The Digital Lifestyle: Microsoft Puts Power of Software into Consumer’s Hands

John O’Rourke, Senior Director, Consumer Strategy Division.

MOUNTAIN VIEW, Calif., Dec. 5, 2003 — It has been more than 20 years since Microsoft shipped its first product for consumers, Flight Simulator, in 1982. And though this popular computer game has subsequently earned a spot in the Guinness Book of World Records for US$20 million in sales, a lot has changed in home computing and electronics. New devices, digital media, and software that take advantage of the Internet to connect people and information are emerging in a new era of technology that Microsoft Chairman and Chief Software Architect Bill Gates has called the Digital Decade.

Gone are the days when consumer software was mainly of interest to technology aficionados, who spent their evenings noodling with early versions of personal communications and productivity software on hulking PCs in a home office. Nowadays, what might be called a
“digital lifestyle”
is emerging. Following the lead of their computer-savvy teenagers or younger children, moms and dads and other members of the family are looking for products that will help them personalize their entertainment experiences, simplify their lives and unite them with friends, family and peers.

To help consumers realize the potential the Digital Decade promises, Microsoft has expanded the consumer business it began building in the early 1980s. The company will showcase some of its latest products and services here today at its Silicon Valley Speaker Series Consumer Roadshow, which is open to the public. To get a better handle on these offerings, PressPass spoke with John O’Rourke , senior director of Microsoft’s Consumer Strategy Division. Its his job to define the company’s consumer strategy and coordinate and integrate initiatives among all consumer product groups at Microsoft. O’Rourke discussed company tactics and highlighted new products that have been created and refined with the consumer in mind.

PressPass: How would you say consumer needs and consumer products have changed in the last decade or so?

O’Rourke: When I started at Microsoft 10 years ago, the early products were in some ways designed with the technical enthusiast in mind, as PCs were just coming into the home at that time. Most of the products people were interested in, such as Microsoft Office, were designed to help them increase their productivity and enhance their communication. At that time, the Internet was still in its infancy and computing power was fairly limited, and most consumers still thought of computers as just something people used at work to create reports and spreadsheets.

Today’s consumers are looking for connected experiences in their homes, and want to use their PCs as well as other digital devices like the television to enhance their music listening and movie and photo viewing. As technology has evolved and exploded, people are only limited by how far their imagination can take them. The products we have to offer provide many choices, numerous devices and a breadth of functionality. That I get to coordinate this user strategy is an incredibly exciting job to tackle, at an incredibly exciting time.

PressPass: Talk a little bit about the consumer and how Microsoft’s strategy regarding this group has evolved over the years.

O’Rourke: Without a doubt, the consumer audience is becoming increasingly important to Microsoft, because it’s a group that can be served well by our software products and our core mission — to help people realize their full potential through the power of technology. We help information workers and other employees become more productive so when they go home, they have more time to enjoy the entertainment and leisure tools we’ve designed for what we like to call a
“digital lifestyle.”

A recent Harris Interactive Inc. survey showed that people are becoming more comfortable using digital media, and this has spawned growing interest in new ways to use the PC and other devices to enjoy entertainment. The increased simplicity in using the computer to acquire, edit, organize and enjoy music, movies and photos is clearly driving the trend, and we’re responding to this growing consumer need.

For example, with Microsoft Windows XP Media Center Edition 2004, consumers can take advantage of advanced computing plus easy-to-use, integrated digital entertainment live and recorded television, movies, music, photos and radio. They can pause and rewind live television or radio, digitally record an entire TV series or program category, watch DVDs and videos, organize and play their music collection, or showcase digital photos. Mobile consumers also can carry their information or their media with them beyond the office. Windows Mobile software for Smartphones is another exciting new product. The software not only provides a great phone experience, but it allows customers to access their e-mail, contacts and calendar with them in one handheld device. No matter where they are, they’re connected to co-workers, friends or family.

PressPass: You’ve mentioned the digital lifestyle a couple of times now. How would you describe what that is exactly?

O’Rourke: In the beginning, technology was mostly designed for enterprise or the early adopter. Today, that’s changed. Technology has really taken root in everyday lifestyles. The youth market is driving it in many ways. Things like their music and their video help define who they are. Technology enables them to share their memories and experiences with friends and family.

It’s incredibly exciting to create products for people who are not necessarily looking to become more productive but who want to be more content. Digital lifestyle products help them stay connected literally in terms of communication, with things like instant messaging and phones, but also emotionally in terms of being able to share memories, music, and the things they really like with others.

PressPass: So what does that mean for average consumer? Can you run me through a few lifestyle scenarios and discuss various Microsoft products and services that are helping to usher in the Digital Decade?

O’Rourke: A big part of the digital lifestyle obviously deals with entertainment. For instance, there’s a new product called Xbox Music Mixer, which for the first time ever, connects the Xbox video game system to your personal computer and lets you take your favorite photos and your music and bring it to the living room. With Music Mixer, you can create slide shows and be a DJ. With the pack-in microphone, you can actually do karaoke. Through the power of software, you can have predetermined song shuffle and you can remove lead vocals to almost any favorite song — the one you sing in the shower or in the car. With Xbox Music Mixer, you can sing, like Kelly Clarkson or Ruben Studdard, at least in your own mind, in your own house.

If you want to take your music on the go, Microsofts Windows Media Audio format makes it easier to enjoy the most music on a variety of portable devices.

With more than 50 music services around the world built on the Windows Media 9 Series platform including Napster, MusicNow, MusicMatch, and Windows Media Audio

support in more than 400 consumer devices and over 40 portable music devices, consumers can use the services they want with the device(s) they choose. Not to mention, Windows Media 9 Series advanced compression technology ensures you are getting the most out of your devices storage capabilities.

Plus, the Windows Media Player 9 Series provides an easy to use and comprehensive tool for managing your digital music experience in one place, from music purchase and download at services such as Napster and MusicNow to ripping playlists to CD or transferring to portable devices.

Another great example of a digital lifestyle product is Microsoft’s Voice Command. The company’s first-ever voice-controlled software for mobile devices made its public debut last month, and it enables people to experience effortless, speaker-independent, hands-free voice interaction with their phone, contacts, calendar, applications and digital music while on the go. Whether phoning a friend from behind the wheel or listening to music on the elliptical, Voice Command makes it easier, simpler and more convenient than ever for people to connect to friends, family and colleagues when they’re on the go.

PressPass: What else are you showcasing at the Silicon Valley Speaker Series Consumer Roadshow and what does Microsoft hope to accomplish with this event?

O’Rourke: Microsoft has created the monthly Speaker Series as a way to educate people, press, partners and the Bay Area’s high-tech community at large on work that Microsoft is doing. With this particular event, we are excited to raise awareness about advances Microsoft is making in the consumer space.

In addition to products like Xbox Music Mixer, Plus! Digital Media Edition and Voice Command, things we will be demonstrating include the Tablet PC, which is the evolution of the notebook PC. In addition to being mobile, it delivers the full power and functionality of today’s notebook PC; and MSN Premium, which is targeted at broadband connected households. Rich digital information-sharing features allow customers to get the most out of their digital photo collections; and extensive safety and security features, such as the Pop-Up Guard, help customers have a safe and more enjoyable experience while online.

PressPass: What is Microsoft doing to satisfy needs of the creative user?

O’Rourke: Well, I think a lot of what we’ve discussed previously will resonate with the creative user. But we realize that some of us are naturally creative and others can use a little help. We have many great products that can help anyone create exciting, creative digital content. Another highly popular and recently upgraded feature in Microsofts digital media enhancement pack, Plus! Digital Media Edition, lets you take photos and music and create these very rich, multi-media slide shows with just a couple clicks of the mouse. Called Plus! Photo Story 2, this feature provides a very powerful way to combine your memories. Say you went on vacation to the Grand Canyon, took 20 great photos and wanted to share that memory with your mom who lives on the other side of the country. You can create a Photo Story, burn it to a video CD and ship it off to Mom who could pop it in her DVD player and listen to your voice describing your family vacation as the video slide show rolls. Microsofts Windows Media 9 Series advanced compression technology even makes these files small enough to be shared via e-mail.

Another innovative product that feeds the creative consumer is called Movie Maker. This lets users take their video and edit it in a user-friendly way. It even has features that can automatically create a digital video and then scan what it views and select the vest footage you have, weeding out images that are shaky or poorly lit. It will pull together a video that features your best footage without you having to edit it yourself.

PressPass: How is Microsoft adapting existing products and technology to better serve consumers?

O’Rourke: At least one great example of this is the work weve done through our Smart Personal Objects Technology (SPOT) initiative. This initiative spawned new products we’re calling Smart Watches with MSN Direct. These new Smart Watches can receive personalized information via FM radio waves, including the latest news, weather data, stock quotes, sports information and calendar reminders. Through our partnerships with watch manufacturers Fossil and Suunto, weve taken a tool most people use — a watch –and made it more fun and informative.

Through trial and error, advancement and innovation, Microsoft has come a long way in the consumer space since developing the Flight Simulator. As we delve further into the “Digital Decade,” we will take our cues from the consumer, and continue to seek ways to improve existing products and services to better connect people to their families, friends and colleagues through familiar software and devices for business and pleasure.

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