Bill Gates: WinHEC 2006

ANNOUNCER: Please welcome General Manager, Windows Hardware Platform Evangelism, the Microsoft Corporation, Marshall Brumer.

MARSHALL BRUMER: Thanks very much, and welcome to WinHEC 2006. It’s a very important time for us this year, with some sort of imminent releases coming up, to talk to you, and the industry, and to work together with the industry about what our hardware plans are for, sort of the coming releases that we have and, just as important, sort of the future advancements that we have coming. And that’s what WinHEC is all about.

In the last 15 years, we’ve been on a stage somewhere in the U.S. 15 times, our 15th year. We’ve been in other places in the world, and a big part of that has really been driving sort of what is going on, what’s evolving in the ecosystem, and what are our opportunities in your businesses and ours to work together as an industry and create sort of the end user satisfaction that we look for, create models for our businesses to succeed.

And one of the things that we do at WinHEC is not just have Microsoft stand up and provide that information, but we also do it with the entire industry. So, you’ll see in the next three days a great deal of innovation that’s happening, a great deal of work that’s going on between Microsoft and our partners. Specifically for WinHEC this year, our tag line has been “Advancing the Platform.” And the two main areas are both in technology, which has historically been the main focus of WinHEC, the Hardware Engineering Conference, and also business opportunities. So, 15 years ago, many of us didn’t even realize where this industry was going to go, and much of what we were doing was very much driven on our technology needs, and the technology directions we’re going. Today, as the PC has become essentially ubiquitous, we’re looking for many new opportunities in the business for all our businesses to work together and provide solutions for our customers.

Specifically at WinHEC, from our point of view, it’s all about the content that we provide to the attendees here over the next three days. This morning you’ll hear three different keynotes. Bill Gates will talk about overall advancing the platform. Will Poole will talk about business opportunities from a client perspective. And Bob Muglia will talk about business opportunities from a server perspective. We believe it gives you sort of a foundation with Bill talking, and then the two client and server opportunities that are coming for all of us.

And then, for the next two-and-a-half days after that, we have 128 technical and business sessions across 12 tracks, and this year we’ve added a few panel sessions. We also have five sponsor sessions that are coming up. And then, new this year, we’ve added 60 hours of hands-on labs. That’s an opportunity for developers, both hardware engineers, software engineers, to actually work with our tools, and work with our technologies hands-on, with Microsoft proctors in the room to give you guidance and answer your questions.

We’re also handing out, again, our segments Design for Success for WinHEC 2006 this year, this is an opportunity for us to bind, which we don’t do a lot of paper anymore, but we actually bind a small book that will give people an opportunity to read through what are the technology areas that we’re driving at the most, and what are the changes in the work that you in the audience have an opportunity to go work with Microsoft and each other on. Many white papers beyond that Design for Success book will be available on the WHDC, you’d think I could be able to say that, Web site.

And, lastly, the conference proceedings for the three days will be available on DVD to all attendees starting in July.

So, specific tracks, I’m not going to go into the details here, you can find listings of the tracks in many places, but we view this as an opportunity to look at sort of the broad spectrum of what’s going on in the industry. We’ve also worked with the WinHEC Technical Advisory Council to drive a lot of this technical content, and a lot of the direction of what the Advisory Council believes we really needed to make sure we address with the audience this week.

Next is really the opportunity for everybody in the room to engage with Microsoft, and to engage with all of yourselves. And the idea here is really that the industry interaction over the years has really driven the direction that the ecosystem has taken. If each one of us had stood separately and done our own thing, we wouldn’t be where we are today. So, specifically for speakers and staff, you’ll find them in these lovely blue shirts that say Microsoft on them. They wouldn’t let me wear my badge out here, but the badge has a red lanyard on it. So, for anybody that you want to talk to that’s been sort of either up on stage, or is wandering around in a blue shirt, if they don’t know the answer, they’ll be able to try and get you to the person that does.

Next is the Ask the Expert Sessions. We’ve done these for a couple of years. I think some of you have asked for more, we’ve provided some more, and some more consolidated. One of the key changes this year, or additions, is we’ve added a special session right after the keynotes this morning that will run at lunch time, with some of Microsoft’s distinguished engineers to, instead of cover sort of a specific technology area, they’ll take a broad spectrum of questions, and discuss with folks at the conference what are the things that are on your mind from a technology perspective.

And then, lastly, at the Expo Hall, the WinHEC Expo, many of you that registered last night were there for our opening reception, but you’ll find, surprise, surprise, lots of us in blue shirts there. Tonight there will be an evening reception in the Expo Hall, but it’s your opportunity to also meet with all of the exhibitors that are there, see what they’re doing, and meet with your peers in the industry in sort of a more casual atmosphere.

While you’re here also, it’s important to note that there are a number of different tools and things available to you. Number one is, wireless networking connectivity, except you’ll notice that you probably won’t get wireless right now. We turn off the wireless in this room while we’re running keynotes to make sure that all the different hardware that we’re doing here we’re not having any collisions and things. But throughout the conference, you’ll get wireless. You can connect using the (LEXR ?) key that we gave you in your bags. Next is the (ComNet ?) that we’ve run for a few years. It’s got essentially all the content that we have for you to download and print. You can sort of create your own content, if you will. And, lastly, please wear your badge everywhere. It’s the thing that gets you into all the sessions, the Expo Hall, and also your way to get into the Game Night tomorrow night.

I would also like to thank our sponsors and exhibitors, without them I don’t think we would be where we are in terms of the full content at WinHEC. This group and the next group, and this is really not only do we have our sessions that have third parties in them, but our sponsors and exhibitors really help bring together the industry.

Next, I would like to talk about the competition that was launched last year, and then winners were announced at CES in 2006. We have a few of those up on the 6th floor, the Next Generation PC Design Competition, this is an opportunity for sort of new industrial designs to come out, it’s an opportunity for you all to sort of flex your muscles for people who are even outside of our industry to flex their muscles for what new design ideas can we generate. And please feel free to visit their kiosk up on the 6th floor to see some of last year’s winners, and to figure out what’s going on this year.

A very important part of WinHEC for us is to get your feedback. Much of what you see over the last 15 years that has changed is truly driven by the feedback from all of you that are in the audience. One of the areas that we do is, we step back after WinHEC and we try and list everything that all of the Microsoft team has figured out is going on, and then we make sure that we take that into account along with all of your feedback, and improve year after year. So, specifically what we heard last year was, you were not too happy with us when we ran, I think it was, four vice presidents head to head right after the key, so this year, what you’re seeing is three keynotes in a row, and all the technical session run without that high level sort of VP viewpoint, but you’ll see other people that are leading off their technology areas instead of an executive.

We won’t do any late sessions on the last day, it will give you an opportunity to go out and enjoy the lovely Seattle weather, or get to your plane if you need to. We’ve improved the wireless connectivity except in here. So, we got lots of questions last year why it wasn’t on. I think I explained that. And then, even more technical details, we do a review of every session to make sure it’s truly delivering the technical details that you need to build your products, and to evolve your products into the future. So, specifically, the opportunities for providing feedback, session evaluations, every time you walk into a session, you have an opportunity to give an evaluation form. Please turn it in on your way out. We’ll be giving away two Xboxes during the conference, each one of your evaluation forms is an entry into that contest.

Secondly, the conference evaluation, you should have gotten that in your bag, and everybody that turns in their evaluation, this isn’t a contest, you just get it, you get one of the new Wireless 6000, Laser Mouse 6000, which is kind of a cool thing, give you an opportunity to work wirelessly with your laptops that I’m sure most of you are carrying today. And, lastly, we have a WDK Survey on the ComNet.

The last thing is, please enjoy yourselves. We have lots of opportunities with the Vista Lounge, the Intel Digital Lounge, the Windows Gaming Zone from AMD, Gibson is here again this year, they were extremely popular last year, and then our attendee party is 64-bit Game On at Gameworks that’s sponsored by Intel and Microsoft. Please remember that you need your badge to be able to get into the party tomorrow night.

So, with that, what I would like to do is sort of kick us off into and introduce Bill Gates, the Chairman and Chief Software Architect of Microsoft Corporation to talk to us about advancing the platform. Thank you. (Applause.)

BILL GATES: Good morning, and welcome to WinHEC. WinHEC is a very important event for us, an opportunity to bring together the key partners in the Windows ecosystem and talk about where we’re going next. And, year after year, we’ve driven key advances, things like USB, Plug N Play, all of these things come out of the kind of collaboration and discussions that take place at this event. This year we have a healthier, stronger PC market than ever, and lots of new opportunities in front of us. So, there’s lots and lots to talk about as we take the PC into new areas.

We’re taking advantage, of course, of many trends. The miniaturization of the PC is leading into use more in mobile types of environments. The form factor that connects up to high speed wireless means you can get the information wherever you want to go. We’re taking advantage of the incredible chip improvements that Intel and AMD and others bring up that allows us to be more ambitious in terms of what software can do on the device, things like ink recognition, and speech recognition, visual recognition are now within reach because of that incredible performance. And, of course, we benefit from the incredible trend towards Internet usage, more and more broadband capability globally, and that’s driving people to take things that would have been done without the Windows PC and make the Windows PC a central element of that activity.

For example, think of photography over the last five years, it shifted to largely be digital. The way you organize and archive those photos is now done overwhelmingly through software on the Windows PC. And if we think of that broadly over the next five years, the whole idea of memory, keeping track of the neat things that happen with your kids, or your family, or your calendar, all of that organized and easy to navigate, software can do a lot more than it’s doing today using the power of these machines.

The digitization of the economy, advertising becoming targeted and moving to an online environment, that’s creating an economic model that drives more and more software creation. There is no doubt that as the world globalizes, the tool that is allowing that to happen, allowing work to be done anywhere, allowing matching of buyers and sellers in new ways, it’s this software ecosystem running on the PC that allows that to happen.

And so we get a virtuous cycle here as we make the software and hardware better, we get these ambitious new applications, and those drive it provide new levels of performance and capacity. And, fortunately, all the elements are coming together. If we take bandwidth on the network, that’s enabling what we want to do. If we take the resolution of the screen, low cost, large LCDs, a move in the home towards high definition, now with those screens coming down in cost, that’s something that everyone building Windows games, and thinking about interactive experiences can assume very, very high definition. And so the innovation feeds on itself. And it’s led, of course, to record sales of Windows PCs. Over 250 million PCs will be sold this year, and that’s more than a 10 percent increase coming up from last year, increases across the board, the use in business, the use in education, the use at home, every one of those things simply getting stronger and stronger. A big trend towards the mobile phone factors, the small form factors that you can take and use anywhere connected to the wireless network.

Last year a big theme of WinHEC was the move of the industry from 32-bit to 64-bit, making a transition in terms of our memory model has always been a tough thing for the industry. From 8-bit to 16-bit, that was done with an incompatible change from essentially 80-80 type processors to 80-86, moving from 80-86 to 286, you get a little more memory going from 16-bit to sort of 20-bit, 24-bit, that was a very messy transition because of the different things for extended memory.

Here from 32-bit to 64-bit has been very smooth. Upwards compatibility, running the older applications, and so you’ve seen lots of the software have a very simple job to move up, and not only run 64-bit, but to take advantage of it. Here you see a list of the products we’ve put out that are 64-bit optimized, that run best in that 64-bit environment.

We’re now making a shift, and this is a very important shift, that a number of our server products are going to be 64-bit only. So if you look out there, starting with this year there are a number of releases, for example, the next big release of Exchange, Exchange Server 2007, that we had codenamed as Exchange 12 that comes out late this year, that is a 64-bit only release. So a clear message, starting on the server, but moving down onto the client over time, that 64-bit is here to stay and will be pervasive.

I would give the industry as a whole very high marks for how this transition was made. It did require device driver makers to come out and test their new drivers, and we still have a little bit of that to do, but overall I’d say that pieces fell into place very well. That’s very appropriate, because we can see from this chart the arrival of 64-bit, and the percentage of the machines using it was very, very high. We can see on the server it got ahead, but then on desktops a very quick rise to where over the next three years we move to basically 100 percent even on low-cost machines, and then mobile only lagging that a little bit.

So 64-bit really is here, it’s allowed us to achieve record levels of performance, record levels of performance that even dramatically more expensive machines cannot achieve. We’ll no longer be talking about catching up with proprietary UNIX or mainframe performance, because we’ve gone far beyond that. Now it’s simply the absolute level of performance, tackling problems that used to be in the realm of supercomputing, or rich data mining of things like Web logs that provide really unbelievable amounts of data.

So what is the next big issue for our industry, that’s really core to the architecture of how we build systems and write software. Well, it’s multi-core, and multi-core is happening pretty quickly right on the tail of 64-bit. Here you see a similar curve showing for the different system types how rapidly we see it moving to multi-core. And it’s quite dramatic. You can see as you move out to 2009, again, all the different types of systems will be multi-core systems.

Now, the software has always had the ability to run multiple threads in parallel, so we immediately get benefit from this capability. However, optimizing the software, particularly as you move up into large numbers of cores, as you move to 4, 8, 16, 32, that requires architectural changes, it requires understanding where the bottlenecks are, it requires changes in the tools and the performance analysis that gets done. If we’re going to keep those cores working for the user and not just sitting idle, it requires actually some very, very innovative work. And this is very necessary, because the raw cost performance that we’re going to see changing over the next four or five years won’t be the rate of the past, it will only be a doubling, or at most a tripling it appears. Therefore, a lot of the performance gains will come from activating those additional cores and making sure we have the right parallelism.

This has been a huge focus of our research activity, thinking through the tools, high level expressions, but it has an impact on all of us here, the drivers, the way we think about the way that the hardware and software are coming together. So a lot of energy will go into that, and that will give us the kind of advances we want.

There are changes across the board, in terms of how hardware and software work together. If we think about boot, we’re finally moving away from the old BIOS to this unified extensible firmware interface, and that gives us new flexibility and capability, and it’s got a rich API set to build on, so many of you are working with us on that. Networking, making sure that there’s no bottleneck here, that you can get a TCP/IP stack that not only has the IPv6 but that can scale and perform, and even perform more of the functions down at the driver level, things like the encryption-decryption capabilities being down there, as well. In the wireless area, a lot going on around WiFi and the new performance there, a lot going on with the ultra-wide band, which we think will be important, as well. So building in a very rich wireless stack that lets people understand why it’s working, why it’s not, what’s going on, a lot that’s important where Vista is a big change there.

In memory management, we have the whole idea of being able to cache in a very sophisticated way. Inside Windows this is called Super Fetch, and it gets rid of a lot of the bottleneck of going out to the disk again, and again. So non-volatile memory allows us to improve performance fairly dramatically in lots of cases, and even reduce power by letting the disk spin down when we’re able to get the storage mostly off of that RAM/non-volatile memory combination. So we’re working together to make sure we’ve got the right approach here, and that Super Fetch can give the performance back to the user that we want.

Finally, power management is a gigantic issue, because of this move to mobile, wanting the long battery life, and yet wanting to do that without giving up system capabilities. So a lot of things about hybrid sleep and policies that we need to work together on that are making drivers have to be a lot more sophisticated in this area. We see the PC changing, we see it with bigger screens, more mobility, the relationship between telephony and the PC will change dramatically, getting great microphones in there, taking the graphics to this next level of performance and having all applications take advantage of that. So the PC in no way is standing still, and that provides opportunity for all of us. But, we need to make sure the right standards are in place, we’re coordinated, we’re getting all the levels of the stack working together so that the innovations roll out and are fully utilized.

As we step back and think about IT departments, they face a demand for lower operational costs, higher utilization of what they’ve got. They want to take a lot of things that have been manual and put them under software control. Even the idea of what software load is running on which server really should be software that’s looking at that, and deciding how to move those things around. And it means moving to describe systems in a more high level, modeled-type fashion. It means having software that makes things like updating far easier, so it’s not a system-by-system activity, but just one policy-type command that gets given.

If we can free up the operational expense that people have in managing system, they can take those dollars and spend it on buying new servers and implementing new applications, moving to WiFi, or our new portable machines for all of their employees. So this kind of software innovation, for IT operational challenges, we think is really fundamental. It’s what’s going to allow customers to move and focus on these future things.

Just take something as simple as, I want to buy a new server, bring it in, install it, configure it, get the software up and running on that, how much manual effort should that require? Well, we can all say that the software should make it so that as soon as you plug it in it’s auto-discovered, it’s just in the resource pool, and loads are distributed to that system. But, we all know that we’re far away from achieving that goal today, the kind of self-description information, discovery, service modeling that would be needed for that to be true all the time is something that we need to invest in, and needs to become part of a number of industry standard efforts.

One of the key elements that’s going to allow for these improvements is the move towards virtualization technology. This is something we’re making a huge investment in, both in terms of how Windows connects up to the virtualization tools, and building those tools ourselves. Then finally, what we would say is perhaps the most important thing, is the management tools around it, so that you get the ability to have policies that automatically these virtual machines are being deployed and used in a way that meets whatever constraints people want to have.

This means host clustering, and lots of virtual machines. Of course, this is all 64-bit type capability. There are some scenarios around compatibility that are supported here, some around isolation for security type things. There’s a lot of APIs that we’re building at this level, that are opportunities for partners. We’ve got a VHD format now that we’ve made royalty-free, and available to everyone. So a lot of commitment to this virtualization, in fact, yesterday we announced that that would be a feature, the support for it in the server would be included with what we do in Windows Server.

To give you a sense of why we’re so excited about this, some of the scenarios and the commitment we’ve got on this, let me ask Jeff Woolsey, a lead program manager on this work, to come out and give you a glimpse of how we see it being used.

Welcome, Jeff.

JEFF WOOLSEY: Thanks, Bill.

It’s a pleasure to be here to demonstrate for the very first type our new hypervisor-based Windows Server virtualization. My assistant Mike is going to bring up the new Windows Server virtualization UI, and let’s get started. As you can see, Windows Server virtualization uses a new MMC interface, and takes advantage of the latest MMC capabilities in Longhorn Server.

Let’s bring up our first virtual machine. As you can see, this VM is running Windows Server 2003 Standard Edition. You can see by the system properties and Task Manager, this is a uni-processor, 32-bit virtual machine. In fact, we created this VM using the free version of Virtual Server 2005 R2, and migrated it to Windows Server virtualization. We did this to demonstrate the fact that we’re protecting our customer’s investments in Microsoft virtualization technology, so they can feel confident in creating virtual machines today, knowing that you’ll be able to easily migrate them into Windows Server virtualization.

Let’s bring up our next virtual machine. Our second VM is running Red Hat Enterprise Linux 4, to show the interoperability of Windows Server virtualization. This brings us to a common question, why is Microsoft supporting non-Microsoft operating systems in their virtualization solutions? The answers are, interoperability, and standardization. Our customers have told us, they want to standardize on a single platform for virtualization, they don’t want to use one virtualization technology for Windows, and another virtualization technology for other operating systems. Since the majority of operating systems being virtualized are Windows, it only makes sense that we provide our customers the best platform for virtualization, so that they can standardize on Windows Server virtualization, and Longhorn Server.

Mike, let’s bring up our next virtual machine, and you can see this VM is running Windows Server 2003, X-64 Edition. This is a 64-bit virtual machine. Let’s also bring up Task Manager to show, this is a dual processor virtual machine. By supporting 64-bit, and multi-processor virtual machines, Windows Server virtualization scales to run workloads that have larger memory and performance requirements, and takes advantage of the latest hardware advancements, such as multi-core technology, and hardware assisted virtualization. As you can see here, we’re running 2 32-bit, uni-processor virtual machines side-by-side with this dual-processor, 64-bit virtual machine all on the same server.

Next I’d like to talk about our new virtualized I/O architecture. In developing Windows Server virtualization, we took a long, hard look at one of the most expensive areas to virtualize, I/O, and developed a new architecture. The goals of this new architecture are to provide the highest possible performance with the lowest possible overhead, without requiring our hardware partners to develop new drivers. In addition to increased performance, this architecture enables new hot-add functionality within virtual machines. For example, this dual-processor Windows Server 2003 virtual machine we actually created without a network adapter. You can see, Mike has brought up the network connections to show there simply aren’t any.

We did this so we can demonstrate just how easy it is to hot-add a network adapter to a virtual machine. So Mike is going to switch over to Windows Server Virtualization UI, select the virtual machine settings, he’s going to add a network adapter, click add, and okay. Let’s go back to the virtual machine, and you can see we just hot-added a network adapter to this virtual machine without downtime. No other hardware virtualization technology provides this functionality for Windows, and this is only the tip of the iceberg.

Before I show you more hot-add functionality, let’s bring up the next virtual machine. Here is Longhorn server. And as you can see by the system properties, this is a 64-bit virtual machine with 4-gigabytes of memory. In fact, this is a great opportunity to mention that we’ve shattered the virtual server limitation of 3.6 gigabytes of memory per VM. With Windows Server virtualization each VM can allocate more than 32 gigabytes of memory per virtual machine.

Let’s bring up Task Manager to show that this is also a quad-processor virtual machine. By providing quad-processor, and, in fact, up to eight processor support for each machine, Windows Server virtualization scales to run enterprise-class workloads. Now, suppose we created this quad-processor virtual machine for a SQL workload, over time as more people access this database concurrently we see an increase in paging. What we really need to do is allocate more memory. Well, with Windows Server virtualization it’s pretty simple, but before we actually do this, let’s pay attention to Task Manager, and look at the total memory. I’ve actually asked Mike to put the cursor right under where you need to look, because this hot-add occurs so quickly that if you blink you just may miss it.

Mike is going to go back to the Windows Server virtualization UI, bring up the virtual machine, and we’re going to change the memory for this VM from four gigabytes to five gigabytes, and click okay. Let’s go back to that virtual machine and look at Task Manager now, you can see we’ve just hot-added a gigabyte of memory to this virtual machine without downtime. Again, no other hardware virtualization technology provides this functionality for Windows. This is also an excellent example of the integration between the Windows kernel and the Windows hypervisor, to provide our customers the best solution, in terms of dynamic capabilities and performance.

In short, Longhorn server has been developed to take advantage of hypervisor-based virtualization. This is Windows Server virtualization. Thank you very much. (Applause.)

BILL GATES: What you saw there we’ll have in beta this year, and it will RTM after Windows Server Longhorn. We expect it will be about 100 days after the server release of Longhorn. That is a technology that we’re working with a number of you on, to make sure we’re getting everything right there in terms of how it connects up to device drivers, and industry standards and those things, so very important things.

I also mentioned how important the management software element of this is, and we call that system center, virtual machine manager, and that’s being developed in parallel with this, and I’d say in terms of making it simple to define policies about resources, and performance, and things like that, and let you control a lot of these all at once, that piece is a necessary element that some people sometimes miss when they think about how we’re going to get all of this to come together.

So together we see this really helping with that IT challenge I mentioned, helping them simplify things they do in terms of provisioning, running older applications, and then freeing them up for what they really ought to be doing with innovative applications. Bob Muglia in his speech will talk more about virtualization. So you’ll go away with a clear theme here about how serious we are about that area.

The overall PC ecosystem is getting richer and richer, and this has to do with the variety of PC devices, it has to do with the variety of devices the PC is connecting up to. We think this is fantastic. The more digital devices there are, the more valuable the Windows PC becomes. In terms of form factors for the Windows PC, one of the great successes over the last several years has been Media Center Edition of Windows. A year ago it was a little bit of a phenomenon, two years ago it really didn’t exist. It’s this year that we’re getting all of the elements to come together, the connections to the cable video, the satellite video, connecting up to those standards on a global basis, and people really can expect the PC to be the place where everything comes together, video over the Internet, where the innovation is great, but also the traditional video sources coming together into one place. So that energy we’ve put around Media Center has paid off in a very big way.

Another form of Windows that we’re very committed to is the Tablet version, that works with ink. I hope a lot of you noticed that we’ve had some new form factors that we call ultra-mobile PCs come out. This is one that came out from Samsung just in the last month. This looks very good. It’s bringing in new price points, new capabilities, and really a very nice device that can either be your primary PC, or a second PC. Obviously, the industry benefits a lot if we can make it easier to work with multiple PCs, and people decide that the one at work, the one at home, the one they have on the go, that those are different machines, and yet we make that a seamless experience. We have a lot of emphasis on that, because you’re seeing these different form factors, the idea that at different times you want those, that becomes more important.

Now, the complementary devices to the PC are often devices that are about media consumption. The Windows PC is unique, in terms of that’s where you organize things, that’s where you edit and create things, that’s where decisions about commerce, and rich communications will be taking place. But, the phone, that’s getting richer and richer, connects up to that. So we want to make it simple for your mail, your schedule and your documents to show up there.

This is a phone that was just announced this week. This is called the Motorola Q. We’re quite excited about it, because it brings together all the advantages of Windows Mobile and how it has the affinity to the Windows PC, with a great hardware form factor that our partner, in this case Motorola, has put together. So the volume of these has gone up quite dramatically, about 6 million last calendar year, and we expect quite a bit of growth, and there’s experimentation in terms of the different form factors we think it very important.

Digital media devices, this is a new one from iriver, that they call their Clix. It’s got a two-gig flash drive in it, and a fairly innovative design in terms of how you just use the edges to navigate around. Good support for photos, music, video, and even an FM tuner there. So a partner building something that’s very complementary to the Windows PC, that you can connect up and sync in an easy way. And the more people are using those devices, working in a digital fashion, the more time they’re going to be using their PC, and connecting up to media of all types, including video blogs, audio blogs, user created content, as well as the typical sort of albums or TV shows that you would expect to see there.

Now, these scenarios, video for example, require all of us to invest in the ecosystem. For example, with video, getting high definition to displays so there is no frames being dropped, so that the audio is the wonderful 5.1 just built in, so that whatever requirements people have for encryption in these media pathways that we’re able to meet those needs so that studios feel comfortable putting their content into our environment. This requires work at the driver level, at the operating system level, at the application level, so a very, very important thing.

These new form factors require innovation. I mentioned that the tablet, we are pushing that into the mainstream. Right now, the strength of it is in areas like health and insurance where special applications have been written for it. We want to get so that even students think about that as the natural portable machine for them to use, and with the Vista version of the tablet software, and some of these hardware changes, we think we move a significant step in that direction. Things like synching between the devices, that’s an area of big investment for us, making these network connections between these devices both through the general Internet, but also peer-to-peer type connections so that you can exchange things, there’s a lot of investment that we’re doing in that as well.

I mentioned telephony and its connection to the PC. This means that connecting over the Bluetooth, or having array type microphones for high quality communications, and thinking of telephony as just something that the PC does very, very well. Over time, PBXs, traditional PBXs will be like mainframes in the sense that there will be less and less of them, we’ll have nice gateways to them, but the really rich new functionality, the great applications, both flexibility and high quality will be moving to be pure IT based with PC software in control instead of going into a lot of specialized limited capabilities that PBX could support. And so thinking through how products like, in our case, Communicator, and Messenger connect up to that world, and yet even in a sense over take it with new capabilities for screen sharing, and multiple people, working with the cameras, and the software that we can have on top of that, lots that can go on including hardware innovation that we need there.

Obviously, storage is exploding, making it easy for people to carry around a flash drive, and have that information be secure. We need to take a role in defining some of the standards there, so that that becomes straightforward, and even some of that you’ll have on the phone as it’s connecting up either physically or over a Bluetooth or WiFi type connection. So, we’re just scratching the surface in terms of these user-centric experiences with the different devices, and what can be done there.

Today is a milestone for us in terms of the huge investment and big innovation going into the next major version of Windows, and all of the complementary products. We’re actually announcing today the beta of three major products. You can say the three most important Microsoft products, and we’ve never had this synchronized in this way before, and we think that’s a great thing for us in terms of seeing how they work together, and then for customers as it comes time for them to roll these things out. So, very specifically, Windows Vista Beta 2 is coming out today. The Windows Server, Longhorn Beta is coming out today. And, likewise, what was called Office 12, but now the 2007 Office System coming out. Each of these is a very, very important product, and they all fit within some very common themes in terms of what we’re doing. One that this audience may not spend as much time on is Office, but I would highlight to you that it is quite important in the way it’s using the new graphics capability for its redesigned user interface, and the kind of richness it has not only for visualization, but information sharing, particularly SharePoint becoming the standard platform for collaboration. In the same way that Word or Excel became the standard for document creation, now SharePoint is something that you’ll just assume that everybody knows and uses, and there will be standard templates there for managing a project, or setting up a discussion, and all the kind of rich capabilities around blogs, and wikis are all available there, and so getting people to collaborate inside your operation with that flexibility just becomes commonsense, you’ll take it for granted that you’re setting those things up, and using them. So, Office is a very important part of this triumvirate of major products that are coming out today.

What are the key themes? Well, simplifying how people work together, that’s a very key thing. It’s about communications, seeing people’s presence wherever they go, being able to find things. There are very rich search capabilities that span these products, making it so that when you do search, you can search on the desktop, and on the SharePoint Server, the file server, with one simple command, and see those results come back altogether.

There’s a theme around security. Microsoft, many years ago, talked about that as our top priority, and absolutely that remains the case. We’re very proud of the progress we’ve made facing down these problems in a way that no one else has, the updating infrastructure, the testing processes that we go through, the techniques for isolation that we’re providing customers including things like the IPv6-based work. Great progress there, and that’s built in to each one of these products. They went through the methodology for design and testing that really brings security up to a whole new level.

Managing content, that has to do with the rights protection capability, the search type capabilities, really being able to implement compliance processes across all the different ways that information are stored. You’ve got your Exchange mail store, you’ve got SharePoint file stores, you’ve got people taking things off on laptops, how do you implement the critical business requirements of packing those things up, and having policies, and that’s a scenario that we made sure across all the work in these products we made that fairly straightforward.

So, rich information, empowerment, helping IT to do their piece of this story very well, and then creating opportunities for developers. Every one of these products has things that brings their extensibility to a whole new level, a lot of it around the theme of the XML and Web service type extensibility that we’ve been betting our company around, and driving through standards processes all the way back to the Year 2000, when we announced our .NET Initiative. So, we’re really trying to bring it together for customers.

One way to give you a sense of how this is being accepted would be to have one of our customers who has been a great partner in working with us on this come out and talk to us a little bit about how they see these products. So, let me welcome Alan Nunns, who is General Manager of Global Technology and Strategy at Chevron. (Applause.)

Good morning, Alan.

ALAN NUNNS: Nice to be here.

BILL GATES: Thanks for coming. Tell us a little bit about Chevron and the challenges that you have to deal with.

ALAN NUNNS: Yes. Chevron is a global energy company, as you know, a very interesting business to work in. Our business is finding, exploring for oil and gas, developing it, producing it, shipping it, refining it, and finally marketing it. So, this is a very technological business. It’s highly capital intensive, and by capital intensive what we mean is, we have a lot of steel in the ground. We have a lot of steel in big platforms out on the sea. We have a lot of steel in tankers. We have steel in refineries. We have steel in trucks. We have a lot of steel. So, you might think Chevron is all about steel, I should have a wrench in my back pocket, right. Actually, the real business of Chevron is making business decisions very well using digital information, that really is, in a sense, our core business.

We make two sorts of difficult decisions. First, because we are asset, very capital intensive, and we have long-lived assets, oil fields, the development of an oil field may last 30 or 40 or 50 years, a refinery may last for 50 years, we have to make difficult decisions about which assets to develop, how to develop them, and to make the right economic decisions for them. And then, on a day-to-day basis, we have a lot of operational decisions to make sure that our oil fields, our refineries, our pipelines, and our tankers are operating safely and reliably. So, we’ve got these sort of big decisions, and then real-time decisions. And we make all of those decisions, basically, with people working together, generally collaborating using digital information.

So, to give you a perspective on that, we have about two petabytes of data at the moment, growing at about two terabytes per day. So, for example, when we explore for oil and gas, the seismic data we use, which is sort of like a full body scan of part of the earth, typically we have about 400 terabytes of that online at any given point to make our decisions about where to explore for oil.

An oil platform, well, when we decide to develop an oil field, the economic analysis goes into that, or particularly if it’s a portfolio analysis, some of the biggest spreadsheets probably in any company are being run by the guys who do those analyses. If you put an oil field, or an oil platform into commission, the design through commission is about 100,000 design documents. Those design documents then have to be carried forward into the operation so that you can do maintenance many years in advance knowing what the original design was. A big oil platform at the moment is spewing out about 300 gigabytes of data per day, real-time data. A refinery is producing about a terabyte of real-time data per day, and of that about a terabyte per year is stored and maintained.

All of the people, the 60,000 people we have working in 186 countries exchange about a million e-mails per day. So, we’re doing teamwork across geographies, where people in Angola are working with people in Houston, are working with people in the Bay Area to make decisions both these capital decisions, and also the real-time decisions. Our commercial transactional systems are processing about four million commercial transactions per day. So, we’ve got this really data rich environment. We’ve got this two petabytes of data, about half of that is what you would call structured data in big databases, big files. The other half is documents, e-mails, PowerPoints, Excels, all sorts of other documents. And there’s probably about 100 million of those. And many of them, because of the long time cycle in our business, we actually have to keep and maintain, and make sure we have them for future reference.

Our biggest strength is information management, and our biggest challenge is probably information management at this point. So that’s sort of where we’re at at the moment.

BILL GATES: Wow. That’s impressive. Contrary to a lot of companies, Chevron has been willing to embrace technology, and has included a lot of the different waves of Microsoft technology. How has your experience been?

ALAN NUNNS: In 1998, I think we were one of the first major global corporations to rollout a very standard desktop and server infrastructure worldwide, and we were early adopters at that point of NT4 technology, and we put in place software distribution, et cetera. So, from that point on, Chevron employees worldwide actually had very standard desktops, very standard laptops. If people traveled from one part of the world to the other, they could immediately logon to somebody else’s PC, get rights, work efficiently, and it was a really major step, both in cutting IT costs, but also in improving business productivity, and our business folks are very happy with it. We sort of rode that cycle through.

And then in the 2001-2002 point, we went to the next wave, and right at that point, we were actually merging Chevron and Texaco. So, we were doubling the global reach of our company, and becoming really a very, very large global company at that point. And, in the next wave, we rolled out XP across the enterprise. We also significantly improved our network infrastructure, and significantly improved our security infrastructure by implementing smart badges, and things in with the Office System. And, what we really gained in that was really a globalization of work processes, and a focus on people actually in more or less real-time, or real-time being able to work across geographies. So, we made a lot of use of NetMeeting, a lot of use of instant messaging, and so on. So, we really created a global community at that point.

So, we’re now about to embark upon the third wave of adoption with the 2007 set of products, and we’re really looking toward a lot of the new Vista technologies, particularly encryption of laptops, and the server capabilities to improve manageability of this network and infrastructure. But the big bet we’re probably making in this wave, coming back to my starting comments, is information management bet, because if you think about it, we’ve sort of had 60,000 people operating in a way that they can communicate and collaborate seamlessly, but in many cases they were storing their own sort of scattered business information with them, and now with the new SharePoint environment, Office 2007 environment, we’re really looking to create sort of a standard information management infrastructure. So, we’re moving up the stack into really the business layer for that. So, that’s the next new wave.

BILL GATES: That’s fantastic. Chevron is part of all three programs, Longhorn, the client and server, and Office as well. So, let me hand over to you these Beta 2 DVDs for all three of these products. You’ll be the first customer to get all three of these. (Applause.)

Thanks, it’s super to be working together.

ALAN NUNNS: Thank you. (Applause.)

BILL GATES: And, of course, the Longhorn client and server bits will be available to all of you. We’re turning out DVDs as I speak, and so all of you I know you’re anxious to get your hands on that, and we’ll make sure that happens.

Next, I wanted to give you a chance to see the progress we’ve made, give you a sense of which of the key advances we’re excited about here, what the scenarios are, and so you’ll see a demo that combines elements of all three of the products, and so to give us a quick tour of that, let me ask out Mika Krammer, Director of the Windows Division.

Thanks, Mika.

MIKA KRAMMER: Thanks, Bill. (Applause.)

Good morning. What I would like to show you today are the great customer experiences that our software can enable together with your products. So, I would ask you to suspend your disbelief for a moment, pretend that I’m an ad exec, and let me invite you over to my office.

Now, if you look at my desktop, you can see that Windows Vista offers an amazing visual experience. If you look over here on the right-hand side, there’s Windows Sidebar, has gadgets that are customized based on the information that I want at a glance, dynamically updated. A particular gadget that I’m obsessed with lately, since I recently moved to Seattle, is this weather gadget. I am hoping for a day without rain, and I’m constantly looking for one. I can take this gadget, drag it out onto my desktop, and look at the forecast. What’s incredible is innovations in touch monitors, together with Windows Vista, enable me to interact with my PC in different ways. So, I can touch my screen and drag it back to where I want it.

Another such marriage of hardware and software innovation is this picture frame. This picture frame is enabled with Windows Slideshow on the Windows Slideshow platform, and it takes content from my PC that I can customize to provide me with at-a-glance information that I value. You can see I have pictures of my kids, I have my Outlook reminders, and I’m constantly updated with what’s happening with my IM buddies.

As a high-powered executive, I like to start my day and figure out what’s going on in the world. And I do that by looking at Internet Explorer. It will pull up my favorite new sites, and I can look at my news sites, and I can navigate using the tab. What’s really cool is, if I go to quick tabs, and it gives me a snapshot of each of the home pages of my favorite sites, and I can decide where to go. Right now, I would like to go to The New York Times. This is great, but let me tell you something that’s even better. The New York Times is working and taking advantage of Windows platform, and creating an application that’s the New York Times reader. And what they’ve done is, they’re developing a user interface that’s far more like reading a physical paper, but has the benefit of the immediacy of the Web. You can see here what’s great is that if I resize my window, it automatically resizes the content. A great visual experience, I can go in and I can navigate, look at the information that’s interesting to me, that’s not particularly interesting, sausages. And once I’m done with the news, I can shut it down.

What I like to do is then go into e-mail. I click through this last e-mail, I see here that I actually have an e-mail from my colleague Shanen. She’s telling me here that there’s a last minute request for a key client that’s coming into town tomorrow, and I have to update a presentation to help them out. If you’re like me, I access dozens of documents, I look through hundreds of e-mails, and a handful of applications every week. I find it extremely challenging to figure out what I’m looking for, and to easily find and use that information, that content. Windows Vista helps you out with it.

If I go here, I know the presentation that I’m looking for has something to do with sales. So, if I enter sales, check out my search results. My search results come up with documents, they also come up with news articles that are related to sales, see here an article with the New York Times, and the search actually extends beyond the desktop, thanks to Windows Server Longhorn, it actually searches my network for documents and applications.

Now, I know that the presentation is on this sales server here, so I can go to the server, and I can see here another visual experience where I can look, at a glance, at the first page of every document and, again, it helps me easily find the content that I’m looking for. I can also, without having to open the document, browse through the content and see whether this is what I’m looking for, and, in fact, this is the presentation I’m looking for, so I’ll open it.

Again, just like Windows Vista, Office 2007 offers an amazing visual experience. We’ve replaced the task bar with this ribbon, and what’s really cool about this ribbon is that based on what you’re doing with your document, it dynamically changes for better discoverability of features, because how many times have you worked on a Word document, a PowerPoint document, and you’re trying to figure out how to insert a page number, you’re trying to figure out how to insert a date. Windows Office 2007 makes that easier.

Now, I know in this presentation I need to update this diagram. It’s embarrassing, I have spent countless hours trying to create diagrams in PowerPoint, getting the right shapes, getting the right color, making sure the fonts look right. PowerPoint 2007 makes it amazingly easy. So, I see here that I need a product cycle. PowerPoint offers me a whole host of diagrams that I can automatically use, and I would like to click this cycle. It provides me the opportunity to enter my text, and automatically formats my text for me. And I can also format the look of the diagram, the color scheme, click off, and within seconds I have something that looks like a graphics designer created.

Now, I have one more thing I need to do to this presentation, and that’s add a slide. As a high-powered executive, I like to do as little work as possible, and I like to leverage the work of others. What’s amazing with PowerPoint 2007 and SharePoint Server is that I can go access Live libraries of content that I’ve created and that others have created. I go in here, click the spot that I want to add the slide, and hit “add slide.” Alternatively, I can go and hit add slide, and say, reuse slide. And this accesses my slide library. I’ll go in, open the presentation that I accessed last again, I get these great visual queues on the slides within the presentation without actually having to open the presentation itself scroll down, this is the slide I want. With one click, it adds the slide, and my document is complete.

What’s amazing also, what’s really cool, is that the owner of this slide, if the owner of this slide ever updates this slide, what will happen is, I’ll get a notification that will ask me whether I want to apply those updates to manage version control. Now, I see here that Shanen is IMing me. She wants to meet me to look at this presentation. So, I’ll just reply to him, sure. Okay, so I’m just going to save this to my desktop, and I’ll be good to go.

As I wait for Shanen, I can use this amazing form factor, and while I’m offline I can access my New York Times Reader. What’s great about this is I can take advantage of the touch capabilities and navigate my way through the New York Times Reader. I can click on items, I can scroll back and use gestures, I can go back and forth throughout the document, and look at the information that’s most meaningful to me. It’s an amazingly immersive experience that’s much more like reading an actual physical paper.

When I go back online what will happen is, it will update the content.

SHANEN BOETTCHER: Hey, Mika.

MIKA KRAMMER: Hey, Shanen, how are you doing?

SHANEN BOETTCHER: Good, how are you?

MIKA KRAMMER: Great.

SHANEN BOETTCHER: How is the presentation coming along?

MIKA KRAMMER: Perfect. I think I did all the updates that we need.

SHANEN BOETTCHER: Good. Did you get a chance to e-mail it to me, I didn’t get the chance to check my e-mail?

MIKA KRAMMER: I didn’t e-mail it to you. Actually, it’s too big to e-mail, so I have it on my desktop here.

SHANEN BOETTCHER: Okay. So, we’re in the lobby here, we don’t have a wireless network available to us. What we have in Windows Vista is a new feature called Windows Meeting Space. And this is built on the peer-to-peer platform that’s in Windows Vista. It will allow us to use the wireless cards in our laptops to connect up with one another. So, I’m going to go ahead and start a collaboration session here. And I’ll actually go ahead and invite Mika to the meeting. And, Mika, you’re going to get an invitation here shortly. Why don’t you start the collaboration session for us?

MIKA KRAMMER: Okay.

SHANEN BOETTCHER: What’s great about this is, this can be used anywhere, if you’re out with partners, or customers, and you don’t have a wireless network available to you, or you can’t get on that domain infrastructure at work that they have, you can just easily connect up with one another to share files, to view presentations, and it’s just using, again, the mobile technology of the laptop PC to share information. You can view PowerPoint presentations, we can pass control around the room to one another to show each other the documents, and even share information.

There it has presence information, so you can see that Mika is inviting me to the meeting. And I will join the meeting here with Mika. Okay.

And, Mika, can you go ahead and just share one of the PowerPoints with me.

MIKA KRAMMER: What I can do is, I can actually drag over the PowerPoint presentation, and share with Shanen my presentation. He’ll be able to view it on his screen, and we can review the presentation, and we can do this when we’re in a meeting with multiple people, so you project your presentation among everyone who is in the room. And what’s great about this is that what I can also do is not only share the presentation, but drag the presentation over into handouts, and make it available to everyone else who is in the room, so that they can save it, and then they have a copy of the presentation that I’ve provided.

SHANEN BOETTCHER: Mika, I’ve got a video here, too, that is from the customer, it’s an ad spot that they’re working on. So, I can drag that into the handouts area of this session. Again, I’m using the peer-to-peer technology to share this with us, so we’ve got this both on our laptops here.

MIKA KRAMMER: Great. You can see that that ad has actually made it over to my computer, and now I have this video that sits on my work PC that I can take with me.

SHANEN BOETTCHER: Great. I think we’re all set .

MIKA KRAMMER: Perfect.

SHANEN BOETTCHER: Thanks very much.

MIKA KRAMMER: Thanks, Shanen.

SHANEN BOETTCHER: I’ll see you at the meeting tomorrow.

MIKA KRAMMER: Absolutely. Thanks a lot.

SHANEN BOETTCHER: Bye-bye.

MIKA KRAMMER: Now, as I travel home, I’m going to put my work PC away. Before my husband and kids get home, there’s a few things I need to take care of. Shanen in a phone conversation earlier had told me that Frank, one of our key clients, is now in charge of the international accounts. And so, as a result, I need to update the customer database, because we’re sending out some mailers to our clients, and I want to make sure that he gets the right information. If any of you have tried to access any of your company information, or company applications from anywhere other than your business PCs, you know that at times it can be challenging. You have to RAS in, you have to VPN in, you might forget your smart card, or still on your home PC you might not have the right software to connect.

With Windows Server Longhorn Terminal Services, from any browser I can access my line of business applications. So, I can go here and launch a browser session, and go to my customer database, and what I’ll do is, I’ll enter my information and I’ll login. I’ll search for my client. I’ll update the information, so I’ll say, please send international docs. Update it, logout, update is completely, access my application, I can now go on.

One more thing I want to do here, I actually want to see the video that Shanen provided me in the lobby on my work PC over here on my home PC. And one of the great things with Windows Vista is the ability to access media, your pictures, your videos, your movies, from any PC in the house because I’ve enabled sharing of media between my home PC and my work PC. So, when I launch Media Center, and go into my video library, I’ll be able to see the video, and any media for that matter, that’s on my work PC over there. You can see here that the video from Shanen is on my work PC, and I can stream it over to my home PC and view it here. Again, an amazingly rich, visual experience.

So, what you’ve seen as I’ve traveled from my office to my home, and I’ve been on the go, you can see the amazing customer experiences that our software can enable, but this can only be made possible through innovation of products from you. Thank you very much. (Applause.)

BILL GATES: Another important development in our industry is the creation of Web services, and Microsoft calls its platform in this area where we’ll provide services to make it easier for other developers to provide services, we call it Windows Live, and we even talk about this as the Live era, where all the software services that you used to be able to get only by setting up your own server will have parallels that are equivalent that can be done through a services type approach. Some things, like indexing the Web, or having maps to the world will typically be available on a services level, because nobody would want to duplicate that within their infrastructure, whereas other capabilities like storage, and mail, and communications capabilities you’ll have as the ability to mix and match. In our case, of course, we’re using identical architecture for the on premise things you do in your data center with the server, and what we’re doing with these services up in the clouds.

These services will advance Windows personal computing in a very dramatic way, even just something as simple as having a document translation service, or the Virtual Earth with all the different maps and things, that’s a very big deal. We’re very active in this area. We’ve built a lot of end user capabilities, and now we’re focusing on converting those, and having rich APIs for people to take advantage of those things. With our mail, we’ve got 240 million users, about the same number with Messenger, over 100 million with Spaces, which is about blogging, and that’s a very new thing, and already big, big numbers.

One thing we’ve seen, just in the last few months, as we’ve provided more support, is the uptake on voice and video. And, in fact, we have a lot of enhancements to make these better that are coming out this year that should drive them even more. If you just take one month, we had 800 million minutes of voice, and in the same month a billion minutes of video, and just overwhelming use of those capabilities. So this is changing communications and how people think about that.

If we think about Windows Live and why this is going to be important, just imagine somebody trying to decide about keeping their photos on their machine, will they ever lose those photos? Well, if we can define a backup service that does that for them, they’ll be more willing to use the digital approach. Likewise, for purchasing music digitally, if they lose the rights, because something happens to that machine, having it in an archive up in the cloud will make you more comfortable with that. Perhaps most important is the scenario I mentioned about making it easy to move from one Windows PC to another. These cloud-based services can be involved in doing that replication. So even if the machines aren’t turned on at the same time, as you leave one machine that information is moved up to the cloud, and then as you connect up with the other machine, the information comes down. So the ability to work with multiple machine, not having to think about moving the information around, that happens for you in a very automatic way.

Windows Live creates a number of partner opportunities. We have SDKs coming out. We have even special peripherals that are connecting up to these communications capabilities. For example, today we’re announcing that we have a partnership with BestBuy where they’ll offer in their retail outlets these Messenger-type phones. One will come from a company Uniden, that’s quite good, we’ve also got a Microsoft hardware Web cam, we’ve got a Plantronics headset, we’ve got a this is the Motorola Messenger-type phone that connects up and lets you have typical telephony things, but also the presence and the capabilities that a Messenger Internet voice environment provides.

A lot of partners are doing the peripherals that connect these ways, for example, not only that Microsoft Web cam, but one from Creative, as well, and one with Logitech, as well. So there’s a lot going on around Live that’s going to change how people use PCs. It’s going to change what all of us want to bring together to fit into these new applications. So we thought it would be good to give you a quick demo of some of the new capabilities in Live, and Ervan Pouliquen will come out and show us why we’re so excited about this area.

ERVAN POULIQUEN: Thank you, Bill.

Good morning, today I’m very pleased to show you the first devices uniquely built to target the hundreds of millions of Windows Live users. And I will show you at the end how you can also tap into that opportunity. For that, I’d like to invite you into my home. The place here is my living room, the place over there is my office room. First of all I will show you these devices that Bill mentioned. This one is the phone from Phillips that is shipping since yesterday. So you will find it in most European retailers since yesterday, and you can see our Windows Live Messenger brand is highly displayed, to help the user to identify the phone on the shelf. This one is the Motorola phone that was just announced today by Bill. And this one is the Uniden phone that is shipping at BestBuy since two weeks ago.

Now, I’d like to do a more detailed demonstration with the Uniden phone. So, first of all, this phone looks like a phone, behaves like a phone, because first and foremost it is a phone. And if you have your grandmother visiting you and she has to do an emergency call, she will dial 911 and it will go through the regular landline, so it’s very easy for the end user to discover this phone. This phone doesn’t require a specific driver, it uses a generic driver that is shipping with a Windows Live Messenger client. Now, I’m going to use the Windows Live Messenger services that this phone gives access to. It allows me to do PC-to-PC calls, or PC-to-phone calls. Here I’m going to do a PC to call. First of all I press a key here, and I realize I’m not signed in. So I am here in my living room, it’s not a big deal. I can remotely sign in, away from my PC, without having to go to my PC. So I press the sign-in key, and then wirelessly it will tell my PC to sign in for me. Then, as you can see, I have my buddy list displayed on the screen. It is a very nice colored screen. I can see and look for my contacts. Not only I see if you are online or offline, but I see also if you are away or busy.

So now I’m looking for my friend Ken. So I have hundreds of contacts, I don’t want to scroll down, I just have to press the initial of his first name, and then it will sort to the matching combination. So I’m going to select Ken. As you can see here I have Ken’s IM address, but I also have his phone number. And as Ken and I are using the same Live contact services that automatically updates the numbers, I know that these numbers are truly his true numbers. So now I’m going to call Ken using a new service with our partner Verizon Business, it’s called Verizon Web Calling, that enables me to call any number in the world, but particularly to up to 30 countries at a very attractive price, 1.9 U.S. cents per minute.

So I’m going to call Ken now, and I’m going to put it on speakerphone so that you can listen to my conversation.

Hey, Ken, hi, it’s Ervan speaking.

KEN: Hey, where are you?

ERVAN POULIQUEN: You won’t believe it, I’m on stage at WinHEC doing a demonstration with our Uniden phone.

KEN: Wow, I never would have known that, the sound quality is great.

ERVAN POULIQUEN: That’s cool, because if the sound quality is great, and the prices are attractive, that’s very promising. So, Ken, I have to continue now, but I’d like to chat with you later.

KEN: Okay, bye.

ERVAN POULIQUEN: Bye.

So as we have seen, these phones are a great way to use as a normal phone. Additionally, they provide you a good extension to the voice services of Windows Live Messenger. Also, they can act as a notification display of incoming messages. So if you have an incoming Windows Live Mail message you can see it on your phone. If you have an incoming Windows Live IM, you can see it on the phone, and the same thing with MSN alerts.

So today we are very pleased to announce the extension of the Windows Live platform to hardware. We will release this summer the first beta of our SDK. Additionally, today we are announcing a new partnership with DSP Group, a leading chipset manufacturer for cordless phones, so that we provide rich designs that will facilitate the innovation on the platform. So that’s it. The Windows Live platform, a new opportunity for ISVs and OEMs. Thank you. (Applause.)

BILL GATES: The original vision of Microsoft was a computer on every desk, and in every home. That goes back to the very founding of the company. And of course, the number of personal computers running Windows we have out today is really quite phenomenal. Yet, if we take it and think about 6 billion people on the planet, there are still a lot that don’t have access. Now, there’s a number of ways that we’re dealing with that, programs for community use of PCs, kiosk-type PCs, cafe access to PCs, a lot of innovation in that shared use model, and having that be a simple way people get the early experience. But, we also want to make it as simple as possible for people to own their own, and have that at their house or wherever they want to use that. So today we’re announcing a technology called Flex Go, that allows for a pay-as-you-go type model, that lets people essentially rent the PC, and yet the hardware control means that it’s only accessible to them when they’re making those payments.

This is something we’ve worked on with a lot of partners, and their enthusiasm about using this to drive out PC penetration and get individual PC ownership out to people who wouldn’t otherwise have it, it’s great to see the response in the pilots, and the partners in dozens of countries worldwide, who will be the first people driving this forward. So let’s take a little look at Flex Go and what the partners are saying about the trials and where they see this going.

(Video segment.)

So that’s a very important initiative that’s part of our overall commitment to make sure that computing gets out to everyone, going back to the original commitment that the company was based around.

So you’ve heard today a lot about how we’re advancing the technology, taking advantage of the latest things, the miracles that the hardware is enabling. We’re driving those through the ecosystem to make sure that the software solutions come in, so that the demand is there, and drives this to an even higher level of volume, as the ultimate in sort of the high-volume, low-priced offering that improves faster than any product in the economy. And the new business model, pay as you go, advertising, subscriptions to Live-type services, all of those are coming in to a complementary way, to help the Windows PC environment move up to new levels, and embrace new people.

The key here has always been the ecosystem, which is about working with partners like you. The key work here, of course, will go on in the technical sessions, as we’re really defining the new interfaces, and the new capabilities. So we thank you for coming, and we’re very excited about the things that we can come up with here together to take things to a new level.

Thank you.

END