Steve Ballmer Speech Transcript – Microsoft Office System Launch

Remarks by Steve Ballmer, CEO, Microsoft Corporation
Microsoft Office System Launch
Orlando, Florida
October 21, 2003

STEVE BALLMER: Well, thanks. It’s a real honor and privilege to have a chance to be here with you for the Office System 2003 launch.

I have to say, I don’t know what I did that was so wonderful that I got to do the launch here in Orlando. As I turned on the television this morning to the Today Show, I noticed there was flooding in Seattle, over six inches of rain and I’ve got to go home tonight. But I certainly thank you for spending your time and for just having such a wonderful environment.

We want to try to cover a lot of ground this morning and really let you have a chance to get a good feel for the motivation and for all of the work, and the ways maybe that you can exploit this new Office System technology, so I’m going to sort of dive into that, if you will, without further ado.

Microsoft as a company, really in a number of ways, grew up thinking about what we call the knowledge worker, or the information worker, as kind of the core customer constituency of the business. If you go back far enough, you would say it was software developers, because that’s really where we got started with BASIC and blah, blah-blah, blah-blah. But I’ve been at Microsoft 23 years now; when I arrived at Microsoft, the number one thing in 1980 that Bill Gates and Paul Allen wanted to do was to build productivity tools. And here we are, 23 years later, and I would say productivity tools and what we do for information workers is really at the heart and soul of a lot of the value that our company, I think, adds in your environment.

We did a little survey, the results of which are being published actually today, that we call the Great Moments at Work Survey. And we worked in conjunction with Harris, the polling organization, and really went out and tried to talk to people about what are the kinds of things you do at work, where do you get satisfaction, where do you get your greatest joy, what are your hardships, what are your tools, how do you get your work done. And there is a lot of very interesting information in that, and I certainly will point you to our Web site to be able to read and learn more about that.

But there were a number of things that were very interesting. When you ask people, ‘What is the number one thing, the number one thing, that you really derive satisfaction from at work?’ people say it’s solving tough problems — solving tough problems. Now, in a sense, that should probably not come as any surprise, because we’re talking about the time at work, not the time at home, and I think most of us really sort of gear up and get quite switched on by the notion of some kind of a big challenge that we can attack.

We think it’s important that we continue to invest and drive and make tools that really help people do what they want most to do, to derive those great moments at work, to solve those tough problems, and so as part of it we also asked people what are the tools that you value most at work, what are your favorite technologies.

Number one was e-mail. Number two was the cell phone. Number three was actually the laptop, very carefully chosen words by the people in the survey, it wasn’t the PC in general, it was the laptop. Number four was the phone; I guess that means the fixed phone or it just may be that we didn’t amalgamate cell phone and phone. Number five was the word processor. Number six was the spreadsheet.

People work with ideas. When they go to solve tough problems, a lot of it is about communicating, collaborating with other people clearly through mail, through voice communications. A lot of it is about analyzing ideas, presenting ideas, communicating ideas in a variety of ways.

So in a sense, maybe it shouldn’t have been a surprise, but frankly we weren’t sure where things were going to go when we started this thing, but it reinforced our fundamental belief that if we can enhance the basic toolset and the basic experience that people have with tools that help with analysis, communication and collaboration, we will really do a lot to help people have great moments at work, and from a business perspective, if people are solving tough problems, those are tough problems which have been eliminated or reduced for the businesses for which these information workers are employed.

Today, around the world, we have about 400 million users of Microsoft Office. It’s a basic part of the fabric of the way information workers work, literally across the globe. And the average worker spends about four hours a day doing something with the Microsoft Office suite: reading mail, piping mail, working on reports, putting together a presentation — really a very dramatic number, if you stop and think about the total hours in the day.

It’s certainly clear that there should be a big opportunity to continue to work on the fundamental productivity of these information workers to allow them to break through, and that Microsoft Office is a very natural starting point for that future innovation and future work.

It probably makes sense to take a little bit of a step back and look at sort of the history, if you will, of the last 20-plus years, in terms of what’s gone on with the computer in terms of productivity benefits.

If you stop and think about it, you go all the way back to 1980, about the time I started at Microsoft, go back even further, if you like, ’75, but ’80 is a very vivid time for me. I arrived at Microsoft, and we had a thing called a Telex machine. Some people may remember one, but that’s how we communicated with our people in Europe and there was about one person who knew how to use the Telex machine but it was a very important device.

We had proprietary word processors at Microsoft. That was quite an innovation for me. I had arrived from Proctor & Gamble, and when I was at Proctor & Gamble, the secretaries would type our memos onto a certain kind of heavy paper and then when they needed to edit them, they had Exacto blades and they would literally cut and paste, Exacto blades and rubber cement, and that was the way documents got assembled, so these word processors were pretty cool.

But if you stop and think about it, really the period of the early ’80s, mid ’80s, was a period where there was a basic kind of replacement — a very important replacement — but a basic kind of replacement of ledgers, of typewriters, with some kind of electronic communication.

The period of the ’90s was much more rapid. There was the move to graphical user interface. We got the universal connectivity over that time of the Internet and access to information. E-mail really took off in the back half of the ’90s. That may sound funny to people, but I can still remember discussions in the mid ’90s with CEOs who said, ‘I don’t use e-mail, so we don’t need it in my company, because if I don’t use it nobody else will either.’ And there was a truth to it, frankly. There were islands of information, and so we saw an explosion of productivity as people moved to use the most modern tools in a very, very different way, much more general purpose, much more fundamental part of the communications and analysis infrastructure.

We sit here in the early 2000s, and the question that may be sort of best asked is what’s the future of productivity? Some people actually ask is there a future for the productivity revolution. There are all too many times when I’ll have people ask me, ‘Aren’t we kind of at the end of the road for this thing? We’ve got 6,782 features in Word. We don’t need anymore. This is kind of the end.’ That’s actually not a correct number; I didn’t count them before this meeting. But suffice it to say there’s a lot of capability there. But people say, ‘Aren’t we really at the end of the road?’

And it’s really a question of the perspective that you take. If you stop and say to yourself, Moore’s Law is not done, and so certainly the hardware is going to give us greater capabilities. And if you take the perspective, which I know our end users all take, which is, despite the fact that I get a lot, I don’t get all I want; I don’t really have access to the key business information that I need to make decisions in the way that I want to make them.

I was talking backstage to one of our customers who was pointing out that at the end of the day, keeping track of contacts in kind of a CRM way is still too hard. The gap between something like Outlook and something like Siebel is a huge gap; people really can’t accomplish what they fully want to accomplish. The information is too much in islands.

If you really stop and think about it, there are specialists who actually do want new features in all these areas. The people who worked very hard on this slide deck, I guarantee you they have a list as long as my arm of new features that they would love to see in the PowerPoint tool.

And at the same time, the more casual user is saying, ‘How do I do things I can’t do with these tools? How do I better collaborate? How do I even get these tools to do things they probably do but I don’t understand? Why don’t these tools understand my direction, my speech, my intent? Why do I have to learn so much about the way they work?’

Let me give you a good example of a feature that nobody is sure what it is: revision marks. Revision marks, when we first introduced them in Word, revision marks were kind of a feature for the sophisticated user. In law offices, you’d send around contracts with revision marks on. Today, revision marks are much more popular amongst a broad set of our Word user base. Why? Because people have gotten comfortable with the concept, and whether you’re passing around a press release, a business plan, no matter what the document is, people want to have the notion of ‘I want to see changes other people made, I want to be able to comment, I want to be able to propose changes,’ et cetera.

So there’s a broadening of the sort of basic notion of what is productivity, and a simplification of many of the things that people want to do to make them more possible that I think are very important in terms of the future of productivity.

Today, we’re going to share some of those kinds of ideas, a broadening of the basic concept of what Microsoft Office is. It is not, from our perspective, a spreadsheet and a word processor. That may be kind of where people think it grew up. We think of Microsoft Office as the foundation for the definitive set of tools that we need to provide to enhance information worker productivity. And you’ll see new members of the Office family today. That’s why we call it the Microsoft Office System, because it’s a broader, bigger definition than it has ever been before, because we think we need to broaden out the notion of what it does to really deliver on the promise and prospects of future productivity.

I’ll just take a small look into the audience; very hard to do with these bright lights in my eyes. But looking out into the audience, I think I can fairly say this meeting has not been transformed very dramatically through Office productivity. Yeah, I’m using PowerPoint, but most people out there don’t look like they have a computer turned on right now. Heaven forbid that I would say something interesting today or silly, either one; I mean, you see that video guy right there. He’s making a tape. You ever know anybody who ever looked at any tape that came out of any meeting you ever went to? (Laughter.) I’ve never met the person who ever looked at the tape.

On the other hand, if this presentation was being broadcast over a wireless network in this room where you could have the audio and the video synchronized with the PowerPoint and the notes you were taking, so when you said, ‘This made sense,’ you could just e-mail that to your colleagues, they would click on your note, it would take them right to the point in the audio and video session, it would take them right to the PowerPoint that was up at the time, then maybe we’re cooking. Then maybe we have something where we can say this meeting, your productivity in a meeting like this, was enhanced because of the use of technology.

So I see a big, broad future, and I think that’s the future for the Microsoft Office System is the future of delivering on these kinds of improvements in productivity.

Today we’re launching Microsoft Office System 2003 and I frankly think it is the most significant advance we’ve made in Microsoft Office in a long, long time. If you think back, ten years ago we launched really the first real version, Office 4, the first real version I would say, of Microsoft Office. There was an earlier version that was just sort of a collection of products thrown together. Ten years ago, we really brought them together and integrated them. We brought them up to 32-bit with the introduction of Windows 95. We made some enhancements for collaboration. We extended their Internet capabilities. We made them easier to deploy. But this is really the first generation in a long time where we significantly, I think, advanced the frontier of productivity for the information worker.

The Microsoft Office System 2003 is not just a word processor and a spreadsheet. In fact, it’s not even just a client-side application. It’s client-side application that can talk and intelligently exploit server infrastructure, services that run out in the Internet cloud and solutions that have been developed and written by partners of ours as well as by end customers that help enhance the overall productivity experience for people.

I was reading on my way down to Florida yesterday about a solution that a partner of ours, SETAG Asset Management, is introducing that helps brokers who work with people with high net worth communicate and collaborate with them much better on their portfolios using the new collaboration capabilities in Microsoft Office 2003; a good example of solutions being built on this basic core platform. So, it is a broader definition even technologically than any other version of Microsoft Office heretofore.

It’s also in effect the day in Microsoft’s history, and certainly in Microsoft Office’s history, when we are launching more new products than we ever have on any day in the past. There’s a new version, of course, of the core components: Excel, PowerPoint, Word, Access and Outlook. We’re launching a new version of our Live Meeting service, a new version of Publisher, a new version of Microsoft Exchange that’s really synched and coordinated with the new Outlook; a new version of our Portal Server that fits naturally in the collaboration and information sharing context of Office System 2003; a new version of Visio and Project, a new server that helps with real time communication in Microsoft Office that we call the Live Communication Server; a new version of the back-end for Microsoft Project that allows teams of people to collaborate, Microsoft Project Server 2003.

Of course, we have a professional version, a basic version and a small business version of Office, and then new versions of FrontPage and two new products, Microsoft InfoPath, which is an intelligent XML forms package that we’ll talk a little bit more about today that can be used as part of Office to really help it integrate into business processes, and a very new application we’ll show you today called Microsoft OneNote, which helps facilitate the process of note taking, something that all of us do and all of our kids do in many times in many ways over the course of the day.

So when we talk about the system, we’re really talking about all of this machinery — client, server and services — that fit together to deliver on the productivity advances and promises that we’re so enthusiastic about.

I get asked the question as I’ve been out seeing customers, ‘OK, are you guys using this Microsoft Office System 2003 internally at Microsoft? What has it brought you? Has it been important? What do you think?’ I mean, we talk at Microsoft about this notion we call “eating our own dog food.” You’re suppose to eat your own dog food before you serve it to anybody else. We’ve done that really with the Office System 2003 and we do it with all our new products. Before we’ll ship a version of Exchange, it gets deployed completely inside Microsoft. Before we’ll ship a new Windows Server, it gets deployed under and inside Microsoft.

With Office, of course, it gets deployed, but it’s more important that it not only get deployed, but that we actually start reaping the kind of productivity benefits that we’re talking about with you. So let me give you a little bit of a characterization about how the Microsoft Office System is already in use contributing vigorously inside Microsoft.

We’ll show you a capability inside the Office System today that delivers on what we call Information Rights Management. We’re working on the next version — I hate to tell you this confidentially but I’ll have to swear you to secrecy now — we’re working on the next version of Xbox right now and we’re working on Halo 2 and Halo 3, the two newest versions of the game.

Now, the plan for those things are super, super secret, top secret type stuff. I mean, they really are, in fact, because if you take a look at our competition with Sony it’s a big chess game — who’s going to do what. And the team said, ‘Look, we want to send out the documents about this, but we really only want them to go to very few people.’ They sent those documents and the e-mail around that protected with Information Rights Management. I got the document. I couldn’t print it. I was not allowed. They didn’t give me permission to print it. I couldn’t Print Screen it. They didn’t want to give me permission to do that. I couldn’t forward it and when I replied to it, it stripped everything out of the original e-mail so that there was not a trace, not a place for leakage in the system.

You might think they could trust me a little bit more — (laughter) — but the fact of the matter is as a guy who sends out mail to our employees and knows that it’s immediately going to go to the Wall Street Journal, I can be somewhat sensitive to the notion that says we should be protecting our confidential information; big benefit already captured in the context of our own business.

SharePoint Portal and Windows SharePoint Services: Our IT department built out essentially a farm where people can host these new collaboration sites. I think about the SharePoint Services as essentially a replacement for old-style file shares, and you’ll see some more of that later.

Organically, we have already 25,000 work spaces set up. Every meeting, every event, every team has a SharePoint site that they use for coordinating, collaborating and sharing documents in their projects.

Microsoft Outlook, you’ll see the demo; I can’t imagine living without the new version personally of Microsoft Outlook, but from an IT perspective, if you take a look at how much bandwidth we’ve saved just using the local caching technologies in the new version of Outlook, it’s amazing.

We’re using the new InfoPath technology to improve the connectivity between our SAP systems and our knowledge workers.

I’d do a survey; how many people in this audience use SAP in your organization, a show of hands? Anybody? A small group. If you take a look, a lot of people, like at Microsoft, we have 50,000 employees, we only have 200 people who actually use SAP. Everybody else connects to it somehow through Microsoft Office and InfoPath improves that experience dramatically.

In this year alone, we hope to save about US$43 million in travel costs by letting people communicate and work collaboratively in meetings over the Internet using the Live Meeting services.

So, as a productivity benefit to our information workers and to our corporation, the Microsoft Office System 2003 is, if you will, very much at work.

We did a study with a consulting firm called Navigant and we pulled in about 14 of our rapid adoption customers from Microsoft Office System 2003, big customers, people like Telecom Italia, Siemens and a number of others. And they looked at these 14 early adopters and tried to assess what benefits those customers are seeing. An average gain in information worker productivity of about two hours per week. Median payback on solutions that were built using the system comes in about eight months. It’s a very rapid payback on new investments. And a median net present value, positive value of about $4,000 per information worker.

It’s early data. It comes only from 14 customers. But it was done very professionally under a licensed study by this consulting firm Navigant, and we think it reflects very well the kinds of productivity gain that your companies and your users will see from using Office System 2003.

The breakthroughs in this product really fall into three buckets, and most of the rest of our chat today will focus in and help you see these benefits in these three areas: collaboration amongst workers; integrating essentially knowledge workers, information workers into business processes through integration via typically XML Web services or collaboration technologies; and then lastly, efficiency, efficiency for individual users and teams managing e-mail, organizing notes, working on the go with mobile devices and participating in digital meetings. And we think all of these areas are rich with opportunity, and so what we’re going to try to do today is share with you a little bit of what the products do, give you a sense for that, demonstrate the products to you a little bit, and have you have a chance to hear from customers that are already taking advantage of Office System 2003 in a variety of these ways. And I’m going to go through them in this order, starting first with collaboration.

If you take a look at the work we’ve done in Office System, this is probably an area that most users when they see a demo react most viscerally and say, ‘I’ve got to have that. I just need it. I can’t live without that.’ And we certainly have found that inside Microsoft.

If you want to share documents amongst a group of people, put together a project — now, you could say that’s what we do in file servers today, but things aren’t very discoverable on file servers today. We’ve got a share in Microsoft called Shows R Us, and Shows R Us is where all the presentations that all the employees in the company give. And you know how people parse through that? They click on the share, they go down all the subdirectories, they open up all the PowerPoint slides or they do a grand search on a set of words that take them to a bunch of individual presentations where the word is embedded and largely they wind up asking some friend, ‘Hey, look, what’s the best presentation on foo and where is it?’ It’s unconscionable that life should be that hard. We’re trying to share that information with our employees.

Now, Shows R Us is a SharePoint collaboration site. There’s text, there’s navigation, there’s description in the Web pages around these. It’s easy as people are participating and collaborating on putting together a new presentation or modifying an existing presentation to share that information in a rich way, and we’ll show you some of this.

I talked about Information Rights Management and securing information. It even goes beyond that. If you think about this day and age in which corporate governance, Sarbanes-Oxley, these are big topics these days. Many of the business leaders I talk to are very concerned about them. How would you implement a document retention policy? We have the capabilities with what’s in there now for you to be able to do that, to be able to say these documents are rights managed and we will delete them automatically at a certain period of time in the future. Now, some people can say, ‘Oh, that’s horrible, that’s terrible, that’s great.’ It’s at least predictable and manageable.

Some of you may follow this court case going on in New York where an investment banker is up on jail charges for sending a piece of mail that says, ‘Clean up your files.’ Who knows what the rights and the wrongs are, but it would sure be nice if the computers just cleaned up the files appropriately automatically and certainly in a number of industries, healthcare, financial services and a number of others it’s a very big deal.

Noticing who’s online and being able to collaborate with them in real time, when we’re getting ready for a presentation like this I want to go to the share, but I need to be able to say, ‘Hey, is Dave Mendlen around?’ Dave is the guy who helps me on my speech. Normally, you pick up the phone, et cetera, et cetera, et cetera. Now, I go right to the SharePoint Web site, I can see if Dave’s online, and I can ping him immediately with an instant message or something else to get him involved in the project.

And people want to be able to publish schedules, projects, list of participants very easily onto the Web. A lot of the products have important technologies for delivering on this collaboration potential. The new Office, the Windows SharePoint Services, which are part of Windows Server 2003, SharePoint Portal Server to allow for better aggregation on an enterprise level and better searching of documents, the new Project Server, the Real Time Communication Server, Live Communication Server 2003 are all important to these collaboration scenarios.

We’ve had a little bit already in the press about SharePoint Portal Server. This is an article that was published on October 14 in the Dallas Morning News. The writer is Alan Goldstein and he says, ‘Collaboration is where I think businesses would find the most significant gains. SharePoint is particularly compelling. The program can help organizations act faster by automating communications that would otherwise be done through e-mails and phone calls.’ Just giving you a sense of some of what the reviewers are already starting to say about the SharePoint technology.

But rather than just hear me kind of prattle on and get excited and blah, blah, blah, what I’d like to do is invite up on stage with me Dawn Graham. Dawn is the VP of Information Technology for Kinko’s, a company well known to all of us, and we’ll hear what Dawn has to say about collaboration in Office 2003. Dawn? (Applause.)

DAWN GRAHAM: Thank you, Steve.

Well, as you know, Kinko’s is a business services and document solutions company with 1,200 locations globally and 20,000 team members. And I’m responsible for infrastructure, and infrastructure includes all the usual suspects: data center, network operations center, telecommunications and tech support.

STEVE BALLMER: A help desk to all of those Kinko’s stores.

DAWN GRAHAM: That’s correct.

STEVE BALLMER: Wow. And tell me a little bit about what you guys have done.

DAWN GRAHAM: Well, what we were facing, as I’m sure many of you have faced, we’ve got a lot of technology throughout the enterprise, and trying to support and maintain that technology centrally with 20,000 team members is an awesome task and we’ve been doing that over the phone, supporting team members, troubleshooting them through the process in order to make sure the systems are available for our customers.

STEVE BALLMER: And how did the new solution come about and what has it enabled you to do?

DAWN GRAHAM: Well, like you mentioned, you had to wonder what else could be done in Office. Well, in this version of Office, the automation and integration with InfoPath and SharePoint is spectacular. We are able to provide a technical solution that we’re calling e-support that our team members can access and they can troubleshoot, dialogue and solve the problems with rich text involved, so there’s images, and no longer do we anticipate to always have to support via the phone and walking them through the troubleshooting process.

STEVE BALLMER: And what do you think this will mean for Kinko’s: savings, better productivity?

DAWN GRAHAM: Oh, absolutely. It will be everything. We are anticipating savings in tech support costs, as you would anticipate. With the growth of technology tech support costs are growing as well. And so, we are going to reduce that cost, which is in overhead, and then we also anticipate ensuring that all our technology is available for our customers when they arrive. So this is document solutions done right anytime, anywhere by Microsoft.

STEVE BALLMER: And was this an expensive proposition to put this solution in place?

DAWN GRAHAM: Well, one of the exciting things is that we didn’t have to go and buy a whole new application, which if you look for self-help, oftentimes you have to stand up and hold; we didn’t have to do that. We’re able to use the technology that is on the desktop of all of our team members. And we partnered with Avanade, who really understands the next generation of Microsoft technology. We may not have been aware of all the capability in 2003, but they know what is built in and they helped us do the integration very inexpensively so that we were able to do an ROI and demonstrate the benefits — versus many of the other solutions we’ve not been able to demonstrate an ROI because it’s cost prohibitive.

STEVE BALLMER: Anything else you’d like to share with the folks about the experience at Kinko’s?

DAWN GRAHAM: It was a wonderful opportunity to work with Microsoft and Avanade and we are so happy to deliver a solution to our team members throughout the globe who need to solve problems for our customers.

STEVE BALLMER: Well, thanks. Thanks very much to Dawn; appreciate it.

DAWN GRAHAM: Thank you, Steve. (Applause.)

STEVE BALLMER: A lot of enthusiasm.

Why don’t we take a little bit of a look at some of the collaborative capabilities in Office System 2003? And the best way usually to do this is with a demo, so I’m going to invite on stage to join me Baris Cetinok from our Office team and Baris is going to do a demonstration of the collaboration capabilities in Office System 2003. (Applause.)

BARIS CETINOK: Thank you, Steve.

So, let’s see all the great products we’ve been talking about, how they can be put to work for you.

So I will start at the collaboration premise of the Microsoft Office System. Collaboration is definitely the next frontier to make your organizations more productive, but there are different layers in our organization. There’s organizational enterprise level, divisions and teams and the individuals that we need to still connect with.

So this is a very typical portal, yet at the same time it’s extremely flexible. We utilize the same technology inside Microsoft to manage our own intranet called MS Web. Just like inside Microsoft, we have another portal site that is hosted by our HR division where actually I can go in as an employee and do self-service HR functions and tasks. Otherwise, imagine if I wanted to get my W2s or my pay stubs for a credit application: I would have to call the HR department, get them to send me the documentation. Here in a single location, we can connect with multiple line of business applications. It could be your ERP application, it could be your HR application, so your employees can be productive at the enterprise level.

So let’s go down one level and say, ‘OK, how do we make teams productive?’

STEVE BALLMER: So this portal that you put together, what are the key technologies we used in that?

BARIS CETINOK: The core technology behind this is SharePoint Portal Server. And most of the structure that you saw here is out of the box, but it still is extremely flexible for customization so you can actually create your own portal for your enterprise.

At the team level, you’ll notice the look and feel and the paradigm is still the same. Basically, it’s a single, central location where you can share information with other team members. So you see the related team members if they’re online, just like you mentioned. Alex is online, for example. The documents they work on, again —

STEVE BALLMER: So what is this?

BARIS CETINOK: This is a SharePoint Services site.

STEVE BALLMER: So what is this? I’ll tell you what this is. This is a file share. I mean, I’ll say it in a way that does the mapping. People say, ‘OK, that’s a bunch of custom Web code.’ That’s not what that is. That’s a pretty trivial out-of-the-box file share. I say it in my own kind of stark way because it’s not your father’s file share, as the advertising in the commercials go, but essentially it’s a file share. It’s a file share with rich description, it’s a file share with links to other information, it’s a file share that tells you who else is participating in the projects in this file share. It’s got other information like sales call reports that are important to people who are involved in this activity.

But this is essentially something easily put together by an information worker without IT involvement. It’s a very simple, out-of-the-box file share.

BARIS CETINOK: This is as simple as actually setting up a file share. You just have to say new site, new team Web and it just comes up with this standard format that you can utilize right out of the box.

And not only — this is great — it comes actually with Windows 2003 Server as a core component of the server product we just shipped.

So this is at the team level where they can collaborate together, but, for example, inside Microsoft we ended up with about 2,000 team sites. It’s great to actually enable our end users to be able to self-serve themselves in their collaborative projects, yet at the same time important to be able to find the information that you need any time you want to.

So therefore, we integrate a very powerful search engine into this environment. And this search engine actually does not only search across team sites, it also searches across databases, Exchange folders, file shares as well as personal information that is coming from the Active Directory. So the different types of information that comes to me, I just look for the word search, you see there are documents, Web sites, lists and even a person who’s actually working on that project. So it makes it very easy to find an expert who might be working on a specific project that you’re trying to find your information on.

So when we look at Alex’s page — again this is right out of the box in SharePoint Portal Server — Alex did not spend a single minute trying to set up this environment. It’s already there as part of the original system.

And, for example, the documents that you see here, the recent ones —

STEVE BALLMER: This is kind of like the root directory people used to give me back in the old days, and I could make some of it private and some of it public. Well, this is the public side of that and now instead of just showing a bunch of files that are by files, you mean I can actually show these files that I want to share out with people, but I can also share information about me, searchable, all of that —

BARIS CETINOK: And some of this information is dynamic, actually; you don’t have to always worry about which ones — if these are public documents created by you, SharePoint automatically crawls across the network and exposes them to the people who have the rights to see them.

STEVE BALLMER: And I can keep my private documents separated out up there on the site.

BARIS CETINOK: Absolutely. And we have a private realm that is again fully customizable. It could be customized by the user, or your IT department again can come up with a standard template for a certain department so they can see the pertinent news that is relevant to their job, or you can see your e-mail, your contacts. So this is Alex’s private site.

STEVE BALLMER: So this is my private site. I’ve pulled together my e-mail with some of the information, other information from Outlook, with the weather apparently in Buffalo, New York. I must love the weather.

So this is like my personalized home page with my private information, but it’s all kind of out of the box essentially, like my old root directory, public side and private side, but with a much richer set of information that I have available on the page to me.

BARIS CETINOK: So also you can keep your private documents that you want to be able to collaborate on whenever you’re traveling inside the company or outside. So let’s say you’re almost done with a document and you want your team to work on certain components of it. In the past, we would have had to forward this document with no protection at all, that everybody can make changes to different areas in the document.

Now we have two capabilities. One of them is we can actually just pick an area in the document and give the rights to a single person, so except Ryan, no one else can actually make edits to this region. I can also lock the rest of the document so that Ryan, when he’s working on this document, doesn’t make any accidental edits.

We can actually take this one level up. Through Windows Rights Management we can control this very granularly. We can limit who can access it, who can print it, who can copy content from it, when it can expire, so eventually, Mission Impossible, it disintegrates basically and you don’t have access to it. And it’s great; it also works outside the firewall. It’s not dependent on your single e-mail or on the file that you’re sending.

STEVE BALLMER: So, if I rights-protect the document and I send it to this fellow right here, it remains rights protected even as it crosses outside the organization?

BARIS CETINOK: Absolutely. If someone saves it on a floppy and they want to pass it out, because it’s confidential information it will be still protected.

STEVE BALLMER: But how would he get rights to read the document if I sent it to him?

BARIS CETINOK: There are two ways we can do that; one, an extranet solution that we have with the Windows Rights Management solution, so where you can set up an extranet with your suppliers and partners so you can have stricter control, or there’s also a public solution via Passport.


BARIS CETINOK: That’s right.

So we restricted this and let’s send this to Brian and my team to work on this. So I will actually just attach this into an e-mail. So in the past, every time you attached a document to an e-mail, you actually created another headache for yourself because you created three, four, five more copies of the same document, so multiple versions start floating.

So now, as you can see on the right hand side, we have a different option where you can choose to centrally store a master copy of this document within your company. Again, this will be stored, as Steve puts it, in a new type of file share, a team work space where it will be always up to date, so your attachments in e-mail will never go out of date. The minute you open it, it will say, ‘Hey, there’s a master copy of this; would you like me to synch up so you have the latest version?’ so you can always have up to date documents.

So, let’s send this to a group of people that work for me and send it out.

So, I’m going to switch roles, and let’s take a look at Brian’s computer and his experience when he gets this e-mail from me.

There is this e-mail that I just sent out. As you’ll notice, Brian did not only get an attachment that he can use to work offline, let’s say he’s on a flight, on his laptop; he also gets a link, as well as everybody else, where he can go and see this latest related information about this document and other information that might be already posted to this environment.

So when we go here, you’re going to notice that this site was created by Outlook automatically for me. I did not have to spend any time customizing this environment. Again, it was as simple as going File, New, Folder.

There are the people who were in my e-mail To line, so they are the members who have rights access to come to this site. The rest of the people can’t.

So Brian opens this document and he wants to make the changes that I asked him to make. Again, just open from the central location that we just talked about.

This is actually a new capability that we have in Office to be able to read documents as well as printing them so you can actually consume the information that you have electronically on your screen right away.

And he tries to type somewhere in the document where he’s not supposed to but he gets a warning saying basically this document is locked and he cannot make any modifications, but he can go and find the region that he is allowed to make changes in and this is it. He just actually made the changes right in the location that he’s allowed to make.

So we’ll save this back to the share again and so he can actually go back and inform Alex that this document is ready, but the tight integration between Office applications and Windows SharePoint Services and SharePoint Portal makes it very easy for him to collaborate. All the information you saw on that site is actually right there available right within the application. So he can look and see Alex’s online, so he could have chosen to send an Instant Message, but we have other capabilities to communicate with her, so we can actually place a phone call and send her an e-mail. The tight integration between Live Communication Server that enables presence and instant messaging capabilities in your companies is very tightly connected with SharePoint and the Office applications, so collaboration is truly integrated throughout the applications and the product.


BARIS CETINOK: And we believe that this is definitely the next frontier to make your organizations more productive at the enterprise, division, team and individual level. We provide it all.

STEVE BALLMER: Great. Thanks very much, Baris.

BARIS CETINOK: Thank you, Steve. (Applause.)

STEVE BALLMER: There was a lot going on in that demonstration and one of the things, you could look at it and say, ‘Boy, that was a lot of custom work somebody did.’ The truth is, it’s something that any information worker can now do, put up their own site, put up a shared site, share documents and collaborate in the rich ways that Baris had a chance to talk to you about.

So that’s the first theme, and you saw that a little bit, you heard from Dawn from Kinko’s about some of the benefits of collaboration that are built in to Office System 2003. I want to pivot now and talk a little bit about the work that we’ve really done to make Office a smart front-end to business processes and business information inside your organization.

The linchpin of this is really the rich support for XML Web services that we’ve built into Office 2003, the new XML-based forms editor InfoPath 2003, work that we’ve done in Visio to connect it to business processes so that you can define a business workflow in Visio and flow it out through other tools, the work we’ve done in SharePoint to support collaboration, and then finally the work we are continuing on with our BizTalk product where its next release will just further deepen its ability to orchestrate XML workflows inside your organization.

And what we’re trying to do here is take processes that were manual and that may now live in a bunch of different islands and help you connect together these business processes and then put intelligence across the integration.

The biggest productivity enhancements in this industry come when you’re able to better leverage work that other people have done. XML is the key. XML will allow any application to start getting leveraged intelligently by other XML applications in the right way.

I recently gave a speech at the Air Force computer conference. In the Air Force, one of the mission critical processes is getting a fighter ready to take off. He gets his orders from his commander; how long does it take between the time you get your order from your commander and you’re in the air? That’s a five hour process right now. It takes five hours for the war fighter to get ready to take off.

They have a goal to get that down to one hour. The information, what takes the time, the war fighter has to go collect the information that’s gathered hither and yon in a bunch of systems.

We worked with them and their partners to wrap these back-end systems — some of them are on BEA and some are on Oracle and some are on Windows and blah, blah, blah, all over the place — and they used Office System 2003 and they pulled the information using InfoPath and some of the other technologies into the Office product and then the war fighter can work with the information.

They’ve cut what was a five hour process down to a two hour process; they think they can get it down to a one hour process. And it’s essentially the business connecting the intelligent client and information with the business process, if you will, in this case of preparing that jet fighter for their ultimate mission.

The cost and complexity of that application development was relatively minimal relative to the benefits that they get by being able to be more real time in their operation and Office System 2003 was really, if you will, the critical linchpin for that operation.

InfoPath is a new product, a new component of the Office product and it’s designed to help get information in and out and people work with information in an XML form.

The folks at InfoWorld comment: “InfoPath is, in my estimation, the best new feature to hit Office since real-time spell checking.” I think that may be even a little over the top myself, but InfoWorld is not prone to being a little over the time, but it gives you something of a sense of the kinds of capability and the power that’s built in to Office System 2003.

What I’d like to do now is to invite another customer on stage, not somebody who’s used InfoPath but somebody who has really taken one of the most critical business processes in her company and automated it in new ways using Microsoft Office System 2003. Please join me in welcoming from Morgan Stanley, Caroline Arnold, please. (Applause.)



CAROLINE ARNOLD: How are you doing?


So why don’t you tell us a little bit about the process that you guys set out to go to work on?

CAROLINE ARNOLD: OK, well, I’m from Morgan Stanley, as Steve said. That’s a financial services firm. It’s very global. We’re in 27 countries and we serve corporate clients and institutional and individual investors. And I’m in the part of the business, which is the institutional securities business, which supports investment banking, equities and fixed income. I’m on the technology side, and my team writes software for the business.

And today, what I’m talking about is a product that we’ve written for the equity research department. So the equity research department actually publishes our opinions in the marketplace.

STEVE BALLMER: This is the stuff that guys like me and everybody wants to ready, buy this stock, sell this stock.


STEVE BALLMER: That’s pretty important information.

CAROLINE ARNOLD: Absolutely critical. I mean, it’s the firm’s intellectual property that we put out there. So our research analysts, they analyze the performance of companies and they predict how those companies are going to perform in the future. Our economists analyze economies around the world and the global economy and put out predictions about that.

And we blast that out to our clients, and time to market is extremely critical for us. The ability to be able to respond to a very dynamic and competitive marketplace, things are changing all the time. We need to be able to put out new products, regulations are changing all the time, so time to market, accuracy of what we do and flexibility are really key for us being successful.

STEVE BALLMER: So if you take a day like today, whoever the — oh, I don’t know, whoever — the analyst who covers us, Mary Meeker, I bet she’s going to be under a lot of pressure after our launch to come out and make a comment about what this means for our stock price. Would that be the kind of thing we’re talking about here?

CAROLINE ARNOLD: That’s absolutely right. And she wants to be first to the marketplace with that opinion. You want to be read first. That’s very important. And our basic toolset for these analysts has always been Excel for doing the analysis and Word for creating the product, but the automation of that, getting it from the analyst, first the analysis, having that flow through to Word, having it be formatted right, comply with regulations, all the pieces to be validated, getting that through a legal editing process and then through a senior editing process and then finally when it’s ready to go out, of course, it’s send out electronically, but we have many distribution channels and each one has different requirements, so the document is then electronically-rendered many different ways in order to be able to serve these distribution channels.

STEVE BALLMER: So that basic analyzing, authoring, reviewing, publishing process — that is the mission critical process for this intellectual property at Morgan Stanley?

CAROLINE ARNOLD: That’s correct. And the productivity of the analyst is very important. Anything that gets the word out faster is key, and that’s what we’re always looking for. And our own productivity as developers is extremely important because we’re under a lot of pressure to change product, redesign product, put out new product, and in previous versions of Word, we’ve been able to do that very well but we really have become early adopters of 2003 because we think we’re going to be more productive and our analysts are going to be much more productive and that’s a huge competitive advantage for us.

STEVE BALLMER: And what looks to you guys to be the most critical things that will help you improve the cycle time for producing high quality research?

CAROLINE ARNOLD: OK, well first of all is the XML architecture that comes with Word 2003, the fact that we can describe any of our published products in a schema, including all the indexing data that’s required that basically describes the content of the document, the contents, the format that that can all be contained in an XML schema that we can extend very quickly, port to another product; these are huge, huge wins for us. That’s number one.

The other XML aspect that’s important to us is these documents that analysts put out are very data driven, and we pull in data from all over our enterprise to make that go out, and now being able to do that through XML right from within the document is a tremendous advance for us. We did it before but it was much clunkier, much more prone to problems; this is really going to be very seamless for us. So if we want to include other sources of data, we have this toolkit; we haven’t had that before.

Another critical aspect is the relationship between Excel and Word is very important to us, so the fact that the Excel table or chart that an analyst might want to insert in his Word document can now be inserted as a refreshable object so that as the analyst does work in Excel it flows directly through into Word and then Word maintains its own special formatting, which is part of what our published document looks like, that connection is going to save hours and hours of analyst time right there.

We love the smart documents interface because what we try to do when we build things on Microsoft products is stay as close to the user experience, the native word user experience as we can for our users, because we think that’s what their comfortable with, that’s what they’re productive with. And in the past to interact with the user and do validations we sort of had to take the wizard approach, which is very effective but it’s disruptive, it’s intrusive, it’s not intuitive to the user. It takes them out of the document, they have to answer a lot of questions and then only returns them to the document when it’s done.

The smart document technology allows us to utilize a task pane, which is living alongside the author working in Word and to interact with the author as he hits critical points in the document and it makes for a really event driven experience for the analyst. Depending on where he is in the document, he may be interacting with some special information but otherwise he’s just at large in Word and that’s what they’re most comfortable in.

Security is a key thing, and now the fact that you can protect very discrete pieces of the document is very important. We always had to lock down more than we wanted to lock down and that’s another thing that frustrates users and we don’t like that. So how we can lock down just very discrete parts of the document. This part is locked down just for the legal department. They’re the only ones who can touch a disclaimer. And this part is locked down for the senior last editor who touches it. And so that makes for a very fluid experience.

And finally, we can distribute our changes much better through the new distribution method that you have in Word 2003. We have to change things all the time and we have to pump them out to users. And now we can just put that in a single location and know the next time our user opens up Word they’re going to get all the changes that we’ve got.

And this really combines for just a hugely powerful package for us. We can create new products, we can get stuff out, we can take documents that were done as XML documents and render them hundreds of different ways with very little programming on our part. We’ve put a lot of time into programming those renditions before and now that’s going to be a snap, so that’s fantastic for us.

STEVE BALLMER: Well, super. Anything else our audience ought to know?

CAROLINE ARNOLD: Well, I mean, I think all in all we’ve jumped into the 2003 thing, we’re working with some people from Microsoft on it, because we really do think that we will be faster in the marketplace, we’re going to be more productive, we can count on the accuracy of what we put out and we really think that’s a win in the marketplace. And as I said, it’s a very competitive marketplace so anything that gives you an edge forward is very important.

STEVE BALLMER: Caroline was also telling me back stage when they hire new analysts, and an analyst is a very skilled, highly paid position, the new analysts think you have something at Morgan Stanley that just kind of blows away the tools they had anywhere else.

CAROLINE ARNOLD: That’s true. We do a lot of debriefing of people that come from other investment banking firms and we debrief them on the technology they had and we get huge reviews at both investment banking where we have a special product built on PowerPoint and in the research department that says these tools really are a huge lift over what they had before, and we like hearing that so we’re going to keep trying to build products like that.

STEVE BALLMER: Super. Well, thanks very much. Thanks, Caroline.

CAROLINE ARNOLD: OK. Thanks a lot. Thanks for having me. (Applause.)

STEVE BALLMER: I think that’s a very good example of where the collaboration and the business process integration advance has really come together in a very strong way and enhances an important mission critical process at one of the largest financial services firms in the world.

I want to turn now to the last topic, which is the topic of efficiency, which in some sense is a measure of personal productivity, probably the thing we can all best individually relate to, and I might start it with a little bit of a thought exercise. We can all ask ourselves the following question: How do we spend our time? How much time a day might you spend reading e-mail, writing e-mail? How much of your time do you spend creating or authoring information for others? How much of your time are you essentially engaged in communication via the phone and what assistance does the technology give you? Do you ever have to go to a meeting? I do. Other administrative tasks: approving expense reports, invoices, et cetera, et cetera, et cetera. Analyzing and looking at information that others think you need to do your job.

And people are all over the spectrum. If you take somebody who works in a call center, taking help desk requests or selling product, you’d get different answers than if you take a look at somebody who’s a manager than if you look at somebody who works in a research department. But I think we can nonetheless say, and it goes back to why in terms of Great Moments at Work survey, why people value these tools. A lot of people’s time is spent dealing with these kinds of ideas, and anything we can do to enhance their productivity I think is a big win.

Let’s start with one that’s on I think many of our customer’s minds, which is the management of e-mail. I think pretty much everybody these days struggles with how do you manage the e-mail that you get, how do you sort it and search it easily.

We have a set of very nice technologies in Office System 2003 that let you define search folders, find all the unread, find all the mail from Foo, find all the mail from Foo where I’m in the ‘To’ line, find all the mail that comes from somebody who doesn’t work at Microsoft. It’s very important to me because those are coming from our customers and business partners and I want to get at those before I get at any of the other mail that comes.

How do I manage business contacts? How do we make that a richer experience that’s got more in it than the old Outlook did?

How do I limit distribution? We talked a little bit about Information Rights Management.

Avoiding spam: Spam is still a huge issue for our customers and how does Outlook and Exchange help expand that experience?

I happen to have two e-mail accounts. A lot of people in this room may have well more than two e-mail accounts. How do we help you pull that information and look at it together in a coherent way?

In all of these areas, whether it’s search folders, whether it’s the new Business Contact Manager that’s available with Office System 2003, Information Rights Management, we have new anti-spam technology integrated in the Outlook client, those will also be available here over the next several months on the server, and the ability to let you see multiple e-mail boxes all together.

If there’s one thing I’d call your attention to personally, it’s the new Outlook. I really couldn’t look anybody in the eye and tell them they’d made the right call if they hadn’t gotten Outlook 2003. It is such a step forward. Whether it’s improved speed of connectivity, the fact that you can connect now to an Exchange back-end without VPN-ing into your organization, so many huge wins in the new version of Microsoft Outlook.

David Pogue, who writes for the New York Times , said, “Outlook 2003 is a sensational and far-reaching overhaul,” and, quote, “a gift from the Gods to the mere mortals who have to use it eight hours a day. The upgrade to the 2003 version of Outlook is worth every penny and more. Jump, don’t slump, into your desk chair and order it.”

I’m with David on this one. (Laughter.) But I think you’ll find that David’s also with many of the other people who have really reviewed and taken a look at the new version of Outlook.

When you couple the new version of Outlook with the work that we’ve done in the new version of Microsoft Exchange, it gets particularly powerful. Mobile access to e-mail: I talked about being able to access e-mail without a VPN. We’ve built the facilities in to be able to get e-mail on a small form factor, wireless device and Baris will show you some of that.

We’ve improved the security and the privacy in Exchange. We’ve taken your feedback and suggestions to lower the total cost of ownership. We’ve really optimized the thing for Windows Server 2003 and put it through extra security work, tuning with the new directory enhancements, et cetera.

The reliability is outstanding and particularly for people who want to consolidate servers, I think it’s a breakthrough and we’ve simplified a lot of the basic IT infrastructure.

But first and foremost is we’ve really designed this new Exchange with the new Outlook. And so in some senses, the best experience for the new Outlook is with the new Exchange. The new Outlook works with down-level Exchange. The new Exchange works with down-level versions of Outlook. But together the new protocols, et cetera, that they can implement are very, very nice.

As PJ Connolly from InfoWorld writers, “Overall, Exchange 2003 looks to be the product to beat for future entries in the collaboration market,” and we’ll show you some of these capabilities.

Mobility, another efficiency item: People are traveling, people are on the move, people want to take some device with them that they can use in a very simple form. Or you don’t have a device with you and you just want to go up to a machine that’s got a Web browser on it and get access to your e-mail. We’ve done a lot of work to improve Outlook Web access so you get absolutely a seamless experience from any browser to your Exchange mailbox, whether the Outlook client is there or not.

We’ve improved the work particularly in our Windows mobile phone and Windows mobile Pocket PC software for PDA and phone devices to make it easier for you to view Office documents and interact with Web sites when you’re offline.

And, of course, our new Tablet technologies are deeply built into all aspects of Office System 2003 so the ideas of inking, of carrying information around, of annotating by handwriting, of doing handwriting recognition, instead of being added in, in a layer, as they were when the first Tablet PCs shipped, they’re now fundamental in Office so that Office can participate in that kind of rich pen and handwriting-based world.

Another thing that we’ve done that I think is pretty important, for at least my personal productivity, is a new capability that really integrates Outlook fully with our MSN Hotmail back-end.

Now, you’ve always been able to get your Hotmail on Outlook or at least for a number of years you’ve been able to do that, but you don’t get the full Outlook capability set. You don’t get Outlook calendars and schedules. You don’t get full Outlook contacts, you don’t get full roaming, et cetera.

I do have two accounts, and for me it’s nice that I get the same capability set now against my Hotmail as I do on my Exchange. Pretty nice, but there’s an even more important breakthrough that came and enhanced my efficiency dramatically.

It turns out that we’ve also designed this thing so that I am allowed to share information from my Exchange calendar to people who are on Hotmail the same way I can exchange information with people who are inside Microsoft and on Exchange.

Said differently, my wife, who is a Hotmail user and is not on the Microsoft corporate intranet, now has access to my calendar in the same way that my secretary, who is in the Microsoft corporate intranet, has access to my calendar. The efficiency gain in that in the Ballmer household is tremendous. (Laughter.) The number of hours of communication about the calendar that we have engaged in is dramatically reduced. The days when my secretary would print my calendar for the next year and have me send it home and take it to my wife, the number of missed appointments at the children’s school is down dramatically. (Laughter.)

Now, I’m having a little bit of fun with this, but it gives you a sense of the kind of thing we know we need to do. We’re all people. We have a personal side and we have a business side. And helping you manage efficiently isn’t only about helping you perform better your direct service to your company, but you’re also engaged in a variety of private activities even during the course of the workday. Your computers at home are being used for home and work. Your computers at work are being used for home and work. And we have to recognize that we have to let you integrate your life in very sensible ways and integrate with the folks that you work with outside your own organization.

I picked a personal example, but the same thing could be with a shared calendar with a customer, sharing that over the Internet using the new, as we call them, Outlook Connector Technologies for MSN Hotmail.

The future of note taking: Note taking is a big deal for me. I don’t know about the rest of you. I probably spend more of my time writing, taking notes in meetings than I do any other time. I sit down with a customer last night, I’m speaking here at the Gartner Group Symposium here in Orlando and I’m sitting there scrawling notes, they’re telling me do this better, do that, do you know about this and some of these analysts, you know, I’ve got to take a lot of notes.

What would have happened in the old days with those notes? I would have copied them over, I’m always working those things. I write them on a piece of paper. Then I decide who they have to go to. I have an elaborate system on my pieces of paper from the old days. If I put an asterisk next to something that meant it had to take action. If I put an asterisk with a name next to it, I knew who I had to assign it to. I had all this rich metadata built into my notes. And you know where it went? Nowhere. Because I would then sit there and re-key them.

Now I have a tool where I can take the notes electronically, I have all of my notes stored up, unless I choose to delete them. I don’t have to worry about where is the piece of paper; I’ve got to keep track of one thing. And the metadata means something. The metadata means something. I can sort and it will show me all the things that I wanted Ken DiPietro to take a look at. He’s one of my direct reports.

So the notion of letting me organize information, capture information in new ways, get back at my notes quickly, to reuse and share the notes, because I do want to be able to share them, I want to be able to send. You might want to send the notes from this kind of a meeting to somebody who works for you and you want to be able to pass them along in that kind of a rich way.

From Sam Diaz, who writes for the San Jose Mercury News , and OneNote is the name of the new application in Office System 2003 that helps note taking. “If you’re a note taker, especially if you’re a student,” because I think he thinks they take a lot of notes, “I think OneNote is a productivity tool that could change the way you take notes.”

You’ll have a chance to see it. I think it’s another one of these technologies that if we really stop and think about it, we spend a lot of our time and enhancing the productivity of that basic kind of a process is pretty important.

To kind of pull together some of these things that I’ve been talking about in terms of efficiency I want to invite Baris back on stage to do one more demonstration for you of some of these technologies. Baris.


So let’s switch to OneNote and demonstrate some of the things that Steve actually already mentioned.

As you can see, the paradigm of OneNote is very similar to a three-ring binder. So you have tabs, which are an endless number of them. You can add new ones if you choose to do so on top. As you’ll notice, as I flip through them, you have the capability to capture very rich different types of information in this notebook. It has the flexibility of paper, but also brings the power and the capabilities of a digital organizational tool such as being able to do search across them and find the things you’re looking for.

Imagine all those paper notes you took, if you wanted to go back to them three months later and look for some note, it’s very hard to find what you’re looking for, but with OneNote I can actually do a very quick keyword search and it basically searches across all my notes that I have taken and finds the occurrences. Not only does it find it in the typed notes that I might have taken on my notebook or on my desktop PC, but it also finds the notes that I might have taken on that Tablet PC with ink, so it does recognize your handwriting and find all the notes you took.

Not only that, but this is a great capability that I use in meetings, I can also record the audio of that meeting and my notes are synchronized with the sound file, so I can go and click on the note and it will start playing the meeting from the minute that I took that note.

And the great thing about OneNote is all the information that you actually capture here is very easy to share with others. All you have to do is just e-mail it to them. We do it in a smart way. Instead of just sending an attachment just like a Word document we also send it as a Web page format or in HTML format so the people who don’t have OneNote still can get the note and consume them. It’s not an image; it’s full text and it’s fully rich in HTML.

So let’s talk about e-mail. As the time grows, many of us rely on e-mail as the core communication tool in our organizations and in our businesses. This reliance also comes with a burden of increased number of e-mails that we have. So the first thing you’ll notice is the user interface design change we made in Outlook. This doesn’t mean this is just a makeup. Actually, this new design is our usability testing provides us with up to 40 percent more information about the information you’re seeking.

A great example of it is the thing that you see on the right hand side, what we call the Reading Pane. Instead of opening every single e-mail to read them, you can quickly scroll on the right hand side and get to the point of the e-mail without having to open every one of those e-mails that you have.

We talked about how we work with e-mail and the way we work with e-mail, remember, trying to get to them. Well, one thing we changed is how we group the e-mails. One of the requests we had was how can I reduce the number of e-mails that show up, especially those long threads, when everybody goes reply, reply, reply. It can easily fill the whole screen of Outlook on that one topic.

Now we have this capability to group the e-mails around a specific conversation thread, so I can actually just collapse it, the most current one or the unread one will be the one that’s exposed in that thread. And to clean it up I just have to delete the thread itself, not every single e-mail that was in the thread.

We talked about spam. It is a big problem. Currently up to 30 percent of the e-mail traffic that we have in our inboxes is resulting from spam. So the new spam filter technology that we have developed with MSN — they’re utilizing it in their MSN Explorer as well as in Outlook — does a great job of putting the spam where it belongs, into a junk e-mail folder.

You also have the opportunity, you might scroll through your inbox and say, ‘Hmm, this is definitely not an e-mail that I intended to receive,’ you can easily mark this e-mail as junk e-mail and going forward the system will learn and all e-mails that are coming from this sender or similar senders will be moved into your junk e-mail box. And you also have the capability to customize every one of the options so you can determine who are the safe senders, who are the safe recipients and you can block out certain senders absolutely from your inbox.

A lot of us work on the road. For the last three days, I’ve been on the road. I’m in a hotel room that’s supposed to have broadband but doesn’t, so I have to dial up. And they have a restriction on their PBX system so I’m connecting at very low speeds to my Microsoft environment.

In the company at home I have broadband but now Outlook is intelligent enough to make me productive when I’m away from my office, too. It gives me the capability to actually download what I need to download, automatically and intelligently takes the speed of the connection and starts going through my e-mails. First we’ll download just the subject line, then it will download the first few lines of the e-mail, then it will download the whole body if I choose to do so and then it will download the attachment.

The worst thing that used to happen: your connection dies and there’s a one megabyte attachment, you have to start all over again. Now it will start where it left off, so it does incremental downloads as well. The improvements are tremendous.

And the other great this is wireless networks are available in many airports, but many of them have some setups that do not allow me to virtual private network — VPN — into my corporate network at times. But now with Exchange 2003 and Outlook 2003, I can synchronize my e-mails, my calendar, my contacts. I can see all the previous information by bypassing all those firewall connection needs and directly synchronize with Exchange on the fly.

STEVE BALLMER: Without compromising the security of the mail or of the corporation.

BARIS CETINOK: Absolutely. Especially VPN can also be a security problem because it opens up all access to the whole corporate network. Now you just have a single drawer to get into to get your e-mail and get out.

And also when you’re on the road, let’s say your computer, you lost it, a lot of us forget it in the security check line, or you don’t have access. Well, now with Exchange 2003’s Outlook Web Access — actually, yesterday when I was doing a demo for some of the people that we work with, they were like in Outlook — this is not Outlook, this is Outlook Web Access. The paradigm, the look, the feel, the functionality —

STEVE BALLMER: Are you saying this is a browser?

BARIS CETINOK: It’s totally Internet Explorer.

STEVE BALLMER: So if I got to the Gartner Group little public place where they’ve got all the computers on the Internet, I can literally just go connect up to my Exchange e-mail box, nothing else to be done, no VPN required, just a browser, boom?

BARIS CETINOK: You can get your tasks, public folders in Exchange, rules apply, spam, junk mail continues to function, even the right-click options are almost identical to the full Outlook client.

Not only that, one of the top requests we used to receive, and this is not offered by any other Web access application, is the capability to do spell checking in seven languages on the fly against the server. So you can actually spell check against the server, and boom, you will never have misspelled e-mails that you send out from the road.

So Exchange also offers me the capability, let’s say I don’t have access to a PC, well, if you have a smartphone, it utilizes Windows Mobile. This is an example phone that’s actually out there, you can take a look at it at the stand, from Samsung, but other vendors like Motorola and other vendors are working on this phone, as well as the Windows Mobile based Pocket PC Phone Edition, can fully synchronize on the road with Exchange 2003, so you are mobile and productive all the time.

So basically our premise is we want to be able to help you manage the information that you want, and you don’t want, in your inbox — as well as we want to enable you to be productive when you’re on the road away and disconnected from a typical connection like you have with your PC at work.

Thank you.

STEVE BALLMER: Thanks, Baris. (Applause.)

I would hate to see him forget the phone.

OK, I have just a couple more things I want to hit on and then wrap up. We didn’t talk at all today about digital meetings, but it is actually an important area of investment for us. We think more and more of business communication will be people collaborating remotely. You’ll want to share screens, you’ll want to have an audio conference, you want to actually be able to share video. We’ve got our first service in the market today, our Live Meeting service, which you can subscribe to, to hold meetings, but you’ll see us make more and more investment in this area, including over time a corporate hosted ability to do that, to have you run that inside your own network.

There are many, many partners who are involved with this product. Literally, we have hundreds of companies that have built applications already, running on Microsoft Office System 2003. There are many people who have capability to build custom solutions like the Avanade solution that you heard about at Kinko’s. Here’s just a list of some of the folks who are adding value and extending Office System 2003 in important ways: solutions, antivirus capabilities, custom software development, implementation capabilities; a wide range of partners doing a wide range of things, and I think getting full value out of this product will be what we put out of the box plus your own work plus the way that you interact and mobilize our partner network, and we’ll certainly do everything in our power to help you understand what we’re up to.

I also want to highlight a thing that is very different about Office 2003 from any other version of Office we’ve ever done, and that is the way we have designed in our ability to continue to improve this product for you even after you have installed it. We’ve built in a whole new range of instrumentation into Office System 2003 that builds on this little thing that everybody here recognizes. You’ve seen a message from time to time that says, ‘An error has happened, do you want to send this to Microsoft, yes or no.’ Anybody ever seen one of those? (Laughter.)

People can say that’s a terrible thing, but in a sense the technology that underlies that is actually core to a lot of work that we’re doing to improve the product. We built Office System 2003 with that technology in place during the beta cycle. What does that mean? It means that all of these problems that we found and fixed based upon statistical feedback about how people are hitting them, we have now found and fixed in advance of shipment, very important instrumentation was in during the process.

The security work, which I’ll talk about a little bit more here in a minute, is built in so that we have this to be the most secure system we’ve ever done.

The same technology that can report crashes today, which is what we ask you to do, has also been done so it can improve the level of feedback that you give us and the level of information that we give you about things that don’t cause crashes. Don’t like a feature? You can report on it. Can’t find something in the help system? You can report on it. So we can constantly be improving the basic nature of how this product operates even while we’re not updating bits on your client, simply by improving the level of automation and support that we give you from our so-called Office Online site, which is set up and instrumented into the product for access by your users.

So a lot of work was done to say, ‘How do we make this product one that has more service capability built in and has more ability to grow and learn as our user base gets smarter about how to use the product? How do we share that out broadly with all users of Office and the so-called Office Online Web site?’ — which is instrumented into the product, and is an important part of that.

I can’t give a speech in this time in our company’s history without briefly mentioning security. With all of the hoopla and all of my excitement about this launch, I do have to tell you that the number one priority on my mind is security and helping you secure your environment. That’s got a lot of pieces. We have to improve the patching experience. I could go on for hours about what we’re doing there, but a lot of good work will be available over the next six months or so.

We have to innovate in ways that allow you to mitigate vulnerabilities without patching. There will be a new release of Windows client and server, new service pack release that really will help you with that.

Guidance and training: We’re set up to train over 500,000 people in how to secure an enterprise that uses Microsoft technologies. Those seminars will start in December.

And we continue to make continuous quality improvements in our basic products. This is true of Windows, this is true of Office, et cetera.

There is no silver bullet here, but we think we’re going to make dramatic improvements in the next year. We think Office fits well in that context, but I thought it was important while we’re together for me to give you a word or two about that.

I want to end with a statement about our commitment to information workers. We grew up with developers and information workers as our core constituency. We think we understand more about what people want to do to derive value from information out of computers than virtually any company on the planet. We think a lot of that starts with the individual, letting the individual be more efficient, participate in business process, get the access to information that people need to do their jobs. And we really do want to be a core company that delivers tools that help enable those great moments at work when people solve tough problems.

We think there’s a huge opportunity for innovation in terms of the productivity of information workers, and we think Office System 2003, as you get to know it, you will find and agree that it is absolutely a tremendous, tremendous step forward.

I want to thank you all very much for taking the time with us not only at this keynote but we’ve got breakouts galore, and we certainly hope that you got something out of the session, that you’ll enjoy the breakouts. If I can help further, because I know they’re going to rush me back to another speech, I’m [email protected], and I’d love to hear your questions, comments and thoughts. I appreciate it very, very much.


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