughout the Office System. So, here the workflow engine shows up again, and I can go ahead and submit that result.

So, going back as the business manager, let’s say I want to take a look at those results. So, I can go into my InfoPath forms library within SharePoint and take a look at all of those individual results with just a quick click.

But, you know, I don’t know want to look at the results one-off, I want to be able to look at an aggregate view of all this information. Because InfoPath is built on top of the XML standard, we can quickly separate the data out of each one of these forms, and drop it either into a SQL database or even an Excel spreadsheet.

So, what I’m actually showing here is called the Report Center in SharePoint 2007. So it’s a new concept: It’s the ability to go ahead and have a single place to go to manage all your reports for the user.

So, as a business manager these are the key performance indicators that are most important to me. I realize that the customer satisfaction is something that I need to have my finger on. So, as I look at the results on the survey, I’ll notice that my Orion 2004 Lite product has suffered some bad scores here. So, I’ll do a little bit of drilldown here. So I’m going to click on that, and you’ll notice that I have an Excel chart, I also have an Excel pivot table, or even a full Excel table.

So, what you’re seeing here is Excel Services. Excel is running in the SharePoint environment, but the results are being passed to me through the browser, which is different than the ActiveX based Web components that we’ve had before.

But if you’re like me, you probably want to work within Excel, possibly take this information offline. So I’ll click on Open this data in Excel. How many of us use Excel here? Great, a lot of folks here. Okay, so one of the things that you’ll notice about Excel, by the way, 65,000 rows before in Excel with 256 columns. We’ve improved that; we have over a million rows now that are supported in Excel, and over 16,000 columns. So that’s a lot of data you can work with. (Applause.)

STEVE BALLMER: I’ll bet there’s at least one of you out there who’s saying, “Whoever needs that much data,” and I bet there’s at least one of you from some financial services company who’s going to send us mail afterwards, and say we still need to expand the row and column size.

JOSE THOMAS: So, with that much information in Excel, it can be difficult to really analyze and find the information you’re looking for. So, here’s one thing that we’ve done. We’ve improved the conditional formatting capabilities, so now with a couple of quick clicks I can add a color gradient to my data so based on the value in Excel the color changes, and at a glance I can see, you know what, I’ve got a couple of bad scores that I really need to work on.

So, let me go ahead and do a sort so I can see the lowest scores first. So I’m going to sort from small to great. And here I can see right off the bat that most of my customers, the feedback I’m getting here is consistent with what I’ve heard in the past; there are problems, there are some issues with the interface, and we really need to address that.

By the way, here’s another really great capability in Excel. When you work with large sets of numbers you’ll notice you’ve got the column headers right here, but when you scroll down the headers tend to disappear. So, now with Excel 2007, as you click on it, the column headers will show up regardless of where you are within the spreadsheet. Isn’t that great? (Applause.)

So now that I know what I need to do here, I need to actually act on this information that I’ve learned. So, being part of the business management group at Litware, one of the benefits is that I get to influence acquisition decisions.

When we talk about mergers and acquisitions, it’s a pretty sensitive topic. There is data here that’s not ready for primetime, there’s data here that others in the organization aren’t supposed to know about.

So, what I’m doing here is walking into a SharePoint document library, and I’ll point out a couple of things that are new here in the SharePoint doc library. One thing you’ll notice is I have a choice between multiple document templates that I can choose from now. So you can have a whole range of documents in your corporate taxonomy that you can pick from now. So, with a quick click I’ve dropped down all my choices.

Another thing, this is another big piece of feedback that we’ve received in the past, the recycle bin. SharePoint now in the document library has a recycle bin, so you can do a single item level restore now, and you don’t have to go through a whole database backup. You guys like that? (Applause.)

So, I’m going to come in here and make a change to this document that looks like it’s already in process. Laura Norman owns this document, who is one of our product managers. And, you know, I really want to push this through, and I just want to put my stamp of approval that we need to acquire this company.

Kontoso happens to be one of the partners we work with. We’ve seen their interface, we know it’s a great product, and we want to bring them into our fold of businesses so that we can improve our customer sat scores.

So, by looking at this you’ll notice that there are some changes that have been made. So, very quickly I can come in here and change the owner to Pat Coleman, and modify the review date. You’ll also notice as I’m making these changes up here, they’re being modified in the document itself. So, now Office shares that same rich Open XML file format, so it allows us to make quick changes to the metadata that will also reflect within the document.

So, I want to move this into ready for review. Now, here’s the most important piece of this demo. If you look here, there’s this information management policy window that shows up, and what it’s telling me is that anything that’s inside this document library has to adhere to these policies. And the specific policy here is that auditing is turned on. So, any user that works with this document, changes it, makes an update, or even looks at it, we’ll audit that information and we have a trail to review it later.

So, now that I’ve made those changes, the next thing I need to do is pass this onto legal.

Now, I know the legal environment, you guys are a tough audience, they really require us to be very careful with information that we leave behind in documents. And this is another great piece of feedback that we’ve received from our customers.

So, you’ll notice there are some changes that have gone on in this document through the course of its life. So, now with the Office 2007 product I can quickly click on Prepare, Inspect Document, and have the document inspector show up and go through the entire document. It will check for comments, it will check for annotations, any custom XML data, any headers and footers, and with a couple of quick clicks I can say I want to remove all comments, I want to remove all document changes, and any custom data that may be hidden. So, very quickly I can inspect the document and sanitize it and pass it on to review. You guys like that? (Applause.)

So, now I’m going to switch over to my Outlook environment. And one of the things that you’ll notice is that sensitive information lives in documents, but it also lives in Outlook, it lives in e-mail. So, now we have this concept of the Exchange Managed Folders. So, if I have sensitive e-mails I can quickly choose the messages, and drag and drop them into these managed folders.

So, what’s a managed folder? So, the idea here is we can set a retention policy at the folder level. So by dragging and dropping those e-mail messages into the folder, the messages and the payload, so all the attachments associated will go ahead and inherit those retention policies. So, I can only keep things in here for six months, and then they get archived.

Cyril talked about scheduling earlier. So, now that I’ve done all this work on this acquisition document, perhaps I want to schedule some time with my customer. You’ll notice that I can come in here now in Outlook 2007, and send my calendar off as an e-mail. So very quickly I’m going to choose the next seven days is the window that I want to specify, click Okay, and you’ll notice that Outlook drops in all my free/busy times into this e-mail, which I can quickly send off to my customer. (Applause.)

So, now as we schedule time with the partner, I want to talk about these acquisition details, the very last thing I want to mention is how do we get that sensitive information, those sensitive documents into the hands of the partner without compromising security? This is where we introduce Microsoft Groove. The Microsoft Groove product is a new member of the Office Enterprise SKU, and it allows us to do seamless peer-to-peer secure collaboration with partners, suppliers, customers, vendors, those organizations that are outside of my firewall.

STEVE BALLMER: Secure, but you don’t need to give them permission on our corporate network.

JOSE THOMAS: Well, that’s correct, Steve.

So, in this example what I’m going to do is I’ve set up this workspace already, and it gives me a place where I can drop files in, I can have discussions or a calendar item, but what’s really great about Groove is it is has the ability to synchronize with SharePoint. So, I’m going to click on the SharePoint Files Tool, and I’m just going to punch in the URL of that document library we talked about earlier, and I’m going to say Select, and you’ll notice very quickly that Groove goes to that SharePoint document library, takes all those documents in, brings them in here, and now I’ve been able to extend this to that outside organization so my partner can look at this information as well; secure with military grade security here.

So, what we’ve just talked about is the ability to manage content both internally and externally, and SharePoint provides that platform for us now. We can protect sensitive information like mergers and acquisitions, or intellectual property. And finally, we can share information securely with our partners and our customers.

Thank you, Steve.

STEVE BALLMER: Thanks, Jose. (Applause.)

Still just the tip of the iceberg. (Laughter.) Now, it’s actually a very important thing. I thought Jose did a nice job of showing you a lot of what’s there, and yet when you actually look at the way we’ve woven information rights management into e-mail and many other places, I think you’d all agree there’s a very rich set of functionality there: content management, content protection, content collection.

I want to move to the last of the pillars, and this is really about IT costs and security. Vista, you know, five years ago, Bill Gates decreed that security basically would be our job one priority. And security is not a glamorous thing, but security actually is a thing that can disrupt operations fairly significantly.

Microsoft Windows Vista is the first operating system product that we have shipped on our new development process that we call the SDL, the Secure Development Lifecycle. We built it this way from the get-go, and other products that we have released on this process, like our SQL Server product, have seen dramatically fewer vulnerabilities than products that we built before the development of this new software development approach.

We have a lot of capabilities in both Windows Vista and in Office 2007 that relate to costs and security. In IE 7 we’ve built in anti-phishing, we’ve built in better protection of PII through our CardSpace technologies, we’ve built in anti-spyware capabilities through Microsoft Windows Defender. We have new Network Access Protection that will let you restrict who gets access to your network and what tests you want to make them go through before you give them access to the network.

The number one way in which viruses are introduced today in most companies is a laptop that gets infected outside the network and then gets reintroduced. You don’t want that network to get immediate access. You want to quarantine it, check it, and make sure that it has been cleaned before it rejoins your network. That’s a built-in capability.

We’ve lowered costs in Windows Vista by allowing you to go to a single image of Windows Vista globally.

And we’ve reduced down time with better diagnostics, recovery, and self-healing capabilities.

So, across the board we’ve done a lot of work to really help you reduce IT costs around Vista and Office 2007, and improve the security.

I think this is an area in which we have done perhaps the most work, particularly on the Vista side. We’ve talked a lot about it. There will be a tendency for people to want to say, well, does that mean I’ll never have another security vulnerability ever? I won’t say that, but I think that the degree of improvement will be absolutely dramatic, and the amount of cost that you will spend maintaining, securing, deploying client releases will go down quite dramatically.

Again, to give you a bit of a sense of this, a little bit of a demonstration would be useful, I’ll invite Rob Jackson from Microsoft to come on up and show you a little bit of this. Rob. (Applause.)

ROB JACKSON: Thanks, Steve.

STEVE BALLMER: Thanks, Rob.

ROB JACKSON: Good morning.

Just to piggyback a little bit on what Steve just mentioned, Windows Vista is our greatest, most secure operating system ever. And to Steve’s point, one of the greatest concerns that organizations have is the theft of data. And one of the greatest risks to that is via the USB thumb drive. How many of your end users today have that or use them? It is a direct threat to your business; great device.

But what I’m going to do is I’m going to show you something. I’m going to show you how Windows Vista makes this more secure, allowing you to reduce the overall cost of doing business by reducing those help desk calls, and providing greater security.

So, I’m going to go ahead and put this thumb drive into the computer here. No glue here. Steve, there’s no glue here.

STEVE BALLMER: No glue I’ll validate.

ROB JACKSON: No glue.

STEVE BALLMER: No glue.

ROB JACKSON: And what you’ll see here is that we’ve put in a policy, in Windows Vista we’ve added over 500 new group policy settings. And those group policy settings can be managed right from your Active Directory, reducing the need to having to manage those systems.

So, let me show you what we’ve done. All we did was enable this, we put in a custom message, and we’ve enabled it so that your data is more protected and that you’re able to do it at a lower cost, and greater compliance to your IT policies.

I’m sure you all have seen this before if you have mobile users traveling all over the world, or people that go out and make presentations, issues like not being able to make the date and time changes, maybe they can’t change the power setting, or they’re unable to work with the line of business applications, because again we’re forced to, if we’re running users as standard users, to lock them down. And that’s what we want to do, but what we’re forced to do with a lot of our mobile users is set them up as administrators, again exposing the organization to risk.

So, how do we avoid that? Well, Windows Vista out of the box comes with some great wave of providing greater flexibility for your end users and mobile users while providing greater compliance and security to corporate IT policies.

So, what you’ll see here is I can change the time zone when I’m traveling. So, I can go here, just change this, change it back if I need to, back to Eastern time since we’re in New York, or what’s great is with User Account Control I can lock down things I don’t want them to change, like the system clock. We want to make sure that if they send an e-mail fro their computer, that that e-mail is accurate across the e-mail chain through all the servers. That can definitely cause a flag as that e-mail moves through the system. So, this prevents that, again keeping the organization more compliant while delivering greater flexibility to users.

Another great example is I can change my power options. So, I can make that change, and then I’m done; again, more flexibility.

But if I want to go in and make a change to the device manager, I don’t have the privileges to do that. Now, I might be able to see some things but I won’t be able to make it to do any other change except try to install that USB device.

So, that’s just scratching the surface. There are so many things that we’ve done in Windows Vista.

One of the other great things that I think you’ll really like is some of the things we’ve put into Internet Explorer 7. And we’ve made some specific things that are unique to Windows Vista only. So, you may have IE 7 on XP, but Windows Vista has some unique things, especially, for instance, I’ll show you this where we’re able to go in, this is an e-mail, I came into the Office, I have all my Windows Mobile Smart Phone, I took some snapshots, some pictures of friends, and I want to upload those to this one-penny site, one penny, wow, for photo prints, awesome. So, if I go in, I’m going to put my thumb drive in. Oh, I can’t do that, policy issue. But anyhow I’m going to go through these steps, and then look at this. Well, first, Vista tells me, hey, there’s a problem, there’s a security warning, you can’t just download files randomly. And then it pops up another error message saying, again, are you sure about this? And then, of course, hey, I’m sure about it, one-penny photos for me; who cares about the IT policies and security. And look what happens; the end user gets a message that says this is harmful to the system. This spyware can potentially damage my systems, a big threat to the organization.

So, okay, you know what, I’m just going to go back, I’m going to go ahead and use Outlook if I need to. I’ve got to answer this e-mail that just came up. What you notice is that warning from Windows Defender that’s part of Windows Vista doesn’t go away. You can’t move on, you can’t do anything unless you — you can look at the e-mail, but that message is going to stay up there. So, we’re going to go ahead and remove this.

We’ve done some really cool things inside of Outlook. So Outlook out of the box has its own phishing filter that leverages technology that’s part of Windows Vista. So, first of all, this message is in red. It says, hey, I don’t like that text string there, that e-mail string, that doesn’t look secure. If I click on this, it tells me, hey, you can’t open that e-mail, we’re not going to let you do that, based on company policy and also technology that’s part of Windows Vista.

Some other places that we’ve enhanced that security are also in Internet Explorer. So, what I’m going to show you is this first example where I’m getting ready, I see this e-mail from my bank. I think I have an account with Kontoso bank; I’m not sure, but let me click on this. Oh, man, what’s going on? Look what happens. Windows Vista and Internet Explorer go out to the Internet, we have a Microsoft online service that goes and pulls in the information that says that this site is a reported phishing site. We’ve been doing this for the last two years, going out, crawling the Internet, finding suspicious sites to protect users right out of the box.

And the other cool thing about this is that Windows Vista sets up Internet Explorer 7 as a lower privileged user than even a standard user, so again isolating things.

Now, what if we don’t have that site in our database of suspected sites? Well, what can Windows Vista do for me with Internet Explorer? Out of the box, again going ahead and taking a suspicious Web site, and just analyzing it based on, for instance, it’s asking for debit card information, but not in a secure encrypted connection; again, a threat to the organization and a threat to your systems.

And then lastly, a few other things I wanted to show, I deploy Windows Vista, I want to make sure that when I’m using Windows Vista that all of my applications run safely, and meet the company policy. And I’m able to do that through the Application Compatibility Manager.

And what I’m able to do here is I can analyze all of my applications and then all that analysis is then shared with other IT pros, with ISVs, with Microsoft, where we can all view this information. And, for instance, we’re providing what is a community assessment, so I know what other IT professionals are feeling about that application or what they were able to find out when they tried to deploy it. Or ISVs, maybe it’s Adobe Acrobat, and there’s some issue where we need to make sure that it’s compatible with some other application, I can analyze this. And this makes rolling out patches and new updates much easier, and deploying Windows Vista, and it works with all of our operating systems, including XP service pack 2.

And then lastly, Windows Vista is designed from the start to prevent errors and stay reliable and up and running.

So, one of the things that we’ve done is inside reliability monitor we’re able to take a help desk call, take that help desk call if we have an issue with, for instance, what we’re noticing is the OS stopped working. We found that when we installed the right video driver it improves the performance of the system. And over time we notice we’re having some more errors. And look what happens; this MP3 application that this user happened to install on the system caused errors.

So again from the start Windows Vista keeps your applications reliable, keeps Windows Vista reliable, greater up time, greater security, and greater enhanced corporate policies to lower cost. This reduces the need to have multiple help desk calls, or when you have help desk calls you can get right to the root cause analysis right out of the box.

So, with that, Steve, I want to thank you, and are you ready for a new day? (Applause.)

STEVE BALLMER: We’ve had both of these products and these surrounding products out with customers in beta test and Technology Adoption Programs, and rapid deployment programs, and we’ve been the beneficiary of an amazing amount of customer feedback. We really did use the wisdom of our customers and our community to tune, to refine the core vision in these products. We’ve worked together with over 10,000 customers. We’ve recorded over 1 billion feedback sessions of information. We had over 5 million beta testers for these products.

And the feedback has really been very positive, but we’ve also been able to take the feedback where there was room to improve, and get to work on it. And you see on the list here just some feedback and some of the customers who have been involved in the adoption of these products.

We’re going to have a chance to hear from the two customers mentioned at the top, (Jagish Rau ?) from Citigroup, and Cathy Gould, who comes from Elite Models. What I’d like to do right now is have you join me in welcoming on stage Jagdish Rao, IT director from Citigroup. Please welcome Jagdish. (Applause.)

How are you?

JAGDISH RAO: Very good, thank you, and congratulations. This is an outstanding presentation. A very exciting day I think for you and for everyone.

STEVE BALLMER: Well, thanks. Thanks very much.

What are some of the key challenges that you’re facing as managing director of IT at Citigroup?

JAGDISH RAO: Well, you know, at Citigroup technology really is a key driver for the business, and it enables us to not only provide innovative products and services to our customers, but it’s the key enabler I think for productivity for our employees.

The challenge for us in the IT infrastructure is striking the right balance and enabling our employees to be able to be productive.

Just to put it in context, we have over 350,000 desktops, and employees spread over 100 countries. So, to keep everything current, to make sure that we have the right security, and strike the right balance between I would say an innovative customer experience and the right kind of security for the enterprise, some of those things that you touched upon, is our big challenge.

STEVE BALLMER: Well, super. What are some of the key reasons that you guys really dug in to Windows Vista and Office 2007 and Exchange?

JAGDISH RAO: Well, we have been in the middle of a major strategic initiative in Citigroup for the past year where we’ve been upgrading our infrastructure. Again, just to put it in context we have, given the widespread scale of the infrastructure that we deploy, 42 datacenters, 100,000 MIPS of processing power, 44,000 servers, 10,000 petabytes of storage, growing every day, and as I said, 350,000 desktops, so the key challenge for us was to embark on a major program to simplify and standardize, and try to get the real power out of this infrastructure as the organization grows.

And one of the strategic initiatives in this program was standardizing our desktop infrastructure. And in that context we’ve been part of the Windows Vista TAP program. We’ve been I think closely associated in working with Microsoft since August of last year, deploying Vista, Office 2007, Exchange, and testing it out within our environment for a large-scale rollout going forward.

STEVE BALLMER: And what’s the experience been like? Please share. I don’t want to get too surprised, but please share your experiences. (Laughter.)

JAGDISH RAO: Well, the experience has been good. The expectations from Citigroup’s perspective is that with the new Vista out of the box, or with Exchange and Office 2007, all of which we plan to deploy in a large scale shortly, we should have much better time to market. Certification is very, very important for us. We’ve been deploying these products for our engineering staff. These are the hard-core techies. We’ve got a thousand of them in the 35,000 strong IT community department internally, but these are really the R&D folks. And they work on certifying the product before it can actually be rolled out enterprise-wide. And we hope that with Vista we should be able to do things in a matter of months as against years, which it’s taken in the past, because once Vista is ready, we hope to roll out on a large scale starting July of this year.

One of the big expectations here is information security. Given the kind of industry we’re in, highly regulated, and financial services being what it is, for us information security is a top priority. Data protection, customer privacy are key. And we hope it will be much more easier and give us better capability, that in the new platform to be able to take care of that for not only our customers and our employees, but make sure we’re in compliance with our own policies, but at the same time continue to give a good user experience. So, the balance is what is key for us.

STEVE BALLMER: Do you see other key impacts coming from the deployment of these products?

JAGDISH RAO: Yes. Once we get this rolled out enterprise-wide there are four things really that I hope, and those are my goals, and that’s what we’re expecting to achieve. First and foremost is the user experience, because we hope, based on all the things that you just showed us today, and what we’ve been experiencing in the TAP program, to get significantly more I would say friendly user experience. And that’s both customers and employees. And the key is to get all the business users, not the IT community — the IT community will adopt this very quickly — it’s to get the business users, the other 300,000 people that I have in my company, to actually use all the benefits and the feature functionality that the platform will provide.

The second most important goal for me is risk management, because given again the nature of our industry, risk management is key. Given all the experiences we’ve seen through patch management and vulnerabilities and all the things that we’ve seen through our history, we hope that with Vista out of the box and with the new platform there will be a significant, I would say significantly improved capability in terms of managing these vulnerabilities. We don’t expect that they will go away forever, and every time you introduce something I’m sure there will be something new coming up, but we should be in a much better position to actually manage this much better.

And as I said, information security should be far more manageable with the new platform.

And most important, of course, I hope, I sincerely hope that we have significantly lower operating cost, because at the end of the whole thing we are in business ultimately to make money. Given the scale of the infrastructure that I’ve been talking about, managing our current platform is very expensive, when I take into account not just the deployment and management costs, but all the reliability and engineering and all the effort that goes on behind. So hopefully with the new platform we should have significantly lower operating costs.

So, it’s really user experience, better risk management, much better information security capabilities, and finally a lower operating cost.

STEVE BALLMER: And, Ladies and gentlemen, this comes — I just want to emphasize a couple of things Jagdish said, 350,000 people, desktops, over 30,000 people in IT alone I think he said, and he plans to be in full production by July, which is really quite soon, and puts a lot of responsibility on both of us.

I want to thank Jagdish for all of his time today, for the business we do with Citibank, but most importantly for all the feedback Citigroup has given us throughout the development process of Windows Vista and Office 2007. Thanks very much, Jagdish.

JAGDISH RAO: Thank you, Steve, and all the best to you. (Applause.)

STEVE BALLMER: Another customer I wanted you to hear from is Elite Models. They needed a whole new way of booking their models into customer engagements. They turned to one of our partners, Infusion, and in just three months they have a fully functioning system. Let’s take a look at a video, and then we’ll have a chance to hear from Cathy Gould, director of Elite Models North America. Please roll the video.

(Video segment.)

STEVE BALLMER: Please welcome Cathy Gould. (Applause.)

Tell us a little bit about your organization and its mission.

CATHY GOULD: Well, Elite is the world’s largest modeling agency. Our mission statement really is to provide the best service to our clients and our models, and to continue to find and develop the best talent in the modeling industry.

STEVE BALLMER: Super, super.

Tell us a little bit about your experience so far using some of these products. It seems there’s a long distance, I’d say, between the modeling agency and this tech stuff, and how does it all come together for you?

CATHY GOULD: It’s amazing. There is a gap between our two industries, but we need your product. And what happened was about a year ago when I was going through the marketing research, I was doing marketing reporting on a quarterly basis, which took me forever to do, and I was at my desk going, we have to find a better way, because our system that we had wasn’t seamless. We had to go to three different areas to get all the data and information that we needed, and I’m like, with the technology that’s out and available today, there has to be a better way of doing business and empowering our staff so they can better manage our models and service our clients.

STEVE BALLMER: Tell me a little bit more about that, and tell me a little bit more about the empowerment you’re trying to give your folks, and how all this has come together.

CATHY GOULD: Well, this is really a people business, we’re managing people, and you have to provide information really quickly. If we don’t provide that information very quickly, our competitors will come in and beat us at the punch. And our business is very fast; we have to provide a service very quickly, let a client know when is the model available. If they need her tomorrow, then we’d better make sure she’s available tomorrow. Sometimes communication is very difficult because they’re traveling the world. So with the Windows Mobile device we can know instantly where they are, they can know their jobs immediately instead of going through faxes or e-mails or the old way that we used to do business, we actually used to fax them. It’s true, we did.

STEVE BALLMER: I hear you, I hear you.

CATHY GOULD: You know, we’re the fashion industry, we weren’t really up to date on technology. So now we are empowering our business to become more productive and more profitable.

STEVE BALLMER: That’s great.

CATHY GOULD: Yeah, we’re excited. And the system is beautiful. When the Infusion guys showed me the system, it was like this is everything that I could possibly ask for, and it looks amazing.

The exciting thing about it is it’s in Outlook. It’s part of Office ’07 and Exchange and Vista, but the whole system is right on Outlook. So the managers aren’t really tech people, so when they go up on their Outlook, which they currently use, it’s amazing because they don’t really have to learn anything different. And the booking system is built on the right-hand side, and there’s a carousel of models that will appear. If you want to know what models are available today to do this booking, then you program that in, you ask that question on the search, and it will just carousel the models that are in town.

So, yeah, it’s beyond belief for us, it’s ecstatic.

STEVE BALLMER: Well, that’s great. Any other key impacts that you want to talk about? It sounds phenomenal though.

CATHY GOULD: Well, just we’re excited about the partnerships with Microsoft, and I just want to thank you personally on behalf of Elite and myself for being a big part of changing our business.

STEVE BALLMER: Well, thanks, thank you and thanks to Infusion. Great job, Cathy, thanks.

CATHY GOULD: Thank you very much. (Applause.)

STEVE BALLMER: I think you can probably not find two industries further apart than the modeling industry and the technology industry, but it is fantastic to see the kind of benefits that Elite is deriving from the system that Infusion built around these new products.

I want to briefly summarize for you, before I wrap up, what we think some of the impact will be here in the New York area from the launch of Windows Vista and Office 2007. We asked IDC to do what we call an Economic Impact Study, and really kind of give us a sense of what they thought these products might mean here in New York.

Essentially Vista will be installed on about 90 million PCs worldwide in the first year. We guess that that will be someplace close to 4 million here in New York alone.

We think that will help drive about US$7 billion of revenue for IT companies based in the New York area. We think it will support around 16,000 jobs here in the New York area in the IT profession. We have partners here in New York that are investing up to 700 million in training and educating their people, and doing application development around Vista.

And it is our estimate for every dollar of Microsoft revenue from Vista in 2007 in New York, there will be another $19 worth of additional revenue and opportunity for partners derived here locally in New York.

The IDC study can support those numbers, and I think it is always good to remind ourselves that not only are we all excited about the benefits Vista can bring, Vista and Office also support a large ecosystem of partners and IT people, including many people in the audience today, and that is in an overall sense very good for economic development and economic health.

Before I wrap up, I want to turn to our partner. We have a set of partners worldwide, many, many tens of thousands. But some of our platinum partners are here today: Citrix, Convault, Dell, EMC, Hyperion, Intel, HP, Mimosa Systems, Wipro, Unisys, SAP, and Quest Software. These companies and many, many more are really lining up, building applications for Vista, being prepared to help you do system installation and integration of Windows Vista and Office 2007. We’ve got over half a million partners ready worldwide and onboard with this launch, as well as a set of major hardware vendors who are rolling out new PCs that have really been optimized to run Vista and Office.

And to give you a little bit of perspective from our partners, I’d like to invite on stage with me Dave Booth, the country manager for Hewlett-Packard in the United States, and Hewlett-Packard senior vice president. Please welcome Dave Booth. (Applause.)

DAVE BOOTH: Well, Steve, how are you?

STEVE BALLMER: I’m great. How are you?

DAVE BOOTH: Well, I can tell you I was talking backstage with Cathy, and did you know that you and I are going to be recruited into the Elite modeling fold? (Laughter.) They’ve got a new —

STEVE BALLMER: Old bald guys?

DAVE BOOTH: I’m thinking girthy, full-figured men. (Laughter.) There’s got to be an audience for us there. But I’ll tell you, it is HP’s —

STEVE BALLMER: I hope there’s an IT policy in Vista that says block the display of those guys. (Laughter.)

DAVE BOOTH: Cut out the double-chin in the carousel, that’s all I’m asking for.

But, folks, it is HP’s absolute pleasure to be here with you, and certainly with Microsoft, on from what I can tell is the largest enterprise product launch in your company’s history.
And it’s interesting, you know, we were just chatting backstage a little bit, and you have with you here today Elite, the largest modeling agency in the world, Citibank, the largest bank in the world, and now HP, per our most recent announcement, the largest technology company in the world. So you’ve certainly lined up some premier partners. And we’re thrilled to be here and to be associated with both Vista, Office 2007, and Exchange 2007.

And we’ve really worked extensively, as you know, with your teams over the last many months and years really to optimize the technology platforms and solutions that we’re bringing to the market so that both our customers and our business partners can take advantage of it day one with the full suite of Microsoft offerings.

In fact, our complete portfolio of Microsoft ready solutions is ready to go today. And it’s exciting because we see that this is going to give both the market and the end user customers but also the business partners a competitive advantage to get work done more quickly.

We saw some of the examples of it through your demonstrations, but I thought the demonstrations were particularly brilliant this morning, and I’d like to compliment your staff on that.

So, when we look at this from a technology standpoint, clearly we’re interested in working with Microsoft and the community across a fairly broad spectrum of our basic technology products, our desktops and our notebooks, our server technology, our software in terms of from a management framework where we’ve collaborated very closely with you folks, and certainly from a services standpoint, which I’m going to talk about later.

When we look at this in conjunction with our Microsoft frontline partners, we think that we’re going to be able to have a competitive advantage in the market that will allow people to either rapidly prototype systems more quickly and get up and running and increase their competitive advantage, or perhaps migrate from existing systems, which I will talk about.

So, as you know, in December we made a joint announcement around HP and Microsoft, the People Ready solutions. We were pretty excited about that at that point, and just to hit some of the highlights, as a result of that collaboration, HP will actually train and move from 22,000 people that are trained on Microsoft technology to over 30,000 people. And it’s designed to complement the people inside of your organization, inside of our customer’s organization, and certainly inside of our partner organization.

And we’ve really chosen to focus in on five key solution areas that we think are critical to helping people gain that competitive advantage while creating a more agile enterprise, because we think that business agility is something that’s going to become ever increasingly more important as we go forward, because whether you’re buying a company, selling a company, adding a division, growing your business organically, this ability to be agile is something that we think is really important, and we think that your software, combined with our technology, software and services, creates a unique combination.

The five key solution areas that we’re going to most focus on are messaging and collaboration and communications, business intelligence, business process integration, we’re certainly going to look at collaboration around content — and you talked about the importance of managing content as we move forward, and not just traditional text content but voice and video, and all the types of content that we’re working with inside of our organization. And finally, we’re going to make sure that we continue to build the best core infrastructure in the world, whether it be services or product-based infrastructure.

So, from an HP standpoint it’s our objective to help our clients capitalize on this shift towards next generation datacenters. We’re an example of it ourselves as we look at how we’re collapsing and consolidating our datacenters to build next generation technologies to reduce costs and increase the competitive advantage of our company in the market.

And we think that this is also a really nice complement to the things that we’re doing already with Microsoft. I mean, one of the things, we’re a big Microsoft customer, and you folks are a great customer of HP as well, and we’ve had a relationship and an alliance that’s lasted now over 20 years. Steve and I were talking backstage earlier, and we were chatting about my first introduction with Microsoft technology was DOS 2.1. For two-thirds of you in the room you don’t know what that is, but you can find it over at the museum of ancient history now in terms of all things Microsoft.

But the reality is we see with this announcement that you for the business community are taking a significant step forward in being able to help people implement technologies quicker, more effectively in a more secure environment.

So, what we’ve done is we’ve actually made a major commitment between the two firms. In fact, it’s about a $300 million commitment around training and development and deployment of Microsoft solutions and services. We think this is something that we want to make sure that we’re taking full advantage of as a company, and we’re going to put our money where our mouth is.

And part of that is in this ability to train and enhance the skills of the people that we have. I mentioned earlier we’ll move from 22,000 trained consultants and trained folks that are familiar with Microsoft technology to just over 30,000 around the world.

And I would highlight that for our business partners and for our customers that’s really important, because many of you now are growing your business outside of the domestic United States, and you have to have partners that can roll out that technology and implement that technology on a global basis. And we might find one of our business partners is implementing the technology here in New York or in the United States, and they’re using some of our services somewhere else in the world or vice versa.

And we know that many of you have already begun to deploy solutions. I mean, I think that your Early Adopters Program I think was really fantastic, and I know that we took part in that specifically.

One of our customers also took part in that, which was The Weather Channel. And for those of you, it’s probably a good day to be associated with The Weather Channel here. But they have over 89 million subscribers to their technology. And they wanted to create a more cost-effective messaging and collaboration system, and they moved from Lotus Notes to an Exchange environment. And now this operates with enhanced communication and collaboration capabilities. It was done smoothly, it was done on time, and most importantly I think it was done on budget. And I think large credit for that goes to the enhanced software capabilities.

One of the things I love about Microsoft is that you’re constantly looking for ways to have the software itself speed the process, both from a development standpoint, an implementation standpoint, a management standpoint, and certainly in today’s environment from a security standpoint.

So, we had a smooth transition with The Weather Channel, and we certainly know that there are many other customers here that are implementing the new technologies.

And we’re a pretty good example ourselves. We’re a big user of Microsoft technology. In fact, I think in-house we’ve got over 200,000 seats of Exchange running inside of the organization.

But leading up to this announcement there were two major projects that we initiated as pilots, one with SharePoint 2007, and the second with Exchange 2007. In fact, with Exchange 2007 we’re just on the precipice of moving into a full production environment for our folks. And again we run arguably one of the most complex implementations of Exchange on a global basis, and we like to take those skills that we learn in our organization and share them out with our business partners and our customers who have equally challenging environments that they need to implement in.

So, as we move forward with this, we see that this is an opportunity for us to increase the competitive advantage because people can actually take and migrate to the new environment. So your existing customers can migrate to these new environments more cost-effectively. And I would guess that you’re probably interested in some other people’s platforms migrating forward. Is that a fair assumption?

STEVE BALLMER: We are always.

DAVE BOOTH: You are always.

So, one of the things that we’ve done is we’re designated as a prime integrator for Microsoft, and really what that means is that we’ve got people all over the world that are trained at how to implement this at the most detailed and technical level possible.

And we think that we’re uniquely positioned in that regard arguably to help customers on a global basis, and to take this notion of a People Ready Business and make it a reality inside of those clients’ businesses.

And we offer the services across the spectrum from design to implementation and certainly support to help people get these systems up and running in heterogeneous IT environments.

Speaking of heterogeneous IT environments, I mean, I think arguably there are a lot of opportunities for us to use this technology, and a couple of them that I like, and that I’ve seen some great success with, are the mainframe environment, people that are looking to move off mainframes into more cost-effective, open system platforms, and also people moving off of proprietary operating systems like Solaris. We think that’s an ideal opportunity to implement these new Microsoft enterprise-class technologies.

We think that services are an important characteristic in this, because any change that you make in the IT environment, people say, well, it’s a simple change. Simple is a relative term, and we want to make sure that between ourselves and our business partners that we create an enablement framework that allows them not just to implement the technology, but to take full advantage of the technology.

I loved your story about Bill Gates and the Excel feature. I can just see him arguing with the developers about what feature was available when.

And these migrations, we want to make sure that they happen on time and on budget, and we think that there’s significant savings for our clients as they consolidate and collapse multiple application platforms into standard Microsoft technologies, and certainly multiple technology platforms implementing new blade technology, new storage technology that’s more cost-effective. You can actually design out costs out of the IT infrastructure. And we think that’s a key characteristic that all of our customers are looking for is this notion to use technology to automate and replace costs that they have inside their IT environment.

And ultimately it’s this business goal of ours to help bring solutions together more quickly.

So, we’re here to help at the end of the day, and I’ll tell you that we have a large staff of people ready, willing, and able to assist in this process. It’s our pleasure to have been here, and it’s a great pleasure to see you, as always, Steve. Take care.

STEVE BALLMER: Really appreciate it. (Applause.)

I have to say we’ve been partnered with Compaq, Digital, and Hewlett-Packard for many, many, many years, and the systems integration services and hardware that support the People Ready Business, the People Ready infrastructure I guarantee you we’re going to have 500,000 partners ready around the world, but certainly for the biggest jobs HP has really an unparalleled capability, which they’ve demonstrated time and time again.

I want to move to conclude really with a notion of what’s available here. Not only are Microsoft Vista, Windows Vista, Microsoft Office 2007 available, but really this whole list of products. Microsoft Vista Enterprise is the flagship desktop product. Microsoft Office Enterprise 2007 has the full capability for the Office desktop. Exchange Server 2000 and SharePoint Server 2007. We have unified messaging services for Exchange that are part of its Enterprise Edition. We have hosted services that will do spam and e-mail cleansing off-premise if you want to outsource that. We have our new security product Forefront to protect Exchange and SharePoint as value-added extras. We have a new version of Microsoft Project, Visio, InfoPath, OneNote and Groove. We have new rights management services products for Office 2007. We have new tools that let you do Web site design for SharePoint Web sites, Office SharePoint Designer 2007, as well as the search specific version of SharePoint, which is more limited, more economically priced. And we have Excel and Forms Servers that you can instance around SharePoint that show some of the capabilities we talked about today.

All of these products are available now, and can be deployed and implemented in much the way that Jagdish was talking about, and Cathy, et cetera.

Over the course of the next year there’s a set of products that will complement these; the new version of Office Communicator, which does instant messaging, voice and real time communication, the server that goes with that, and value-added voice call management features. We’ll bring out a member of the Office 2007 family, PerformancePoint, for advanced business intelligence, forecasting, budgeting and reporting.

We have a set of data mining add-ins for Office that help you do data mining from within Excel. We have additional management capabilities that we’ll bring for the Windows desktop and something we call the Windows Desktop Optimization Pack; Forefront client security for anti-malware, enterprise managed anti-malware at the client; and then additional members of our System Center product line to help you manage clients and manage servers.

So, about half the products or a little over half of the products available today, and then the rest of these will fill in. I wanted to paint the whole picture though, because as you move forward, finish your evaluations of Vista and Office, you can start implementation today, but there’s really a whole retinue of products that I think will fully deliver on this vision that we talk about of the People Ready Business.

We’re very excited about these products. They’re the most significant products that we have ever introduced, 33 products all coming to market, an unprecedented depth of innovation, really delivering on the vision of the People Ready Business, and certainly I just couldn’t be more excited to have had a chance to introduce these to you today. Scratch the surface, dig in deep; there’s a whole lot more we didn’t show you. But hopefully from hearing from Dave, from Cathy, from Jagdish you get just something of a sense of how much there is here to really take advantage of to really empower your people and make them your number one asset.

Thank you all very much. It’s been my pleasure. (Applause.)