Latest Microsoft Products Driving Hardware Innovation and Platform Opportunity

Editors’ update, May 24, 2007
– This page has been updated to correct minor details concerning the IDC profile cited in the fourth paragraph below.

LOS ANGELES — May 15, 2007 — Microsoft Corp. Chairman Bill Gates kicked off the 16th annual Windows Hardware Engineering Conference (WinHEC) today by highlighting the strong sales momentum and positive customer and partner response to Windows Vista™ in its first 100 days of availability. Gates showcased the tremendous wave of innovation and new technologies now available for businesses and consumers. He also unveiled the name for the next major Microsoft® Windows® platform release: Windows Server® 2008, formerly code-named Windows Server “Longhorn.” In addition, Gates announced new hardware makers and third-party software solutions for the upcoming Windows Home Server.

“A wave of great new hardware products from our partners has played a major role in the strong demand we’ve seen for Windows Vista,” Gates told the WinHEC audience in his keynote address. “Going forward, Windows Vista and Windows Server 2008 will provide a platform for hardware innovations that will deliver more intelligent and compelling computing experiences for consumers and business users, driving increased demand for a wide range of new PCs and new devices.”

Gates was joined by Microsoft Chief Research and Strategy Officer Craig Mundie, who discussed the future of hardware and software development on the Windows platform. Mundie emphasized that for customers to fully benefit from hardware improvements in the years ahead, developers must create applications that take advantage of manycore processors and the increased power and computing resources they provide.

Economic Impact of Windows Vista and Windows Server 2008 on Industry

Underscoring the opportunities Windows Vista and Windows Server 2008 provide to hardware partners, Microsoft released results of a commissioned profile from IDC showing the economic impact the two products are expected to have in the U.S. market. Titled “The Economic Impact of Microsoft’s Windows Vista and Windows Server 2008 in the U.S.,”* the profile predicts that for every dollar of revenue in the U.S. Microsoft will earn in 2008 from Windows Vista and Windows Server 2008, the technology ecosystem beyond Microsoft will reap approximately $18 in revenues. IDC also predicts that in 2008, this same ecosystem will sell more than $120 billion in products and services revolving around Windows Vista and Windows Server 2008. Also of note is the predicted 20 percent gain in overall Windows-related employment in 2008 that IDC attributes specifically to Windows Vista or Windows Server 2008.

“The impact of Windows Vista and Windows Server 2008 will reach far beyond Microsoft,” wrote John Gantz, chief research officer and senior vice president of IDC. “Overall, the advent of Windows Vista and Windows Server 2008 will help local economies grow, improve the labor force, and support the formation of new companies. In addition, the indirect benefits of using newer software will help boost productivity, increase competitiveness, and support local innovation.”

Evolving Customer Demands Create New Partner Opportunities

Gates announced that nearly 40 million Windows Vista licenses have been sold as of 100 days after its January launch, confirming that Windows Vista is the fastest-selling operating system in history. A driving factor in the early success of Windows Vista is the accelerating shift to digital lifestyles and the desire for richer computing experiences, as evidenced by the demand for premium editions of Windows Vista, which have accounted for 78 percent of Windows Vista sales. Windows Vista is the most broadly supported operating system Microsoft has ever released. For instance, there are now more than 10,000 hardware and software products that have passed rigorous testing processes to earn either a Works with Windows Vista logo or a higher-performance Certified for Windows Vista logo, served to products proven to deliver a superior experience with a PC running Windows Vista. Thousands of additional software titles and more than 1.9 million devices are compatible with Windows Vista today.

The Windows platform continues to support the industry’s most innovative and varied set of computing experiences. During Gates’ keynote address, partner technologies leveraging the connection and sharing scenarios made possible by Windows Rally technologies, which enable homes to create a fully functional wireless network capable of sharing content such as streaming high-definition video, were demonstrated. One such product taking advantage of Windows Rally is from Buffalo Technology Inc.

“Buffalo’s customers and resellers have been very enthusiastic about the Wireless–N Nfiniti Dual Band Router, and having the Certified for Windows Vista logo has only augmented that excitement,” said Morikazu Sano, senior vice president of global sales and marketing at Buffalo Technology. “The N Nfiniti Dual Band Router is the first Certified for Windows Vista wireless router available today, which is a testament to our commitment of providing solutions that are up-to-date with current market trends with products that are compatible with Microsoft’s latest operating system.”

A Next-Generation Server Platform for Hardware Innovation

Gates underscored that Windows Server 2008 is a key component to the next wave of hardware innovation, which includes support for virtualization, multicore processors and 64-bit applications. Just three weeks after its release, the new Beta 3 version has been downloaded more than 100,000 times, and Windows Server 2008 development reflects Microsoft’s most extensive customer- and partner-centric feedback program for server development to date. This is evidenced by enhancements to features such as the Server Core installation option, Server Manager, Internet Information Services (IIS 7.0) and inclusion of Windows PowerShell™, he said. Also as part of the keynote address, Gates demonstrated how Windows Server 2008 administrators can spend less time on day-to-day tasks and more time adding value to their businesses with Windows Server 2008 Security and Policy-Enforcement features that work together to provide advanced access, control and protection at the network, application and data layers.

As part of its commitment to the overall Windows platform, Microsoft is working with chip-makers, original equipment manufacturers, independent software vendors and developers to help ensure that the ecosystem necessary to support the general availability of Windows Server 2008 is in place.

Windows Server 2008 builds on the improved reliability, security and manageability of Windows Server 2003 R2 to help alleviate pressures on IT professionals today by adding enhancements to further automate daily management tasks, tighten security, provide a more extensible platform for hosting and Web applications, improve efficiency, and increase network availability. When Microsoft releases Windows Server 2008 to manufacturing later this year, it will include the first widely distributed beta of the new hypervisor-based virtualization technology.

New Windows Home Server Partners

The company also announced today that in addition to HP, three new hardware manufacturers — Gateway Inc., LaCie and Medion — plan to build products for Windows Home Server, Microsoft’s new solution to help families with multiple PCs easily centralize, share and protect their digital pictures, music, documents and videos.

Microsoft also announced that Windows Home Server software will be available to system builders, which will further broaden the choice of Windows Home Server hardware solutions available to consumers.

Software partners providing applications for Windows Home Server announced today include Diskeeper Corp., Embedded Automation Inc., F-Secure Corp., HP, Iron Mountain Inc., Lagotek Corp., PacketVideo Corp., Riptopia and SageTV. In addition, Microsoft today kicked off the Code2Fame Challenge for developers of Windows Home Server hardware and software add-in solutions. Information about the contest and official rules will be available at http://www.microsoft.com/windowshomeserver/challenge.

A New Generation of Workplace Phones and Devices

Also at WinHEC, Microsoft and nine industry-leading companies introduced a new generation of devices that connect the workplace phone to e-mail, instant messaging, real-time presence information, conferencing, voice over Internet protocol (VoIP) and mobile communications. Today, a new wave of phones and devices are available for use in the public beta program of Microsoft Office Communications Server 2007 and Microsoft Office Communicator 2007. More information is available at http://www.microsoft.com/Presspass/press/2007/may07/05-13NewGenWorkPhonesPR.mspx and http://www.microsoft.com/presspass/presskits/uc/default.mspx.

A Look to the Future

Making his final WinHEC appearance, Gates emphasized that Microsoft continues to foresee a wealth of opportunity for innovation on the road ahead. He concluded his keynote address by turning the podium over to Mundie, who discussed Microsoft’s vision for the future of the computing industry. Mundie focused his remarks on how trends such as manycore technology, concurrent software and contextually relevant computing will transform the hardware and software ecosystem, signaling the need for a rich, diverse mix of software, services and devices. According to Mundie, those device requirements coupled with external market dynamics will represent both challenges for technology innovation and opportunities to make “a positive difference in the lives of consumers and society as a whole.”

* Doc #5052007, May 2007

About WinHEC

In its 16th year, the Windows Hardware Engineering Conference provides an opportunity for industry professionals to stay aligned with Microsoft’s platform road map and new market opportunities. WinHEC seeks to provide practical information to help hardware designers and manufacturers of all sizes. More information is available at http://www.microsoft.com/WinHEC/VirtualShow.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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