FASTforward ’09

KIRK KOENIGSBAUER: Well, good morning, everybody. Welcome to FASTforward 2009. I’m very excited to be here today with you. I know lots of people came from long and far to join the conference. I think Bjorn mentioned yesterday 29 different countries I think are represented. It’s fantastic to see the interest in enterprise search, and we really appreciate you taking time out from your homes and your family life and your work life to be here with us here in Las Vegas.

Yesterday I thought was a great day of sessions, but I particularly enjoyed Don’s session, the first session that we had yesterday, around growing up digital. Although I will tell you as someone who was born between 1965 and 1976, a Gen Xer, maybe there are some of you here, I think I was referred to as puny and potentially inconsequential in terms of the generation, so that’s something that I’m still wrestling with personally.

But we’ve got, as Jared mentioned, some good content, to talk about the next couple of days. In particular today, we’re going to give you a look forward. Certainly there’s a little bit of celebration that we’ll do. It’s been about a year since Microsoft acquired or announced the acquisition of Fast Search and Transfer. But we’re really going to focus the time today on how things look going forward, and what our plans are.

You know, to put this into context, when I visit with customers around the world and talk with folks, I get lots of different questions – questions about how is the integration going, how is the culture, how are the cultures coming together and the people and the leadership team, and so forth, all really good questions.

The three questions I get most really center around a couple of key points. No. 1, what’s Microsoft’s commitment to enterprise search? We get questions around: What are you going to do with the FAST asset? Are you invested in both the Internet side of the business, as well as business productivity? Some key questions there.

The second question that I get consistently is: What’s your vision? Now that you have the FAST and the Microsoft assets together, how do you think about bringing these things forward, what’s your vision for enterprise search into the future? So, that’s the second sort of core question I get.

And then the third one gets right down to brass tacks, which is, what’s your product roadmap? What are the changes that you’re going to make? What can I expect in terms of a release rhythm. What are the products and the SKUs? And how is the packaging going to change? And so forth.

So, today in this speech I’m going to focus on those three topics: our commitment, our vision for enterprise search, and then our product roadmap.

The first area I want to spend some time on is around this concept of our commitment. We think about commitment in a couple of different ways. The first way that we think about commitment is specifically the technology investments that we’re making around innovation, and there are a couple of key points I want to leave you with.

No. 1, we have a very substantial R&D investment in the enterprise search space. We’ve brought together our FAST resources and the resources that we have at Microsoft on the SharePoint side around enterprise. We’ve got roughly over 300 engineers working on enterprise search itself: in Oslo, in Redmond, in Germany and Australia, a great global development team, which is incredibly important, with an information-centric, information oriented business.

The second big investment that we’re making is with a service that we have at Microsoft called Microsoft Research. Microsoft Research has been around for about 15 years. It is one of the largest R&D organizations in the world.

About 15 percent of the projects in MSR are focused on search broadly. Some of that is in the consumer-facing applications. Some of that is directed towards enterprise search. And they’re working on all kinds of cool stuff around distributed indexing and interaction patterns and multimedia search and new ways of developing rich experiences. A lot of that will end up landing in the different products that we’ve got.

Then, of course, probably one of the biggest investments that we can point to as an example of our commitment on the technology and innovation side is in acquiring FAST. It was over $1.2 billion. It was the third-largest acquisition that Microsoft has ever done on almost any measure, whether it’s market capitalization or the size of the company and the geographic footprint and so forth; so, certainly another big note of our investment there.

But then it’s also important not just to have the great technology. How are we going to support you, our customers, and what’s our commitment and dedication there? There what we’ve decided to do is to maintain a dedicated global sales, support, and services organization around all of our enterprise search products, including FAST. That’s something that we feel is particularly important. These are complex products. You need to have the team behind you to get these up and running and deployed and maintain them going forward.

We’ll also continue – and we’ll talk more about this in the roadmap session as well – we remain committed to a breadth of offerings, and a breadth of offerings really on two dimensions. One is around not just focusing on business productivity search, but also super, super committed to focusing on the Internet side of that business as well. That’s something that sometimes goes a bit unnoticed at Microsoft, because people think, well, you know, the information worker group at Microsoft, the SharePoint team was sort of leading point on the acquisition of FAST and that’s all inside the firewall stuff.

Not true. We’re very committed to business productivity, don’t get me wrong, but we’re also very, very committed to how we think about delivering enterprise search in these Internet facing scenarios as well.

The other thing around breadth of offerings is that we also have offerings targeted at our largest enterprise customers with FAST and with SharePoint down to small- and medium-sized businesses with a product that we have called Search Server Express. So, we’re really trying to provide a broad portfolio of needs in the space.

Then the last point that I’d mention, too, is that we remain committed to cross-platform support. And for those of you that have come from the FAST world, that is certainly an important thing. We are offering today 10 years of support for the current FAST products, whether they’re on Windows or non-Windows operating environments. Aand going forward we will continue to innovate on non-Windows operating environments, too. Certainly there are things that we’ll do on the .NET platform, particularly when we think about integration with SharePoint and so forth, where it can really get some benefits on the Windows platform, but we are really committed to offering a set and suite of cross-platform products around FAST.

So, to talk a little bit about how things are going, we wanted just to put a couple of points up, because while acquisitions of this size certainly have lots of complexity, and there are always bumps in the road, we are very, very pleased with how things are going. Across all of the different measures that we target, we’re sort of beating our expectations around the acquisition itself.

Let me just give you a couple of data points in terms of how things are going.

This product I just mentioned, Search Server Express, it launched in March or last year. We’ve already done over 100,000 downloads of that product. That’s a free product. It’s designed again for small- and medium-sized businesses, it’s designed for potentially departmental use in the enterprise space, and very rapidly we have got a fantastic distribution of this offering, which is showing the breadth and interest in the enterprise search space itself.

More towards the enterprise side of our business, roughly a third of our customers, our enterprise customers, our largest customers have deployed a Microsoft search solution. That can either be SharePoint or FAST, in some cases this Search Server Express product, but that is explosive growth, particularly in the last 12 months, and so we’re really excited to see that, too.

The partner ecosystem is thriving, and both on the SharePoint side for sure, but also FAST specific partners. Just in the last six months we’ve doubled the number of partners available to help support you and your needs with systems integration work and independent software vendors and so forth, and so that’s really wonderful to see.

We’ve also been fortunate to have some great analysis recognition. There’s a quote here on the screen: “What this purchase will do is allow Microsoft to go to the largest companies in the world and say we can handle every search need you ever dreamed of” — Witt Andrews from Gartner. So, it’s great to get that industry support.

For sure though the biggest measure of how we’re thinking about the business is customer adoption of the products themselves. Bjorn mentioned yesterday Hewlett-Packard. You can see we’ve got a logo on the screen somewhere for Hewlett-Packard. They’re using it for HewlettPackard.com. Other companies, lots to go through: Deutsche Telekom serving millions of users in their online site for e-mail, FAST is now the standard there; Aetna using FAST both for inside the firewall scenarios, as well as their customer facing presence, so customers can go there and get better information on health care and their different offerings, as well as their employees getting better information to help service those customers inside the firewall, so some wonderful examples there.

So, that’s a little bit about our commitment. I want to shift gears a bit and talk a little bit about our vision going forward.

To give you a sense of this, I’d like to frame it by first starting with our vision at Microsoft itself. And our vision at Microsoft and our strategy is quite simple: We have an aspiration to write the world’s most important software. That’s a bold goal, it is an aspiration. There are elements of our business where we feel very, very good about the progress that we’re making, and there are elements of the business where we’re emerging and we’re just starting, and we have more work to do for sure.

In some cases — and let me actually read the vision statement: create experiences that combine the magic of software with the power of Internet services across a world of devices. That’s our statement.

And we take this concept and we apply it across all of our core businesses. If you look at the bottom of the slide, you see desktop and enterprise and online and devices. These are the core businesses at Microsoft itself.

So, whether it’s with Office and Windows in the desktop space or on the Windows Server operating environment or SQL Server or Exchange or SharePoint in the enterprise space, which has become a very big business for Microsoft. In the online space whether it’s consumer offerings like MSN or Windows Live, or whether it’s new products that we’re offering like SharePoint Online and Exchange Online in the cloud for businesses, our new Windows Azure development environment in the cloud – a very, very important part of our business. Or in the world of devices, the world of devices ranging everything from software to phones and MP3 players and services on Xbox and so forth. So, this is how we think about it, creating experiences that combine the magic of software with the power of Internet services across a world of devices.

So, what does this have to do with search? Well, it has everything to do with search. We think about search as an important part of the user experience in each of these different businesses.

Now, sometimes it’s obvious, sometimes it’s a simple search box in Outlook to read your mail or on Windows Live to do an Internet search, but sometimes it’s not obvious at all. Increasingly we’re using search-based technologies to create rich, personalized, dynamic experiences.

With search, as we’ve talked about the last couple of days, you can move through mountains and mountains of information from a variety of different data sources. And at extreme scale deliver the right information to the right person at the right time in a highly, highly personalized way, and create with that these really, really rich experiences.

So, the theme of our conference today is around engaging users, and we feel like search is the key to engaging these types of information experiences and will be going forward.

Some of these are going to show up in things like online advertising or how we design Web sites on the Internet-facing side. Some of it will show up inside the firewall with how we think about business intelligence portals and collaboration sites and making content management and compliance and all those kinds of things simpler. But search really, really is at the core of how we think about designing these user experiences themselves.

So, what I’d like to do for a quick moment is pause, and we’re going to show you a video. The video is a futuristic video, think 10 to 15 years out, and it’s going to give you an example of some of the rich experiences that could be powered by search, and using these information access technologies.

As you look through it, and as you look at the examples, think about not only the experiences themselves but where search could actually be a piece of it.

So, I’m going to roll the video.

(Video segment.)

KIRK KOENIGSBAUER: Great. So, pretty cool stuff, and as you look through those different scenarios, many opportunities to think about how search could be powering those types of experiences.

A couple resonated for me: The ability to have my health records no matter whether I walk into a doctor’s office or go to the emergency room, my lifelong history of health on a device, that would be a pretty cool thing to have.

Think about that woman shopping. As someone who goes to the grocery store himself and gets lots every time I go through their trying to find different items in my shopping cart, you know, having a device to help you navigate and making sure that it’s mapping back to the items that you need to purchase, pretty cool stuff.

To ground this a little bit more in reality and what’s available today, I’d like to do a quick demonstration, and invite my associate Jared Andersen to come up on stage, and Jarrod is going to walk through some of the capabilities that FAST can provide today to create some of these rich user experiences based on search. So, Jared, welcome.

JARED ANDERSEN: Thank you, Kirk. Good to see you.

KIRK KOENIGSBAUER: What have you got?

JARED ANDERSEN: Well, you just saw in that video Microsoft has this tremendous vision for making search a universal part of every experience that you can have with the computing device. I don’t think any other company in the world is better positioned to make that happen.

We believe that those experiences should be visual, that they should be conversational, and that they should be actionable, and I’m going to show you three things today that I hope will make that appear real to you.

One is I’m going to show you a visual search experience built on FAST ESP that’s designed to help me see the information that’s available to me at my fingertips.

The second thing I’m going to show you is I’m going to show you how search can initiate a conversation, helping me interact with people and information that exists in our enterprise, so that I can get better answers to my questions.

Then the last thing I’ll show you is how I use search to take action.

My task today is to prepare for a meeting that I have with a customer later this afternoon, Leif Bank. So, I need to be able to collect the resources that I need to be successful in that engagement.

So, to begin with, I use my portal here that’s again built on FAST ESP. Everything that you see here is driven by a search experience.

I have, of course, at the very top a search box where I can type in my queries and questions, and I can see below answers that it will give me.

Right now it’s showing me content that’s relevant to my role. I see here in the center a list of PowerPoint presentations, but also at the top I have a set of filters that I can select. I can identify whether I want to see presentations, documents that are in Word or PDFs, people that we have, projects, customers, and even media.

Then on the left I can see information, entities and ideas that have been extracted from that content. I can see customers, industries, products, and other concepts that might be relevant to the information that I work with; and on the right, people that we have inside of our business that again are relevant to the queries that I perform.

I’m going to do a quick search for information about the customer that I’m going to go meet with. I’m just going to search here for Leif, and see what we get.

So, it doesn’t look like there’s a whole lot of information here. I’m going to guess that Leif Bank is a new prospect for us. FAST search has just brought back some information that exists in our structured CRM system.

But FAST also has this fantastic ability to bring together structured and unstructured information, so that as I look up above here, I see that there is a wiki that we are maintaining about this prospect, and it shows me here that this is a new prospect that’s interested in help with strategy, risk management and finding growth opportunities for the future.

Risk management sounds like a fantastic opportunity for me to go and pursue in the conversation that I have with the customer this afternoon, so I’m going to spend just a few minutes looking for information that might help me with that; again another question that I ask.

Let’s see what information we have in our business about our risk management practice.

You’ll notice that the entire experience has changed dynamically to reflect the type of information that I have here in front of me, again customers and industries that are relevant, content below that’s applicable, and people that have expertise in this area.

I’m going to start by selecting just one of these documents, and you’ll notice that when I choose one, that expands to give me a much more interesting view of the information that’s there. This is a risk analysis graph. It’s clearly a whitepaper that’s giving me a rich thumbnail view of the information here. I can see who authors that. I can people that are associated with it, and even comments and tags that have been posted related to this.

And if I wanted to, I could go and add a comment myself or add a tag that would help other people looking for the same kind of information to be able to also find it in the future.

If I want an even closer look, I can double-click on this document, and get an expanded view. I can preview the entire document without even having to launch any other application. FAST is really streamlining how I access information inside my business.

And then on the right here I can see concepts and other ideas that have been extracted from this document, helping me understand why this was so relevant to the query that I had.

I’m going to step out of this real quick. Since this document might be useful to prepare for my engagement, I’m just going to add this to my wiki up above. What you’re seeing here is this ability to be able to associate content and information and people with the work that I’m engaging in. I have this prospect in a wiki that I’m using almost like a workspace, a digital canvas for collecting information about the work that I’m doing, and I’m going to put that there.

So, let me close this document for a second, and let me look at this other presentation. It’s a risk analysis presentation, and again I get rich thumbnail previews.

Now, the great secret that only people at Microsoft know about PowerPoint presentations is that there are really only about 10,000 slides in the entire world, and we just keep swapping them around all the time. I think we’re probably going to see about half of those slides here at FASTforward.

But my ability to be productive and to use PowerPoint intelligently depends a lot on my ability to steal slides from other people. So, if this is a presentation that I want to make use of in my customer engagement, I can simply right-click on any one of these slides, and you’ll see that it’s being added to this collection here at the bottom.

FAST is helping me build a PowerPoint presentation that I can go and deliver to my customer later on. It’s almost like a shopping cart experience. It’s one of those great examples how consumer experiences are being translated very well into the enterprise productivity space.

So, I’ve just added these slides to my presentation, and one other thing I’m going to do here is just add it very quickly to my wiki.

Now, I noticed as I interacted with this presentation that both this presentation and the document that I was working with before are authored by the same person, Susan Metters. Susan seems to me like one of those people who I should probably involve in this project, just to make sure I’m really prepared with all of the knowledge that I need.

Microsoft has been continually innovating in ways in which we can help you connect with people and expertise in your business. We find that so much of the valuable answers to questions that people have don’t exist in any document, it’s not encoded in any database; it exists within people’s heads. So, my ability to be able to find and tap into that expertise is what makes me productive.

So, if I’m looking for information about Susan, I can see that she’s a consultant in our enterprise integration business. I can even associate her with the wiki that I’ve been working on. And she’ll receive an e-mail notifying her that she’s been invited to participate in this space, and I can even post a comment here to give her some context for why I’ve done that. I’m going to tell her I’m pursuing a new risk management opportunity, and I’ll just add that, and so she knows why she’s been invited. Again I can connect with her after this meeting or after this work that I’m doing here, and just get some useful background information that I might want to know as I prepare for that.

One last thing I want to do with this presentation that I’m building is perhaps include a useful case study. And again the navigation at the left can be a very helpful way for me to understand or recognize what kinds of information is available for me as I’m working on this project.

I can see here, for instance, that we have two customers that I might want to use as a reference. One is City Power and Light. The other is Wingtip Toys. Given that this is a regulated industry, I’m going to go and I think the power company might be a better option for what I choose to go do. So, I’m going to go select that, and again look at the presentation. I can preview the whole thing here, and just right-click and add a couple of these slides to my presentation.

So, with just a little bit of time, I’ve gone and scoured all of the information that we have inside of our business. I’ve built also a wiki that contains useful documents, useful people, so we can engage together on this project.

What you’ve seen here is an incredibly rich experience for helping me find and act on information, and to date these kinds of experiences are a bit like magic trapped inside of a bottle. These powerful, actionable, conversational and visual search experiences are something we want to make much more broadly available. In just a second here I’m going to let Kirk talk about our roadmap for making these available to everyone. Thank you.

KIRK KOENIGSBAUER: Great, nice job. (Applause.)

So, a bunch in the demo itself: We saw search being brought together with things like social computing and expertise search, and lots of different ways to produce these really rich, dynamic user experiences that go beyond a simple text box and 11 blue links. We think that that’s really the future of what we can do to create these really rich experiences to drive more productivity. Whether it’s productivity inside the firewall or experiences that are outside the firewall, there are lots of great examples where using FAST engines today you can see some really wonderful experiences that are absolutely search driven, that are generating nice, rich content sites. In fact, you’re going to see a bunch more demos tomorrow from Bjorn, who’s going to show a number of different scenarios using some of these techniques.

So, we’ve talked a little bit about our commitment to this space, we’ve talked a little bit about our vision, you’ll get more on that today from Bjorn. I want to shift gears a little bit and talk about our roadmap and some of the solutions and areas that we’re going to be investing in, and some of the key changes that we are making.

I want to start by first being real clear that we are focused at the highest level in two core scenarios: one, as we talked about, these scenarios around Internet businesses; and two, around business productivity.

On the Internet business side, again we want to be super clear we’re committed to this space. Here it’s all about enabling these rich user experiences to drive users and engagement and to drive revenue, to drive commerce on your Web site. And on the business productivity side it’s being able to create these kinds of rich experiences that you just saw here for things like collaboration sites and portal sites and content management sites, integrating it in to things like risk analysis and call centers, and effectively making your information workers more productive by giving them better tools to find, discover, and use information inside the organization itself.

So, with this frame, let’s get in a little bit to the specifics around the roadmap.

So, we’re announcing two new products today here at FASTforward. The first that I want to talk about is called FAST Search for SharePoint — again FAST Search for SharePoint.

So, what is FAST Search for SharePoint? Well, it is FAST ESP. It is the full functionality of FAST built on the 5.3x platform, with all the scale, all the connectors, all the high-end capability that you’ve grown to see.

But it’s tuned for SharePoint. It’s tuned to integrate deeply with the SharePoint product itself. SharePoint provides a rich platform, an integrated platform for collaboration and content management and business intelligence and workflow and business process. And by taking the high-end capabilities of search and bringing them into the platform with SharePoint, you can really begin to generate some of the rich experiences that you just saw Jarrod demonstrate.

Now, for those of you that are not committed to the SharePoint platform today, and are wondering, “Well, gosh, I’m not a SharePoint user, we don’t have that on our roadmap right now, what options will I have for inside the firewall type of deployments.”, and certainly we will continue to sell FAST ESP in a standalone way, and cross-platform as well, so I want to make sure that that’s clear, but the focus of this morning’s conversation is really around FAST Search for SharePoint.

Now, the third key piece I want to mention around this is that we are delivering this product we believe at incredibly lower cost relative to what you would get today if you were buying FAST standalone.

Effectively we’re going to be able to achieve for most large organizations upwards of 50 percent cost reduction over the current licensing costs of these standalone deployments with our new packaging model, and so let me take a step back and tell you what that is.

First, we’re going to make it simpler. We’re going to move to a model which is effectively user based or per user. We talk about the licenses for this at Microsoft and what we refer to as a Client Access License or a CAL — I’ll use that acronym sometimes.

Now, to make it even simpler in terms of moving to this per user offering, we are effectively going to include the per user rights to FAST ESP inside of the existing SharePoint per user pricing model, specifically the enterprise CAL, the highest tier of our SharePoint user license.

This is effectively where you get that savings of over 50 percent, depending again on the size of the organization. It can go upwards of 75 percent potentially.

Now, there’s still a server to purchase, and the server that you purchase is called FAST Search for SharePoint. We’ll charge roughly $25,000 for that server, and you decide how many you need depending on your installation.

But again overall we’re able to make the model much more simple, include the user rights as a part of the SharePoint user rights, and then offer this low-cost server to enable these really high-scale deployments with FAST and SharePoint together.

Now, you may be asking, when is this available? Well, we’re going to ship FAST Search for SharePoint with what we refer to as “wave 14,” or our Office 14 wave. And while I don’t have a specific date to announce today, we basically ship the Office 14 wave with Office and SharePoint and Excel and Exchange and our other servers and so forth on a release cycle of roughly every 36 months, plus or minus a few months, depending on that specific release cycle. We’re well underway in our development at this point.

So, that’s FAST Search for SharePoint. It’s FAST ESP tuned for SharePoint at significantly lower cost and a simplified packaging model.

Now, you may be saying, OK, Kirk, that’s great, but I want it now. I got that you’ve got some innovation coming in this wave 14 timeframe, but I want to take advantage today of the new packaging benefits that you’ve got, you’re a current SharePoint customer.

You know, effectively what we’re going to do is we’re going to provide a licensing bridge so SharePoint customers today or folks that purchase SharePoint, say, over the next couple of months, can effectively take advantage of this new packaging plan.

So, if you’re a SharePoint customer, you can purchase this new server called ESP for SharePoint. It’s effectively identical in price to the server that you’ll get with FAST Search for SharePoint going forward. And it gives you a bridge to effectively start using with your SharePoint enterprise licenses that you’ve got today ESP 5.3 inside of your deployments. So, this will hopefully give you an opportunity to recognize the benefits now of the packaging change with the release of the new software with wave 14.

So, let’s shift gears a bit and talk about the other side of the business, and that’s on the Internet facing side. Here we’re announcing the codename for a new product called FAST Search for Internet Business. FAST Search for Internet Business will also ship in the wave 14 timeframe, although with this product, because it’s not dependent on SharePoint, we will have a more rapid release cycle of roughly every 12 to 18 months. So, we’ll ship it in the 14 timeframe, but from there on you should expect roughly a 12- to 18-month release cycle.

So, what is FAST Search for Internet Business? Well, again it’s FAST ESP. It’s the next evolution of the 5.x platform. And there are three core things that we wanted to highlight with the release itself.

No. 1 is technology innovations around what we call interaction management. This is one of the key technologies that we are enabling to build these rich, engaging experiences. It will help businesses manage campaigns and promotions and merchandising in a way that reduces the burden on IT, which will deliver more agility in terms of how you can drive and power your Internet presence.

The second key innovation in this offering is something that for those of you that were here last year at FASTforward may have heard of called Content Integration Studio. So, we’re excited to announce that we’ll be delivering this capability in FAST Search for Internet Business.

Content Integration Studio is at the highest level a way to help you manage diverse types of content. There’s a graphical interface there that can take text analytics into BI and manage the pipeline for content management and database processing and so forth. So, this will hopefully streamline the way that you manage the variety of different content sources that you’re trying to deliver.

The third important piece of FAST Search for Internet Business is here too we’re going to simplify the packaging approach. So, we’re going to move to a model where today with FAST there are a variety of different add-ins that one would purchase with the platform itself, on top of that platform, and we’re going to move those directly in from a packaging perspective into the platform itself. So, things like language packs and connectors and so forth you can assume will be just part of the platform going forward.

We’ll continue to offer add-ins to help you grow your capacity, things like QPS and things like volume and storage in the current FAST model today, and we’ll make that a little simpler, too, but overall we really are trying to simplify the packaging approach, as well as deliver some rich innovations around interaction management and Content Integration Studio.

All right, so let’s just recap. Two core announcements today that we’re bringing to market: FAST Search for Internet Business, FAST Search for SharePoint, again built on the FAST capability, offered at lower cost, simpler packaging, with the latest innovations.

So, with that, I’m going to wrap up. I may be the only presenter to wrap up a couple minutes early.

I want to close on a couple of key things. No. 1, I hope you walked away recognizing our commitment to enterprise search. We feel great about our progress. We recognize we’ve got a lot more work to go do, and we’re investing and committed to help you deliver the solutions that you need.

No. 2, we have clarity on our roadmap, we have clarity on our vision. We’re bringing together the FAST capabilities with the SharePoint capabilities, and delivering rich solutions for business productivity and on the Internet side.

And with that, I’ll thank you, have a great conference, and if you’re a Gen Xer like me, you know, or at least please be nice to us. Thanks very much. (Applause.)

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