Remarks by Steve Ballmer
Forum 2000
Redmond, Wash., June 22, 2000
(Applause.)
MR. BALLMER: Well, thanks.It’s been kind of a long morning.We are behind that little schedule we gave you earlier in the day. I apologize for that.I can’t promise you lunch though, in the next ten minutes. I’m going to take a couple of seconds, anyway, and try to fill in a few of the important elements that we still haven’t really touched on.
The last six months has frankly been wild, absolutely wild, for me at least, professionally.There are a lot of reasons for that, but the most significant one has really been the transition that we’re going through as a company. And this introduction today, in some senses you could say a lot of people and me particularly have been putting in a lot of sleepless nights and a lot of energy into really thinking through that transformation.But it’s that transformation that caused Bill Gates to make the big step, in some senses, earlier this year. To really spend full-time thinking about really what the next generation of the Internet will look like, and how we bring together these many pieces, which we’ve had in development, to stay on top of that consistently, 100 percent of Bill’s time.
So, it’s been wild, but it’s been a lot of fun.For me, the last three weeks have sort of made me almost like a caged animal.You know, we were ready to go, it was June 1st,
“blah”
was coming on June 1st.We were ready to have this sort of come out of the closet — back in the closet, the PR people said, you really don’t want to do this on that day.Okay, back in the closet.But I have to admit, I have been tempted over the last three weeks to be broader than just a few people, a few partners that we’ve really brought inside the tent.And so, when I was traveling, I guess the week before last in Europe, I met with a bunch of ASPs in Norway. There’s more ASPs per capita, by the way, in Norway than any other country in the world, don’t ask me why. But I’m meeting with this group of about 10 ASPs, and I’m walking through this view of what the third generation of the Internet will look like, and sort of running through what we’re thinking about, what is the .NET platform, what attributes does it have, how are we starting on the development infrastructure, which for many of you I’m sure was a little thick during Paul’s speech but pretty exciting stuff if you’re in the business of creating and running Web sites.
And I just became more and more confident as we went through with those guys, what will the ASP look like in the future, how will customization be done on services, and services will be the replacement of software, and I got a little bit more excited, and energy level up another dime.I met with a set of people who were building dot-com sites when I was in Vienna, and we went through the .NET platform.Of course, by the NGWS name at that time, and kind of worked things through, and I was explaining the concepts and some of the core technologies.And, again, a lot of resonance.We’re embarking today, as Bill said, on a long-term transformation in the Internet.
This stuff is not going to happen in the next day, or two days, or three days, but we have a lot of work that we’re bringing to the fore, and we are embarking on a transition.And I think that the transition that we’ve identified, the moves that are key, the transformation of the software business to a service business, the importance of XML as a lingua franca for integration, the role and importance of new devices, but those new devices will be smart devices with intelligence of their own that let them participate in the network, whether those are PCs or phones or TVs.And the new user interface, the new user experience that really fits in the context of the kind of simplification that people have been looking for in the PC world, and is perhaps even more important in the world of the Internet.
And all of that, without being able to do a single demonstration, just to have discussion about what this .NET thing is, the tools that we’re doing, not showing Visual Studio 7 or the BizTalk work, not showing bCentral.We showed you bCentral today, mostly because it really helps galvanize many of the core concepts that any third-party software developer should be excited about in .NET — third-party service integration, next generation user interface, the role of these new devices — and it points to the opportunity in this new world of the Internet as this new kind of platform for services to be much more comprehensive, and really take care of a much broader set of issues that consumers are facing and seeing.
The new technology preview demonstration that we showed you, in some senses I think we underwhelmed you.I look at that thing and I can’t tell you how excited I get.A new user-interface model based upon this idea of the universal canvas is very important.It will be for us a pre-eminent service, essentially taking some concepts which have been in the browser, and then building a new service infrastructure where you can read and write, where you can store information locally, where you can analyze, where you can organize your own Web page.The concepts are all there in the technology that will be prepared to ship in the course of the next year.
So, I think that if you put together the vision that Bill described up front of this next generation of Internet software, software as a service, XML-enabled, new devices, new user experience. And I hope through several different windows that we gave you today, you were able to share some of our incredible excitement about the transformation that we expect to see happen, and some of the important technologies that we have well along in development, which can be oriented and put into this context in a very strong way.
For some of you, though, I’m going to suspect that you still are asking yourselves a few questions.One question might be, and I’ll be as direct as I can be about this, what is .NET?Paul had some very good slides on that in this last presentation.But I do want to emphasize the answer to the question in both a conceptual form, and then very concretely.What is .NET?.NET represents a set, an environment, a programming infrastructure that supports the next generation of the Internet as a platform.It is an enabling environment for that.It is also, though, and Bill made the analogy, I think, with Windows here pretty well for its day, .NET is also a user environment, a set of fundamental user services that live on the client, in the server, in the cloud, that are consistent with and build off that programming model.So, it’s both a user experience and a set of developer experiences, that’s the conceptual description of what is .NET.
If you ask what is it in a code set, it’s a set of software that runs on PC clients, that can run and will run in devices, CDs, wireless devices, et cetera, that will run in servers, that run behind firewalls, or that run out on the public Internet. And it’s a set of services that Microsoft will operate that third-party developers and users can all share in, like identity, and storage, and messaging, and notification, some of the services we talked about.So unlike Windows, where you could say it’s a product, it sits one place, it’s in a nice little box, in this world of software as a service it’s not as easy to say what is it and point to a single box, and say that is .NET.The same thing will be true of other software systems in this world.There will be different experiences that the next generation of software help invent.But, in all of these experiences you’ll probably be working with third-party code, not with just the code and software from a single vendor.So the world evolves and moves forward.So that is my attempt at a shorter answer to what is .NET concretely.
A second question, certainly from the financial folks I had a chance to see at the break, I think is what does our business transition look like in the environment of this introduction of the .NET platform.Today we sell Windows; we either license it or derive a royalty from OEMs.We sell applications like Office; we collect a fee for those applications, sometimes distributed out over a few years with maintenance, sometimes collected up front.And we have some services today that are primarily advertising funded, just a little bit subscription funded in the case of some of the things that go on in bCentral.
What does our business look like in the future?I think our business looks as I show here on the right.There’s a new product, a new line of products, Windows.NET, where the .NET technologies are infused into Windows, and we sell servers as we do today, we license clients as we do today, we license the .NET technology for other devices, whether those run Windows or do not run Windows, both of which are certainly possible, those are royalty or license fee bearing products.We’ll run these .NET Building Blocks out in the Internet for software developers and users to use.They will be paid for in some cases by us, we will just run those, in some cases there will be some cost recovery from the developer, and in some cases they will be included with subscriptions that users buy from us or from other third-party software developers.
And then we are investing in what we talked about today, five big services, a service that is to follow on MSN, a service that is the follow on to Office, this new integrated small business service that we talked about, a new development service. I happen to think this is one of the great opportunities, to push the tools, not to just be better, but to almost automatically let you build, and as Bill talked about earlier, just click to deploy.So you integrate essentially Web hosting directly in with the development tools.
And last but not least, based upon the technologies that we previewed for you today, we see a subscription service that represents sort of the future of the technology that we showed earlier.This is a long-term transition, again.I’ll just highlight that.We’re going to be selling copies of Microsoft Office for many, many years.Non-service components, we’ll be selling versions of the Windows server that don’t have .NET for many, many years to come.This is not a quick transition perhaps, but this is the direction of transformation that we’re describing.
The road map. Bill put this picture up earlier, and based upon some of the comments I heard at break maybe I’ll try to flush through a few things.Some of you will ask what’s concrete, what’s short-term, what’s coming immediately, and what’s farther out there?I think by virtue of the demonstrations you saw it’s easy for you to say what’s coming soon.It’s some of the core development and server infrastructure that supports this new programming model.You saw great demonstrations of Visual Studio 7 and the BizTalk server.We will have Visual Studio 7 in the hands of tens of thousands of developers this summer, and we’ll ship that within the next 12 months.We’ll have the BizTalk server shipping this year.So those become really the first elements to come to market.
Second will be a version of Windows, next year, Windows.NET, and I guess I’ll emphasize again, the 1.0.We emphasize the 1.0 primarily because it highlights the fact that we’re not going to have the full vision for what Bill described in terms of the user interface implemented next year.But, we think it’s important in Windows.NET to start putting in elements of the user interface, elements of the programming model, tightly and nicely integrated into the Windows product, at the client level and over time at the server level.
We’ll come back, it will take us more than a year to probably really have a Windows.NET server, where we’ve taken the infrastructure elements that we’re pioneering in Visual Studio and BizTalk and build those into the server.We have today the first of the Internet cloud-based building blocks, the Passport service for authentication, identity, payment.We will add next year three or four key services, including instant messaging and notification as a service that third-party software developers can use.
They can ask us to authenticate someone, they can ask us for billing information, they can ask us to deliver notification on their behalf into the same unified notification interface in which people would get instant messages, and start the process of building a unified place for users to handle and parse that kind of information.And there’s a couple of others, the storage service we will pioneer really in 2001, where an ISV application, or a Web site can store things on the user’s behalf in their personal storage spot out on the Internet.
And then it will be again 2002 and beyond before we have all of the services that Paul and Bill described today, and where we have a corporate server that can replicate information back and forth to the Internet on a user’s behalf.I’m sure we have many people in the room today who have the problem of having corporate and personal email be very separate, of not having good ways of unlocking either one of them from certain parts of their lives.And that’s why this federation concept gets increasingly important.
And then in terms of user services, we have some services like MSN and bCentral, which need to be what I might say .NETified, that will happen next year.We’ll introduce a yet-to-be-named personal subscription service.NET.And then it will be 2002 and beyond where we have Office and full Visual Studio in the form that we described.
This is a long-term road map.There are short-term deliverables, but this transformation, not just for us, any kind of transformation like the one that we’re describing in the Internet will not happen in six months or a year, or two years.There’s a lot of work that needs to happen.And as the Internet makes this transition, and as we try to transition our business with it, we know we need to have the same kind of long-term approach and patience that we had with Windows itself.
One question I get asked a lot, particularly in the geopolitical environment in which we live today, is what is your view of partners?How are you reaching out to third parties?Are you a source of opportunity for entrepreneurs, or are you a company that wants to suck everything up itself and have it all inside.We are a source
—
wise aleck out there in front — we are a source, we must be a source of opportunity for many third parties with .NET.We cannot succeed without that.This has all of the same attributes of that ilk that Windows 1.0 did back in 1983, when we first announced it, ’85 when we first shipped it, blah-blah-blah-blah-blah-blah.But, it has those same attributes.
For me it was particularly gratifying to see Paul Grayson in the video that we showed you earlier.Paul was the first Windows 1.0 ISV with his company Micrographix and their product Innovision, and with the work they’re doing at Alibre, and the vision they share of rich clients participating, software as a service and XML, they see themselves again building on this kind of infrastructure.But, we have to put time and energy and people’s efforts into really creating opportunities, working with third parties in a technical sense, making sure we see ways to help showcase and drive business for us and our partners.And really energizing an entrepreneurial development community, whether that’s in smaller companies or larger companies, around the .NET platform.
Today, software ISVs, the application service providers of tomorrow, you can say they’re very similar.These are people who write code and want people to use it.We see benefits in terms of the speed of development of their services, and of deployment to the Internet.We have to have our evangelists working with them technically.We have to help showcase the first applications, the first services that use .NET, and bring that alive.
We have a group of solution providers and systems integrators today who work implementing products like SAP and others in packaged product form on our platform.The world for them is particularly interesting, because these are companies whose fundamental skills are customization and development, not deployment.And the world of software as a service is a world of rapid deployment.And the tools we need to provide there are tools that let somebody not host, necessarily, their own service, but through the miracle of XML customize a service that is being hosted by a third party.
As we look at the future of the solution providers and hosters into today’s world, what they want to do is aggregate services from a variety of people.Maybe they want to put them under one bill, so they want to take an accounting service from this person, they want to take a productivity service from that person, and they want to blend those things.How do we let them customize those things through XML, how do we give them the tools that allows those things to put those things on one bill?How does the .NET platform enable that kind of service aggregation that we see so many hosting firms, and some ASPs, interested in today?With device vendors, how do we describe a rich set of devices, and have an appropriate run time to put into a phone, a TV, a palm computer, so that it runs appropriately?And for network operators, how do we really create an infrastructure where the operator can take these services, aggregate them with their telecommunications services, and offer them in a rich way?
We really are talking about a world in which there are Web sites that you visit that are off talking to our .NET building blocks, and they’re off talking to UPS, and they’re off talking to somebody else, but from the user’s perspective it’s one experience.The crusade of application integration, which has been so important over the many years of the computer industry, I think will be much improved by the full embrace of XML in this world.
We will run this with the same kind of openness that we’ve run the Windows effort, but we will dramatize those even more.For every component of the .NET platform we will run design previews, with literally hundreds of software developers, and information technology specialists to preview, to understand what we’re doing, to critique it, to give us feedback.I’ll talk a little bit about our involvement with XML, so far, but certainly the kind of work that we’ve seen from Dave Winer, from Don Box, from others, just in participation in the development of the SOAP specification, has been really amazing and really valuable.And we need to rev up that engine in a variety of ways.
We had a chance to formally brief, talk to, and get feedback from partners across the spectrum.ASPs and software developers like CMGI, software developers like Commerce One and Ariba, business to business, business to consumers, systems integrators like Andersen Consulting, hosters like Verio, ASPs like Alibre, ASPs like Loudcloud.If you’d asked me, frankly, six months ago whether we’d be standing on stage arm in arm, partnering with Mark Andreessen, I would have thought that was going to be an amazing six-month period of time.But, we have a coincidence of interest, and that’s very powerful, about what the future of the Internet looks like.
So I want to run just a few more videos to kind of flush out the nature of the reactions that we’ve seen from partners across the spectrum of this endeavor.
So let’s roll the video, please.
(Video shown.)
MR. BALLMER: I hope we didn’t make you too seasick with some of those videos.Everybody has got their stylistic preferences.
I want to talk just a little bit more in the context of openness and partnership about XML.No more of the technical details, we’ve had a chance to talk some about those.But, this has been a big investment for us for a long time, literally back to 1996, when one of the sort of early folks to get involved with XML, a guy named Jean Paoli who works here now, joined Microsoft. We’ve been interested, we’ve had people working, we’ve literally been working on the SOAP specification, of which now IBM is a co-author, Winer-Box, some of the people I talked about earlier, very involved, a lot of companies, but SOAP is essentially the protocol that lets XML travel over the Internet, if you will.
But we’ve been committed to these things, and we’ve been committed to them in an open way, so that literally as we talk about the .NET platform, we’ll want to have people use our software for these applications in a variety of ways, but because of XML you can have a Web site or a device on the Internet that does not run .NET software, but nonetheless we can participate with through XML..NET has got to be the best way to help users and developers take advantage of this platform, but it’s certainly not going to be the only way because of the openness that XML provides, and the openness that SOAP provides.
We’ve also done a set of work under the auspices of a group that we pulled together, but it really runs itself now, which we call BizTalk.org, where people are busy publishing standard schema or standard representations of data, or information, or messages, in this XML format, and those, again, are all very open public schema.Microsoft will participate in driving some of those schema.We will, for example, be very involved in things like calendar, and company, and some of the things where, effectively, you saw over the course of the day today that our software had knowledge, but those, again, are schema that third parties will need to and will be able to participate in very, very openly.And last but not least, while we don’t have any announcements today, we’re very open and we will talk to partners and competitors about taking the .NET software, if you will, and adapting it, so it can run on other systems, other devices, that don’t run Windows, that don’t come from Microsoft, but, nonetheless, where we want those devices and systems to be able to participate in the programming infrastructure and user infrastructure that .NET represents.
One of the questions I got from our employees after we did the dry run of this thing back on June 1st, since we were all set and ready to go, I got some of the guys saying we spent a lot of time talking about the consumer, we spent a lot of time showing things for the end user, a lot of time showing things for the developer, for the small business, but does this .NET thing have anything to do with the enterprise, the large enterprise, the large enterprise that wants to make applications and information available to its employees, that wants to participate in business-to-business e-commerce, that wants to participate in business-to-consumer e-commerce, that may want to ask the question, can I use this .NET platform to dramatically simplify my internal IT operation, my intranet, my operations infrastructure?Can I eventually maybe outsource essentially my entire information and communications infrastructure to the Internet using this .NET platform? And it is certainly absolutely the case that the .NET platform has relevance inside the enterprise.If you look at what XML is, it’s not just a lingua franca for the Internet.It actually becomes the basis for doing better enterprise application integration than is possible today, application application, and then desktop application to data, so that people can publish and make corporate data much more available through tools like Excel and others.
Business-to-business, we’ve participated in, and much has been made of today’s B2B marketplaces, but most of the transactions that happen between businesses won’t be easily moved into generic marketplaces.You’ll want to describe your own business-to-business workflows.I was talking to the folks at Boeing, and when they think about business-to-business, they have to think about how they and Lockheed work together on the design of a next-generation project for the U.S. military, and the kinds of business workflows will never be put in place by a marketplace.They need tools to describe those business-to-business workflows like the BizTalk server.
In the business-to-consumer case, if you can actually have Web sites integrate in and provide services with other Web sites, in some senses, all Web sites become more findable or discoverable than they are today.We know we live in a world today where companies have spent literally millions and millions of dollars unsuccessfully in many cases to try to get somebody to pay attention to their Web site.But if you’re the shipping engine, if you’re the book-buying engine, if any time somebody clicks on the name of a book in a word processing document your store can be discovered or found, I think it lends both user simplicity and nice site discovery.And, as Paul talked about, this concept of federation, we do very much see the .NET platform being part of an overall boon in which people will be able to, in some senses, outsource or federate their internal intranet infrastructure with the public Internet, yet retain control over management and policy and security in the ways that all companies certainly want to today.
I want to try to bridge the .NET from the other things that we’re doing.And I want to do that in some senses through a simple frame.What are the core priorities of Microsoft?And I think they are four-fold.Number one is to continue to focus in on the PC. The PC is an exciting tool, which has got a long way to go yet to be simpler, to provide more capability.We just launched this Windows Me product; we showed you some of the technologies actually earlier on today.Windows 2000 is absolutely the best version of Windows that we’ve ever shipped, and I can’t imagine a user in a business setting working without it, although I know many people still don’t, I just can’t imagine it.Office 2000 and what we have coming in traditional forms of Office.We still have a lot of ideas to improve the way Office is a tool for information and analysis, and collaboration, and certainly XML will help.So that’s one priority for us.
And that doesn’t go away.I got asked at the break by a journalist some question that sort of implied, you know, well, what about Windows today?You’re talking all about the .NET platform, well, what about Windows?Well, Windows isn’t going away.To take advantage of this future trend in technology, we need this new .NET platform, and you’ve seen in our discussion how we bridge and integrate the two through products like Windows.NET.MSN, MSN is a big priority because in some senses a lot of our learning, and a lot of our presence with consumers and value we deliver to consumers, we’re getting through MSN, and I couldn’t be more delighted with the progress that we’re making in the marketplace with MSN.Rick Belluzzo had something of a chance to talk about it.I had a chance to live it when I was in Europe.We were nowhere 18 months ago in Europe, nowhere with MSN.Now, I was in England, we’re number one in England.We’re number four in Spain now, I was in Spain.In Norway, I think we’re still number five.And there’s one local bank and two local newspapers, and one ISP, but just huge increase driven primarily by people’s desire to manage their own information, messaging, notifications, e-mail, communities, file sharing, those are the things that are really driving the acceptance of MSN.
And, thirdly, and I’m going to talk about this in more detail, is our focus in on e-servers.You can call those enterprise or e-commerce, your choice, but it refers, I think, equally well to both.
And then the last priority is developing, launching and migrating to this .NET platform.I sometimes get asked the question, can Microsoft do more than one thing really well?We’ve done this PC thing pretty well, I would say, over the course of the last 25 years, and we’re really talking about doing some new things well..NET and MSN, they’re not the same, but they show the need for us to develop a service, an operations capability.People have been asking me, is Microsoft making progress in the enterprise, are we really going to ever get that right?How are we doing?We feel like we’ve made a lot of progress, and still have a long way to go.We’ve got a multi-billion dollar business delivering database servers and application servers into the enterprises of the world.We have the world’s leading TPCC database performance benchmark — beating anything you can get on Sun and Oracle — on Compaq with Windows 2000 and SQL.We have big systems, like the system at Southwest Securities that processes more trades per day than anything that any of the other online brokers process either on Windows or on UNIX systems; 43 percent of the secure Internet sites in this country, and 62 percent of the business-to-business sites, are on the Windows 2000 platform; 60 percent of all the new SAP installations are on the Windows platform, and the lion’s share of those are now moving to also be on SQL Server.A lot of progress in this business, and still a lot of way to go.
Windows 2000 was a big step forward.The reliability, the availability and the scalability that it brought was incredibly important.This year, though, we have a bunch of new things coming.SQL 2000, the BizTalk, which, by the way, has great XML support.BizTalk Server we showed you.The Management Tools, Application Server.Some tools that help with business-to-consumer commerce, Commerce Server 2000.And then Visual Studio 7 product, which absolutely ensures that the fastest way to build an Internet-oriented e-application is to use Visual Studio 7 and Windows 2000.So, we’re very excited about our enterprise progress, and we also know we still have some work to do, but we just keep focused.And just as we stayed focused on Windows, and made some progress there, we’re staying focused on this e-server opportunity, we’re staying focused on MSN, and we’ll show that same kind of focus and persistence and patience around the .NET platform.
I talked a little bit about our business transformation.I just want to highlight that both in our existing businesses and through .NET we see upsides.The PC market continues to grow.There will be over 130 million PCs sold worldwide this year.We have exciting releases of Office coming that really use XML in the ways I’ve described.We have both volume opportunities and revenue-per-server-sold opportunities as we move upscale into bigger and bigger enterprise applications.And with MSN, whether it’s through our Access subscriber growth, our portal user growth, or just monetizing better the users we have, we see great revenue upsides.
But, that .NET platform creates even more upsides.Software as a service is a concept you really have to let your mind wrap around for a while.But, the best thing that ever happened for a software company is this transformation.Somebody asked me outside, aren’t you afraid about the transformation from royalties or license fees to subscription?I’m enthused, I’m charged up, I’m
— it may take a few years, but I’m going to be here.And why am I excited?We can deliver a better user experience, a more complete experience; we can take care of more of the user’s problems.We can keep the user current.The big problem, particularly in the small-medium business and consumer market today is users are afraid to do new things.It’s just an incredible new opportunity.
I think the opportunity in subscriptions is incredible.The opportunity to expand our offer with the stuff we showed you in BCentral today, customer management, lead management, sales force automation, we’re expanding the range of our offer in significant ways, and I think that’s important.I hope that we will make the net platform successful, and that will drive demand for even more net servers.And we get to participate through these .NET devices.
As we think about devices, the ones that we’ve been most focused on have been TV attached devices, and wireless.With .NET we will invest in software that goes into the devices, software that a wireless carrier, or that a cable company can run for .NET, and services like MSN Mobile and others that they can offer.Our involvement with these people will be very open.It’s not an all or nothing proposition.Sometimes they may like the device work that we’ve done, and not like our services and infrastructure.Sometimes they might like another piece, one, or two, or three.So we’ll work at multiple levels and have an openness and flexibility with partners, people like AT & T and British Telecom, Telefonica, TD Cabo in Portugal who signed up, Rogers is a customer in Canada for our set-top box work, and many, many others.
The relationship that we have with the device vendors will also be important.We showed a Samsung phone, we announced a joint venture and a deep partnership with Ericsson earlier in the year.We’ve been working with General Instrument, and Thompson, and Philips on a variety of important new devices.You’ve seen us invest in working directly with some manufacturers in the work we’re doing with X-box the TV attached device.So all of this work, I think, is an important part of letting the .NET platform come to the fore, and represents new business opportunities for our company.
One question which we all should ask is why Microsoft, why should we be successful with this .NET platform?And the question is really why should we be successful?Software will become a service, XML will be important, new devices will be important, the user interface will evolve, but why will we with .NET be successful?The first thing I’d highlight is we’re software people.We have a passion for software in our blood.And the problems that we’re talking about require incredible software, the user interface advances, the developer advances.
Secondly, we really grasp developers and this notion of what it means to be a platform.And I think that’s very important.This is not a world where every Web site will be an island.We need tools for developers to facilitate this.And, frankly, I don’t know who else loves developers and has spent so much time on this as we have.We’re able to bring a broad vision that runs from users to developers, from enterprises to consumers.Any platform advance that will facilitate this next third generation of the Internet will require that breadth.It can’t be something that just targets the consumer market, or just targets the business market, or the enterprise market.Platforms need to be broad in their reach.
We have a commitment to doing not only the platform, but for services that support the platform.People often ask, what was the key to Windows success?Well, one of the keys certainly to Windows success was our investment in Microsoft Office.And we’re investing in, we’re putting our money where our mouth is, doing services built on the .NET platform: MSN, Office, bCentral, a personal subscription service that we talked about.We have great customer reach, through our run times, through MSN, through Office.I think that will be important.We’re committed to third-party success.I’ve said it before, I’ll say it again, I probably will say it one more time before I’m done today, but it is absolutely critical that we be open, that we involve third parties.And we’ll show the kind of patient long-term approach that is required.
A gentleman said to me outside at the break, he said, it took 15 years for Windows to happen.You launched it in ’83, and he said it wasn’t really right until 1998.We can quibble about whether it took 7 years, or 18 years, or 15 years, whatever the magic number is, but certainly it took patience.I’ll be almost 60 fifteen years from now, so it can’t take that long.But, it will require a patient approach.This is not a transformation, as we said, that will happen in one to two years, not for us, not for the industry.
Who is the competition?In some senses it’s a very good question.There’s no competitor who has announced their .NET.I can’t point to anything and literally say, yes, smells like .NET, it’s got a developer aspect, it’s got an end user aspect.I can’t point to anybody.In fact, it’s very hard with the possible exception of IBM on this list, to point to anybody who is even embracing XML with the same kind of fervor that we are.Yet, I think, and I feel very confident that the XML revolution will happen.
Sun, Sun is primarily a hardware company.These are primarily software problems.This is a world where not all the intelligence will live up in the big server.Just look at the exciting things that are happening on the Internet today, Are You Sure, Velocity from Schwab, the new instant messaging clients, Gnutella, Napster, look at some of the most interesting applications, they all take advantage of client-side intelligence.So I think it is important to have a view that’s not as centralized as the views that Sun and certainly Oracle, and maybe IBM have.
The Linux phenomenon continues to go along, but it’s a phenomenon that works well in times when things are quite static, and people just want to hack around in the detail.I’m not sure it’s a very good approach for taking new trails and affecting transformation.AOL, AOL is a company that’s done a wonderful job, but they’re not focused in on software development, and the development process, and what Web sites need.And certainly I don’t think their acquisition of Time Warner brings them closer to seeing themselves
—
I just don’t think you’d see a demo like the last couple that we did there at an AOL event somehow.
Oracle, Oracle is a good competitor.They are a software company; they’ve got some pretty good technology.But they, too, take a very centralized view, and their view doesn’t largely involve the end user.There’s no user experience aspect to what they’re doing.They’ve done some work with XML, have more work to do.And I think this is the core competitive landscape that we think about, and would expect to see people respond to what we’ve had a chance to talk about today with the .NET platform.
So what’s the .NET bet?What is the .NET bet?What are we betting on?First of all, we’re betting on ourselves being able to transform, to embrace something new, to execute very well, and to be very patient.But, we’re betting on a transformation of the software industry.This notion of software as a service is wildly compelling.We’re betting it will be as compelling for our brethren.But how quickly will people be able to transfer and transition their business models?We’re betting on the importance of application and Web site integration, and XML, a bet I feel very confident about, but it’s a bet.
We’re betting that the whole world does not move back to a mainframe model of centralized computing, that rich servers, rich clients, and rich cloud services are important.We’re betting that user interface matters, that it’s not going to be just a world of browsers, but a world in which people want to locally store, and author, and shape the presentation and data they work with in rich ways.We’re betting on ourselves, and we’re betting that users develop confidence in the kind of privacy and security that our platform and our partners can provide in this world.
We’re betting on Windows 2000, our core foundation work. The platform, or the operating system I guess I should say, on which we will host our .NET work is the Windows 2000 platform.And we’re betting that we really got it right on the scalability, the reliability, the manageability.We may see .NET in other environments, but we’re making a bet there.For the financial people in the audience, it’s fair to say we’re betting that the subscription business model works, that you can get subscriptions.And today it’s only ISPs, people who provide telecommunications services as well, that have built significant subscription revenues.And last but not least, we’re betting that if we commit ourselves completely to bring partners into this mode, that we can be very successful and really reach out, and succeed in stimulating partners in the richest possible way.
I personally couldn’t be more enthusiastic to be here today.Most people in a lifetime I don’t think get one chance to participate in an industry revolution. Because of my long acquaintance with Bill, and the recognition that he and Paul Allen had early on of the revolution that was the microprocessor, and the revolution that was graphical user interface, I feel fortunate to have participated in one major industry revolution, that has literally positively impacted now almost half a billion people around the world.I’m doubly excited to have a chance to do it again.
And certainly, speaking on behalf of now almost 40,000 people who come to work here every day, with passion about software in their blood, we’re certainly glad to be out of the closet, talking about the .NET platform, and able to start now really having the dialogues that let us get questions, comments, and opinions from software developers, and technical professionals, and business people around the world.It’s been our pleasure to have this chance to host you today.And I’ll invite my comrades back on out, and we’ll be happy to take your questions.
Thanks everybody, very much.
(Applause.)
