Speech Transcript – Bob Herbold, PC Expo ’99

Remarks by Bob Herbold

PC Expo ’99
June 23, 1999, New York.

MR. HERBOLD : Thank you very much.It’s a treat to be here.It’s such an exciting time to be in this business.For those of you who have been in this industry for a while, it’s a real treat to hear the kind of comments that Alan Greenspan made the past few weeks in regard to this industry.I can remember the tough days when you had those massive cost overruns on those huge, huge projects that used to take years.And for someone of his stature to finally admit that the industry has truly turned the corner is really a major plus for the industry.

If you go back to 1975, this is a very interesting picture.This is Bill Gates and Paul Allen in the very early days, and a picture of Microsoft Basic over there on the left.The important thing about this slide is that these two guys had a dream which, at the time, people looked at and said, that’s a crazy idea, the notion that people would have these kind of devices on their desktops and it would be that pervasive is just silly.I wish today some of those people would just go on an airplane and look at how many people pull out a laptop to catch up on their work.

So, some incredible progress.But, most importantly, an incredible prediction in terms of what was going to be going on in the industry.So, is it true?Well, not really.There isn’t a computer on every desktop and in every home.But we’re certainly heading in that direction, and it truly is exciting what is occurring.And what is occurring blows the mind in terms of the productivity of the hardware looking at the price of your typical PC in 1990, with two megabytes of RAM, and a device that basically cost almost $3,000, a hard drive with 60 megabytes of storage.Compare that to today, where for $600 you can get a truly amazing machine.

We see that kind of progress, we accept it almost as standard progress these days.And, in fact, if you look at the progress in regard to the number of PCs sold, we’ll top 100 million personal computers on a worldwide basis this year.That, by the way, matches the number of bicycles that will be sold this year, just for the comparison.These things are truly becoming a standard fare for knowledge workers.You can’t hardly imagine doing your work without a state-of-the-art PC that gives you the access to the kind of information that you need.

Now, this is a very technology savvy get-together here.But, on the other hand, I think it’s wise to step back and think about these technologies in terms of the real progress that has occurred.

In terms of the microprocessor, you’re talking about almost $10,000 per MIP in terms of the cost back in 1975.You please some of the people some of the time, but not all the people all the time.Today, where are we, 500 MIPS at a cost of about $3 per MIP.And where will it go?Well, if Andy Grove was right back at the COMDEX speech in 1996, he said, hey, Moore’s law, no problem, next 15 years, we see the same kind of progress that we have been seeing.And, in fact, if that’s true, here’s what will occur.That possible MIP will drop down to a penny, which is just incredible when you think about it.

So, this is the kind of audience that takes these numbers for granted, but there are very few industries where the core technologies in that industry are moving along at an incredible pace.

Now, let’s also think about that in the context of the fiber optic wire itself.If you think about the wire, the wire is not changing.What’s happening is the software and the technology for pumping bits through that wire is massively improving.Since 1990, it’s increased in capacity about 40 percent per year.But that rate of change is actually going to significantly improve.Why?Because of wave division multiplexing.There will be a breakout session on wave division multiplexing in the next room, you can become an expert.Just kidding.

On the other hand, where does it take us?Today we’re pumping 40 gigabits per second through a wire.Now, how much is 40 gigabits per second?Well, if you had single sheets of paper, typed, single spaced, no margins, all words, and you had sheets of paper like that stacked current 55 miles high, that’s how much information is going through that piece of glass every second.Now, in the labs, using wave division multiplexing, we’re up to 3,000 gigabits per second.

So you might say, well, how much information is that?If everyone on the planet earth were on the phone, so we’re all paired up, everybody, every human on this planet, so how much capacity would it take to handle all those telephone calls?Well, it would take about 17,000 gigabits per second, which means we need six wires to handle all the phone calls on the planet earth.Naturally, you have to organize them in such a way that you can pull that off.But you get the point.These technologies are just moving at incredible speeds.And so, over the course of the next 15 years, we should see the continued progress that we have seen the last 20 or 25 years, which is absolutely mind-blowing when you think about it.

In terms of U.S. household PC and Web penetration, the numbers are really impressive.If you break it up by income, what you’re seeing is between $50,000 and $75,000 income, you’ve got 68 percent of households with a PC.Higher than $75,000, you’re at 78 percent of households.And you might ask the question, what percent of those are web users in those PC households.And so, if you looked at over $75,000 for example, you find that 83 percent of those people are on the Web.So, if you do the calculation in terms of percent Web users, Web user households, what you get is over $75,000 income, two-thirds of the households that have that kind of income are using the Internet over the past four weeks.The way this question is asked is, your usage level over the past four weeks.So, these are incredible rates.

If you look at it over time, what you see is the various countries are, in fact, tracking exactly what has happened in the United States.It’s just that there’s a time shift, but the curve itself is shaped very similarly.Now, the Nordic countries and the United States are clearly the leaders.On the other hand, many of the countries in Europe are ramping up significantly.Once again, the shape of the curve is very similar to what you see in the U.S. and you see in the Nordic.

Efficiency rates are mind-blowing.If you go back to the year 1990 and say, what if I were to buy these three applications, and at that point you would have bought things separately, you would have spent $1,485, and in today’s currency that would be $2,000.Today, a package called Microsoft Office includes the large majority of those tools, in fact, includes all those tools plus many other things, and the price is significantly lower.So, we’ve seen that same kind of efficiency relative to software as well.

So, what should we expect as software evolves?Well, there are a couple of characteristics that we can point out that are very obvious.And, in fact, they’re built into the latest products from Microsoft.Microsoft Office, incredible ease of deployment.We heard the message.People want to be able to take this tool and implement it with a minimum amount of pain relative to files that they may have had, applications that they may have had.They want all this to integrate with the past with the greatest of ease.Most importantly, they want tools that are incredibly Web-enabled, so that there can be great collaboration in a Web-format.And so, with this tool, as you probably are aware, you can draft a document, as an example, in a Word format and with a couple of clicks it’s already in HTML sitting out on the server.

So, the ability to put together knowledge management systems, the ability to share documents with people in your organization no matter where they are, the ability to do those kinds of things is significantly increased, very rich analysis tools.

In terms of the server, Windows 2000, an incredible client-server platform that has incredible reliability built into it, and also a lot of flexibility in terms of managing desktops from the server.Additionally, it is the best platform for key applications given the industrial strength nature of it, and given the new capabilities that Windows 2000 truly does represent.

Now, one of the key points I want to make in this presentation is all about the future of the personal computer.And what’s really happening to the personal computer.One law of marketing is that all markets fragment as they develop, specialty items occur in those markets.I don’t care if it’s toothpaste or automobiles or personal computers.As a market matures, individual entries emerge that fit the needs of specific segments of that market.And that’s what’s happening here.Sure, there are still general purpose PCs, but there are single purpose PCs.They also have some devices now that are being incredibly easy to use in terms of appliance-like simplicity.Why?There’s a group of people that want that.Large, flat panel screens are the rage.We’re going to see more and more of that.Many different form factors to match up with the jobs that individuals have.

And, once again, that’s just the law of marketing at work where that market is fragmenting into specialty items that really make sense.Wireless is very hot.It will continue to be hot and, consequently, a lot of these devices are emerging with wireless capabilities because that’s what customers want.High speed Internet, you see a lot of investments being made, some by Microsoft, to encourage bandwidth.So, we’ve invested a lot of money in cable companies and the like.What’s our intent?Our intent is to encourage bandwidth, to work with these various organizations to speed up the process of getting high bandwidth into the home, getting high bandwidth into organizations so that they can take advantage of these new kinds of capabilities.

The more natural the interface, the easier it is to use.As the percent of people who are using these technologies increases, you have to get the simplicity to a new level simply because you’re picking up a lot of new users who don’t have the kind of familiarity with this industry and these kinds of tools historically, and consequently the pressure is really on to make it simple.The pressure is really on to make it incredibly reliable.And most of the suppliers and vendors, such as Microsoft, have really gotten that message, and those priorities are very high on the list in terms of what we’re trying to achieve.

So, what’s the new dream as we go from 1975 to 1999?It’s really all about empowerment.What these technologies are doing now is creating a variety of tools that just about anybody should be able to use.It depends on what their role is in their organization, or what their role is relative to their own lifestyle.The great capabilities that will enable people and organizations to do what they want, where they want to do it, and when they want to do it on any device connected to the Internet.So the Internet becomes the tool of global connectivity, an incredible inflection point for this industry, an incredible inflection point for just about any industry in terms of looking at their business model and asking the question, what can I change to be more effective versus my competition by taking advantage of these technologies.

So, it truly is an exciting time to be in this industry where the core technologies are romping along.The Internet emerges as global connectivity, and consequently creativity is really the winner in terms of business models, in terms of how you run your personal life, in terms of incorporating these new kinds of tools to do exciting things.

So we call it the PC Plus era.Why?Because the PC will continue to exist.There are high-end applications, middle-size applications that need that kind of capability.But what you will see is all kinds of ways to manage your email, your voice mail, personal information, permission slips, preferences, news, et cetera, on just about any kind of device.And, once again, what you see is that fragmentation, that maturity of that marketplace.So, now we’re really launching the ability to reach most everybody in terms of their role in life, their role in their organization in terms of what these technologies should mean to them.

So, we imagine a world where computing truly is everywhere, and let me give you some examples of that that focus on an operating system that we call Windows CE.Windows CE is used in a lot of surprising places.When I say the term “Windows CE” what probably pops into your mind is a device you hold in your hand that has a real small keyboard and a real small screen.I’m here to tell you, you should think about some very unusual applications when you think of Windows CE because they are everywhere.

This happens to be an ordering center in a restaurant called Chik-Fil-A, which is a fast food operation.And, in fact, you walk up and simply punch in the pictures that, in fact, match what you want to order.What’s going on in that device?Windows CE is going on.It’s helping you place that order in this restaurant.What does it simplify?It simplifies the whole process of someone having to ask you what you want, scribbling it down on a piece of paper, potentially handing it to someone else.Here you can automate that whole process.That’s why these kinds of applications are hot.It generates better customer service at lower cost, and that’s everybody’s dream.

How about that gas pump?Some amazing things are happening at the gas pump.I used the Radiant Systems logo here, simply because Radiant has been a key player the devices that I’m talking about here.

This gas pump actually has a Web based screen on it.And so as I’m pumping gas, first of all it’s reminding that they have great coffee in this center standing right behind me, and why don’t I go in and get a cup of coffee, and they’ll just put it on the bill automatically.It’s also pulling up all kinds of information about other services that I might be interesting in purchasing at that facility.And naturally it’s also keeping track of me as a customer, and potentially providing information about how often I’ve been at that particular gas station, or how good of a customer I’ve really been, in terms of the regularity of visiting with this particular vendor. The important thing is you can craft all of those applications to make it a more interesting customer experience with a tool like Windows CE.That’s what’s become an element in these two devices.So next time you roll up to that gas pump, think Windows CE, next time you go into that fast food chain, think of Windows CE, those are that kinds of applications we’re pursuing.

Now, I’ll give you a very bizarre one.This happens to be a washing machine.This is Fischer Pikel and, in fact, it has Windows in it.And, in fact, it keeps track of how many loads you do, what temperatures you use, what’s the state of this machine from the standpoint of usage, on average how many a week is it running, et cetera, et cetera, et cetera.When a service person walks up to this machine, what they do is simply point to it, and in fact their device is loaded up with the history of the machine, and they can look it over, in terms of: well, it’s clear that this thing is being run into the ground because you’re using so much, et cetera, over a short period of time, or this part is the machine is showing wear, et cetera.

The kind of things that we’ve dreamed about in the past, are really occurring now.Why?Because we’re building software into these devices, so that they become a lot more intelligent than they ever have been before.So the computer truly is everywhere.You are beginning to see these signs, and hopefully they’re beginning to actually be more reliable.I mean, many of us have seen these signs in the past, and all you see are stars or sevens or whatever.Today they’re becoming a lot more helpful, and the reason why is there’s more technology built into them.The networks are being perfected so that, in fact, they truly are mission control stations where they can feed meaningful messages to these devices, to help traffic flow and the like.So how are they implementing it?In this machine sits Windows CE, an operating system, so that the software applications can be built and reliably run, day in day out, helping drivers get to their destination in a more efficient manner.

This is a strange looking fellow.Let me explain what he’s doing.The old method here, in terms of managing a warehouse, and going ahead and picking an order, the old method was the human being picks up a piece of paper called a picking slip and, in fact, it would have the items that they need to take this forklift and go load them up.And they would go down the aisle, look at their slip, et cetera, figure out where it is, and the like.A lot of human intervention, in terms of the paper, the list, potential errors in regard to what’s going on.

So what’s this guy doing?He has a box on his belt and, in fact, a head set on, so it frees up his hands, and it frees up his eyes, so this is completely wireless.And, in fact, the system is talking to him.And it’s saying, okay, next order, and it says, aisle seven, and the guy goes to aisle seven.It says turn right, and he turns right, and he goes down and it says, bin 233, five pallets down on the right.He goes to that location, and the system says, pick 25 cases of Crest 6.4 ounce.And he gets off, picks the 25 cases, scanning them each time.And it, in fact, reminds the person that, in fact, they should pick one more case, because they haven’t loaded it all correctly yet.He gets back in the device, and off they go.

So from the standpoint of efficiency, the probability of actually picking correctly is significantly increased, the efficiency of actually going to the right location immediately, and having that dialogue with the machine is a revolution in this industry, in terms of efficiency.Once again, what’s running in that black box?Windows CE.

In terms of mobile, there are just all kinds of applications.There is some very creative hardware emerging that, in fact, enables you to use that device almost like a telephone anymore, in the context of messages being sent to you, and the device vibrating to signal that you just got a message.Wireless devices, audible tools that are playing back music, just a variety of things are emerging in terms of various mobile technologies, capitalizing on wireless, capitalizing on the great capabilities of very, very small devices.

Windows CE truly is filling out the spectrum that I referenced before, at the low end, in terms of a multitude of applications.There’s a lot of hardware vendor innovation here.There’s also a lot of capability in terms of synchronizing these devices.With the desktops, a laptop machine you might be using to hold permanent records of what it is that you have done, and the like, there is also, once again, just an incredible surge to capitalize on wireless technologies.

If you go over here, we’ve got a display that hopefully they can get on camera and you can see some of these devices.This is a Compaq Aero here, and this is the device that can vibrate and remind you that messages have occurred, just as a messaging tool would do today.Here is a Casio Cassiopeia, it’s got over 65,000 different shades of color in this machine.So as far as the quality of the representation, it is absolutely impressive.This is a tablet PC, and it’s very thin.On the other hand, it’s got a very convenient keyboard to it.But, this can hold a full PowerPoint presentation, and it’s truly very impressive.This is an IBM device, it has a full keyboard, a natural keyboard, so you get all the pluses of a larger keyboard, but, in fact, you get the incredible efficiency of a very small, very light device.And the thing that’s unique about this NEC laptop is the fact that

— of you could call it a tablet PC, is the fact that it’s got an eight by six screen, a great screen, and it’s also touch sensitive.

So you’re seeing incredible creativity in these devices these days, which again goes back to that very premise, what we’re seeing is incredible fragmentation, but that just means the market is maturing.These technologies are becoming very real, in terms of large percentages of the population being able to exploit them.

So in terms of these kind of personal companions that I referenced over here, how should we think about it?Well, you know, we often discuss this concept of a digital nervous system at Microsoft, where you think of the nervous system of the human body, in terms of when there’s a stimulus, the body responds, or when there’s some input the body can process the information and make a decision.And we draw the analogy to an organization, in terms of how responsive is that organization when it gets a new piece of news, how quickly does it react, how does the information get to the right people?Does it take a long time?

Now, these tools basically take the digital nervous system and extend it out, so you can take your applications and you can extend those tentacles into the organization a whole lot further.So your productivity applications can become incredibly pervasive throughout the organization, with very simple tools in order to implement those applications, email, calendar and contacts all of a sudden is right down to a personal level, no matter where you are.

It just depends on where you are, what kind of device you should probably have with you, and so it’s a terrific time right now to be able to extend that digital nervous system.And actually, everybody ought to be able to take their line of business applications, their core processes and simplify those processes, and get the information out, both to centers to collect information, as well as the centers to provide information, out as far as they can in the organization.And it’s these kind of devices that are really making these applications far more useful to people, so that you’re getting the info out there where it can really make a difference.

An example of this is Mesa Energy Systems, this is the name of a company, and they’re in the heating, ventilating, and cooling industry.Okay.So they, in fact, go into commercial buildings that are being built and install air conditioning systems, heating systems, and the like.And the thing that’s powerful is these folks who work for this company are now carrying devices that are wireless.They can pull up a form that basically says, hey, I’m now at site A, and I’m doing such and such, and I just realized I need such and such a part, and immediately get feedback, in terms of where that part is, reminding them that it’s in their own truck or, in fact, it’s in somebody else’s truck, who is also on the site, or it’s over at a warehouse and they’re going to have to go over and get it.

Another thing this thing can do is log in how long that individual has been on this site, and so from a growing standpoint, in keeping track of how the manpower from Mesa is being used, this is a great tool.So there are some fabulous quotes from Mesa Energy, in terms of their appreciation of these technologies, and what it has meant.Our customers are very happy about it.It’s easy for them to get quick status reports on their jobs, they get billed faster, which makes it easier to run their business.So once again, these technologies are creeping out to touch the very people who, in fact, are involved with actually doing things, collecting information, but most importantly, getting information that can help them I their jobs.So it’s great to see those kinds of applications emerging.

Now, as you think about all these applications, what’s very important is that with Windows CE we’re really trying to leverage existing expertise.And so consequently, from a development standpoint, I thinking about building these kinds of applications, Windows API, Microsoft Foundation Classes, HTML, the normal kinds of things that people already understand are the tools for putting these kinds of applications together, Visual Basic, Visual C++, and most importantly just thousands of partners that, in fact, are familiar with how to help people build great applications, systems integrators and the like, that can take these technologies of Windows CE, and very quickly be fully up to speed, in terms of crafting applications that take full advantage of these new kind of capabilities.

Once again, the reason why that can be done is we’re taking a lot of time and effort to put into these kinds of tools the ability to interface with things.Microsoft is only as successful as its ability to interface with the things people already have in their shop.And so consequently, we put a high priority in trying to understand that well, understand where people are going, and make sure our technologies fit in well to their environments.That’s in our best interest and it’s also in the customer’s best interest.

In terms of leveraging infrastructure, same kind of statement.In terms of communications, proxies, LANs, WANs, wireless all these are common standards that our partners and systems integrators and the like can quickly implement applications because we’re using all of the standard kind of infrastructure interfaces.

Microsoft Exchange Data

Store would be another example, and centrally managing software distribution, policy reinforcement, backup and the like.Systems administrators end up being a lot more important and, in fact, can drive a tremendous amount of efficiencies because we’re providing more and more capabilities from a server standpoint that enable people to manage these networks, manage these applications, manage these capabilities in a smart, smart way.

Consequently, I think it’s good for us to look at a few additional applications of Windows CE in the context of these hand-held units to see just how powerful they are today.And to help us do that, I’d like to introduce Brian Shafer.

Brian, let’s take a look at some of the devices that are hot today.

MR. SHAFER :Good morning, everybody.

Well, what I thought we’d do is skip the traditional demo, and actually jump into how we’re using these devices out in the field.

MR. HERBOLD :Okay.

MR. SHAFER :So, the first thing I’m going to do is actually hook this one up so you can see it.This is my own personal device, as you can tell by the

MR. HERBOLD :So, who is on there?

MR. SHAFER :That’s my little boy Luke.

MR. HERBOLD :Luke, that’s an “in vogue” name.

MR. SHAFER :I need to talk to George Lucas about his timing.But, nonetheless, you can see what it shows here is that, one, I can personalize it, just like my desktop PC, I can personalize my companion.It’s a very familiar environment, it’s the Windows interface, just like I’m used to.And right from the start menu I can get to all the applications that I would expect in my PIM, such as calendar, contacts, inbox, et cetera.

But we’re going to concentrate on doing things that most people don’t do with these devices.So, the first thing I did when I actually set up to come here to PC Expo was built a map on my PC and downloaded it into my device.Sticking in there various important information, such as where is the Javits Center, where’s my hotel, et cetera, et cetera.Now, this morning when I got up, I needed my caffeine fix.I had to go find the local Starbucks.

MR. HERBOLD :All the roads in red are under construction, right, Brian?No, they’re all blocked.

MR. SHAFER :So, what I thought I’d do is go out and see if I could find out where the nearest Starbucks is.

MR. HERBOLD :That’s a good idea.

MR. SHAFER :I didn’t put this in, this is all built into the map.So, if I go ahead and use some handwriting recognition here, you can see

MR. HERBOLD :So, you don’t have to learn any fancy ways to write any of the individual letters?

MR. SHAFER :No, that’s exactly right.What I learned when I was six years old works here.So I don’t need to teach the device, the device just learns from me.So, if I go ahead and click that up, I can pick up all of the Starbucks that are about there, and I’ll just try one on Broadway, since I know that’s roughly close.It goes away and finds it for me, and as you can see, it’s right next to my hotel, it’s very, very handy.

MR. HERBOLD :That’s great.Okay.

MR. SHAFER :So, keeping in touch on the road is very, very key.And our approach to data on the road is all about having one set of data, one email store, one contact store, et cetera, not multiple stores.This way everything that you work with is automatically synchronized from device, to device, to device, no matter what you’re getting it on.

So, of course, how do you actually get that data into the device when you’re on the road?Well, there are three principal ways with the Windows CE palm-sized PC.The first one being in Internet connection.If you’re away in a different office where you didn’t have your PC, you could use an Internet LAN connection, or most likely you’d be in a hotel using a dial-up modem, a 56K modem.Or what you could start doing now is using a data-capable cell phone such as this one.This one is kind of neat in that it actually has an infrared port to allow me to synchronize with the infrared port that’s in the device, so I don’t have to carry around any cables or what-have-you.It would also work on my regular PC because it’s a standard tool.

So, these days, though, being on the road is all about taking your data with you, and that’s all about browsing.So, let me go ahead and open up a little program called iBrowser.Now, iBrowser is a third party piece of software, it’s actually shareware, you can download it from the Web from Foliage.com.Foliage as in the leaf.And what this does is, it gives me a rich browsing environment, as you can see as I’m scrolling through.

MR. HERBOLD :So you can download pages, before you go on this trip, and they’re available to you any time?

MR. SHAFER :Exactly.If you think about it, I shouldn’t have to connect to go read stuff, I can suck everything down, read it when I need it.

So the next thing I’m going to go and do is actually open up another Web page.This one is even more interesting, in that it was actually generated by Microsoft Office.So this is the beauty of the new version of Microsoft Office 2000, in that it saves everything as HTML files, so you can actually load them on the device.You don’t have to necessarily have a pocket application on the device in order to actually load it.

Okay.The first thing I want to take a look at

in fact, I can even go as far as loading up a presentation within one of these devices.So before I got on the plane

MR. HERBOLD :A PowerPoint presentation.

MR. SHAFER :Exactly.Before I got on the plane I took your presentation and loaded it down onto my device, so I could have a look at where my demo was in the context of what you were talking about.

MR. HERBOLD :Don’t peek ahead, now.

MR. SHAFER :The next thing I want to cover, though, is something that we’re actually doing for our sales field.And currently we produce internally at Microsoft we produce these little sales tools called Drive Time.And it’s educational information on our products.And the idea is, as you’re going out to an account call, you put it in your CD drive in your car and you listen to it and you get yourself up to speed on the product you’re going to talk about that day.It can also be quite cumbersome, by carrying around a whole bunch of tapes with all this information on them, and of course these all end up in a landfill somewhere, a big mess.

So what we’re going to do is actually implement through a program called Audible Player, the ability to not only listen to talking books, like in this case I was looking at Bill Gates’ new book, Business At the Speed of Thought, actually not looking at it, obviously, listening to it last night.If I want to go and open up a Drive Time file, we’re actually for our sales field putting those drive time files down on these devices, and we have somewhere between two and three thousand of these devices out on the road at the moment.And all of our field is able to listen to these files.So let’s take a look at one,

this is one you did.I don’t know if you remember.This is one you did a couple of months ago on Y2K issues.So let’s have a little listen to that.

So there you have that audio, so these can go out and touch your sales force in whatever say is appropriate for them.Now, of course, I know you’d like to think that we’re always sort of working.But, that’s not always the case.Maybe five minutes before I go to bed I might want to listen to some music.So I’m going to load up the mobile audio player.This is, of course, after I finish Bill’s book.You can see that I’ve actually loaded up what’s known as the Windows Audio Player.And this plays basically CD quality music, in fact, I can sample CDs of my own, and put them down onto this device, and it’s done in a format that can’t be stolen around the Internet.So, for example, let’s go ahead and play something.This is coming right out of this device.The important thing is here, everything else I showed you today, up until this point, is available in all the devices.This particular functionality is unique to this device.

Okay.The last thing we’re going to do is I might even go as far

MR. HERBOLD :I know where we’re going.

MR. SHAFER :I might even go as far as to play the odd game on my handheld PC.

MR. HERBOLD :Occasionally?

MR. SHAFER :That’s right.In this case, you might actually recognize this one, I wasted a few quarters on this one over the years.Of course, I have no idea how to work it.So let’s skip that and we’re going to move over, and show something with a little more enterprise.What I have here is a Handheld PC Pro, this is Vadem Clio device.And the interesting thing about this at the moment is it’s operating wirelessly.I’m operating on an 802-11 wireless LAN, talking to a receiver backstage.Now in our office, the building that I work in is actually completely wireless enabled.So we can take this device, go to meetings, and we’re always online.And I understand that Bill Gates in a recent CEO summit committed to putting it into the rest of the campus by the end of the year.

MR. HERBOLD :That’s true.

MR. SHAFER :So what we’re actually doing today is taking a look at how we can use this in what’s known as Windows 2000 Terminal Services.And if you look up on the screen, you’ll have the PowerPoint up on the screen.What you’re seeing is me holding this device in an image on the screen.I’m actually going to be running PowerPoint on this device.And you’ll be looking at it with me.So here you can see it’s actually running on this device, and we also have it up on the screen.Now, you might be saying to yourself, look ma, no wires, how are we actually doing that?So what we’re actually doing is running a Terminal Server session from this device up to a Terminal Server.So the session is actually hosted on the server, and the screens are being passed down to my device.

As I’m advancing PowerPoint, again, you can see that the information comes down.So what we’re also doing, then, is remote controlling another PC, where we’re attached that PC to the monitor, so you can actually see it.So it’s a little bit of a trick, but in the real world you’d actually just be walking around your office with one of these devices.So in this instance what I’m actually doing is administrating this Windows NT Server.And there’s two things that I can do as administrator.Well, I can actually do anything on the device that I could do if I was sitting at the console.

MR. HERBOLD :Instead of playing the user role now, you’re playing the system administrator role?

MR. SHAFER :Absolutely. And more to the point, maybe I’m the system administrator of a small business, where I’m the only person who is on call.It’s one thing if you have to go get help, it’s another thing if you have to wait for Fred to come in on Monday.So what I do now is actually, you ring up Fred, and you say, get on the phone.He takes his HPC, or his PC, dials into the server remotely, and he can administrate anything.He can add users, change permissions, change groups or what have you.In fact, Fred sort of realizes somebody is actually eating up all the disk space on the system.So what he’s going to do is just dial in quickly, and use the Computer Manager, and this is something in Windows 2000 where we’ve consolidated all of the administrative tools from Windows NT 4, that were here and there, and there, and there, put them all in one place, one stop shop, to administer the system.And so the beauty of it is, I’m doing it remotely, as well.

So if I were go to into disk management.Okay.We’ll go and select that.I’ll go and select the disk that’s having some trouble.Maybe I want to go in and just show some quotas on that disk.So I’ll put on some disk quotas on that disk, lock it down, slow the users down, figure out who’s filling up the drive and sort it out on Monday when I come in.The important thing, though, here is it’s all included as part of Windows 2000 Server.The terminal service ability and the remote control capability.It’s just a service, you switch it on, and it’s very low overhead.

MR. HERBOLD :Very impressive.

MR. SHAFER :What a great time to be in this business.

MR. HERBOLD :That’s right.

MR. SHAFER :Thank you very much.

MR. HERBOLD :Take care.

(Applause.)

MR. HERBOLD :Let’s talk a little bit more in regard to personal companions.Naturally, building a flexible network infrastructure is obviously important, because of the high priority in terms of these kinds of applications, determining preferred configurations, extending the line of business applications, creating new applications that can take full advantage of these tools, those are the kinds of things that lead to this dream.

So it’s a great time to be in this industry, as we’ve said.These kinds of tools truly are enabling us to take this dream, this vision that we have, and make it a reality.So, you’ll see Microsoft using this vision statement in the years to come, because we really do believe in global connectivity, we really do believe in personal empowerment in the broadest sense, in terms of doing these kinds of applications, getting this kind of information when you want it, where you want it, and how you want it.

So, with that, I want to talk a bit about Internet connectivity because it is a big, big issue.Naturally, most people today are using simple dial-up on standard telephone lines, but there’s an awful lot of work in regard to DSL, cable modems, corporate LANs, as the ability to pump bits through those networks increases, naturally you have to increase the capability of the particular network, wireless satellite, every device with a screen will connect to the Internet.That is a reality.That’s where the world is going.And, consequently, this whole subject of connectivity gets a lot of attention.

Another thing that gets a lot of attention is the devices people use to interact with the system.And one of the things we’re announcing at this show are some new keyboards.Two different versions, one has the natural slant to it, and the other is a standard kind of keyboard.The thing that’s amazing about these keyboards is that they have a series of blue buttons up the top where, in fact, those are Internet based hot links so that, in fact, I can just hit those buttons and they become equivalent to commands on your browser in terms of doing various things.Integrating the actual features of a browsing capability right into the keyboard, so you don’t have to fool with the software anymore, just go ahead and hit the button for these various pieces of functionality.Naturally, USB ports are important and consequently they’re being given serious consideration in terms of configuring these kinds of devices to make sure we have an adequate number.

Another tool that we put a lot of attention against because of where the world is going, so to speak, is the whole NetMeeting tool, which has emerged as incredibly popular and, in terms of improvements in Version 3, it’s got a new flexible user interface, a lot of good security capabilities, the ability to share desktops is something that we want to talk about in a little more detail here.Also, you can embed all of this within Web pages, and resource kits are naturally available for deployment.These are powerful tools for conferencing.These are powerful tools for help desk activity.

And, in fact, what I’d like to do is introduce Tom Laemmel, who is going to come out, he’s a product manager at Microsoft, and we’re going to talk about NetMeeting in the context of a help desk application.

Tom, how are you today?

MR. LAEMMEL :I’m fine.

MR. HERBOLD :Great to see you.

MR. LAEMMEL :Okay.What I want to show you today is

MR. HERBOLD :You have a pink screen?

MR. LAEMMEL :Yes, I’ll talk about that in a minute.I didn’t realize that.I want to show you how NetMeeting can be used to change the way help desks work.

MR. HERBOLD :Okay.

MR. LAEMMEL :So, NetMeeting is a component of Windows, it’s in Windows 98 Second Edition.It’s in the forthcoming Windows 2000, and you’ve pointed out my pink screen.I’m not happy with this, so I’m going to see if I can get this changed.And then if I had a corporate, I’d go to my corporate intranet site where the help desk begins, and this is where you might go to try to figure out how can you change your screen settings.

I have navigated to the point where I’ve been trying to find the answer online already, and I couldn’t figure it out.So, now I have the option to actually call somebody, to call the support technician.And I’m going to do that now and see if I can talk directly to them and see if they can help me with my problem.

So, I’ve now connected up to the help desk, and from his end, he should now be able to tell, since I’ve been navigating to that screen, he knows who I am when I gave him the call, and he knows what general area my problem is in, because he can tell where I am.

Plus, what his help desk application on his side would bring up perhaps the configuration of my machine, and maybe the history of all my many calls that I’ve put in to him.

So, I’ve got a problem with my desktop here.

MR. :What’s the problem with the desktop, Tom?

MR. LAEMMEL :I want another color.We’ve set up this horrible pink color.

MR. :It’s really easy to change, Tom.All you have to do is push the start button, go to settings, then control panel.Then you click on the display icon, go to appearance, pick color options.

MR. LAEMMEL :Well, wait a second.I’m a marketing guy here, okay, so could you perhaps start again at the beginning, double click on something.

MR. :Push the start button, go to settings, then to control panel, then click on display

MR. LAEMMEL :It’s not going to work, could you just come down and do it for me.

MR. :I’m pretty far away, so why don’t you send your Desktop out to me and I’ll fix the problem for you, and then I don’t even have to move.

MR. LAEMMEL :That’s an offer you can’t refuse.This gives me an opportunity to show you a little bit more about the NetMeeting UI.To launch NetMeeting UI separately I’ve programmed one of the hot keys in the Internet Keyboard Plus Pro.I’ve actually launched NetMeeting, and so you can see it a little bit better I’ll minimize the Web page.So this is the data view of NetMeeting view.A lot of corporations are deploying NetMeeting, only in data view for the data collaboration features of NetMeeting.There’s also a compact view, which is video only, it looks a lot like the Web page we were just at, and then there’s the standard view, which is my favorite, that’s both together.So you can see both video and have the data collaboration stuff.

On this data collaboration view you see the main data collaboration features.You can view it as text based chat, electronic white board, for doodling and exchanging graphics, or doing diagrams, an actual file transfer is part of NetMeeting.But, what I want to do as the technician suggests is share out my Desktop.So I go to the share button, which launches the share dialogue.I have a choice here to share out any individual application or folder that’s running on my machine.The only thing I have open right now is Internet Explorer or my Desktop itself, so that’s what I want to share out, because then he sees everything that’s going on.As a matter of fact, I’m also going to do an additional step and allow the technician to have control.

MR. HERBOLD :So you’re handing your machine right over to this individual?

MR. LAEMMEL :Right.So now he has control of my desktop.He sees this pink screen, and we see his initials, TS for tech support.If I was in a virtual meeting or something

— he’s going through it now and doing this all for me.Actually, a lot of help desks would probably do it the other way around.He would ask me to do it, and then watch as I was making the changes, because he can see my screen.

MR. HERBOLD :You must have looked like a slow learner.

MR. LAEMMEL :Yes, he figured we don’t have time today to go through all that.But, if you did do it yourself then maybe you would know the next time.

So thank you very much.

MR. HERBOLD :That is super.

MR. :All right.Looks like your Desktop is all set.I hope everything is okay.

MR. LAEMMEL :Thank you.

MR. HERBOLD :That’s great.Thank you very much.

MR. LAEMMEL :You’re welcome.

(Applause.)

MR. HERBOLD :Okay.Now

we’re going to shift gears and talk about a completely different subject, and that’s privacy, a very serious subject.Naturally, people are worried about making transactions secure, they’re worried about encryption, warding off spam, protecting children online, and most importantly protecting personal information.Probably that last item has gotten more attention than any of the others, although the protecting of children has certainly been high.

The thing that Microsoft is announcing at PC Expo is a series of steps and some serious technology that can really help on the privacy front.Let’s face it, we’re in an inadequate state right now.And what Microsoft intends to do, and I hope that’s exhibited by what I’m about to talk about, is provide some leadership and provide some technology that can enable us to make some serious improvements in these areas.

In terms of the real needs, people want strong privacy policies, they want better privacy tools.With that in mind, there are five things that I want to talk about that we’re announcing at this show.One is the Privacy Wizard.What is a Privacy Wizard?It’s a tool that’s available.It was available for the last six weeks out on Link Exchange, and now it’s available at such popular sites as Microsoft.com, MSN.com and the like.It, in that six-week period, has been used by 2,000 sites to craft privacy statements.

So, what is this?If I’m a small Web site, or if I’m a large web site, I can go to this location on the Web, and be walked through a series of steps in regard to questions on privacy in terms of what kind of policy I want.As I answer these questions, XML sheets are being put together that captures the essence of that privacy statement, and when I’m finished with this session, there sits this statement on the Web site along with the pages that explains that privacy statement, and it’s all been developed by the Privacy Wizard.

This is a great tool to enable Web sites within an hour to craft privacy statements that are completely consistent with P3P guidelines, which the Privacy Wizard follows.So, we’re extremely pleased to be able to finally make some good progress from a technical standpoint in terms of putting tools in people’s hands that actually will take a big step forward.

Now, from the standpoint of a policy that we want to implement relative to advertising, what we are doing is, in terms of the advertising monies that Microsoft spends online, we’re telling the sites that we typically advertise with, and that we will be advertising with in the future, that we want them to have good, strong privacy statements.And when I say strong privacy statements, I’m talking about quality privacy statements that adhere to the guidelines of organizations like TRUSTe and BBBOnline.We are giving Web sites six months to make sure they get the privacy statements up.And then, effective January 1, 2000, we won’t advertise on sites that don’t have high-quality privacy statements.

How can they get a high-quality privacy statement in a very simple way?Go to the location on Microsoft.com, fire up the Privacy Wizard, go through those steps, and within an hour they’re all set.So, the important thing is, simple to use tools that enable people to put these kind of statements together that will put them right at the state-of-the-art in regard to the kind of guidelines everybody wants on privacy.So, we think this is an appropriate and responsible step, but the important part here is the technical tool to assist people to be able to do things so that, in fact, this issue around advertising becomes a non-issue, because it will be and is so simple to put such statements together.

The third thing we’re announcing is that we’re extending our privacy policies, which exist on MSN.com here in the United States, to all of our international portals, and there are 29 of them.They are implemented in 15 different languages.And so, consequently, they will clearly reflect the privacy principles on notice concerning access, security and enforcement and children that, in fact, are operative here in the United States.We want to adhere to P3P and the kinds of policies generated by W3C out at MIT.We’ve worked with those organizations closely, we’ve worked with TRUSTe and BBBOnline closely as well.

Number four, the thing that we want to do is encourage privacy standards, and the Privacy Wizard is, in fact, the first application of P3P syntax for privacy statements.There’s been a lot of work against P3P and we feel very positive about taking this step from a technology standpoint to, at long last, have something real that people can use to take advantage of this work that has gone on in regard to these guidelines.It makes these guidelines, for the first time, truly come alive.

The fifth point that we’re announcing is in regard to Microsoft Passport, we’re asking all the partners of Microsoft Passport to have the right kind of privacy statements that are consistent with TRUSTe and BBB Online.

What is Microsoft Passport?Microsoft Passport is a tool that, in fact, you can fill out information in regard to things that you might want to provide Web sites, statements about what you don’t want to provide Web sites.Then, as you visit a Web site, if, in fact, they have adopted Microsoft Passport as their interface with consumers, you can simply hand it the Passport, and you don’t have to repeat saying those policies that you personally want to adopt.So, as I go from one web site to a second, to a third, I simply hand them the Passport, so to speak, and, in fact, I don’t have to type in that information all over again.

The important thing from a privacy standpoint, though, is we’re asking all of these sites that use Passport, that accept Passport, we want them all to adhere to the standards of these organizations, and the easy way to do that is to use the Privacy Wizard.So, consequently, again, that core piece of technology, the Privacy Wizard, is really the key to these announcements today.Okay.In terms of Passport, it’s going to be an easy to use consumer device, but most importantly, it really does take a giant step forward relative to privacy.

So, in terms of the five items, the Privacy Wizard, and advertising only on privacy oriented Web sites that have adopted these kinds of standards that we’re interested in, extending our policies around the world, being the first P3P application, and Passport requiring those kind of quality privacy statements, we think that is truly a step forward relative to this overall subject that we know a lot of people are very interested in, and appropriately so.

There’s a lot of work to be done yet, but we’re pleased to take some leads here that really will get us moving to take advantage of the technology to help us solve these kinds of problems.So, what have we talked about?We’ve really talked about two things, extending your computer resources beyond the desktop, to the new world where your digital nervous system, so to speak, really has tentacles out into your organization and you have the kind of devices across that whole spectrum of capabilities that enable you to implement applications today in a way that touches end users like they have never been able to capitalize on your information before.

Secondly, some important steps forward relative to privacy.It’s everyone’s responsibility.At long last, we’ve got some good tools here that we think can take a proper step forward.Naturally, we want you to look to Microsoft for the best of the PC Plus era.It’s an absolute treat to have had the opportunity to talk with you today, and with that I will conclude.And thank you for your attention.

(End of event.)

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