Q&A: Making Technology Relevant to Consumers’ Daily Lives

LAS VEGAS, Jan. 6, 2000 — In his keynote address at this week’s Consumer Electronics Show (CES), Craig Mundie, Microsoft’s Senior Vice President of Consumer Strategy, outlined the company’s vision for making technology more personal and useful for consumers. In a conversation with PressPass, Mundie expands on his and Bill Gates’ keynotes to explain how the company’s announcements at CES fit into the company’s consumer strategy.

PressPass: What is Microsoft doing at CES this year?

Mundie: Bill Gates is giving the millennium keynote address, which is significant because we’re now seeing the next step in the convergence between the traditional consumer electronics industry and the computer industry. There is a growing awareness that products — whether you’re talking about entertainment products, automotive products, or anything else — are becoming more intelligent and connected.

In our booth, and in Bill’s speech and my own, Microsoft is demonstrating how consumers will benefit from our activities to pull all this together and present it in an integrated way. The booth shows how Microsoft has brought this technology together to make it more personal and useful for consumers. And it’s an effort we’ve been working on for years, so it’s a significant progress report.

Primarily, we’ll be demonstrating scenarios we think are relevant to people’s daily lives. We’re showing the benefits of adding powerful microprocessors and interesting software to each device to improve and personalize the capabilities of these devices. We’re also showing how it’s possible to further increase the value of devices to consumers by having them work together. Microsoft is one of the few companies with enough breadth in our relationships with manufacturers and our research and development activities to write the software required to do this.

PressPass: What exactly are you announcing at CES?

Mundie: We are making several announcements at CES in support of these efforts. For example, we are unveiling the Microsoft Concept Home at our Redmond, Wash. campus, which is designed to showcase our vision for how software can improve people’s quality of life. We are announcing additional features to the MSN-based Web Companion and are previewing MSN Mobile Service 2.0, which will make MSN services accessible from Web-enabled cellular phones. We are introducing the name and vision for the next generation Windows CE palm-size PC, now called the Pocket PC, and are announcing that Microsoft Reader, Microsoft’s eBook technology and Windows Media Player will be featured applications for the Pocket PC. And we are previewing announcements with barnesandnoble.com and Barnes & Noble to support Microsoft Reader and to help enable broad distribution of eBooks content.

Other announcements include the availability of version 2.0 of the Windows CE for Automotive solution for manufacturers and expanded WebTV partnerships with Philips Consumer Electronics and Thomson Multimedia. We’re also announcing our new Intellimouse Optical ambidextrous mouse, which offers the benefits of our innovative IntelliEye technology in a new shape that’s comfortable to both left- and right-handed individuals. So we have a whole range of announcements that support our consumer vision.

PressPass: How do your efforts at the show fit together with Microsoft’s overall vision for consumer technology?

Mundie: We started a set of programs seven years ago to prepare for the day that’s now dawning at CES 2000. Microsoft is demonstrating that we can bring all this together across an entire array of devices by connecting products as well as services. We have recognized for a long time that microprocessors add value in many different devices. What’s new is that through the microprocessor’s dramatic increase in performance and decrease in cost, we can now put more powerful microprocessors in these devices, so they can support more sophisticated and interesting software.

The next stage in the convergence revolution is that devices are now becoming connected. The Internet has shown that traditional PCs, when connected, can do interesting new things. This revolution will be extended dramatically by connecting traditional computers with the appliances that are part of our daily lives. The combination of powerful microprocessors, interesting software and complete connectivity will revolutionize the way devices are built and the way we interact with them, dramatically extending their usefulness to consumers.

For example, we are beginning to see how people will receive more personalized goods and services. Whether it’s TV, where you order what you want to watch when you want to watch it, or it’s shopping for a product that’s custom-manufactured just for you, these dreams of consumers are beginning to happen. The combination of the Internet and the many devices people interact with, endowed with intelligence and connectivity, provides the basis for this personalization.

To do this, you need more sophisticated software in the devices themselves, an overarching software architecture to pull it all together and common service components so it can operate in a user-friendly way. This is the investment Microsoft has been making for the last seven years — device platform technology, such as Windows CE; development tools; handheld personal computers; Web TV and Auto PC; and service components such as MSN and Hotmail, which can be accessed across all devices. All are part of the infrastructure, which together positions Microsoft as a major player to bring it all together for consumers.

PressPass: What makes Microsoft the best company to “bring it all together” for the consumer?

Mundie: There are two areas where Microsoft has unique skills and competencies. We have learned how to write sophisticated software systems and test and deliver them on a scale unrivaled in the industry. When you look at the diverse environment that will be created, the software will have to be very sophisticated for the experience to be both simple and useful for consumers. The experience Microsoft has had building a broad array of software for personal computers has taught us the lessons necessary to deal with the dichotomy of using complex technology to provide simplicity for the user.

We also have a unique role relative to many players in the industry — that of evangelist for new ideas. We know how to coordinate a broad array of partner relationships in consumer electronics, computers, communications and services. Due to the scope of our activities, both as a technician and evangelist, we are in a unique position to help define how products should relate to each other, and provide a common architectural platform and tools for other companies to build on as well as the sophisticated software applications to bring it all together for the consumer.

PressPass: So the PC is still a central element in your vision for the future of consumer technology?

Mundie: Clearly, the PC is the foundation on which all this is made possible. It continues to be a technology driver. It’s also where consumers have been exposed to the benefits of computing and using the Internet for communications, convenience and entertainment. The PC is the most sophisticated computing device most people will choose to have in their lives, at work or at home. When PCs are present, they can provide an additional level of capability or service that may not be achievable in other devices by themselves, and they can be used to integrate or control a diverse array of appliances that are part of daily life.

PressPass: Why should consumers choose Microsoft and its partners?

Mundie: The world is becoming a place with incredible choice for consumers in the devices they buy, the software contained in them and the services available through the Internet. We think people should choose the brands of trusted companies, such as our partners. And Microsoft has great brand recognition and trust with consumers, based on our success with personal computing. So as computing software and communications come together in new ways, consumers will want to turn to a company they know to be sure their investment is preserved and they get maximum value.

Our work in our own products and the technologies we provide to our partners helps assure consumers will receive great devices, service and integration across these areas. They get the trusted brand of our partners and the Microsoft components and services included with them. Brand trust means added capability, credibility, usability, simplicity and integration. Today’s advances could not be achieved using devices from various brands if they did not have the Microsoft brand to connect them.

PressPass: What role does Microsoft’s Consumer Group play in making the company’s vision a reality?

Mundie: In the last two years, Microsoft has continued to refine its organizational structure to deal with the new diversity of devices and services. The Consumer Group, under Rick Belluzo, has been fine-tuned organizationally to provide a point of integration in Microsoft. This group works to build on the great platform technologies we have, and to build the applications and services people will need to take advantage of new devices and bring them together usefully. We now have a clear partition of responsibilities. Platform technologies and the family of Windows operating system products, from the 8-bit Smart Card through Windows CE, Windows 98, Windows NT and Windows 2000 are the responsibility of Jim Allchin, and the devices key to the consumer experience fall under the responsibility of Rick Belluzzo.

We’re really looking at the consumer experience in a focused way and are thinking about how we can help consumers more. For instance, we created a new Microsoft
which will be unveiled at CES, that we’re calling the Digital Diva. This character — who is really our employee Stacy Elliott — will be available to demonstrate and explain new technologies from Microsoft and its partners in a simple way.

PressPass: Can you tell me more about the Digital Diva?

Mundie: The majority of U.S. households now have at least one PC, and many have more than one. As we move forward with new advances, we are aware of the need to make devices simple and useful, and also to find more ways to explain the capabilities and benefits of rapidly evolving technology to ordinary, non-technical people. We also need new ways to listen to consumers.

We think the Digital Diva will be a great way for us to both explain and listen. We will make her available through broadcast television, radio programs and the print media the public is already familiar with, so she can comfortably come into consumers’ daily lives. The idea is that the Digital Diva will be a trusted agent who can explain how technology is coming into people’s lives in a way that’s useful, not scary.

PressPass: What is Microsoft doing to ensure this technology and information is available to all people, regardless of their financial situation?

Mundie: One of the great things that comes from embedding this technology — computing, communications and sophisticated software — into such a diverse range of devices, is that you begin to offer a broader array of price options than was possible with just the PC. Even in limited income households, people generally have televisions and telephones. They have made a family investment in basic communications and entertainment devices, and in the future, that same investment will bring Internet access and a new class of services.

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