Kirill Tatarinov: Convergence 2008 Keynote

KIRILL TATARINOV: Good afternoon, everyone. It is my great pleasure to welcome you here to Convergence 2008 in Orlando, very excited to be here with you this afternoon.

Michael spoke to you this morning that there are more than 9,500 people here today joining us for this exciting event. Earlier today, I saw another very exciting statistic: 60 percent of the folks here are actually coming back. 60 percent of the folks are alumni who were also with us in San Diego. So thank you. Thank you for commitments to Microsoft Dynamics. Thank you for being here with us. Thank you for staying with us and continuing this journey. Thank you for our customers. Thank you to our partners. Those of you who are prospects, I sure hope to welcome you next year as our customers, as our alumni.

I’ve been here in Orlando for about two days now, meeting with our customers and partners in group settings and one on one, and there’s one thing I’ve been reminded through all of those sessions and all of those meetings: How much we actually have in common. It is all about serving our customers. Customers are really what it’s all about. For us to serve you as our customers, it is very important for us to build a community of business. Make sure we’ll listen to you, make sure we understand exactly where you want us to go, make sure that we connect with this ecosystem of our partners together. Make sure that we get this triangle of success with Microsoft and partners working for you as the pinnacle of this success working together.

This is what this event is all about. This is why we continue to come together at Convergence. This is why we’re listening to you. This is why we’re doing speak-your-mind booths and many other activities to make sure that we understand exactly what you want us to do.

I would like to spend the next 58 minutes talking to you about the business and what it takes for us to drive your business forward and what we need to do together to help you advance and help you achieve more and, ultimately, help you serve your customers better and help you deliver better value to your shareholders.

When we talk about driving your business forward and helping you accelerate, there are three very important key areas that we need to recognize. First, and most importantly, it’s about helping your people be more productive. People-ready software is what it’s all about. Adapting to change. Change is truly the only constant in today’s world, and making sure that we help you stay ahead of this change is a very important area that we also need to discuss. Innovation, making sure that you can innovate at the face of your business, making sure that you can deliver on innovative solutions before your business needs them. These are other important key areas that we’re going to talk about.

Let me start with productivity. There was an article published recently in the InformationWeek magazine, based on very extensive surveys. And that article basically says that user adoption for enterprise software is critical to competitive position of a company that is using that enterprise software. It basically talks about the need for people to embrace the software that the company has invested in.

This is also the area where there is significant improvement that needs to happen in the industry, and this is one area where we have been incredibly committed in terms of innovation and research and development, as we’ve been doing, to make sure that we help you advance, we help you deliver better solutions to your users, to the people in your organization to expand the use of that software.

Last year in San Diego, we spent quite a bit of time talking about role-tailored user experience. This is a very exciting innovation that Microsoft has been spearheading for the last three years. This is extensive research of different personas and different roles that exist in your organization. This is also very unique research in business processes that those people participate in. This is also research in unique end-to-end scenarios that help us understand what does it take for somebody to do their job? How many clicks do they traditionally have to do to process orders and to process credit requests? And what can we do and how can we work together to minimize those clicks and to make sure that this end-to-end scenario and end-to-end experience continues to work better.

Last year, we also announced Dynamic Client for Office, which is essentially a set of technologies designed to integrate Microsoft Dynamics and Office in a very close, unprecedented fashion. That technology is really helping us today expand the usage of business applications within your organization. We have examples of customers who, by usage of Dynamics Client for Office, connecting SharePoint technology with Dynamics now enable 100 percent of their employees in their organization to get full access to business applications.

Of course, some of those users are true power users who wound continue to use Dynamics rich client, but some of them would be accessing this business information and business intelligence in read-only formulate through Web and SharePoint experience. This is a very exciting example of how innovation in role-tailored experience and how innovation in integrating Dynamics and Office helps you achieve the goals of increasing productivity of users in your organization.

We continue to innovate in role-tailored leadership, and we continue to expand our innovation in this area, taking Dynamics to executives’ desktops, making sure that executives in the organization can get all the necessary dashboard, all the necessary KPIs right in front of them available to be viewed at a glance.

We’re working to take Dynamics and we’re working to take business applications beyond the PC. Mobility is the reality of life. Mobility is what we all use every day, and it’s very important for us to make sure that Dynamics is available across a variety of devices that is used by the end users, by people and organizations.

And, of course, continue to make sure that business applications are widely accessible and used by the people inside the organizations and also supports very sophisticated viewing scenarios that people can use to make sure that they can access the data and view it no matter how complicated this data may be.

Role-Tailored Experiences

So with that, I just thought I’d spend a few minutes to showcase for you, what does that role-tailored experience really mean. I know many of you had a chance to see that already in some of our products in some of our labs, but for those who didn’t have a chance to do it yet, I thought I’d do a little showcase of our products and demonstrate what you should expect and what we actually have available on the market today.

First of all, I want to show a screen shot of Dynamics GP-10. What you see here is the role of a credit collector. And that person gets exactly what they need to see in this role. And that person gets complete help and gets complete understanding on what she might be responsible for and how that experience will help her execute her task better. Of course you see familiar Microsoft Office Outlook experience. This looks just like Outlook, and that helps this person understand her day-to-day job much better. This is just one example of how today, with Microsoft Dynamics GP-10, we’re delivering the role-tailored experience to you.

Now, I know that some people here in the room are already using and enjoying all the benefits of Microsoft Dynamics GP-10. But I know there’s many others that are still using old versions of GP, and I know that there are many partners here who would like to work with you and who would like to connect with you and help you take full advantage of our innovation and help you move up to Microsoft Dynamics GP-10 today and start taking full advantage of the role-tailored user experience.

Now, let’s take a look at Microsoft Dynamics NAV 2009. This is the next version of our NAV product that’s going to be coming to market towards the end of this calendar year. What you see here is zero-click access to information. You see all the critical information at a glance. You see it available instantly from the standard user interface without you having to drill any deeper into that.

You see the data that is filtered specific to the person who is using the product. And yet again, you see charts with simple visual analysis without having to drill down and pull out another separate business analytics tool. You see it right here at a glance. You also see information that is filtered and alerts that are filtered and delivered right to you in personalized notification, helping you do your job better, helping you connect, also helping you connect to unified communications integration, the demo that you had a chance to see in Steve Ballmer’s keynote earlier today. That integration with unified communications technology will cut across all Dynamics products, helping you help your people to be more productive. It’s really all about simplicity, and it’s about delivering information to your users that help them get the most out of software when they need it, on their terms.

Taking our software beyond PCs and looking at mobility, what we’re looking here is the fact that the next generation of Microsoft Dynamics mobility solutions. And the example you see here is that the field service technicians who need to process a service call and need to look at the inventory of assets. He can look at the inventory right in front of him, right on his phone, and he can see what’s available and what is an asset’s availability. But he also can look in the context of other participants in his peers, in his colleagues to see if he is missing an asset, where that asset may be and how he can connect with some of his colleagues and procure that asset from them, mating a variety of technologies, mating search and mating the assets together on one screen available through the mobile device.

Taking Microsoft Dynamics throughout your organization, what we’re delivering here across our products, across our ERP solutions, is a very rich visualization technology that allows you to view very complex data, whether it’s supply chain and your warehouses and availability of assets and how those assets are broken down across your broad organization; whether it’s a sophisticated organization chart and understanding how people in the organization map to the business processes. The goal of Dynamics is to give you the ability to have this rich visualization for all of your people, for all of your users yet again, extending productivity of your people, making sure that you enable the investment that you made in ERP solutions, in business applications, be available to all of the people in your organization.

Talking about role-tailored experience and the innovation that I just demonstrated to you is really just the beginning of the road here. Making software useful is important. Making software usable is a little more important. Making software desirable, making software such that your people love it is what it’s all about. We want to build software that gives people love. We want your people, we want users in your organization to love Dynamics, just like people say they love their Zune, they love their smartphone. We want to say in the same fashion, “We love Dynamics.” This is our goal in role-tailored experience, this is our goal in innovation in this area.

This is also an example where some of the innovation that we’re doing today is already working for us and we’re actually already starting to see benefits, and we already see people talk about their love for Dynamics. I had a chance to meet with one of our great customers out of the New York area, a company called Rogers and Hammerstein, who is a great reference case for Microsoft Dynamics AX product. They’re now in the final stages of implementing Dynamics AX 2009 as part of the technology adapted project.

They tell me that Dynamics AX 2009 will truly help them make sure that all people in their organization love Dynamics, and they expect to expand the breadth of usage of Dynamics AX with their organization dramatically by the innovation and by role-tailored experience that is delivered in Dynamics AX 2009. So, thank you to Rogers and Hammerstein for working with us and providing feedback on Dynamics AX 2009 and helping us make our products better, helping us make our products such that people love it across the organization.

Now, to make the software such that people truly love it, we need to go beyond the standard methods, we need to go beyond the standard techniques of research. Here today at Convergence 2008, we want to unveil to the world the techniques and the search methodology that we use to make sure that we continue to leap forward in role-tailored experience and we continue to improve desirability of our software.

The methodology that we’re unveiling today is called Felix. This is the methodology we developed jointly with University of Copenhagen, where we have one of the major research and development facilities for Microsoft Business Solutions. It really allows us to connect with our users emotions and it really allows us to assess what are the first, initial subconscious reactions that people may have to the software when they first see it. And as our research indicates, that really helps us build the software that people love.

With that, I’d like to show you some examples of how our researchers do it and what our users’ reactions are to this Felix methodology.

(Video segment.)

KIRILL TATARINOV: As you heard, we go beyond simple functional responses to the software user experience. It helps us uncover true visual first impressions of what our customers will feel when they get the software, and as a result, it truly helps us deliver software that your people would love, deliver software that you would be able to go broad in your organization and get maximum return from the investment in the business application.

Now let’s talk about adaptability, the second very important area that we need to address when we talk about driving your business forward. Change is inevitable and it’s very important for us to deliver solutions that can adapt and evolve with the change so you can drive your business forward. When we talk to many of our customers and our partners, we hear feedback that as far as change is concerned, it is about three very critical areas. It is about regulatory requirements. No matter what country you’re in, no matter what industry you’re in, regulations are very important for everybody, and staying current with those regulations and making sure that you stay compliant no matter what those regulations may be is very, very important.

Dynamics ERP & Environmental Sustainability

Another very important critical area that Steve actually spoke about earlier today is environmental sustainability. How can we make sure that the businesses, in particular manufacturing businesses, can be green, can stay green and can advance the environmental cause? Another very important key area, a very important part of adapting your business to changes which can be environmentally friendly. And, of course, making sure that the actual systems that you deploy — staying current, making sure that you can provide ongoing maintenance and support for your systems without breaking the bank is another very important attribute of the whole area of adaptability.

So rather than talking in detail about this very important category, what I would like to do is welcome on stage Craig Dewar who will spend time talking to us and showing us compliance and its environmental sustainability in Dynamics ERP. Craig.

CRAIG DEWAR: Hi, Kirill. Hello, Convergence. (Applause.)

Today I’ll be playing the role of a CFO in a manufacturing company and my company makes loudspeakers and custom stereo equipment. I’m going to show you some of the capabilities in Microsoft Dynamics AX 2009 that help me track my business. But I will say even though I’m showing this in Dynamics AX, these are core investment areas that cut across all of our different ERP products, so you should expect to see things like this in yours as well.

We’re going to look at three areas, Kirill.

KIRILL TATARINOV: Okay. Good.

CRAIG DEWAR: We’re going to look at compliance. We’re going to look at my role and experience as a CFO, and we’re going to take a look also at sustainability.

So let’s start with the topic of compliance. Now, as a CFO, I’ve worked with many different systems over the years, and compliance has always been a problem for me. Information has been in many different places, never been collected together in one spot. With the compliance center and Microsoft Dynamics, there are four things it gives to me. The first is a one-stop shop for all of my standard operating procedures.

So here I have my internal controls up and I can define in here my business rules for any compliance-related activity. Here I’m showing some simple ones around expense management, but these could be financial, they could be HR metrics, whatever it is I want.

KIRILL TATARINOV: Some of those could be Sarbanes-Oxley and any other regulations that are being imposed on an organization today.

CRAIG DEWAR: Absolutely. I could even use this to track internal training, for example, of mandatory training. Once I’ve defined by standard operating procedures, the next thing I think about is an order trail. And Dynamics 2000 — Microsoft Dynamics has a very rich order trail capability.

What I have is a report that I can go and look at and I can basically pull up any collection of transactions that I’d wish to look at and view what’s happened to them as an audit trail. And not only can I do this, but we actually fully support digital signatures so I can guarantee that these things have not been changed.

So the third area of compliance that I look at is the idea of separation of roles and responsibilities. And this is a really important one. Obviously, I want to make sure people can only do the things they need to be able to do. So here I’m viewing my organization by geography and by cost center, and at each level, I can come in and assign the users the right kind of compliance-related resources.

The final thing I think about as a CFO in this realm is reporting and visibility on my compliance-related activity. I have a large number of reports defined for me on top of SQL Reporting Services so I can pull things out, but what I look at the most is the compliance center dashboard. And this gives me a very simple look at the effectiveness of my controls and the key performance indicators that I would like to track.

KIRILL TATARINOV: This is all at a glance here and is pretty much available what the chief financial officer would want to see?

CRAIG DEWAR: Absolutely. And, in fact, the very cool thing about this, because we’ve used SharePoint Web parts to build it, I can actually take one of these Web parts and I can actually also put it onto my CFO role center. So instead of having to come and look at this, I can take the things I really care about most and have them in front of me all the time.

So let’s look at that. Now, my role center is available to me in two different ways: The first way is via the SharePoint-based business portal. And the great thing about this is I can actually connect remotely from my house or when I’m traveling and view all this information. But when I’m in the office, I primarily use this in my Microsoft Dynamics client.

So let’s go and switch across to that. The really neat thing here is that those two views are exactly the same. So if I customize it in one place or change it, it actually shows up in the other automatically. Speaking of customization, I’m a business guy, I’m not an IT guy, but I can still customize my role center to show what I would like to see. So, for example, if I wanted to add new KPIs here, I’d just go and click on it and I can select any metric out of the system and start monitoring it.

Now you’ll notice here, Kirill, I also have a Web part displaying some environmental KPIs. And this brings us to the third part of our demo, and that’s looking at the idea of sustainability in business applications.

KIRILL TATARINOV: And how business applications help organizations to be more environmentally friendly.

CRAIG DEWAR: Exactly. So the great thing here is that the system, out of the box, understands the information I need to collect and report on to be able to run a measurable, sustainable business. And there’s an international standard called the Global Reporting Initiative, or GRI, that defines these particular measures. And what I’m seeing is four of these measures that I’m looking at in my business.

The first two relate to energy. So both materials I burn on my own site to generate energy, and also energy I purchase from a utility. Now, the great thing about this is once you can actually measure something, you can manage it and improve it over time. So you see the graph down the bottom, I’m plotting my energy usage across time. And you can see here that it’s actually dropped off at this particular point.

We started taking a serious look at our actual processes. We looked at our lighting, at computer systems and manufacturing processes and we implemented many small changes in every one of those places, and we actually drove that down.

I can, indeed, click on that and bring up things. It’ll show me the mix of how that particular energy is being generated, and that’s coming directly from a Web service for the utility that I get that energy from. Now, the great thing about that is it’s not just good for the environment; it’s good business, because the less I pay for energy, the more money I make. Now, the other two metrics I have here are for reporting on what’s called greenhouse gases, what’s sometimes known as the carbon footprint.

This shows energy that I — the greenhouse gas emission from energy use, but also my employee commuting and business travel. Now, the reason that this is important is, as a company, I supply my products to very large organizations. They are actually reporting nowadays on their carbon footprint. To do that, they have to understand the makeup of the products and services they provide that come from their supply chain. So my biggest customers have asked me to report on the amount of carbon that I output on a per-product basis. Because this is built right into Dynamics, I’m able to do that easily without additional cost and complexity.

So Kirill, we’ve taken a look at three things that as a business person help me drive my business forward, compliance, the visibility I get from my role center, and the work we’re doing on top of the environment and sustainability.

KIRILL TATARINOV: And ultimately, those capabilities will be available to all of our Dynamics ERP customers starting with AX this year?

CRAIG DEWAR: Yeah. It’s just tied to the different release cycles, exactly.

KIRILL TATARINOV: That’s terrific.

CRAIG DEWAR: Yeah, thank you.

KIRILL TATARINOV: Thank you. Thank you very much, Craig.

CRAIG DEWAR: Thank you. (Applause.)

KIRILL TATARINOV: Well, thank you again, Craig, that was terrific. As you can see, we’re committed to delivering this role-tailored experiences, and you can see a role tailored to a CFO from the company who can look at both key performance indicators and also see environmental sustainability KPIs in the context of the tool they use every day without having to step out and do something else.

Business-Ready Customer Care

Now, in the area of systems maintenance and in the area that the actual business applications — actual systems that you have running to enable your business, we have very important initiatives, it’s called business-ready customer care. And that initiative is about the choice of when you want to innovate and when you want to stay on the pace of deploying new business applications. It’s about influence and it’s about how you can communicate with us and your partners and how you can articulate your desires and your feedback and your requirements, and about visibility – visibility into our roadmap, visibility into our strategies, visibility into what we’re planning to do in the future so you can map your investment to the roadmap and the roadmaps of your partners.

So let’s talk a little bit about choice. In that area, first of all, we talked about support. We talked about the level of support it would provide to all of our Dynamics products. We now have five-year mainstream support of all major versions of Microsoft Dynamics, which means that all of those ERP and CRM products which you have today will be supported for five years.

We also now have five-year extended support, which means that if you and your users to make the decision to stay on that particular version longer, we will have special provisions that would allow you to do that, and you would be able to effectively stay on the pace of innovation on your terms, not on the terms of your vendor. This is a truly unique offering in the business applications industry today. And we also have custom support provisions that would allow you to stay on that version of software even longer if you and your users so desire.

Now, in addition to that, through customer source — this is the Web portal, this is the community that we make available to all of our customers. Through customer source, you get 24 by 7 support, Web support, for all of our Dynamics products. And this is obviously something that’s available throughout the support cycle, whether it’s mainstream, extended, or custom. Yet again, truly unique support offerings that allows you to innovate on your terms and upgrade on your terms.

In the area of influence, in the past we’ve been doing something truly innovative, and we were listening to you through many different forums, including speak-your-mind booths – we started using it a couple Convergences ago, we’ll continue to use it here. You’re going to have a chance to do that. It’s quite a bit of fun to go and speak your mind at the booth. Give our developers a chance to hear exactly what you have to tell them about our products, about our directions, about our strategy.

And they truly listen to that. They go through all that feedback and they incorporate that feedback into future versions of our software and the methodology that we’re delivering to you with our partners. I sure hope you see the proof, you see the evidence how that feedback gets incorporated in future versions of our software and upgrades that are still being developed in the marketplace.

Customer Feedback Direct: Microsoft Connect

Today, here at Convergence 2008, we’re actually unveiling another tool that helps you influence us even more. This tool is Microsoft Connect. And that tool effectively allows you to provide requests and features directly to Microsoft Dynamics R&D team through the Web portal. It also allows you to vote on features that other customers and other partners may have reported, thus giving us a better view on what you feel is important to you, and what’s important to the community at large because, yet again, it is our job as the member to make sure that we serve this community of business and we deliver you complete solutions that satisfy your needs exactly.

In the area of visibility, we’re taking an unprecedented commitment to be incredibly open on our future roadmap. Most importantly, our commitment is to continue to innovate on all of our Dynamics products. Steve mentioned it this morning, I want to stress it yet again: We’re committed to the entire Dynamics portfolio. We will continue to innovate on all of our Dynamics ERP and CRM products. You will see new versions, you will see innovations. You will see new technology.

We also committed that you will see new versions for all of our Dynamics products in approximately every 24 months. That helps us get more predictable in our cycle. It also helps you understand what’s coming to you and how can you plan the future of your business applications and how can you plan the future of your users, people in your organization as it relates to usage of Dynamics. This is a very important area. This is a very important commitment.

In addition to making this predictable roadmap, we also committed to telling you what’s actually going to be coming in those releases, and this is truly unique for these mid-market companies, for mid-market vendors. Our commitment to you is approximately 12 to 18 months before we put this release out, we will give you a statement of direction – a detailed statement of direction — which will spell out what’s going to come out of that release, and how important it may be to you in your organization and what are the exact areas of innovation we will be addressing in that new version.

Today, we have the statement of directions published and it has been published for quite a few months now on Dynamics AX 2009. We have statements of direction published on Dynamics NAV 2009, which is going to be available later this year, and we will continue to stay the course on being very open, very predictable, very visible to you so you can understand where we’re going.

Let’s take a glance at the roadmap, let’s take a look at what’s going to be coming in the next 24 months. Effectively, as you can see, the entire part — the entire lineup of Dynamics products will be upgraded, and you will see innovations across the line of Dynamics. Steve mentioned today that already we have the strongest lineup in the industry, and that just continues to get better as we go forward as we look out in the next 24 months.

All of those releases, all of those versions have a number of themes in common. We’re innovating around the theme. Most importantly, we’re innovating around role-tailored user experiences. We have role-tailored user experience today with GP 10, which pioneered the technology in the marketplace with GP 10. We take it forward with AX 2009, you saw the demonstration a few minutes ago with role-tailored experience in AX 2009. We will have it in NAV 2009. We will have it in our retail solutions. We will take it to the next level in GP 11 and SL8 that you will see in the marketplace towards the end of 2009, early 2010. And, of course, you will see incredible user experience innovations in CRM 5. We’re talking about CRM 4 at this conference, and already we’re looking at CRM 5 and we’re telling you what are the core themes with CRM 5.

Business intelligence is another very important common theme across all the products. Business intelligence delivers in the context of your business applications. As you saw in the demo of AX 2009, as you saw in some of the screen shots that I showed earlier today, our goal here is to make sure that the user of our products doesn’t have to step out from their experience in order to see business analytics. They’re viewed in context, they’re shown within the same window. They’re shown just when the people need to see them.

So that’s roadmap cadence, and that commitment to all of our products should give you confidence that the investment you made in Dynamics is the right investment. And the roadmap that we have for this product and the innovation that we continue to deliver to you is another proof of that investment and how that investment will extend over time and continue going forward.

It became an excellent tradition at the Convergence conference for us to recognize our best customers. Here today to recognize 12 of our best customers who have some truly unique ways they use Dynamics products and truly unique ways they deployed the technology. We recognize them in different categories, whether it’s innovation, whether it’s environmental sustainability, whether it’s increased usage and operational efficiencies that they achieved with our product.

So I want to use this opportunity to congratulate those award winners. You had a chance to meet many of them over lunch today. Let’s give them a round of applause. (Applause.)

Many of those customers are here at Convergence, and many of them here are to share their stories and share their success. Many of them have written case studies. I would encourage you to look at those case studies and talk to those customers if you happen to see them in the audience because it’s all about community, it’s all about advancing business forward with us and the community working together.

Now let me talk about the third very important key area related to helping you drive your business forward. When we talk about innovation, when we talk about ways we feel we must advance our solutions forward, there are four very important elements that I hope by now feel familiar to you. It’s about delivering software that your people would love. Its delivering solutions that would help your people maximize their productivity. It’s about delivering solutions that synch with your systems, it’s about making full use of Microsoft platforms and making sure that you reduce your cost of ownership by doing that.

It’s about fueling business productivity. It’s about making sure that you deliver a rich set of features and will continue to innovate on unique ERP and CRM capabilities. We’ll look at some industries, and we enable those industries to our ISV communities to deliver very specific vertical and micro-vertical solutions. And, of course, it’s about business analytics and innovation that we plan on driving in that area, as I mentioned when I described the roadmap, how we’re going to be investing in business intelligence and business analytics across all of the Microsoft Dynamics products and how that investment will help you and your users make more intelligent decisions about your business.

Steve spent a bit of time talking about the Microsoft stack and this entire Microsoft platform. He talked about how that platform and how the investments across those areas changed in the course of the industry evolution. Today, we at Microsoft are truly proud on the breadth of technologies that we can deliver, with the infrastructure where we innovate from data centers to the desktop, with the rich set of productivity tools coming from our office applications, with the analytics and collaboration tools helping you achieve the maximized teamwork between people in your organization, and of course, investments in application platforms to truly help us advance the Dynamics capabilities and make Dynamics take full advantage of the industry standard application platforms.

The value of the Microsoft platform for your business, realized through Dynamics, taking full advantage of this Microsoft platform is the math. First of all, it helps you with integration. It helps you make sure that the systems look alike and work together, but most importantly, it helps you reduce overall cost of ownership of the solutions, it helps you do more with less, yet realizing full potential of the system.

It’s also helping us deliver what we call business applications of the future today. It helps us deliver on our promise to you. Of course, delivering on our promise to you is, yet again, about people. It’s about making sure that different people, different roles, different personas in your organization can take full advantage of the innovations that we’re delivering through utilizing the richness and the power of the Microsoft stack. And whether it’s a person in operations, we can take full advantage of that integrated innovation by tying together Dynamics NAV and live search capabilities. Whether it’s the person in sales and marketing who can integrated Microsoft Dynamics CRM with Microsoft SQL Server 2008 and have a very creative look and have very creative reporting on their numbers, and thus make much better decisions on their forecasts in their pipeline.

Whether it’s a finance person taking full advantage of integration of Dynamics and SharePoint and effectively taking the data from Dynamics itself to the breadth of the users in their organization through the use of SharePoint. These are all great examples of how the power of Microsoft delivers to unique roles and unique personas in your organization, therefore helping you maximize productivity for your people.

Microsoft Dynamics and Windows Essentials Business Server

It’s also very important to note the innovations that we’re taking advantage of and delivering to IT professionals and to our partners who act as IT professionals in smaller organizations. In that context, today we are announcing this Microsoft Dynamics — all future versions of Microsoft Dynamics products will have full support for Windows Essentials Business Server.

Windows Essentials Business Server is effectively the version of Windows Server designed for medium-sized organizations. Many of you are familiar with Small Business Server that we have on the market for quite some time now, and Windows Essentials Business Server is the broader offering that is effectively a combination of several solutions pre-integrated together. It gives you Windows platform, it gives you all the security that medium-sized organizations need, it gives you all the management and manageability that a medium-sized organization needs, it gives you collaboration. It’s a very important category, but it’s pre-integrated together, therefore reduced time to deploy solutions and reduce cost. Dynamics will be integrated with Windows Essentials Business Server and administrators will be able to administer Microsoft Dynamics CRM products within the same familiar management experience of Windows Essential Business Server. So that is our commitment to IT professionals and to our partners who act as IT professionals for our customers.

Steve also talked about the power of choice. The power of choice is a truly unique differentiator for our approach to software delivered as a service. That is truly a buzzword in the industry today. Many vendors want to talk about software delivered as a service, many people want to talk about how they’re going to get their software and change the whole proposition by offering it from some data center somewhere in the cloud.

One thing that Steve talked about, and I want to reinforce, because it is very important, it is not about how the capability is being delivered to you, it’s about what that capability is all about. It’s about your process, it’s about your business, it’s about your configuration. That’s what it’s all about. And it’s our job to make sure that you continue to get your process, your capabilities delivered to you, in most cases by our partners, through the variety of choices that we give to you. Whether it’s deployed on premise on your own computers, whether it’s hosted by our partners, the approach, frankly, is the most appropriate, in our opinion, for business applications at large. Or whether it’s Microsoft CRM Live that will be hosted by Microsoft. That power of choice is what gives you the opportunity to continue to drive your process, to continue to take advantage of your unique configuration and yet do it in a fashion that reduces overall cost of ownership, continues to reduce it and also speeds up time to market.

In that area, it’s also worth mentioning another very important category of services that we are starting to deliver to you, our customers, and continue to enhance the experience. It’s effectively a combination service, the services that are enhancing the service or software that you already use, business services that effectively attach to existing scenarios that you already use, attach to your existing business processes, thus extending your experience and making your experience even better.

Microsoft Dynamics Services

Today, here at Convergence, we are announcing three very exciting attached services — services that effectively connect to existing Microsoft Dynamics services and software. First of all, we’re announcing keyword marketing service, an experience that would effectively allow you to connect Dynamics CRM with Microsoft AdCenter, and would allow you to automatically run marketing campaigns and make sure that you maximize your marketing investment.

We’re also announcing Marketplace Service in our partnership with eBay, where, effectively, you’re going to be able to take excess inventory, if you identify it in your ERP system, and automatically offer it through eBay auctions, and then connect the two experiences and make sure that as sure as an eBay sale commences or completes, it is reflected in your ERP system and you don’t have to change the experience and you don’t have to change the user interface.

And the payment service, last but not least, a very important category of services that, yet again, will expand the experience that you already have with your Dynamics ERP solution, whether it’s credit card processing and partnership we’re entering with Chase, or payment services we’re entering in PayPal, you will have very tightly integrated experience without having to leave your ERP screen, without having to leave your business application, you are going to be able to validate credit cards of the people who are buying from you, and automatically reflect it in the invoices that exist in the system, yet again, without having to change the experience, without having to leave the tool of your choice.

So with that, I would like to welcome here Matt G. yet again, our fabulous Matt, and Bruce Kasrel, who will show us software plus services in action and those attached services that we’re announcing today. Fabulous Matt G. everybody.

MATT G.: Thank you, Kirill. (Applause.) You know, Kirill, you did a nice job of announcing some of those attached services up there. For a lot of our customers, even our best and our brightest, some of them might just see those as words on a slide, they really don’t quite understand what it means. Some customers and some partners and even some folks within Microsoft haven’t gotten it yet. We’re going to show you a little bit what that looks like.

Now, one of those customers that absolutely does get it when it comes to adding software plus service is a case study we did a while ago, and that customer is here today, they’re the University of Wisconsin. (Cheers.) Now, the University of Wisconsin, and their loud partner, FBA, were already recognized in the education industry for their work in getting rid of that surplus inventory, like Kirill was talking about earlier. By creatively using new means of using their brick and mortar stores to get rid of some of that and turn that into a profitable business for them.

Well, they weren’t getting quite as much out of that as they could and they realized, you know, if we could unload some of this stuff with online auctioning, it would really help. So today we’re going to show you what that type of system would look like within one of our Dynamics products. So we’re going to bring up Dynamics GP in this case and show you what it might look like to have one of those auctioning services inside Dynamics GP.

Now, first of all, when you’re implementing a software and a service, you’re going to want to create some navigation, some presence within the software portion to connect that and today we’ve added an eBay transaction portion to the sales area page within Dynamics GP. You can see I’ve got my normal things that you’d want to see in there when you’re doing online servicing, how to sell, get your sales lists — but the first thing we want to do today is list some items up on that marketplace.

So let’s click on that and you can see my inventory items will pop up. We’ll sell a few of these. And in honor of Wisconsin, we’ll sell a popular item there, we’ll sell some Green Bay cheese heads, go Packers. We’ll click on “next” and then obviously I need to take those and put them up into the cloud, into the server. So I’ll log in using my Windows Live ID, and that will take me into that Microsoft Dynamics marketplace services that Kirill mentioned earlier, and you can see —

PARTICIPANT: This is Microsoft Dynamics Live service that — now you’re living in the Web.

MATT G.: Yeah.

PARTICIPANT: And you jumped into the Web.

MATT G.: I’ve got the software where it belongs and the services where they belong, up in the Web. So now these items have made that transformation, using the Web service tools that are available in all of our Dynamics service products. I can go in here and edit one of these, and you can see all of the things that I would normally want in an auctioning service, things like photos, how to handle the categories and all that sort of thing.

And when I get all that entered, it’ll go into an eBay ad that looks something like this. Now, with an exciting model like this —

(Crosstalk.)

PARTICIPANT: That’s not gonna sell, Matt.

MATT G.: I’m pretty sure we’re going to get oodles and oodles of sales. Let’s take a look what that looks like when they come back down, and we’ll go back into Dynamics and I’ll download orders and fees, and it looks like, again, through the Web services available through Dynamics, we found at least one sucker who was going to buy the Kirill version of the Green Bay cheese head.

We’ll go over to my eBay transaction list within GP and I’ll see that order 2231 is indeed — I went a little too fast, let’s go back to the other machine, there it is. I’ve gone back and there’s my eBay customer and there’s that order ready to go out. So a combination of those. It’s kind of a loose coupling. You can see where I was in the software portion and then I went up to the Web. Now —

KIRILL TATARINOV: It’s almost hard to see where you are in the tool and where you are on the Web — they’re so tightly integrated.

MATT G.: It’s blurred. Now, the Dynamics AX team for their 2009 releases coming up have taken that even further and coupled it with a credit card authorization service. Now, we’ll show that off a little bit here.

So, again, we’re selling cheese heads. And one of the first things that you want to do as a —

KIRILL TATARINOV: This is AX. We’re in AX.

MATT G.: We’re in AX 2009, which is coming out — I’m on the sales order entry window. I’m going to sell a cheese head. Someone calls in, they give me their credit card. Now, I want to pre-authorize them, I want to make sure that they can pay for that. So let’s go in and go to the pre-authorization function within, again, Dynamics AX 2009. That’ll go out and seamlessly, behind the scenes, go out, validate that credit card. It comes back and says, yes, this is somebody who’s credible, it’s a real, live credit card, it’s live, all that sort of thing.

And then it’s, of course, keeping all of the information stored so I can check out that authorization history. So I’ve got great auditing skills, et cetera, for that. And then I go to the warehouse. I pick it, I pack it, I ship it out the door, then as part of the invoicing process, I need to take that payment and credit to the customer’s account, so I’m one more step away and, boom, it’s very seamless. Again, software where it belongs, service where it belongs, combined into one solution.

So that’s great for a sales order or an inventory-management type role. Bruce, why don’t you show us a little bit about what this would look like in a marketing world.

KIRILL TATARINOV: See what Bruce has to show us.

BRUCE KASREL: Thanks, Matt. Now I’m going to go ahead and show you an example of a software plus service in the marketing role. And we’re launching a new service called the search engine marketing service. And what that service does is it talks with Microsoft Ad Center, and Ad Center is a platform for placing ads on sites like Live Search, MSN, and even Facebook.

And so this service lets you create, edit, and manage your campaigns right within your Dynamics software. So I’m in a marketing role. Matt here comes over and he says, hey, you know, I want you to get those cheese heads out the door. We’ve got a great model, we want to start selling some more. So I’m going to go ahead and show you how you use it in a typical marketing product like CRM, in this case CRM Live.

So the first thing we can do is right within the interface, we can go ahead and pause the campaign so while we’re working on it we can go ahead and stop it so we can make adjustments. And we can see right here in our interface, we’re going to see what are we starting with, what’s our budget, what are we targeting for impressions and things like that. So now what I’m going to go ahead and do is resume the campaign and we’re going to go ahead and edit that campaign and maybe even add some key words right here, right within the service.

MATT G.: Hey, Bruce?

BRUCE KASREL: Yeah.

MATT G.: I was looking out here on your window, you do have some nice set of keywords. But I think if we put our thinking caps on, Bruce, I think we could come up with a few more creative words to sell cheese heads. Are you ready?

KIRILL TATARINOV: Yeah, put your creative hats on, guys.

MATT G.: I’ll put on my thinking cap here. Kirill, do you want to put one on as well?

(Crosstalk, cheering.)

MATT G.: There we go. All right. All right, so let’s think —

BRUCE KASREL: I think we’re ready, I really do.

MATT G.: Yeah, I think —

BRUCE KASREL: I think it’s just us now.

MATT G.: Yeah, now it’s just us with the creative thinking cap. Packer backer.

BRUCE KASREL: Yeah, I think, that’s definitely —

(Crosstalk.)

MATT G.: And I do know that we’re up — we’re in Wisconsin. So let’s think about our Canadian friends, so we’ll need a French version, French-Canadian version. High school French, what is it?

BRUCE KASREL: Oh, God, it’s a long time ago.

MATT G.: Anybody know?

BRUCE KASREL: Let me try — I think it might be —

(Crosstalk.)

MATT G.: — fromage.

BRUCE KASREL: — fromage.

MATT G.: That’s right. These hats make you smart. (Laughter.)

BRUCE KASREL: Yes, exactly. Well, actually, the software is very smart as well, and it can actually work with you through the process of choosing keywords, so I think we can take off our thinking caps and let the software do the work for us. So I can go in here and say find keywords and pull down a bunch of options that we can use to get keywords. For example, we already have some keywords here. It could go and say based on those, here are some other keywords. It can look at that Web site you created and look at that and pull the content from that and create keywords from that.

KIRILL TATARINOV: Automated generation.

BRUCE KASREL: Exactly. And because it’s a software plus services, it can actually go inside your CRM software, find the documents there and use them to produce keywords.

KIRILL TATARINOV: And that’s for either hosted or on-premise?

BRUCE KASREL: Absolutely. It will work in both ways. So the surface part of this will work in both CRM and CRM Live. And also I can go ahead and import keywords that my agency has, it supports the typical file formats for ad agencies.

So once we have our keywords, the next step is to create the ad that would run with those keywords, and this walks us through that. So I’m going to go ahead and click on “manage ads” here. And we already have a few ads already saved up here, so I can go ahead and click on this one here and maybe edit that. And, Kirill, just like you saw in the eBay example where it walked Matt through all the different fields that the Web service would need to publish, well we have those over here, so it walks me and says, here’s the size of the headline, here’s what URL would happen if they would click on the ad, and right here I can even see the whole ad in preview mode.

Now, what’s great is this will then be communicated much like the other services, out to the cloud, and this will run in this case Live Search and the ads will run, people will click on the ads, and then I’ll get results and they’ll stream back into CRM, and I can see those right here. And what’s great is I can see them in two contexts: The first context right here is really about what are my ads doing as a group, and over here, what are they doing against all the campaigns that I might be managing within my software and CRM.

MATT G.: Hey Bruce?

BRUCE KASREL: Yeah.

MATT G.: This is all well and good and great, but I really want to know — it’s all about generating leads at the end of the day.

BRUCE KASREL: Yeah, absolutely.

MATT G.: I mean, CRM’s great at tracking leads and all that. I’d love to see it if you could combine those together so I could see the ads and the leads all coming together so I know which ones are the most effective.

BRUCE KASREL: Well, that’s — you can see right here, we do have our leads listed. And we’ve taken it a step further in that you can actually see the relationship between your advertising and what leads are generated. So I’m going to go ahead and click —

(Crosstalk.)

MATT G.: — measure the effectiveness of your marketing campaign straight from here? Is that what you’re saying?

BRUCE KASREL: You can not only measure it, but you can continually refine it and see how it goes over time, because leads are tracked within the software.

MATT G.: That is way cool.

BRUCE KASREL: Yes, it is. And so here we are, and we have a screen here, and I’m actually going to see which keywords are generating the most leads, and then down here I can actually see which leads they are, which ads they clicked on, and this is all within the CRM software, so they’ll be tracking this and looking at this all over time. This is another great example of software plus services. Here’s our CRM software down here, and here’s our Ad Center Web service up here.

Now, there’s one other feature which I didn’t get to show which is a really interesting feature that we’re adding to this, which is it will optimize the bidding on your search engine based on this relationship. So it’ll be more aggressively buying and bidding on keywords that are generating leads. So we’ll actually be effective for you. So this is a great example.

MATT G.: That’s terrific.

BRUCE KASREL: Yes, it is. And this is a great example of software plus services in the marketing role —

MATT G.: And we saw it how it works in a sales order role or in an inventory management role. We challenge everyone here to get creative on how they might want to use services that they see in the cloud for financial roles, banking roles, all types of different Dynamics integrations. There’s hundreds of services in the clouds that can be integrated into your business using the tools that are available through Microsoft Dynamics. Kirill?

KIRILL TATARINOV: Terrific.

BRUCE KASREL: Thank you.

KIRILL TATARINOV: Bruce.

BRUCE KASREL: Thanks, Kirill.

KIRILL TATARINOV: Thank you very much. I appreciate it, guys. (Applause.)

So hopefully this gives you an idea of what is the true power of software plus service, as opposed to just software as a service. This is also just the beginning. This is just the beginning of our continuous innovation of delivering more and more of those services that attach to our existing software, whether it’s hosted or delivered on-premise, or delivered by our partners. That is the difference that Microsoft brings to this whole value proposition of Internet and Web for your existing investments, making your investments only bigger and better.

So today we talked about community of business. We talked about our partners, we talked about our customers, and we talked about how Microsoft and our partner ecosystem help us advance your business. Help us help you get more of your people on the business applications. Help us help you be more productive and make sure that your people are more productive, and help you realize the promise of people-ready software.

We talked about adaptability and we talked about some concrete examples of how investments we’re making in GRC platforms, government risk and compliance platforms and Dynamics AX 2009 help you realize full advantage of that innovation in making sure that your business stays ahead of change.

Finally, we talked about software. We talked about innovation which we’re delivering in both software and realizing the whole Microsoft stack, mapping it to concrete people in your organization. And we talked about software plus services and how it helps you maximize the investment in Microsoft Dynamics.

But most importantly, it is not just about technology. It’s not just about business processes. It’s not just about methodology, it is about people first of all and most of all. It’s about enabling people in your organization to realize their full potential and help you advance your business and help you drive better business results through the investments that you get from us and our partners.

Thank you for being at the center of our community. Thank you for joining us here at Convergence 2008. Please enjoy the conference.

(Applause.)

END