Doug Burgum: Microsoft Worldwide Partner Conference 2004

Remarks by Doug Burgum, Senior Vice President, Microsoft Business Solutions Business Group


Worldwide Partner Conference 2004



Toronto, Ontario, Canada



July 12, 2004


ANNOUNCER:
Ladies and gentlemen, Doug Burgum. (Applause.)

DOUG BURGUM: On December 12th, 1901 at 12:30 PM the world changed. It changed because a young person, an entrepreneur, a risk taker, someone who didn’t believe what a lot of scientists of the day were saying was impossible, he believed in something that people thought was impossible. He believed in it enough that he took the risk, he spent his own money, he created an experiment to prove to the world that he was right.

And at 12:30 on that cold, windy, blowing December day, Guglielmo Marconi sat on a little rock called Signal Hill in Newfoundland and received across the Atlantic from 2,100 miles away the first wireless transmission across the ocean.

Yes, people thought this was impossible. They believed in wireless; they just didn’t believe that wireless could go in anything other than a straight line. But this young man, only 27 years old, believed that radio waves, as he put it, would serenely follow the curvature of the earth.

His discovery, which led to a breakthrough in ship to shore communications, started a revolution, started a revolution which we’re still living today as wireless technologies impact the way that we live.

But from that day forward everything had been changed. Sure, the wireless telegraph had been around since 1836 when Samuel Morse invented the first device to allow transmission of a wired telegraph transmission, and I think people have heard the stories about how that changed the world. As a matter of fact, in the U.S. two days after the first wired telegraph service was completed — in, I think about 1861 — the Pony Express went out of business. It had that big of an impact on the previous form of the fastest way to transmit information. But almost 70 years after the invention of wired, wireless came through with Marconi’s dramatic demonstration of this capability.

In 1909, there could have been a tragic accident at sea between two ships. The Florida and the Republic collided, passenger ships. Of course, at that time there was no transatlantic air travel the way many of you arrived here, and it could have been a disaster resulting in lost of hundreds and hundreds of lives. But because of a wireless transmission from ship to shore another ship over 200 kilometers away, the Baltic, steamed there and was able to save all but a few of the passengers that were killed in the original collision between the two ships.

And these names, of course, are fated from history because everybody got saved. In 1912 a more famous incident when the Titanic hit an iceberg and went down, also sent a ship to shore transmission, which was received, but there were no boats close enough to get to the Titanic in time to save most of the passengers.

But again it was a tremendous breakthrough, a breakthrough in terms of public safety, a breakthrough in terms of invention, wireless transmission was set up point to point across many locations including across the English Channel from France to England, and it began a revolution of commercial and technological innovation.

Marconi went on to receive the Nobel Prize in physics in 1909 and throughout his life later contributed to breakthroughs around radar, shortwave and microwave technology up through his death in 1935. He was lauded by the Czar of Russia, the King of Italy, the Queen of England, knighted for all of his achievements, which many of us are still benefiting from today.

Perhaps in some ways, perhaps in a less dramatic way, we stand here at the beginning of this century also at the beginning of another transformation. We do get to incorporate into our dreams and our ideas and our thinking the great technologies that have been invented in the past century or two, and we have a chance to benefit from the ideas that are spread quickly across the world and disseminated today so quickly by the information technologies that exist.

But there’s a specific transformation that I want to talk about with all of you, and that’s the transformation relative to helping small, medium and corporate account customers to realize their potential and to realize their potential with the solutions that, together with you and together with our ISVs, we deliver to them.

We obviously believe that there’s a purpose in the work that we do every day. We believe that we have an opportunity to really help businesses and people around the world to realize their potential. We believe that we can really change the way organizations interact with and among their employees, their suppliers and their vendors. We believe that business processes are central to this transformation, and we believe that we have an opportunity going forward to do much better work in delivering solutions along with all of you to affect this transformation.

So this transformation is full of big challenges. There are sort of two kinds of people in the audience today. There’s a group of people that are longtime partners and ISVs of MBS. Whether it be Great Plains or Solomon or Navision or Axapta, there are many people in the room that have relationships with us and that I have relationships with them that go back 10, 15, even 20 years, we’ve been coming together at these conferences. And we also have a group of people in the room who are less familiar with Business Solutions but have perhaps a long relationship with Microsoft on the infrastructure or the I-worker side of the business.

But together this is a job for all of us, and so we have big challenges that we have to undertake, and those challenges have caused us to rethink everything that we do relative to what was the old Great Plains or Navision way of doing business.

So I think that with that change and with the challenges there have been change and people have felt a lot of that change. But as we effect this transformation we’re not changing for change’s sake, we’re doing it because we think there’s a huge opportunity and that huge opportunity can be sized a number of different ways. I like to start thinking about the opportunity the way I described at the beginning: This is an opportunity for us to help change the world, it’s an opportunity for us to have purpose in what we do, it’s an opportunity for us to help our customers to realize their potential.

But from an economic standpoint, if that’s the way you like to approach things, it’s also a huge opportunity, because the marketplace, the addressable market that we believe we can hit with the products that we have, by FY08 a $35 billion market in terms of software and maintenance, that’s just software and maintenance. That doesn’t include all the services that go around that that are delivered, but huge, huge, huge economic opportunity.

And a very diverse opportunity; this market today is characterized by a market structure which is highly fragmented. It’s fragmented for a reason, it’s fragmented because there are so many different niches and categories and verticals and country-specific solutions that are required.

Today we’re able to track with IDC over 12,000 different software companies by name that currently serve this market — 12,000 — and we know that isn’t even the complete set. Even the players that you think about today, the ones that everybody writes the stories about and has the press and so and so, A is battling C for X, Y, Z share; all of the names that end up in the press in the segments that sort of get the attention don’t even represent 20 percent of the total market. There’s a huge opportunity here for ISVs and for us, a chance for us again to transform, in part because of what we can deliver to customers, in part because of the way the market is structured.

But as we approach that we want to have a process, a thought process of how we begin the transformation, because just like with Marconi the transformation can begin with an idea, with an individual, which leads to Marconi’s team, the group of people around him that believed that they could effect that transformation, the people that experiment, that build the towers, the person who helped fly the kite in the gale storm wind with the antenna to get it up higher than they could on just a single mast to try to make that first reception.

And so the team works on that, but as we think about stimulating progress we have to change everything. And some of you that have worked with us have felt some of the human pain associated with change in the last year, because we’ve changed the way we manage relationships with partners, we’ve changed in some cases the actual Partner Account Manager, we’ve changed compensation. Those are things we’ve changed on our side. We’ve changed pricing. You’ve felt some of those things. We’re trying to change again to be responsive to the market and to your suggestions and your needs. And we know that this last year was version 1, this next year is version 2, we know there will be a version 3 and we’re going to keep reiterating and reiterating until we get better, so we’ll continue to stimulate progress.

On the R & D side, which we’ll spend a lot of time talking about today, we’re changing the way we approach building products, the way we approach serving customers, the way we deliver support and consulting. We’re changing just about everything.

And so if you think about a company that’s our size, if you want to talk about a $600, $700 million software company, just the MBS piece, take a company that size and we’re changing everything. If we were a standalone company this would be news. This is a reinventing ourselves kind of event, but when we’re doing that we’re laying the foundation, we’re laying a foundation that can scale, we’re laying a foundation that matches up with our aspirations.

And you might feel like, oh my goodness, these people have changed everything, how can I deal with any more change because of all the change, but I do want to point out that there are some things that we haven’t changed. And using the model that you see here, the preserve the core to stimulate progress, many of you have probably read a book by Jim Collins, “Built to Last” or “Good to Great,” so taking that concept from the research that’s been done on how companies transform themselves from not just being good but truly being great, one of the things that those companies do is they do preserve the core.

And I will stand before you today and I believe that you will know and those that know me, that we are at the core, at our core that we are a mission-driven organization. We believe in helping people realize their potential.

People here today know that we are a partner-led organization, that we listen, that we think and that we build our programs around partners and around partner success. We cannot succeed in Business Solutions without successful partners, end of story. We cannot succeed. There is no way to approach the small, mid-market and corporate account space and do that without partners, without partners in the broadest sense of the terms, partners that resell, partners that deliver ISV solutions, partners that give us feedback, partners that criticize us, partners that challenge us. This is essential. It’s like breathing; we have to have partners for us to be able to affect our vision.

And together we need to have a deep customer focus and that focus has to be around, again, how do we help customers realize their potential, how do we make it easier for them, how do we reduce the IT complexity, as Paul talked about this morning, how do we get their costs down, how do we deliver better solutions. That’s what we have to do.

And we are fighting every day to preserve this core, fighting, fighting, fighting and with you we will preserve this core, we’ll enhance this core and this core will remain solid, even as we change everything else that we have to do to become a great company that can really scale.

We have so many great success stories. Because we’ve focused on preserving the core and because of all of you, the great partnerships there, we’ve got customer stories from around the globe, but I thought it would be important this morning to take a look at what a partner-led organization, a customer focused, mission driven organization can do. We’ve got a great example. We don’t have to go anywhere for this customer story, we’re sitting in it, Maple Leaf Sports and Entertainment, one of our longtime inner circle partners. Let’s take a look at what this focus on the core can do for us.

(Video segment.)

(Applause.)

DOUG BURGUM: It kind of makes you want to get out and drive a Zamboni; a hockey joke. (Laughter.)

But again this is one great success story that we have with the Maple Leaf Sports and Entertainment.

Last year with you our partners we added over 16,000 success stories, often similar to this in terms of how we were able to help an organization perform better, how we were able to take an organization and move ahead.

With that we’ve had great success in the market, and so I wanted to take a moment to thank all of you, our partners, because customer by customer, one by one, partners working, delivering, implementing solutions with ISVs, with this success, through the first three quarters of our fiscal year this last year Microsoft Business Solutions posted 21 percent growth year over year. The market is growing about 4 to 6 percent so with you, our partners, we’re proving that partner led is the way to go because we’re outgrowing the market by almost 3X. Let’s take a moment and say thank you to all of our partners that are driving this great growth. (Applause.)

So that was a bit of the past. Let’s talk a little bit about our aspirations going forward.

We have an aspiration, Microsoft, to be the clear business applications worldwide market leader in our target segment. Again, our target segment, small business, mid-market business, the divisions, the international subsidiaries, the distribution organizations of large organizations, so again very broad in terms of the size of companies.

We have target customers that we’ll talk about more in terms of where we want to play in terms of how we want to deliver the core and have the verticals delivered by partners. But with that target segmentation and with that belief that across those segments there’s over 41 million organizations worldwide we believe that there certainly is an opportunity for us over the next decade, that this is a big enough space for us to be able to pursue.

And when we think about the number of customers we added last year across our core ERP and CRM products and the size of that marketplace, it’s just mind-boggling to me how much opportunity we have. The fact that we may think that we have partners that run into each other, I think I described it years ago, rowboats in the ocean, rowboats in the ocean bumping into each other. We need to figure out a way to get aligned and paddle together to pursue and really understand how huge this opportunity is.

And as we pursue that opportunity we want to end up with a high volume of enthusiastic customers, not tens of thousands, not just hundreds of thousands; our long term aspiration, like other products at Microsoft, is millions of enthusiastic customers that are benefiting from Microsoft Business Solutions.

To achieve that, as we’ve said, we need to have a thriving partner ecosystem, again in the broadest sense: resellers, consultants, ISVs around the globe, across many, many niches, across many segments in terms of large and small companies, but we need to have a thriving, thriving partner ecosystem for this to work.

How are we doing to do that? Of course, we’re going to deliver superior value and we’re going to deliver superior value in terms of solving the pain points of customers and we’re going to solve those pain points with customers through integrated innovation.

And as a result of all that, we expect and we expect for the Microsoft shareholders, of which I’m sure includes many of you, is that we’re going to build a profitable, multibillion dollar business along the way. And as we build a profitable, multibillion business, as it has been when Microsoft has built other businesses and particularly in Business Solutions, there will be a multibillion opportunity equal or greater for partners than what shows up on the books at Microsoft.

So that’s our strategic long term aspiration, big challenges, big opportunities, appropriate aspirations relative to our mission.

So, as we say, okay, so we’re here, that’s where we want to go, how do we get there? To get there we have to grow and to grow we have to come up with innovative and creative ways to grow and to create opportunity even larger than what we’ve demonstrated in the last couple of decades.

There are sort of three basic ways that you can grow. The first is that you want to grow revenue from your existing customer base, and our existing customer base represents not only MBS customers but the Microsoft customer base, so this is a huge opportunity. How do we amplify the existing value of the products that we sell today, ERP, Microsoft CRP, Microsoft CRM, how do we amplify that value and how do we do that across the existing customer base of all of Microsoft?

The second is, how do we do even a better job of delivering great value through integrated innovation. Why do you say this? Well, we need to think about if you’re going to compete you always have to be better than the competition at what’s important to customers. How can we be better than the competition? We can do a better job of making sure that the integration works well that we’re shipping directly out. What do customers want? Customers want high ROI, low TCO. Integrated innovation, one of the things that integrated innovation delivers is the number one thing that customers want, which is low TCO, high ROI.

And then the last thing, which is the piece that I’m most excited about when we think about the decade ahead, is that today there is so much of this market that’s under-served or not served at all. I mean, when we think about automating a business, if you go into a customer today where we’ve automated their business, they may have our products running there, they may have your solutions, your customizations, your implementations and next to them they’ve got a bunch of folders of paper, tracking a bunch of ad hoc information that is not tracked in the system. You don’t have to do any more research than that to know that we are not solving all of the needs of customers today. But we’ve gone a lot further than that in our research but we have an opportunity to trigger new decisions, get people off the bench and into the game, get people who haven’t been participating in this market to spend money and spend it wisely on IT and actually grow the entire IT market because we can deliver superior value.

So let’s take a look at each of these three quickly.

In terms of amplifying the existing value, when we think about Microsoft ERP, Microsoft is in ERP in a big way and Microsoft is in ERP with four or the top brands in the business. We have an embarrassment of riches in the mid-market across Great Plains, Solomon, Navision and Axapta, all top products, all of these products with unique capabilities suited to different particular niches in the market. All of those products are coming up with new releases in the next year. This is the strongest product cycle I’ve ever had a chance to participate in, in my 21 years in the industry, and we’ll get a chance to take a look at some of the power of these new releases that are coming out today.

Microsoft CRM, breaking into the market less than two years ago, already establishing itself as the product to beat in mid-market CRM. So as we continue to spend R & D and spend R & D in a big way relative to these products you’re going to see these products get better and better and better and better.

Superior value through integrated innovation: A lot of talk about this and you might say,
“What is it?” When I take a look at this as sort of an R & D guy sitting inside Microsoft, we can say, hey, we can attack in any direction: BizTalk, SQL, Exchange, Active Directory, Office, Outlook, SharePoint. We can put resources against all of those, just to name a few, in terms of areas where we know that we’ve got opportunities to deliver more value for customers with tight integration coming from us. And there are opportunities for all of you to extend that and if you go to the expo there are some terrific — as you see in the white space around this diagram, the ISV solutions and partners are also part of the integrated innovation story in terms of the extensibility and the ability to customize solutions for customers.

But we can and we will continue to focus on building compelling, competitive differentiations. And as I said earlier, we have an opportunity here to not only exceed known issues that partners have but through smart integration we can actually have an opportunity to wow customers with, hey, wow, I never thought about that, I never even knew I needed that and now you’re showing me that, yes, I want that.

And so in this case it really is a two-way street. This is where MBS partners and Microsoft infrastructure partners really have an opportunity to work together, because we know we’ve got customer success stories, we’ve got partner case studies, which would show when we sell the business app it pulls along the infrastructure. And we also know that when people are implementing new infrastructure, if you’re an infrastructure partner, there’s an opportunity for you to say have you thought about X, Y or Z because I know that it integrates beautifully with the infrastructure that I just put into your business. And as this two-way street we can help each other, partners can partner with each other and build even stronger and better businesses.

And again Microsoft across the segments that we’re pursuing is uniquely positioned to be able to deliver this integrated value, uniquely positioned. And why is that? Because many of the customers in this segment aren’t too concerned about heterogeneous environments. They believe that there’s value in working with a single vendor. Not so in the world’s largest corporation. In this segment it’s actually a plus not a minus, hey, I can get all the technology from one vendor, it’s all going to work together, I can have one source of getting all of this stuff supported. So we’re uniquely positioned to actually deliver what the market wants in the segments that we’re pursuing.

In terms of triggering new decisions, again this is an area that we could do an entire keynote on and, in fact, we have. Just taking the five design pillars here was central to Satya Nadella, who leads R & D for Microsoft Business Solutions. At TechEd his whole keynote was just on building off the themes on this slide.

We’re going to be releasing a white paper, which is going to be available at the Microsoft.com/businessolutions/community site, which will be out later this month in the month of July for you to go and read more about the specific examples across best TCO, across insightful, across connected, across the powered users and importantly across adaptive processes, processes that become central to how we think that we want to build software so that as companies change their processes they don’t have so much expense associated with getting the software to map to the inevitable change that companies have as they grow and evolve.

But even as we think about these design pillars driving how we think about future R & D, today the research that we’ve done, the extensive research, the thousands of hours and the thousands of customers that we have gone in depth with and talked to them about how they actually use their systems and how do they actually conduct business processes and how do they change when they get exceptions driven by customers or by their own growth, that is flowing into the products that you’re going to see today, whether it’s retail management or FRX or CRM or the Microsoft ERP products. Those design pillars are driving our vision for where we want to go today in a very powerful way.

I also talked that there’s another way for us to trigger new decisions and bring new people into the market, which is to actually have better solutions for them at the time that they’re considering making a decision. And one way to do that, to meet more of their needs is to have vertical capability.

In the slide up here in the blue is the area that Microsoft Business Solutions is focusing our R & D, across the base areas of financial management and CRM and supply chain and analytics. And on top of that we’ve got an area that we call core, which we offer some core functionality across areas like manufacturing, like distribution, like professional services and we’ve added some capability around public sector in the last six months.

But again baseline functionality, not full verticals, not the full capability that people need. We know that we need ISVs, not 10, not 20, not hundreds; we need thousands of ISVs around the globe to take our base capability and in an effective way built on these design pillars into all of these segments.

You heard Sanjay P talk yesterday extensively about the roadmap for the platform and tools and how that maps with Business Solutions, and I would just again reiterate, if you just take one of these vertical segments like education, which some people may say education is a vertical, education is not a vertical, education is a category. Inside that there are verticals like library management. Inside library management today, in the U.S. alone there’s 20 or 30 companies delivering library management solutions. This market is so fragmented and there’s so much opportunity for us to add value, support ISVs, bring the Microsoft infrastructure and the MBS core solutions to these things that it’s mind-boggling to me the opportunity. But again our strategy is a partner-led strategy to serve verticals.

So we’ve talked about how we want to drive value through Microsoft ERP and CRM and the great, strong cycle we’ve got coming up. We’ve talked about how we want to deliver against integrated innovation in unique and powerful ways to bring all of the R & D from Microsoft, the over $6 billion of Microsoft R & D that gets to support the work that we’re doing with Microsoft Business Solutions, and we’ve talked about the importance of ISVs.

So let’s have some fun, let’s take a look at a demo where we bring all these three themes today. So first on stage I want to bring up the group manager for Microsoft Great Plains Development. He’s an irrepressible emcee by night and he’s a development lead by day. Please welcome the fabulous Matt G. (Applause.)

MATT G.: Doug, how you doing?

DOUG BURGUM: I’m doing great, Matt.

MATT G.: Delivering a great message out here on Business Solutions, time to take a look at a few of those, and to help do that this morning I’m going to ask everyone just to suspend reality for a second and you and I are going to pretend that we no longer work at Microsoft.

DOUG BURGUM: Okay.

MATT G.: We are going to work for everyone’s favorite MBS demo company, Fabricam. I’m going to be a sales clerk working in the home office but we need somebody to take care of our Canadian sales region, Doug, and I can’t think of a better closer than yourself. Do you want to be our field sales rep for Canada?

DOUG BURGUM: I’ll sign up, I’m in.

MATT G.: All right, I’m going to make this incredibly easy for you. We’ve mined our ERP data, we know exactly which customers we want to target with a new promotion. We’ve got some modular furniture that’s just come in, a new category for us. We want to go out and sell some of that here in Toronto. So we use CRM to send out the right campaign.

We’ve done pretty much everything to set up this lead with our favorite customer, Aaron Fits. All you need to do is show everybody how easy it is to close this deal using the only tool you’re ever really going to need out in the field. That, of course, is Microsoft CRM, in this case CRM Mobility.

So here’s your tool, Doug. I want you to be our field sales rep for Toronto. Show us exactly how you’re going to use CRM Mobile to help close this deal with Aaron Fits.

DOUG BURGUM: All right, thank you, Matt.

And Aaron Fits, I’ve been working with Aaron for almost 20 years.

MATT G.: Aaron Fits is our favorite customer.

DOUG BURGUM: He’s been in a lot of things. So we’ve got it up on the screen here. So I’m selling in Toronto. I’d love to be a rep in Toronto. I see you’ve got me based out of Altona, Manitoba.

MATT G.: Yeah, well, you wanted to be close to home, so we drew a line from Fargo straight north and the first city we found was Altona.

DOUG BURGUM: Okay.

MATT G.: But you’ve got a big territory. All of Canada is yours.

DOUG BURGUM: Okay. I’ve been to Altona.

MATT G.: We’re expecting big, big things.

DOUG BURGUM: I’ve been to Altona, I’ve been there, hauled a semi load of beans there when I was a kid.

Okay, but I’m calling on Aaron here.

MATT G.: Aaron Fits has part of — he’s one of our contacts. You’ve got an opportunity.

DOUG BURGUM: Okay, I’ve got a meeting. Here I am, I’m in Mobile. You guys who know mobile devices, you guys know all about CRM Mobile. But within this device I’m able to place meetings in here. I’ve got a meeting set up with Aaron Fits, an appointment, so I’m going to go try to close this sales call that Matt has. You’ve marketed to him, you’ve set him up, you’ve identified this.

MATT G.: You’re brand new. You’re never going to make an easier sale than you’re making right now.

DOUG BURGUM: Okay, here it is, regarding right here, as you said, regarding modular furniture, so I’m going to talk about that with Aaron. And as a matter of fact, just the call went so well with Aaron, he’s got ten new employees in his Toronto office, he wants to order quantity ten of the new modular furniture, so let’s give him ten of those.

And with our new workflow built into this thing I’ve got an opportunity here, it says push order, so, Matt, I’m just going to hit on this thing and I’m going to say yes. And now that I’m going to say okay to that, do you want to save the changes, yes, I want to order those ten things.

So I plug this into my mobile device and when I get back to the office I synch and this sends off the order to you, Mr. Back Office, to handle.

MATT G.: Exactly. This kicks off a flurry of workflow, sending e-mails to the right people for notification and, as you mentioned, Doug, it actually pushes that order right back into our ERP system. In this case we’re going to take a look at that order in Great Plains 8.0.

The first thing you’ll notice about Great Plains 8.0, as well as a lot of our other ERP systems, is they’re all getting a facelift this year. It looks a lot more like another Microsoft product you’re probably familiar with. That, of course, is Outlook and Office 2000. We wanted to reduce that training so that our partners could go out and instead of training people on a different interface, we wanted it all to look and feel the way and again, like you said, integrated innovation across in this case the user interface, so it looks like a Microsoft app, which is very cool.

One of the things we did add was the ability to go in and add this list-based navigation so if I wanted to go out and take a look at Aaron Fits, there he is, if I wanted to see all the transactions for Aaron Fits, I’m one click away from that information, if I want to make a new order or whatever, it’s all there, one click away.

Now, any demo would go smoothly if it was just that simple, but let’s say for fun that after you close the deal Aaron thought, you know, that PDA that Doug was using is so cool I’m going to order ten of those as well so they can be sitting on those modularized desktops as soon as they get there.

So he can’t get a hold of Doug because you’ve got a lot of territory to cover, you’re probably on the road, but he called the 800 number and he said, “You know, guys, I need to add some PDAs to that order. My PO number in my system is PO 2020, can you add 10 PDAs to that?” So I’m just going to type in Aaron’s PO number from his system, PO 2020, we’ll go find that and voila you’ll see that, wait a minute, PO 2020 doesn’t show up here, let me take a look. We’ll add the customer PO column and you’ll see that while most ERP systems can track both the customer’s PO number, what they see in their system, as well as the order number in ours, you can see we’re one click away from actually getting that combined information. It’s like a universal translator between customers and suppliers, it’s very cool.

We’re going to go and pull up this order. This is again pushed straight over through the workflow from CRM. We’re going to insert a line, say insert row into here, and I want everybody to focus on this field that I’m going to type in, another one of our universal translator features we’ve got. In Aaron’s system his item number in his inventory is called PDA for PDA. That’s not what it is in ours, but you’ll see here as I tab off of this field it automatically gets transferred over to what’s in our system, again a universal mapping so that customers and suppliers can speak to each other without having to know the same language and it’s very nice.

Okay, we’ll add ten here and it looks like again any demo could go well if everybody had things in inventory to cover it. It looks like we’re adding a degree of difficulty by having a few left. Well, Aaron Fits is on the phone and he wants ten of these. I don’t have ten. It says in my inventory I’ve only got five. So I can either disappoint Aaron and tell him I’m going to have to back order them and get back to him or because of some of the usability we’ve added in the sales process for Great Plains 8.0 I’m one click away from our new available to promise window, which will tell me that I’ve got a few of these coming in on a purchase order, I’ve got some of them that are already back-ordered and down here in the bottom is the field I want to point out, the availability date for when I can actually fulfill this order for Aaron Fit. I can tell him, look, I can get this to you on the 13th, very easy, very simple. So we’ll just say okay to that.

Because the system is integrated across both financial, distribution and manufacturing it’s going to tell me that this is going to kick off another piece of workflow to manufacturing that says I need to go and build a few more of these. So we’ll save that transaction. It tells you a little bit about how easy it is to integrate through the new sales process through Great Plains 8.0.

So let’s assume we’ve got this order in, it’s time to go and deliver this out to Aaron Fits. Wouldn’t it be nice if there was integrated innovation across the fulfillment side where we actually take this order and get it on the truck, out the door, off to the customer’s site? Let me show you how easy that is. I’ve set up a little list here about things that go out on our trucks. Fabricam in Toronto has an 11:00 AM truck that goes out in Toronto, also has a 3:00 and we’ll just take a look at the 11:00 AM truck. And back when we set up the demo we thought we’d be leaving about now so we should have made it the noon truck. Here goes the noon truck out and we’ll pull up the fulfillment order.

Wouldn’t it be nice if as that truck gets loaded I could get a map from my driver that says deliver here, here, here, here, here? Well, thankfully MapPoint is one of Microsoft’s products that’s integrated right into the ERP solution. We’ll add that to our Toronto route and if I pull up the Toronto map for my driver you can see that, yes, it has been added over here. We’ll add our beginning as the stop and get directions in MapPoint. It looks like a little obscure route. Of course, those of you that have used MapPoint know you can optimize for stops and now I can hand my driver not just the manifest but a map and instructions on how to best deliver these particular items in Toronto this morning; integrated innovation across both the CRM front, the field service side, into the back office and using the entire Microsoft product family to help deliver value, Doug.

DOUG BURGUM: Great. Thanks, Matt.

MATT G.: Not a problem. (Applause.)

DOUG BURGUM: So a great demonstration of integrated innovation but, as I said earlier, the importance of ISVs is key for us to delivering solutions to customers. We’ve got some great information stored here in CRM and ERP. Let’s take a look at how we can get that out through a business intelligence application. From Professional Advantage please help me welcome Lynn Swenson. (Applause.)

LYNN SWENSON: Hey, Doug. How are you doing?

DOUG BURGUM: Great, Lynn. Thanks for joining us today.

LYNN SWENSON: Thank you.

DOUG BURGUM: What are we looking at today? We’ve got information coming from both CRM and ERP.

LYNN SWENSON: Yes, we do.

DOUG BURGUM: And you’re exposing this in your new application.

LYNN SWENSON: Yes, we are.

Using SQL and the new free Excel add-in for analysis services, coupled with Webhouse from Professional Advantage, we build a desktop within Excel delivering our business information.

DOUG BURGUM: It looks great.

LYNN SWENSON: Great. Well, let’s look closer. If you take a look, you can see across the top of the screen we’ve got our sales information, again coming automatically from our Great Plains system onto our Excel desktop and alongside that we’ve got our opportunities pulled out of CRM.

Now, if we look closer we’ve got some more information, we can see our sales not just by month but we also see sales and opportunities for the entire year. And below that you can see we’re also looking at not just sales information pulled over from Great Plains but we’ve got our receivables or our aging information as well.

DOUG BURGUM: So Matt had me set up as the sales person for Fabricam. So can we take a look at some of my sales territories?

LYNN SWENSON: You bet we can. All we have to do is open up our all customers field and, as you can see, Fabricam is a global company, we sell in a number of countries. We can look specifically at Canada and if we wanted to drill down to a province or a city or even a customer we certainly can.

DOUG BURGUM: Maybe we should take a look at Manitoba since that’s where I was based.

LYNN SWENSON: Well, that we can do.

DOUG BURGUM: Uh-oh, I flat lined.

LYNN SWENSON: You’re not doing so well. We’ll go back to Canada, since you are super sales man and you’re covering the entire country. We’ll open that up and as you can see —

DOUG BURGUM: That looks a little better.

LYNN SWENSON: All of our information is updated from our sales to our CRM to our aging information. It’s all right here in one spot for you.

Now we’ve got some detail regarding not just what our overall sales are but we’ve got it broken down as to what we’ve been selling, in this case, of course, our call center equipment. So you can see our item class is broken down, again pulled over from our Great Plains system. And if I wanted to know what I sold just of those PDAs all I have to do is a quick click and now we see our items that roll up into that category. I’ve got my sales information as well as what I sold last year, and because we’re working within Excel we can add sales on the fly. We’ve put in our target information along with calculating some variances as well.

DOUG BURGUM: So those are looking at sort of by categories of equipment. What if I said, hey, I want to focus in on a particular customer, like my buddy Aaron, and see what he’s been buying?

LYNN SWENSON: No problem. It’s not just about getting that information and showing you what your sales are but you want to know who made them, who’s selling them, where are they coming from. All you have to do is click on my graph and what we see is a pivot table, generated from Excel and again populated with data from Great Plains through Webhouse. So here’s our sales by item class. I’m just going to drag my customers over. And now we can see our call center equipment and what Aaron Fits has purchased.

And if we wanted to see everything else that Aaron Fits has purchased as well, I’m just going to drag that over and now we can see by all of our item classes everything that Aaron Fits has purchased, quick click on call center and we see the Acme PDAs.

Our customers have SQL, which includes analysis services, and we have Excel, which everyone is familiar with. What we’ve done is built an application to bring your information out of MBS and into analysis services for you to be viewed in Excel and taking something that would normally take a month or many months to bring that information over on your own or a customer doing it on their own and reducing it to an install taking just hours.

DOUG BURGUM: Great. Thanks, Lynn. And if people wanted to learn more about Professional Advantage and Webhouse, where would they go today?

LYNN SWENSON: Okay. Well, we’re in booth 328 and if you want to learn more about the Excel add-in for analysis services there’s a session at 3:30 under Microsoft Office for Business Intelligence.

DOUG BURGUM: Great, thanks, Lynn.

LYNN SWENSON: Thanks, Doug.

DOUG BURGUM: Great job. (Applause.)

So now we’ve talked about the opportunity, we’ve talked about the tremendous solutions that we’re delivering and we want to spend a few minutes talking about partnerships. And I think again people know and have known for a long time, understand how central we believe partnerships are to our success in this marketplace. And I think that people have understood that from our passion and I hope that they’ll understand it from our investment. It’s been asked of me sometimes and over the last three years and I’m getting more and more quizzical about how the question can even come up but it comes up, which is, is Microsoft committed to this market. And I think any question is valid, so I want to take those at face value. But even for Microsoft, if you take a look at the 1.7 billion that’s being invested in this next year in channel programs that Orlando has articulated, if we take a look at the over 800 million that we’ll be investing within MBS relative to the creation and delivery of our products, that this is a $2.5 billion investment that we’re making to lay the foundation for what we know will be a very, very large and important business for us and for you.

And so I think at the beginning of any partnership it’s natural to say, hey, do you have any skin in the game, partnerships are about two people deciding they want to go after an opportunity together.

But I think that this ought to be the year where people stop asking is Microsoft committed to Business Solutions because it just becomes so obvious that we so deeply are, that this is such a central part of the strategy of integrated innovation and bringing this all together and as Steve Ballmer said last week around Business Solutions, which is this is an opportunity for us and our partners to build deeper and stronger and longer relationships with our customers. It’s about the customer relationship. Business applications puts us in a position where we can talk about and have a dialogue around customer pain and as we solve that customer pain at the high-end of the application we can deliver the infrastructure and the tools and the operating systems and the desktop productivity tools as we solve those scenarios for those customers.

So we’re not only committed to it in a big way with dollars, it’s central to the vision and mission of Microsoft.

So that’s from our end of the partnership. So the partnership checklist does start with us, which is are we in it, we’re in it. We’re in it and we’re in it to win.

So, on the partnership side on your side what are some things that you can do from a partnership checklist? The first thing we talk about is knowledge. What a great place this conference is about knowledge, about coming here and learning, and asking questions, and attending the breakouts, and learning from other partners that have had an opportunity. As I talked back on the integrated innovation slide, there are going to be breakouts this afternoon for CRM and for MBS. We’ll have partners on the ERP panels delivering information about how they have used integrated innovation to close and win deals. So, this is just a great, great learning opportunity now through the rest of the conference.

After the conference, with the new Microsoft Partner Programs in place, and the competencies, there’s an opportunity for you to sort of codify, to distinguish, to stand out in front of customers, and within the partner organization that you have the skills required to deliver these solutions. And so, I would, again, take a look at all the competencies, but there’s some that are particularly relevant to MBS, which includes the infrastructure, the ISV, and the MBS competencies are all important competencies to think about if you are working with customers around business solutions. So, there’s great opportunities, we’re there to support you to be able to pursue that.

In terms of the relationship, again, as I acknowledged at the beginning, as we change the foundation, we broke a lot of things. We broke a lot of long-time relationships between our field reps and partner organizations. This year, we’re getting more clarity around it, and more focus, and more technical resources, and we’re driving the investments and bringing the efforts of MBS, and SMS & P into more clear focus for all of you. And so there are relationships at the field level that can continue to be developed and be nurtured. There’s also relationships between the classic partners and the MBS partners which create an opportunity, again, to pursue business jointly, to deliver referrals, to do a better job of serving customers together. So, there’s an opportunity again, and I would encourage all of you to focus time and energy on building these important relationships within the community or ecosystem that we will create to pursue our aspirations.

And the last thing, which is something I know that you do every day, I’ve always loved partners. Partners are entrepreneurs. Partners are risk takers. Partners have passion. And partners often have their own equity on the line. It’s not just a job for them, it’s a love. They’ve got a commitment to their customers. And that’s why I believe so powerfully in the partner channel because of the kinds of people that are attracted to work in partner organizations are exactly the kind of people that we want to work with when we want to build long-term relationships with customers.

And so, as you build your business, a couple of thoughts, I can’t be precipitous because everybody is in different segments and countries, and markets, and targets, but one thing is, get clear around your focus. You don’t have to do everything that Microsoft does. You don’t have to pursue every competency. You don’t have to represent every Microsoft ERP product line. But you do have to be good at what you do. You have to be very good at what you do, and you have to be able to really deliver value for customers. And if you can really deliver value for customers, if you focus, you build your business, you know that we’ve got the program, we’ve got the marketing awareness, we’ve got the investments that we’re making in creating a presence, we’ve got the GTMs that we’re delivering this year. We’ve gone from over 30 GTMs down to five, Microsoft Business Solutions is one of those, and across the scenarios of ERP, CRM, delivering tools, again, to really create velocity in this marketplace.

But, as we create that velocity, and as the lead comes, and as awareness grows, and the opportunity is, then you need to be ready. I think I gave the speech about ten years ago one time where I told people, I used the analogy, I said, the train is leaving, you’d better make sure you’re on it.

There’s been a year this last year where there’s been plenty of time to have questions and even have some doubts about sort of where is Microsoft going. From this moment forward, those doubts are over. We have vision, we have clarity, we have direction, we have investments, we have tight integration across the organization. You, as partner organizations, need to make sure that you are onboard as we start to accelerate, because the market is accelerating, we are going to be a market maker, we have the position and the vision to really transform the market. We need you to be along on that trip. So, again, focus. So, knowledge, relationships, and business.

If we take a look at my very point at the beginning when we talked about how starting with a single individual, Marconi, 27 years old, he’s not a famous scientist, he’s not well-trained, he doesn’t have all of the advantages that someone might be in a position of influence or power. He does have a couple of great parents. He’s got a mom from Ireland. He’s got a dad from Italy. He’s got people who believe in him. He grew up thinking that, hey, it’s okay to question. It’s okay to wonder. Has everything been discovered? Is this the way that it has to be? Why does it have to be this way? So, obviously he was steeped in curiosity, and he was willing to experiment.

On this day changing transAtlantic wireless transmission in 1901 didn’t happen on the first try. The kid had been running experiments since 1895. That means he was 21 years old when he was out in his dad’s backyard in Italy trying to set up some wireless thing. People scoff, people don’t believe, can’t be done. He overcame all that.

And so, when you think about how transformation begins, transformations often begin with a single individual. And that single individual has something that nobody else has, they have a belief and an idea.

We have a belief and an idea, we believe that we have an opportunity to transform a marketplace. We believe that we have an opportunity to help people realize their potential. But we can’t do that without you, and we can’t do that unless all of you are on a path to realizing your own potential. I doubt that any one of us, if we ever slowed down for a moment our busy days would say, yes, I’ve reached my complete potential. I doubt any of us would ever say that. So, in our gut we know that we’re not as good as we can be. We know we can do better. We know we can learn more. We know that whatever our weakness is, that we can become better at that. Even we know in our strengths, we may say, hey, even in our strengths, we can have those be better. One of the beautiful things about being human is, there are always more upsides. There are always more upsides for us to try to pursue and aspire to.

And so, I think that one of the things that’s exciting about me, about this opportunity, and being in this industry at this time is that we really have an opportunity to change things. We’ve got the resources, we’ve got the vision. We’ve got a proven concept around partnerships that have lasted a long time, and we want you to realize your potential as we pursue that. We need others to believe that we can really make a difference for our customers.

So, as I close out, I want to leave you with one thought, and it relates directly back to Marconi and this wireless revolution that began over a century ago. And this comes from a woman who had a lot of impact on thought in her own way in the last century, she was an anthropologist who spent her life studying people, and studying how cultures change, and how cultures go through transformation, particularly when they get hit with lots of new technologies. And, I think one of the things it says is that, never doubt that a small group of committed people can change the world, because, as Margaret Mead says, indeed, it is the only thing that ever has.

I want to offer the challenge to all of you. We’re not such a small group anymore. We’re a rather large group, but made up in this large group there are individuals, and I know in this group, just like Marconi, that there’s young and old out here, we’ve got entrepreneurs, risk-takers, believers, people who believe in themselves, believe in their partner organization, believe they can make a difference for customers. We’ve got the resources, we’ve got the technologies, we have the opportunity, the marketplace is structured for us to pursue it. Let’s go out as a small group of committed people, let’s go out and change the world because, indeed, it’s the only thing that ever has.

Thank you very much. Have a great rest of the conference.

2004 Microsoft Corporation. All rights reserved.

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