Annual Report Highlights Microsoft’s Focus on Software Services in the PC-Plus Era

REDMOND, Wash., Sept. 29, 1999 — Microsoft is turning its gaze beyond the PC to focus on simplified, Web-enabled software solutions that will empower people anytime, anywhere and on any device. In the newly issued Microsoft 1999 Annual Report, company chairman and CEO Bill Gates highlights Microsoft’s push to provide software services in this

“In the new millennium, the remarkable power and flexibility of the PC will be available wherever it is needed,”
Gates says in his letter to shareholders.
“The PC-plus era will be about connectivity, scalability, and simplicity. It will be an era where people are at the center, where technology is a natural extension of the way consumers and businesses think about themselves and their interactions with others.”

As intelligent devices and appliances join PCs as mainstays in everyday life, Gates says that
“more software will be delivered over the Internet, and the boundary between online services and software products will blur.”
Software will ultimately be viewed as a service, enabling friction-free information flow within organizations, seamless e-commerce operations, Web-enabled products for many devices, simplified and reliable PCs, and a personalized Internet.

Microsoft’s software for knowledge workers in this PC-plus era will be designed to make them far more efficient. Future versions of Microsoft Exchange will offer a platform for unified messaging and
“Web Store”
technology to promote centralized communications and information access and management. A customized
“Digital Dashboard”
solution in Microsoft Office will help knowledge workers prioritize tasks, information, messages and meetings, as well as access the tools they need to analyze and process data.

These services will be supported by a Windows platform that scales from the smallest embedded operating systems in thermostats and lights, to the largest mission-critical server farms. Windows2000 will deliver breakthrough load-balancing technology for superior reliability and IntelliMirror technology to simplify network backup and data synchronization on many devices.

Consumers will also use these Web-enabled software services in their homes. Gates views the broadband connectivity that Microsoft is investing in as allowing people to
“leverage the power and richness of the PC on any intelligent device, thanks to fast, low-cost wireless networks that will make high-quality audio and video available in every room.”

Gates also emphasizes Microsoft’s commitment to investing $3.8 billion in fiscal year 2000 on research and development tied to delivering these new software services in the PC-plus era.

Microsoft’s online annual report, including Gates’ letter to shareholders, offers a number of special features not available in the print version. It can be found on the Microsoft Investor Relations web site at . Gates’ letter and Microsoft’s new vision statement are available in 11 different languages, and Microsoft’s income statement can be viewed in the languages, currencies, and accounting conventions of six major countries. The online version also features hyperlinks connecting to relevant Microsoft Web sites with further information on products and initiatives discussed in the annual report.

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