Microsoft CEO Steve Ballmer Affirms Commitment to Dynamic Systems Initiative

Las Vegas — April 20, 2005 — Microsoft Corp. CEO Steve Ballmer spoke to more than 2,600 attendees at the Microsoft Management Summit (MMS) 2005 today, describing how Microsoft’s execution on its Dynamic Systems Initiative can enable customers to build and operate dynamic environments to achieve higher business value through automation, flexible resource utilization and knowledge-based processes. In his keynote address, Ballmer announced increased investments in support of the Dynamic Systems Initiative, specifically in the area of virtualization to help enterprise customers improve the flexibility and utilization of their computing hardware. He also announced an important step toward industry agreement on the technology architecture to simplify network security management.

“We’ve heard from our enterprise IT customers loud and clear that they need their systems to be more automated and flexible,” Ballmer said. “That’s why we’re investing in the Dynamic Systems Initiative and areas like virtualization, more secure network access and interoperability — we’re committed to helping IT deliver greater efficiency and value.”

Virtualization for Improved Flexibility and Utilization of Hardware Environments

Virtualization allows customers to make more efficient use of hardware resources and reduce IT infrastructure costs. In his keynote speech, Ballmer announced Microsoft’s increased investment in both virtualization and virtualization management technology, demonstrating near-term product improvements and laying out a long-term strategy for both areas.

In the short term, Microsoft is responding to customers’ needs by improving the performance and interoperability of Virtual Server 2005 and improving manageability through integration with Microsoft® Operations Manager (MOM) 2005:

  • The Virtual Server 2005 Service Pack 1 (SP1) beta version is available today, delivering 64-bit compatibility and improved performance and availability. Virtual Server 2005 SP1 will enable support for Windows Server (TM) 2003 x64 editions as host operating systems and, along with performance improvements in the virtual machine software, will enable customers to further increase the efficiency of their hardware environments. Virtual Server 2005 SP1 beta is available at The final version is scheduled to be available by the end of the year.

  • Microsoft is working with industry partners to expand the support of third-party guest operating systems running on Virtual Server 2005 SP1. This expanded support is designed to make Windows Server 2003 and Virtual Server 2005 a powerful platform for heterogeneous server consolidation.

  • A new MOM 2005 management pack for Virtual Server 2005 provides administrators with a central console for managing the health and performance of both physical and virtual machines seamlessly, allowing customers to leverage their existing server management tools to manage their virtual environments.

  • Microsoft will license royalty-free the Virtual Hard Disk (VHD) to make it easier for partners to develop VHD-based solutions and continue to enhance the capabilities and extensibility of the VHD file format. A common file format helps improve security, reliability and cost-efficiency for customers. Microsoft is committed to enhancing and extending the capabilities of this format over time.

In addition to these near-term product deliverables, Microsoft is working with the industry and increasing its investments to provide customers with more robust virtualization and virtualization management solutions for the Windows® platform:

  • Microsoft will build virtualization capabilities into the Windows platform based on Windows hypervisor technology, planned for availability in the next product wave of the Windows operating system, code-named Windows “Longhorn.” This integrated hypervisor technology in the Windows operating system will be designed to provide customers with a high-performance virtualization solution for Windows and heterogeneous environments.

  • Microsoft Windows hypervisor technology will support enhanced hardware technologies, such as Intel Virtualization Technology and AMD’s Pacifica specification. The combination of these software and hardware technologies will open the door to widespread use of computer virtualization in the future.

  • Increased investments in Microsoft’s System Center family of products will result in management products that are optimized to take advantage of the unique capabilities that virtualization brings to the Windows platform.

“Gartner sees the integration of virtualization technology with the operating system as a natural evolutionary step for the x86 platform,” said Thomas Bittman, research vice president and distinguished analyst at Gartner Inc. “The broader adoption of virtualization that is spurred by this integration will make management even more important as customers strive to exploit this technology and further improve the utilization and flexibility of their hardware environments.”

“Intel is excited to be working with Microsoft on the foundation of a more dynamic and manageable computing environment, one that maximizes our companies’ hardware and software virtualization expertise,” said Abhi Y. Talwalkar, vice president and general manager of the Digital Enterprise Group at Intel Corporation. “Microsoft’s virtualization technologies, in conjunction with Intel Virtualization Technology, will help deliver virtualization solutions that increase the security, manageability and flexibility of both server and client infrastructures.”

Enhancing Heterogeneous Interoperability

Ballmer also demonstrated progress in implementing WS-Management, a Web services specification co-authored by Microsoft, AMD, BMC, Dell, Intel, Sun and WBEM Solutions. WS-Management addresses the cost and complexity of IT management by providing a common way for systems of all types to access and exchange management information across the infrastructure. Ballmer demonstrated the use of WS-Management to provide cross-platform management between Windows Server 2003 and Sun Solaris systems. WS-Management is scheduled to be included in Windows Server 2003 R2, available later this year.

Driving Industry Agreement on Network Security Management

Ballmer also announced Microsoft’s architecture alignment and planned interoperability between the Trusted Computing Group’s Trusted Network Connect (TNC) architecture and Microsoft Network Access Protection (NAP). This alignment represents an important step toward industry agreement on network security technologies and endpoint integrity. Microsoft Network Access Protection technology will help address this need by simplifying the process of ensuring that as users connect to corporate systems and data, their devices are healthy.

With Network Access Protection, Microsoft is committed to providing customers with a widely supported, open solution. Many companies, including Dell Inc., HP and HP’s ProCurve Networking Business, Juniper Networks Inc., McAfee Inc., Sygate Inc., Symantec Corp., and VeriSign Inc., are members of both the Trusted Computing Group (TCG) and Microsoft Network Access Protection partner program..

“Recent headlines of attacks, identity theft and lost or stolen systems point to the increasing need for protected access into the corporate network and assurance of endpoint integrity,” said Jim Ward, TCG president. “With alignment of Microsoft Network Access Protection with the Trusted Network Connect architecture, users and vendors can be assured of products and services that provide the enhanced security they need in an interoperable fashion.”

Related to today’s announcement, in October 2004, Microsoft and Cisco Systems Inc. announced an important alliance to share and integrate Network Access Protection and Cisco Network Admissions Control (NAC). The two companies are making steady progress on this coordinated approach to help customers benefit from the embedded security capabilities of Cisco’s network infrastructure and the security features in Microsoft Windows. Network Access Protection will be delivered in the next major release of Windows Server 2003, code-named “Longhorn Server.”

About Windows Server System

Microsoft Windows Server System (TM) is integrated server software providing the infrastructure for IT operations, application development, integration and information work. Built on the Windows Server operating system and designed with Common Engineering Criteria, Windows Server System is focused on making it easier for IT professionals to connect and manage their IT environments. Because Windows Server System products are integrated for enhanced manageability and security, they help organizations reduce complexity and lower costs. All Windows Server System products support open industry standards including those based on XML to promote interoperability with other platforms. More information on Windows Server System can be found online at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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