Microsoft’s Gates Says Innovation Will Drive “Digital Decade”

REDMOND, Wash., July 26, 2001 — Although the personal computer has already transformed the way hundreds of millions of people work, communicate and live, Bill Gates, chairman and chief software architect at Microsoft Corp., today told financial analysts that many of the most significant and exciting technological advances will take place in the
“digital decade”
ahead.

“Twenty-five years ago the idea of widespread, low-cost computing was a dream. Today it’s a reality, and we’re still only at the start of the digital decade,”
Gates said.
“Over the next 10 years, an advanced new generation of PCs and smart devices will transform business processes and revolutionize how people work, learn and spend their leisure time.”

Speaking to an audience of more than 350 financial analysts, investors and journalists at Microsoft’s annual Financial Analyst Meeting, Gates outlined his vision for the coming digital decade and described how Microsoft® .NET Web services and industry standards such as XML will enhance productivity, communications and leisure activities.

“We believe the coming decade will be a time of enormous opportunity, both for consumers and for companies all across the technology industry,”
Gates said.
“We are investing in research and development so that we can help provide the software and services that will deliver unprecedented benefits to customers, and incredible business opportunities to the high-tech industry.”

Gates said Microsoft research and development spending in the coming fiscal year, estimated at more than $5 billion, will advance key priorities for the company focused on building momentum in the enterprise, energizing the PC and continuing to grow Microsoft’s consumer business.

Demonstrating the company’s progress in delivering .NET enterprise solutions, company officials announced at the meeting that Ford Motor Co. has selected Microsoft BizTalk™
Server 2000 and Microsoft .NET Enterprise Servers to build the company’s global integration project, dubbed eHub. This landmark project will be one of the first Fortune 50 technology solutions architected for XML Web services. Microsoft’s largest BizTalk Server 2000 implementation to date, this integration solution will enable an instantaneous and seamless flow of information between Ford and its suppliers, dealers, exchanges, business partners and customers.

Microsoft executives also announced at the meeting that the company’s Great Plains division will introduce a new financial management solution for small businesses in the fourth calendar quarter of 2001. The Microsoft Great Plains® Small Business Manager will provide an on-premise accounting and payroll solution tied to Microsoft’s online bCentral™
small-business portal services.

In the consumer space, Microsoft highlighted significant gains for the MSN® network of Internet services in worldwide unique users, U.S. Internet Access subscribers and advertising revenues. With more than 250 million unique visitors worldwide per month, MSN now ranks as the world’s most popular Web destination and recently surpassed Yahoo! in global advertising revenue. In addition, MSN Internet Access subscriptions have grown to more than 6.5 million in the United States.

Webcast Details

Microsoft is holding a webcast of the Financial Analyst Meeting today from 8:30 a.m. to 5:30 p.m. PDT. In addition to Gates, the day’s presenters include Chief Executive Officer Steve Ballmer, President Rick Belluzzo, Chief Financial Officer John Connors and several other executives, highlighting Microsoft’s business and product strategy. The session may be accessed at http://www.microsoft.com/msft/ . In addition, the session will be archived on Microsoft’s Investor Relations Web site under
“speeches/events.”
Visitors to this site can read transcripts of the presentations, see the slides or watch the replay of the audio/video presentation at http://www.microsoft.com/msft/speech.htm .

About Microsoft

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

Microsoft, BizTalk, bCentral and MSN are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Great Plains is either a registered trademark or trademark of Great Plains Software Inc. in the United States and/or other countries.

Great Plains Software Inc. is a wholly owned subsidiary of Microsoft Corp.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft’s corporate information pages.

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