Steve Ballmer: Microsoft Office “12” Project and Visio Conference

Remarks by Steve Ballmer, CEO, Microsoft Corporation
Microsoft Office “12” Project and Visio Conference: Momentum, Innovation and Impact
Seattle, Washington
January 19, 2006

STEVE BALLMER: Well, thanks. It’s my honor and privilege to have a chance to speak with you here today. To some of you I guess I can fairly say, welcome. To those of you who have already been here a few days, I’ll say a belated welcome. We’re super, super delighted that you chose to spend the time with us talking about some of the most exciting and interesting innovations going on inside Microsoft.

This is a Project and Visio conference, Project and Visio. And is that just a concatenation of two products or is that really kind of a theme we should talk about, and we really decided it’s a very important theme.

As we take a look at Project and Visio, and who buys the products, and what their interests are, and where they come from, there’s really a lot of commonality between the two products.

Project and Visio are the parts of the Microsoft product line, the innovations that in a sense most feel and fit with the desire of businesses to manage process, in addition to collaborate and manage and understand data.

And so we find that many of the same people, the same customers, the same vertical segments have passion and interest in these projects. IT departments managing large projects and processes are excellent customers for both of these products. People who are trying to comply with Sarbanes-Oxley and chart those processes and manage the projects that are required to comply tend to look at these products together.

Our teams who build these products work together carefully, because there’s a set of functions that are going on around business process and projects in companies around the globe that our teams in these areas have world class expertise.

This is a big business for Microsoft. We will do over $1 billion in revenue around business process just through the lens of our Visio and Project businesses this year. And we think we’ve barely begun in some senses to scratch the surface. If you take a look at all of the let’s say process and projects, if I might say just in the sales and marketing functions around the globe, very little of those have been automated with formal process; R&D more so, manufacturing more so, IT more so. But I still think that we’ve barely begun to scratch the surface.

And so if you take a look and say what’s a billion-dollar software company, it’s the 25th largest software company in the world if it was standalone, and the range of opportunities to innovate, to improve the management of process and projects remains enormous.

We have over 300 partners who have independent applications that run in this ecosystem and over 1,300 partners around the world who are not only with their own applications but have expertise and focus on Visio, on Project, and on the business process aspect that we see around the globe.

These are products that are adopted from the very largest organizations in the world down to the very smallest: Allianz in financial services, Mercedes-Benz in the manufacturing business, GE, Kenwood, NHS, the local little real-estate developer who builds the Microsoft office buildings; all customers for Project and Visio because these things really fit in the context of what they’re doing.

So we’re talking about an area that is large, an area that I think will grow in terms of opportunity not just for us but significantly for our partners, I think our partners realizing something like $5 to $7 of revenue for every dollar of product revenue that we see, so it’s an enormous partner opportunity. And yet every time I sit down and talk to Richard Wolf, who runs our Visio business, or Mike Angiulo, they have a list this long of new customers, new process, new things, new innovations that can really help to continue to transform the world of folks who use these kinds of products and work in this kind of a world.

Acquisition: A Major Piece of the Innovation Puzzle

Today – actually I think a little bit earlier this week, but I want to be formal about it, we’re also announcing the acquisition of another major piece of the puzzle of tool sets and innovations to help us work with folks who are engaged in these kinds of processes. We have acquired some software and intellectual property from UMT that really puts us in a position now to also offer portfolio management, if you will, which in some senses bridges the world of projects and process and the world of decision support and business intelligence.

So now instead of just talking about what does this project look like, how do we lay the process out, what’s going to happen, we want to give decision support tools that tie to the project management system, which of these projects are most valuable, which are least valuable, which are most worth investing in, and based upon those decisions how does it affect the resources that I have to allocate against these projects.

Think about this particularly in the sense of a CIO. Well over half of all of the projects that CIOs consider don’t get funded. Now, you might say for an IT vendor like Microsoft that’s just a terrible piece of news, but it remains the case. CIOs confront every day decisions about which projects to fund and what that does for scarce resources. And so providing tools, whether it’s to the CIO or other decision-makers that help really bridge these two things is essential, and with this acquisition of UMT we will for the first time bring portfolio management to our customers in this world of business process and analysis of what to do about it.

So we’re excited about not only the momentum we have in the market, but we have with this UMT acquisition some things that we’ll be doing in the very near term to really ratchet up and step up what we’re doing and the innovations that we bring to this customer set in the very near future.

Innovation for the Digital Workstyle

Most of what we want to talk about today in my keynote, between me and a great set of folks who will come on and do some demonstrations for you, is where we’re going, where we’re going with Office and where Project and Visio fit into that over the course of the next year.

We’re hard at work at something that we still, for lack of a better of a name, call Office “12”, the next version of Office. And our focus in Office has been clear: We’re trying to innovate to allow people to continue to improve their ability to lead what Bill Gates likes to call the Digital Workstyle, how do we make more and more things that go on in business able to operate smoothly and efficiently, and empower people to make better decisions through digital techniques.

At the end of the day as we said in our little video that sort of opened up the morning, it’s people that drive business success. Microsoft Office we see in some senses as the bridge between that whole world of both information and process and the people who need to drive the business, make the decisions, drive the process and really make businesses succeed.

So with people at the center there are three areas where we’re trying to innovate broadly in the next version of Office. Number one, we’re trying to improve the tools that we give people to work with others across boundaries. There are all kinds of boundaries out there: There are the boundaries between organization A and organization B inside of big companies, there are the boundaries between me and my vendors, me and my customers; we’re trying to break those down. There are the boundaries between information source A and information source B, and I think we all have horror stories of how hard sometimes it is to connect up two pieces of information and make a decision. So in Office “12” there is a lot of work we’re doing across the product line to break down those boundaries.

Number two, we’re trying to streamline access to information, can you find what you need to find to make the decision you need to make. And it has lots of implications. As we talk about some of the new features today in Project, we’ll talk about its improved usage of SharePoint. We want to take more of the information that today feels to some users bound up in the project management system and make it more available and more accessible to more end users. Mike Angiulo will show you some of that later on today.

I want to be able to go to our intranet and just ask a question like, “Who is the account manager for Ford?” I don’t want to have to know what application owns that, learn the UI, blah, blah, blah; I just want to be able to pose a query and get a answer.

With what we’re doing with the new SharePoint, we’re trying to improve enterprise search so that you can unlock a lot of data that’s in mission critical systems, for the kinds of searching and sharing and finding that people expect to do.

We’re trying to help people better control content and process. We’re going to talk a lot about that and we’ll show you a couple of demonstrations, one from the realm of compliance, which is a big theme in business today, and one from the realm of IT governance that are really all about enabling people to better control the content they create and the process that’s around it.

Now, at the center of all this innovation in Office “12” is a dramatic improvement in the core user interface to Microsoft Office. We want to make more of the capability and functionality that’s in these products available to all users. Everybody knows somebody who wishes they could use five more features in Excel or Word. In this crowd I think it’s probably fair to say everybody knows folks who can’t sort of get started in the way they want to with a product like Microsoft Project. With the kind of transformation that we’re doing with the user interface, we’re trying to make more and more of the capability transparent and open up whole new categories of users for products like Microsoft Project and many, many others.

So Office “12” is the most significant piece of innovation we’ve brought to market for the information worker I’m going to guess in 10-plus years, it’s an amazing piece of work; Project, major enhancement; Visio, major enhancement; Excel, Access, Outlook Scheduling; and we’ll show you some about how Outlook scheduling and its innovations tie into what we’re doing in Project; Word and PowerPoint in the communication realm, some significant improvements there. But it’s really about the way the whole is bigger than the sum of the parts, the way we introduce portal, workflow, business intelligence across the product line that really allows us to innovate with people very much at the center.

Introducing Visio “12”

Visio “12” is an important release. We bought Visio – my mind is getting older, but roughly five years or so ago. I thought we’d done a very nice job of getting it fully integrated into the Microsoft Office product suite, but really putting the pedal to the metal and adding a lot of new features targeted at what I might call core Visio functionality, that’s what you get to see in Visio “12”.

We guided ourselves with three primary scenarios: Network and IT management, business process excellence, and information reporting and analysis. And with those scenarios guiding us, we added new capabilities in three areas. First is visualization, document and design. We wanted to make sure that you could literally pop data from a wide variety of sources, SharePoint, OLE DB, and arbitrary database, and just pop it directly inside a Visio diagram. We wanted to make sure that we could refresh those diagrams automatically so we did a bunch of work on data graphics refresh. We want to make it easier to auto connect a Visio diagram to a back-end data source. So that’s the area of visualization.

Analysis: Analysis is sort of my favorite area, and I’m now just sort of letting my mind run wild over what’s possible with the new Visio, but we’ve basically introduced the concept of what I might call or what we will call pivot diagrams. I’m a pivot chart lover in Excel. We now have the equivalent, the logical equivalent – you let your mind run there – inside Visio, which I think will be fantastic new functionality for analysis, what if type of thinking.

And in the area of communication we have a whole new set of shapes and themes in Visio, and we have much deeper out of the box integration with the rest of Office “12”, which I think should continue to improve people’s ability to use the tools to communicate.

To do a demonstration of Visio “12”, I’d like to invite up on stage with me Sandy Sharma, who is vice president of technology and strategy at INS, one of our partners. Sandy is going to take the opportunity to show you a demonstration of how Visio “12” can be used inside a business compliance process scenario, if you will, and hopefully that will wet your whistle just a little bit. Please welcome on stage Sandy Sharma. (Applause.)

SANDY SHARMA: Thank you, Steve.

Good morning, everyone.

INS is a global system integration partner with Microsoft. We focus on infrastructure, security, business productivity solutions. Our business productivity solutions are built on the Microsoft stack. And recently we’ve seen a lot of uptick in compliance. And for us it’s always an ongoing endeavor to look for new opportunities on how we can enhance our solutions with technology.

So today, I’m honored and excited to show you how the new Visio “12” and Office, the whole stack is enabling us to build great solutions amongst these, of course, as a compliance solution, which we’re going to talk about today.

So compliance is a very broad subject. We’re going to focus on some aspects of Sarbanes-Oxley. And within Sarbanes-Oxley one of the big challenges that companies have is documentation of processes. So you have a lot of business processes which you have to document and companies like to do that visually. They’ve always been using Visio to do the documentation; the challenge, though, has been how do I connect that visual diagram with the risks and controls associated with those processes, because the risk documentation typically might happen in Excel or in SharePoint or in a Word document, and the controls are also documented elsewhere. There is no easy way to connect these, and that’s what we’re going to show you as one capability today.

So we’re going to start with we’re using the SharePoint Portal here as a process portal, and what you see on top is a bunch of processes that I have documented. At the bottom I have some reusable sub-processes, and we’ll differentiate those in a minute for you, and on the right I have a list of risks which have already been identified. And these can be categorized, as you can see. And then corresponding to each risk there is typically a control to mitigate that risk.

So let us first look at what the new Visio “12” can do with us in terms of improving our productivity to do the documentation, because there’s loads of these processes to be documented and you definitely want productivity.

So I’m just going to load some of these with a macro, I’m going to use a simple cash disbursement process to showcase this.

So let’s first create a document here, we’re putting in a request. The auto connect feature that Steve just talked about, that allows me to simply click on the arrow and connect the decision box right away. This might seem trivial, but for people who are documenting thousands of processes, this is a big deal.

Now I’m just going to go ahead and complete the rest of the process just by adding a few more shapes, and loading these with a macro.

Now the thing that we talked about was linking this process diagram with data I have elsewhere. So I have textual or numerical data, which is not linked to this diagram, and that’s what the challenge is in my documentation. So we use our new data link capability to import data into shapes. I can get data from a bunch of sources: Excel, Access, SharePoint. In this case you will remember on our portal we had a list of risks, which was a SharePoint list, so we’re going to go ahead and import that. I’m going to select what I need here, I’m going to select risks, and link it as a view.

So cash disbursement is the view I’m interested in. So as I import the data in, what you see at the bottom is those risks from SharePoint have now shown up in Visio. So this is a new Visio “12” capability, which is very compelling, because now I have the ability to associate the shapes with the data, which is what I’m going to do next. So I can take one of these and drag and drop it here. So really what I’m doing is the first risk that I had has been associated with a specific process shape in my process flow diagram.

And now we’re going to show you another new Visio capability, a new Visio “12” capability, which is called data graphics, and this is really nice to visualize what’s happening with my data. I’ve linked that data and now I’m going to visualize data in a meaningful way with coloring and graphics.

So the example is risk impact, right. If the impact is high, I’m going to show a red color; the impact is low, I’m going to show green; and medium is yellow.

Similarly, I can who the risk probability level to be a data bar. So the progress would show me the risk probability level, and then I could associate the risk ID, which is these numbers R1 to R7 as another ID that shows up in the visual.

I’m going to just go ahead and now also load in similarly my controls. So if you see now I have the controls down here, we’ve skipped a few steps just to expedite the demo. I’m going to close this out and show you what this completed diagram looks like. If you see here now I have a cash disbursement process, right, which has an approval stage, cash payment stage, we have identified areas which have risks, probability of risk and corresponding controls.

Now, as we test our controls, which is part of my Sarbanes-Oxley requirement, I have to report on the effectiveness of the controls, and that effectiveness is also symbolized here with a checkmark.

So now we’re going to go ahead and save this diagram of ours. Now, I am saving this as a reusable sub process, and this is a big value add in Visio “12”. As I do my process documentation, there are lots of processes which can be predefined and reused again and again, and that gives me a content library of processes. A lot of people we’ve been working with have been asking for that for years. So we had to do that in a klugey manner with some coding and customization, but this now comes out of the box with Visio “12”.

So I’ve saved this as a new, reusable sub process. I go back to my portal. And now if you look at some of my existing process diagrams that I’ve started, I will show you how in marketing and create advances I will use this sub process that I’ve already created.

So right here we’ve already started a diagram. I’m actually going to go ahead and search for sub processes. So there is a little bit of custom programming involved to do this, but most of it is out of the box functionality.

So cash disbursement is the sub process that we just created. If you notice, that comes across with these two bars on it, shows you the predefined process, so it came from an existing content library of processes. So you see very great integration between Visio and SharePoint here and that’s what’s enabling companies to do content management with Visio diagrams, which is I think a brilliant capability.

Now, we add the rest of the shapes here and complete our diagram. And when you have a completed high level process diagram I still have the ability to drill down into my sub process that I’ve created. So I can click on that and say “show process.” And this is the process we’ve just created in the past.

Now, this I think is brilliant in terms of process diagramming and it’s not just limited to compliance. I’m sure your cogwheels are turning and you’re thinking about a hundred different applications where you can use this. That’s kind of what’s happening to us.

So let’s close this out. Now, the second challenge with compliance is about reporting and visualization. Executives on a quarterly basis have to report on the effectiveness of the controls. I’m sure you do that.

STEVE BALLMER: I sign off or go to jail. (Laughter.)

SANDY SHARMA: Right. So now that’s a pretty significant scenario there, right, so let’s look at how we can help keep Steve out of jail. (Laughter.)

STEVE BALLMER: Thank you, Sandy.

SANDY SHARMA: So we go to our compliance project and the Visio pivot diagram that Steve was talking about is what we’re showcasing here. Now, as Steve mentioned earlier, we are showing how Project Server first can be used to manage all your compliance projects. Compliance, just like any other initiative, has risks, it has issues, it has people, it has tasks, it has milestones; so what better than Project Server to use to manage your compliance initiatives, and that’s what we’re showing at the bottom.

On top we’re showing the Visio pivot diagram where we’re showing you how with color coding you can easily visualize what’s going on in my environment. If Steve himself has to drill through all his divisions and identify risk areas in a textual table, that would not be that easy. But the red color here stands out because this shows that you’re delayed in your schedule for compliance.

So you click on North America, and then within North America you see manufacturing is a division where I have a problem. So you click on that, and as you’ll see the view at the bottom is also changing, so expanding the project view as you’re doing the pivot drilldown into your Visio diagram there.

Now, within that, sales seems to be the division with the problem. So you click into that, and now as you see under marketing and trade show advances, the one we just built, they are behind schedule, documentation is 40 percent, and control effectiveness is 30 percent. Obviously, Steve is not going to be happy about that, right?

STEVE BALLMER: Not at all. Actually, it’s a material weakness.

SANDY SHARMA: So we click on that and go to the project workspace. Now, this is a SharePoint Project “12” feature, which you’ve seen, and in here David is the process owner. So the way Steve is going to end this demo is he’s going to send him a hate mail, right? (Laughter.) So that’s kind of how I —

STEVE BALLMER: But we’ll let you send it.

SANDY SHARMA: OK, sure. (Laughter.) So I’m not going to write it, that might be just a little too controversial.

STEVE BALLMER: Just a little.

SANDY SHARMA: So we’ll leave it there, but that’s the idea, right? You open up that and you open an e-mail and send an e-mail out as a reminder.

So what I’ve showed you here today was not just how Visio and Project come together, SharePoint, the whole Office stack, it’s truly coming together in a new way. We’ve been building a lot of solutions for a lot of customers for a long time, but for the last few months we’ve dedicated a team to work with the Office “12” team, and we are finding that the platform is way more glued together than it was before.

Now, as an SI should I be worried about that, because it takes away professional services dollars? Probably, but we are smarter than that. (Laughter.) Because I think for our customers and for our developers it reduces the risk and gives us more opportunity to do much more for you and focus on the business value, studying the processes and change management than just to worry about doing custom coding where it’s not needed.

So that’s what we’re excited about, we’re building a lot of solutions in IT governance, in manufacturing, in retail and healthcare, and we continue to innovate as Microsoft supports us in this innovation.

Thank you, All.

Introducing Project “12”

STEVE BALLMER: Thank you, Sandy. Great job. (Applause.)

As exciting as the new version of Visio is, the new version of Project is also a very exciting release. I was trying to – I asked Mike backstage, c’mon, between us chickens, tell me, so to speak, is this a breadbasket or a refrigerator or is it something in between, bigger than a breadbasket, smaller than a refrigerator. Mike says this is a sub zero, this is the biggest set of innovations we’ve done in Project in a long, long, long time.

And in a sense you could say they fall into four categories. First and probably foremost is we just make it easier to get started with Project. I mean, the Holy Grail in some senses for us is there are so many more people that could benefit from the kinds of innovations that Project brings, we’ve got to continuously push to make it easier to get into the game.

We did a couple big things I’d put into this category. Number one is the integration of the new Outlook Scheduling, which is amazing, with the schedule and project information inside Project, so that somebody with Outlook can participate, if you will, without getting started on the full Project Professional product.

The other thing that we did is the integration with SharePoint, and Mike is going to show that to you because it makes it easy for a lot of people to get at project management data who might have found that harder in the past. That’s number one.

Number two, we’ve tried to raise the visibility and insight into data that comes by using Project. Portfolio management and the stuff that I was talking in the UMT case falls into that area. Better reporting and analysis for proposals and maintenance work is an important part of that; particularly if you think about folks who are outside the main project flow, it’s the report on a project, it is the report on the proposal, it is a report on ongoing work that a user like me, a CEO, a CXO would typically use, and I think we’ve really made it a lot easier to give insight and visibility to project data with these innovations.

Number three, we’ve put a lot of effort into the enterprise, particularly on performance. I understand those of you who were at the Project Conference earlier in the week got a little bit of a sense of how much we’ve improved the performance, but I think that is absolutely essential, we get 100 to 1 on certain kinds of things, because of the improvements that we’ve made in the way we do patching.

And last but certainly not least is the extensibility. Really transforming Project to sit on top of the .NET and SharePoint infrastructure means that all of the tools and improvements that we’ve made to make it easy to build extensions using that toolset can now be linearly integrated, if you will, with the rest of the project management experience. And as developers like Sandy and many, many in this room and around the world want to build out custom projects, custom processes, custom workflows, we think that having this extensibility be simpler and have you have access to better and better tools really makes for a great combination.

So it’s a major step forward for us in one of the biggest businesses inside Microsoft, and to show you an example of Project “12” being used in the IT governance area, I want to invite back on stage Mike Angiulo, general manager of our Project business. Mike? (Applause.)

MIKE ANGIULO: Great. Thank you very much.

So I’d like to show you guys a prototype of an IT governance solution that’s based on the new Project “12”. I’m going to start by going to my Project Web access homepage, where you can see a variety of Web parts pulling together the different pieces of information I need as an IT manager to stay on top of my department.

At the top is a scorecard, and that comes from Business Scorecard Manager, and it shows you the Key Performance Indicators –

STEVE BALLMER: Business Scorecard Manager, a new Microsoft business intelligence project released within the last six months.

MIKE ANGIULO: And that helps pull information out of my line of business system like the SAP information showing me how I’m doing against my budget on various parts of my portfolio. And here I can see I’m a little bit in the red. Over here I have a pie chart that’s being pulled down from Office Server, and this is showing me the breakdown of the work that I’m spending on innovation versus operations. And I kind of don’t like that picture. Ideally I’d like to see those better balanced. This is one of the metrics I use to determine whether I’m really leading the business with investing in innovation or whether I’m chasing the business by just continuously maintaining legacy systems. We’re going to take a look at that in a second.

Down here I have a view into my project center where I can drill into the current projects that I have in operation. I can see what’s on time, what’s over budget, I can get to very specific task information and follow up.

But what I want to do this morning is take a few minutes to plan the 2006 project mix. My goal is to pick a better set of work for next year that’s going to support my company’s objectives and hopefully balance my portfolio.

So I’m going to click on the project proposals link, and this takes me to something that’s brand new in Project “12”, the whole concept of Web-based proposal management. Here I have a Visio flow process that shows me the governance steps in between starting with an idea for a proposal all the way to a fully funded project. Right now I’m at the stage of analyzing the impact and picking which projects I’m going to fun.

I can see that I have a total budget of $10 million to spend and $29 million worth of ideas. So in a way that’s a good thing, I’ve got a lot of work to do but not enough money to do it all. This puts me in a position to have to make some hard choices.

Let me drill into one of these proposals and show you what shows up behind that title. There is a new feature in Project Server “12” that lets you through a simple Web interface enter a project proposal. You don’t have to have a whole schedule, you don’t have to start with Project Pro; I can simply come into this SharePoint list, give a title, so here it’s a proposal to create a Mandarin language e-commerce Web site. I can give it some parameters on time, a top level budget, and down here I have four choices of how this proposal aligns to the business drivers that my executive committee has set up. Supporting current business growth, innovation, cost efficiency and operational efficiency are the four top line goals that I have on my review, and I can see whether this proposal moves the ball forward on which of those, and I can see here this is a strong supporter of business growth; it could be a very interesting proposal.

But even more than just the description, I can click a link called Work Details and see the tasks and the various ideas of what I think it’s going to take to turn that proposal into a project.

Now, again, this was a list of tasks that for the first time with Project “12” people could put in directly in a SharePoint list. So if I have an idea, I can get my idea into the system without having to be a project manager or engage a project manager.

Furthermore, by clicking Resource Plan, another new feature in Project “12”, I can look out over the next six months and see what kind of commitment, in addition to the budget is it going to take to make this happen. So I can look at the different kinds of resources that might apply, either by skill, by named resources or generic resources, and tell in full time equivalent it’s going to take one architect during this period, it’s going to take six testers during this period, and really put a full picture together of what that proposal entails.

And if I go back to my list of proposals now, today I might start picking through and saying, well, this proposal looks good, I think I’ll take these three, and kind of make a choice by choice analysis until I have $10 million worth of work. But now for the first time I can say the new member of the Microsoft Project family, the UMT Portfolio Manager is going to take this proposal list and give me a much more powerful environment where I can apply real calculation and real analytics to make and communicate this decision.

So here is the proposal grid that I just pulled in. Again, these colors indicate the alignment of various proposals with my business drivers. Now, my business drivers have been ranked, and so when I click next the UMT product can actually go proposal by proposal and give me a very, very detailed view of these ideas ranked by value to me.

But I don’t live in a perfect world where I get to make an optimum selection every time, there is work that I just have to get done. There is no way I’m going to –

STEVE BALLMER: Kind of like security.

MIKE ANGIULO: Kind of like security, kind of like maintaining my existing systems, kind of like working on those compliance-driven controls so we don’t send you to jail.

I’m going to click “forced in”, I force those projects in, I have no question there. Furthermore, I have a limited budget.

So I’m going to tell UMT that I have $10 million to spend instead of $30 million, and run the Portfolio Optimizer. I now have a list of projects that have been selected based on my business drivers, the alignment of the project to the business drivers, and other constraints like my portions or my total budget. The scatter diagram here shows the project in green, which has been selected, versus the projects in red, which haven’t. And I’m curious to know how well I’ve done. So I can come in here and do some advanced analysis and look at my efficient frontier. The efficient frontier, of course, is a set of the best bang for the buck. So for every dollar I spend as I move to the right, the dot on the green line is the most value that I could get for that given amount of spend. And my solution, this pink triangle, is a little bit off that line, you want to be as close as possible, so we can see I’m off that line precisely because of the projects that I’ve forced in. So this is really the best that I can do.

But what’s super exciting about this environment is it’s not just a modeling tool. I can take these decisions and because those proposals live in Project “12”, I can push these decisions back into Project, and now they’ve progressed in the workflow. These are now real projects; again, for the first time, all of this done on the Web.

So these projects have now all been approved, and for each one of these a new Windows SharePoint Site has been created, a Project workspace.

I’m going to drill into the workspace for that Mandarin language Web site to show you what it comes up. It’s not just a blank workspace; see, it comes pre-populated with checklists, specs, documents, best practices and other policies to follow, based on the kind of methodology that I have in the system, so whether it’s a Microsoft Operations Framework or Microsoft Solutions Framework, it’s methodology, along with a place for people to start getting work done.

Now, project managers can be assigning out these tasks, they can be collaborating on documents and ideas. If I drill down, I can see these tasks are live in the system.

And like Steve was mentioning earlier, imagine that I’m a new member of this project team, and I don’t even know where this site lives, I can go directly to my Outlook calendar and new in Outlook “12” is the integration of tasks and calendar side by side. So we’ve done Outlook integration in the past, but the time and schedule management improvements in Outlook “12”, plus the new improvements we’ve done with the task integration, make working in Outlook a completely natural way to be a participant in the Project system.

Here I’m going to click an Outlook task, which shows up on the same day that it’s due, and I can open it up and right from within my Outlook task view I can come and say that task is 100 percent complete. When I send that off, that’s it. It’s now a real task update in the project system. So I can look at my schedule indicator, it starts as yellow, when I refresh this page, that task has been updated, my resource availability has been updated, my task schedule has progressed, and my schedule is now in the green.

So, when I go back to my top level IT governance page, I can see that 2006 is going to look like a better year for me, I have a better mix of work, I have real time insight into what’s going on in the work portfolio. I have connection directly into my line of business data, and all of this is powered by innovations in Project “12”, the Web-based scheduling and analysis, the connection of line of business data like SAP, the connection of familiar tools like Outlook, and, of course, a brand new edition to the Project family, the UNP Portfolio Management Analysis Tool. So, that’s a picture of how all of these work together.

STEVE BALLMER: Thank you, Mike. (Applause.)

Innovation Commitment

As the backbone of all of what you’ve seen today essentially lies our commitment to innovation. The kinds of stuff you’re seeing I think really takes us to a new place in terms of the tools that we give, not only to the end user to manage process and projects, but the tools that we give to those of you in the audience who are developers, who want to take that broad set of tools and customize for a variety of processes, and a variety of workflows.

What we find in this area is fascinating, there’s some deep, detailed software development that some folks will do, and in some cases the workflow and the processes are done by, let’s just say for lack of a better word, non-technical people. When everybody was crunching for Sarbanes-Oxley, you really needed to be able to take everybody in the finance department, all hands on deck, and you had to let the end user participate directly in all of this work, and giving the right level of customization, and the right level of end user flexibility is really at the heart and soul of a lot of this innovation commitment.

People we put very much at the center. We showed you things today for the end user, but in the same way developers are at the center of this vision, and IT people are at the center of this vision, because all of these folks really use these tools.

At Microsoft, innovation is our life’s blood. We use these tools. It’s a mission critical part of the way we build our software, because at the end of the day software is kind of a funny thing, it never wears out, and it never gets used up. And it’s only by pushing exciting new innovations like Project “12”, like Vista “12”, like UMP, that we’re going to be able to continue to serve you, continue to interest you, and continue to drive the company.

So, I thank you very much not only for being here today, and for your attention at the conference, but we have some of the most dedicated, enthusiastic users, and critics, when necessary, of these innovations, and we appreciate all of the energy you put into not only your use of these products, but helping us to make them better and serve your interests better over time. So, thanks, and I’ll look forward to having a chance to take some of your questions and comments. It’s been a real pleasure. (Applause.)

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