Tami Reller: Dynamics AX 4.0 Launch

Remarks by Tami Reller, Microsoft Corporate Vice President, Business Solutions Marketing Group
Lachlan Cash, Program Manager Microsoft Dynamics AX
Dave Campbell, Technical Fellow Microsoft SQL Server
Sri Srinivasan, Sr. Program Manager Microsoft Dynamics AX
Jeff McKee, Director of Product Management, Microsoft Dynamics AX
Dynamics AX 4.0 Launch
Boston, Massachusetts
July 10, 2006

ANNOUNCER: Ladies and gentlemen, please welcome Corporate Vice President, Business Solutions Marketing Group, Tami Reller. (Applause.)

TAMI RELLER: Good afternoon, and welcome. I am so fired up and honored to be kicking off this worldwide event. And what a great time to do it; I mean, it is a worldwide launch event, and this is a worldwide truly global audience of partners, and we couldn’t be more excited to be doing this with you prior to this exciting conference. So thank you for taking the time to both see what we have in store for the next several years of growth ahead of all of us, but to really also share this exciting time with us as we launch this product.

We’re here today to launch AX 4.0, as you just heard on the video, but I just wanted to put this in some additional context, which is it has been an amazing ride of Microsoft in business applications. It’s been five plus years now, and Microsoft has been investing big in business applications, and you’ll hear Steve’s views on that later today as well.

But this has been an amazing year especially. We’ve had amazing launches throughout the year, we’ve had growth that is just phenomenal. I mean, third quarter, just to remind you, 20 percent growth, we were profitable, and partners are just seeing some great, great growth and opportunity. So this is we’re launching AX 4.0 at such a great time.

And this has also been a journey. This is a product that we’ve been working on for four years, and so you’re going to see the fruits of that labor today throughout a number of demo scenarios, and hear about what we’ve been up to. And those of you who have been involved from a TAP perspective have seen some of this already, but it’s a very, very rich release. And, in fact, just even in the hours we’re together today we won’t even be able to get to all of it, but we’ll start the process together here today.

So during those four years, not only have we been working on delivering this product, but we’ve also delivered five updates to the AX product line as well, so just a very, very material release that we want to talk to you about.

So again I just want to say thank you for being here, thank you for being partners or thank you for thinking about taking on this partnership with us. We know that it’s going to be a high growth ride for the next several, several years in the US$62 billion business applications market that we’re in. So we want to show you the meat of what AX 4.0 is all about throughout today’s agenda, and I’ll talk about the agenda a little bit later as we get into it, but we have rich, rich content for you to absorb over the next several hours.

I wanted to frame up AX 4.0 just a little bit, and really frame up the AX opportunity overall. There’s really four key things that we talk about and think about with AX, and it also speaks to the deep, deep competitive advantage that this product brings in to the marketplace, and why we are seeing increasingly enterprises, mid-market companies broadly asking about Dynamics and specifically asking about Dynamics AX.

Adaptability, the completeness of the solution, and AX 4.0 takes it up a huge notch on that front. Global: We’ll hear about 40 countries and the investments we’ve been making there. Scalability: There’s some big news in scalability that we’ll talk about today, and we actually have a special guest to talk about that, but we’ve got a thousand user benchmark that I know will be of great use to all of you in your sales process, and more important than that, be of great value to customers going forward. So we’ve got big news on the scalability front as well.

One thing, we’re getting traction. If we look at the last seven quarters, we have at least a hundred customers per month. There are some wonderful spikes in there, you can probably imagine which months those are, but we are together bringing on customers into the AX ecosystem at an amazing clip, and winning deals against big name competitors, as well as local competitors.

Thank you. I mean, we know that it takes a lot of hard work and effort and investment, and that investment is paying off, and so very nice clip of customers across the broad range of industries. And you’ll see that when we talk about some of the customers that we’ve been engaging with together over the last many years, and especially during the TAP process, we’ll actually talk about that here today.

I wanted to introduce a customer story that I really think exemplifies the beauty of AX and the beauty of AX 4.0. This is a fascinating customer. They’re a startup that went into business in about 2004, and you’ll hear more of their story throughout the video, but from those of us who are in North America and know Jet Blue, they feel like the Jet Blue of Eastern Europe, and just a very progressive, fast moving company that has some very specific needs, and AX delivered. They were an active TAP customer that live on AX 4.0. So let’s take a listen.

(Video segment.)

TAMI RELLER: What do you think? (Applause.) Good story?

So Wizz Air is based in Budapest, and that was the CFO speaking to us. AX Hungary was the partner involved, and so a great, great story. I loved his one quote, “We fell in love with the modern technology of AX 4.0.” So we’ll continue to have great TAP customer stories coming out, and broad customer stories coming out as well.

In fact, I wanted to share a couple more TAP customer stories, and give you the full view of TAP experiences that we had. We really worked hard on AX 4.0 to make sure that we got great, valid, deep feedback from partners and customers throughout the process, that was very important to us, and we used that and made the product better as a result for sure.

And 12 customers and partners in the Technology Adoption Program or TAP were very involved. We made sure that it was a global view: Europe, Asia, and North America. And we tested both for quality, as well as for performance, and really did a broad range of industries across the board. Wizz Air was one, we also had IT partners, telecom partners, manufacturers, as well as professional services, so across the globe, across industries, and really tested a bunch of different elements.

So a very big thank you to the partners and to the customers that were involved in this process. It was extremely valuable. And for all of you in the room know that it will help, it has helped the quality and the performance of this product, as well as given us some good stories to be able to go to market.

Let me highlight a couple that I think are super helpful, and really speak to the value we’re delivering in AX 4.0 in particular.

Oldcastle Precast is a fascinating company. They’re in a sort of mainstream precast business, about 50 percent custom orders. What makes them unique is their rapid acquisitive nature. They have done over 50 acquisitions in the past couple of years. And so what was very important for them was they wanted one centralized data system, and so they chose AX, and they are able to get a new site that they acquire up and running in two weeks, and they’ve done that over 50 times, so they know that they can do that on a very repeat basis, and that’s super important to them.

So they want the flexibility that they get at each of these sites, but they need one central system, and so a great example of a company that gets the flexibility but yet gets this one central view into data, so one version of the truth for them, really supporting their expansion.

Russell Athletic manages a number of brands, expanding significantly internationally with the number of plants and operations, and so that was an important attribute for them is they needed a system that would be able to expand for them globally, yet the also needed to have one centralized view. They needed to have stronger connected relationships with their trading partners to deliver better customer service on both the vendor side and on the customer side, and so they’re using our integration with SharePoint to do that. So a very big company spread across the globe, getting the flexibility, customer service, and scalability that they need to run their fast growth business, so another great example of a TAP customer where AX 4.0 specifically is making a huge difference for the business goals that they have as they expand their portfolio of products and as they expand to be able to manufacture and distribute globally. So another great example of a customer as well.

Columbus IT: They were a very rapid adopter of AX 4.0, and once they got their hands on AX 4.0 they actually really accelerated their implementation and rapidly began putting that into their operations. A great advantage is they can invoice in local languages, which is very important for their operations in their 26 countries, and obviously using technology in a very rapid fashion way; also a partner, so we’re able to look at the product from a partner perspective, as well as from a global customer perspective as well. So great work, and we’ll actually hear from Columbus IT a bit later in today’s show as well.

So I want to make sure that we show you this in action. There’s so much to show, so I want to set the stage a little bit. We have three acts of demos that we’re going to go through today, and we’re going to do this in a customer scenario so you can see the richness of the solution. And I’ll describe this as you’ll see partly sort of the wow factors of AX 4.0, so you can bring that to market as well, but it’s also sort of the start of our readiness of AX. So we’ll show you some just core fundamental elements of AX 4.0 through these scenarios. We’ll look at it from multiple roles, so you’ll see it from a business decision-maker standpoint, from an operations standpoint, as well as from an IT or developer standpoint. So we’ll give you sort of the rich view across the solutions. And then through the breakouts you’ll be able to dive in even deeper.

So I first want to bring on stage someone who in his real life job — he’s playing a different role in just a moment — has been instrumental to our AX business, 18 years in this segment, as many of you are as well. Please help me welcome our Director of Product Management for Dynamics AX, Jeff McKee. (Applause.)

JEFF MCKEE: Thanks, Tami.


JEFF MCKEE: Thank you.

TAMI RELLER: So we’ve got a customer scenario here we’re going to paint, and I know you’re going to be Charlie, the CEO. So why don’t you tell us about your company as Charlie.

JEFF MCKEE: Sure. So I’m Charlie, the CEO of Fabricam. Fabricam is a consumer electronics company. You can see one of the products that we have here. This is our consumer portal that we have where we have customers buying this device from us directly.

So I’m the business decision-maker. I’m going to walk you through how people use this portal, what some of the challenges I have as a CEO, and show you Microsoft Dynamics AX 4.0, and the role-based homepage that I use as CEO of this company.

So what we have here is a video projection unit that Fabricam has developed. We actually build the video processor unit here in the U.S., and we send that out to be assembled in China by one of our vendors. So we have final assembly happening offshore, but we actually control the manufacturing process for this video chip that we use.

This particular device has four models to choose from, and we also have the ability to customize. So we have users can go in the system and be able to customize. So they can choose a different screen, they can choose different colored speakers, and they can choose a different body if they want. And then this is all going to flow through Microsoft Dynamics AX 4.0.

TAMI RELLER: I think it could double as a UFO.

JEFF MCKEE: Exactly.

And so you can take this particular item and you can actually see what it looks like if you’re projecting it. So you can go and be able to show what that projector would look like in terms of the custom configuration that you develop.

We have different features on the Web site people can use if they want to look at the features and functions for this device.

Now, this device is so hot in the marketplace we only have enough supply to sell it directly through our own e-commerce portal. I’m under pressure from Kontoso Superstores. So Kontoso is our largest retail channel, and they’re asking me to provide supply to them of this particular device. Right now we’re constrained, and we can only provide this through our own Web site, and I don’t have enough supply.

Now, I’m opening up Microsoft Dynamics AX 4.0. So this is the role-based homepage for the CEO. So what we have here is the ability to look at different reports, and we’re able to use this carousel functionality and be able to pull up different reports, and I can quickly scroll through the ones that I’m interested in, and then I can zoom in, if I would like, and I can look and see.

So this particular report that I look at shows some sales forecast. So it shows my e-commerce site where I expect units across the top. Then I have retail stores. So the retail stores would be Kontoso. So they’re starting to put demand on Fabricam that I can’t fulfill just yet. So I’ve got demand out amongst here that it’s great news, but I need to be able to fulfill that.

Now, also what we have here is we have the Business Scorecard Manager integrated in Microsoft Dynamics AX. So as a business decision-maker I can look at this, and I can look and see how we’re trending, and I can drill down in these particular items and look at some of the root causes. So if I wanted to look at vendor performance I could drill in here and spend more time.

So this is the Business Scorecard Manager that I’m looking for business insight into how my business is running, and I’m going to go drill down on those exceptions, those yellow and red areas.

TAMI RELLER: And that’s the Microsoft Business Scorecard Manager that also comes out of the business division?

JEFF MCKEE: Yep, that’s right, Tami. Yep, fully integrated in Microsoft Dynamics AX 4.0.

So as the CEO I’m also interested in industry news. So we have these RSS feeds that we can feed into my role-based homepage. So I can look in here from ZDNet and I can look at what’s happening in the consumer electronics industry to keep up to date. So that’s important for me as a CEO.

Now, as you know, most CEOs have a favorite report. So my favorite report we call top five products by revenue. Now, this particular one, you can see this product called the VPR 1000 is our projection device that’s selling very well. So I can drill down on this report using SQL Reporting Services, and I can spend a little time looking at what this is.

So on the top draft I basically have units sold looking back, and on this bottom draft is where I have some business opportunity. So the opportunity is you can see in July and August the blue represents the forecast from the e-commerce site and my retail partners, and then the green represents our supply. So you can see the supply is fairly constant.

Now, I know that internally we have a little bit more capacity on building the video chip, but our supplier in China is maxed out on doing the final assembly. And what we have here is we have a gap where we have demand in excess of supply. Now, this demand is perishable demand, so this demand, this is going to roll forward, meaning if we at Fabricam don’t supply this demand in those given time periods, that demand isn’t going to roll over, it’s just going to perish, so we have an opportunity window to go look at what can we do to satisfy that demand with increased supply.

Now, in order to do that, I’m going to bring on Vince, my operations manager for Fabricam, and he’s going to walk me through a scenario where we can look at improving the supply capabilities. Vince?


VINCE: Hi, Charlie. Hi, Tami. (Applause.)

So I hear we’ve got a bit of an issue where you need to get into a new retail channel, and we’ve got a bit of a manufacturing supplier problem.

Well, I know you were a little bit reluctant changing from our old system, we’ve deployed Microsoft Dynamics AX, but I think we’re confident we can go forward and get into this new retail channel. I think with our old system we would have been limited by the usability of that application. The integration capabilities that we had with our old system just wouldn’t have given us the flexibility. Likewise the collaboration experience, you know, going with Kontoso, a big retailer, they enforce a lot of requirements on us to give visibility into our system. With the old system we just couldn’t have done it.

So I think we’ve got partners in our vendor model that we can go and work with. So I think you can go with confidence and go and make the deal to go and do the deal with Kontoso and get into the new market. I think we can do that; the systems will support getting to the new market.

JEFF MCKEE: Okay. So, Vince, you’re confident that I can go back to Kontoso Superstores and make the commitment to provide that supply in those given months, based upon your knowledge and what we can do with Microsoft Dynamics AX 4.0?

VINCE: One hundred percent the systems will support us.

JEFF MCKEE: Okay, I’m going to go make the deal.

VINCE: Do that.

TAMI RELLER: Well, thank you, Jeff.

So I heard 100 percent confidence. That’s no margin of error, that’s high.

VINCE: Yeah, we definitely can be. It’s been a struggle trying to convince those guys to upgrade from an old system, you know, green screen system to a new Windows-based system. A lot of our users use Windows-based applications with Office, for example, and they’re all familiar with getting this out of our old system, and with Microsoft Dynamics AX we can do that very easily.

You know, this is one example, for example, what we have is Microsoft Outlook. And users are familiar with getting this out, and one example is with the new alerting functionality that we’ve deployed with Dynamics AX 4.0, the business application can portion prompt status information to those users so they can react quickly than they typically would have done in the past.

TAMI RELLER: You’re in Outlook right now.

VINCE: Yeah, so we’re in Outlook, and this is giving you some status information about some back orders, and there’s a production manager, I’ve actually been sort of tracing that and sort of seeing what’s happened. So I’ve sort of been noticing that our supply wouldn’t really meet even our Web demand in the future.

So I’m just going to switch across into AX 4.0, and this is from that e-mail there this is the linking to the back order line that we were sort of looking at from that alert, so this tells me a little bit about it.

You know, some of those things that we have in the Dynamics AX application like alerts, you know, it’s very easy for all of our users to actually go and configure. It’s a little bit like setting up a rule in Outlook, for example. So they’re all familiar with some of those terms, for example, so they can go and quickly and easily set some of those things up.

TAMI RELLER: So these are customized by users.

VINCE: Yeah, exactly.

TAMI RELLER: And you choose which ones.

VINCE: Yeah, so the whole entire application is you can talk about it as a role-based application. And some of the great things that users are liking in Dynamics AX 4.0 is some of the things like the navigation bar. You know, based on the security when they log into the application, they get specifically what they need to do, their task. Some of our employees are based in China to work with some of our manufacturing offshore. So that’s quite good that the Dynamics application working on one back-end database can have different user interfaces, so we, of course, use the Chinese translations on our clients as well.

So to sort of fit in with the scenario, what I’m looking at here is the back order on this item number. So I can go in and inquire on that, and have a look at the information. So our users love the navigation, easy way to get around the application client here.

So I’m looking at the VPR 1000. I can go and look at the trade agreements that we’ve got here. And you can see that we’ve only got one manufacturer that’s actually supplying this particular product. So I know that these guys really don’t have that capacity to ramp up and give us any more product, so we really need to bring on a new manufacturer out in China.

So I know we’ve got a lot of partners that we’re already working with, a lot of vendors that we do some other assembly with already in China. So what I can do is use some of the new features like search, for example. Search allows me to index all of the data across the business application, and for the users they can easily get access to that information just by searching.

So let’s do a search here for assembly. So what we’ve done is tagged our vendors with a code that we can then search on to find all of our assembly manufacturers. So what I’ve done here is searched across the application, and I can find our A-Datum. They’re our vendor that’s located across there in China.

So you can see here that what we have is so we’re going to look at the trade agreements we’ve got set up specifically. They already to do some work for us, so they’re a trusted partner, they’re now a partner, but, of course, we need to start trading with them specifically for this particular assembly that we need to do.

So that’s basically a quick look at the new navigation features that some of our users are working with, and they love in terms of upgrading to Microsoft Dynamics AX 4.0.

So I need to go and talk to the purchasing guys about setting up some contracts to go and do some work with these guys.

TAMI RELLER: So you can deliver on that 100 percent.

VINCE: Got to do that.

TAMI RELLER: Excellent. Thank you so much, Vince.

VINCE: Cheers.

TAMI RELLER: Also known as Lachlan Cash. Thank you very much. (Applause.)

So in that one scenario we started out with deep integration with SharePoint, we also showed the integration with SQL Reporting, we showed using Web Services to bring us RSS feeds, and then last we saw the deep Outlook interface integration that we’ve done, as well as search; so deep, deep functionality, and you can see that the level of integration across the Microsoft stack has really gone up exponentially with AX 4.0, and you’ll see more of that richness throughout, but that was a great scenario to walk us through there.

Let me more formally take you through what’s new in AX 4.0, and I know you’ll see more as you go throughout the day, but I at least want to give you the high, high level points, because there’s so much to cover.

This is a release that is broad and it’s deep. And I know as Hal and Mark and others start to tell you the details, you’ll start to fill in all of that. But let me give you the high level points.

Again, I’ll bring you back to before, which is adaptability, completeness, global, and scalable. And if you look at adaptable, the integration across the Microsoft stack, some of which you’ve just seen, some of which you will see, really does give us the ability to fit to our customers’ businesses in a very significant and frankly much more rapid-fire way than the competition.

Completeness: Working out of the box but then even going further and extending with types of vertical solutions that we have, both through our IBI partners as well as through all the vertical ecosystem that many of you represent.

Global: This is a big asset for so many of our customers, whether they’re global today, or whether they have plans to go global in the future. We just do this better than the competition, and 4.0 is a major, major upgrade here, so I want to really stress that point.

Scalability: I mean, this thousand-user benchmark is exciting, and when you get the details you’ll be able to use that so specifically in your markets to sell AX in places that you potentially haven’t been able to sell to date. And we will get the attention of enterprise customers for sure. So it’s scalability not only for enterprise customers but certainly for our broad set of mid-market opportunities as well, so four key points.

Let me talk about some specifics as well in each of these areas. When we talk about adaptability it really is those four areas where we’ve brought in the Microsoft stack in a very meaningful and significant way, putting really AX 4.0 is completely Web Services enabled, and there’s so much that you can do on the adaptability front with that in front of you.

And second is SQL-based BI. I mean, this is a big deal to have SQL Reporting Services available to be able to get at the information. You heard that as a high, high priority in the Wizz Air video. That was also true across our TAP customers. Russell is a great example of that.

Windows SharePoint Services, just the ability to really deliver on this role-based dream, comes through with our enterprise portal approach, using SharePoint.

And the familiar UI, you saw that, it looks like Outlook, and just makes our customers much more comfortable, gives us the productivity that customers are looking for from their people.

Completeness: There are just a couple things that I want to highlight here, and you’ll hear some announcements coming up throughout the day that will fill this in even more. But depth in supply chain management, just more and more functionality that really fills out this core area, we know that this is a key area where you’re selling into customers, and we have continued to build this out in a very meaningful way.

RFID is a big delivery in AX 4.0. We’ve been working aggressively and actively with customers to make sure we got this right. And so that’s another big add in AX 4.0.

Industry Builder: This is a new program. I know you’re familiar with it. We have really started to see the traction and the success in the second half of the year with Industry Builders. The close rates, the number of deals that you all have been able to close with and through Industry Builders is just phenomenal, exceeding our expectations. We’re going to make some announcements today about some more Industry Builders, so we love what that program can do for us, and verticals across the board can really help us sell much more effectively.

After market service management, another big set of functionality and module that we’re bringing for manufacturers who have to do after market service management.

And then the Software Development Kit, we did development on the Software Development Kit to make it not only easier to customize the application for customers but to also take those customizations forward, so much more upgradeability with our customizations, which we heard from you, of course, as very, very important, and we heard this from customers, so big advancement there as well.

Globalization: This is a rich story to tell, so let me at least give you the high level point. Unicode: Increasingly a need, bit markets in and of themselves, and then big opportunities for many customers to be able to extend into double-bite countries, specifically Chinese, Japanese, and a big opportunity there.

We’ve increased the number of countries that we’re doing localization for, and we’ve increased the quality of our localizations. We’re making large investments in the globalization of AX. 4.0 takes it to the next level, specifically 40 languages and 36 countries.

Giving our customers the ability to collaborate with trading partners, we’ll show you more of that in the demo scenarios that follow, but that’s increasingly a competitive advantage for our customers, along with inter-company trading as well.

So on the globalization front we’ve just continued to hear that this is a reason that customers are looking to Dynamics AX as they expand their global presence and/or look to better serve themselves as a global organization.

Scalability: It’s really if I had to net out what we’ve done is the system is fast, it’s secure, and it’s stable, and those were just critical things that we wanted to bring to the market with AX 4.0. You’ll see the numbers. You’ll also see our incorporation and active use of Active Directory, which is important for our customers, Windows authentication, there are setup tools that help not only on the technical side of setting up AX 4.0, but also on the business side of setting up 4.0, so it makes it easier for you to help customers but customers to also see the path to implementation.

I talked about Oldcastle, and this is a big deal for someone like Oldcastle, who wants to be able to rapidly add AX 4.0 to additional sites as they get going, so the setup tools are a big deal.

And then, of course, the overall performance enhancements that we’ve done just throughout the application, I know you’ll be pleased and impressed with, as our TAP customers have been, and as the benchmarks will really point to.

So let me bring back Vince, and we’ll also introduce Mort on the IT side. So you’ll see some more business scenarios, and some more IT scenarios of AX 4.0. So welcome back, Vince.

VINCE: Hi, Tami. (Applause.)

So what we looked at before was the client that I used sort of casually, but what I use more often is my enterprise portal. And so the enterprise portal is the same portal that Charlie has, but it’s role-based, so it’s based on my login, my Windows login, it will give me the information that I need to do my daily sort of tasks.

So one of the important things that I’ve sort of been tracking is what’s happening with back orders. So that gives me an early indicator of what’s really happening with our supply situation.

So Mort sort of tells me that this is built on SQL Server Reporting Services, so this is a report coming out of there.

TAMI RELLER: And Mort is your IT guy?

VINCE: Mort is my IT guy. Yeah, we’re a mid-market company, so we’ve only got sort of one IT guy, and he needs to look after everything. So, yeah, he’s a little bit stressed that he manages because we deployed Microsoft Dynamics AX, so he’s pretty cool. (Laughter.)

TAMI RELLER: That’s right, that’s right. They’re paying attention. That’s good. And we’ll meet him, we’ll see his —

VINCE: Yes, we’ll meet him, we’ll meet him.

So I went and talked to my team, and they had done the paperwork in terms of setting up the contact for bringing on this new manufacturer.

So this is some of the Word documents that we trade electronically with our supplier. So this is a Word document. It’s done built out of standard Word documents. So embedded in the Word document is some XML. So within that XML we extract that out. So typically what would have happened is that we would — you know, it’s send paper documents backwards and forwards between our trading partners, and then we’d go and bring them back, and then we’d re-key data in. But with the technology that we have, we can actually extract the information out of those documents, and then put it electronically into our application. So it saves us a lot of time in dealing with our —

TAMI RELLER: And all centralized here in your enterprise portal.

VINCE: Yeah, exactly.

So what I can see here is a list of the documents that I’m working with, a list of the agreements that we’ve got set up. So this is actually built with Windows Workflow Communications Foundation technology. So what it does is allow me to do some collaboration with our trading partner, and it’s all controlled by the Windows Workflow collaboration features.

So what I’m going to do is I’m going to go in and improve this. This will go and extract — maybe not this time. Let me just try this one. Okay. So, yeah, what it should actually do is go and extract out of the Word document, it should go and extract — let’s just try this machine.

TAMI RELLER: Yeah, try it one more time.

VINCE: Okay. So what we should see, if the document has actually gone through, is that it should be approved and actually go through the business application. So it will go and update Microsoft Dynamics AX.

So let me jump into Microsoft Dynamics AX. So what I can see in here is the — if the document has actually gone through, I can go and navigate and find our vendor. So what I can see here is A-Datum, and if it’s gone through the trading partner, what I should be able to see — it hasn’t actually gone through, but that’s okay — you can see, for example, the trading agreement as it would have actually gone through in the application.

So one of the neat things that we have available is that we’ve got complete collaboration between the enterprise portal that our users use for casual type access to the system, and it’s completely integrated with the back-end system.

TAMI RELLER: So you’re using both SharePoint as well as Windows Workflow Foundation? Is that true in this scenario?

VINCE: Exactly.

So a lot of our users use SharePoint, so that’s the enterprise portal that we have with Microsoft Dynamics AX, and it allows our users that don’t typically get into the core back office applications, they can use that to casually access the system.

TAMI RELLER: But it will integrate fully, of course?

VINCE: Yeah, exactly.

Okay, so I’ve sort of been talking to Mort, and he was going to come and show you some of the back office sort of capabilities.

TAMI RELLER: Good, from his point of view.

VINCE: Yeah, from his point of view.

TAMI RELLER: Terrific.

VINCE: So we’ll get him.

So if I jump into Microsoft Dynamics AX, so I’m Mort, the IT guy. So Mort, you know, he’s a little stressed. He’s the only guy, and he’s a little stressed now actually. (Laughter, applause.)

TAMI RELLER: It’s amazing how a couple clicks can change that stress level.

VINCE: Exactly.

TAMI RELLER: These guys can all relate, that’s the good news.

VINCE: You do it every day, I’m sure.

So one of the neat things Mort likes as an IT person within the organization is the simplicity of the business application. So we really get that with Microsoft Dynamics AX in the development environment. Some of the key things that as I’m an IT guy but I do a little bit of development on the side, so some of the neat things we’ve added is .NET integration with CLR interop, for example. So I can develop in Visual Studio and add in references here, which is kind of a key thing for me.

TAMI RELLER: Big deal.

VINCE: Yeah, great productivity enhancement.

So one of the other things is perspective. You know, I get a lot of requests for writing reports, which it slows me down. I’ve got a bunch of things I can do.

But one of the key things that we’re using out of Dynamics AX is the ability to let end users actually do their own reporting. So one of the key features is the ability to add in perspectives. So a perspective allows me to define a collection of tables for the end users, so they can go and see them within the report builder, and find that collection of tables. So that’s a key sort of feature that we have available there for those users to use.

So what I’m going to do here is also have a look at one of the key things we need to do is, of course, enable the electronic trading between ourselves and A-Datum. So I as the IT guy, what I can do is go and define queries. So these queries allow me to expose Web Services out of the application. So one of the key things in Dynamics AX is we get a wizard. So I do development that I’m not a hard-core sort of developer, so this is a great thing for me because I can expose a Web Service out of the business application with a few clicks, so it’s an awesome thing for me to do.

So the application that we do get does actually have a lot of predefined capabilities out of the box, so the application integration framework is this module that we’re using to enable Web Services. So I can go into the actions here, and there’s a whole bunch of them that are already predefined in the application, so I can see them all here.

Now, I can go down, for example, and see my sales orders. So this is the Web Service that I would use to allow sales orders to be sent in. We can set up in here all of the security, because when we’re dealing with the partner A-Datum, we only want them to be able to send in those particular documents, so we can set up specific users and we can set up policies and rules and stuff for that to happen.

Now, this is a little complex in terms of the trading that actually happens, so maybe we can have a quick look at this on a slide.

TAMI RELLER: And this is the relationships between the companies we’ve been talking about?

VINCE: Exactly.

So we’re sort of in the middle as Fabricam, and we’ve got A-Datum as our manufacturing partner on the side. So we have a bunch of documents that we send backwards and forwards. One of them is our trading agreements, for example, that go backwards and forwards as Web Services as we update them. And, of course, then we start trading. So we send across purchase orders to A-Datum to do the manufacturing with, for example, we’re using the subcontracting functionality that we’ve added in to Dynamics AX 4.0. And so they have to purchase those subcomponents of it. So we start this trading backwards and forwards, purely based on the Web Services capability out of the application.

And, of course, when we bring Kontoso online we start to need to start trading with them electronically as well, because that was one of their requirements, so we can receive purchase orders from them, they become sales orders in our system, of course, and we can deal with it all electronically.

So that’s basically it. We’ve set up A-Datum. We’ve got them running.

So the next time you see Vince, get him to show you the portal we’ve set up for Kontoso for them to come and look at their information on the system. We’re pretty proud of it. It’s taken us a little bit of time, but it’s a neat thing for them to be able to look at their information.

TAMI RELLER: Mort, thank you very much.

VINCE: Thanks.

TAMI RELLER: What do you think? (Applause.) Great stuff.

I wanted to put this in a broader perspective, and then we’ll talk a bit about scalability before our third demo scenario. If you look at the Dynamics vision, if you look at the Dynamics vision and then you look at what we’re delivering in AX 4.0, the two just brilliantly come together.

We started talking about the Dynamics vision about a year ago now when we launched the Dynamics brand, and it really was the Microsoft vision of what we were going to do transformationally different in this business applications space, what could we as Microsoft do that was both unique in the marketplace and desperately needed by customers and partners in this space to really try to transform things going forward.

And these four elements were so important to customers, and the deep research that we did not only with an extensive set of customers but also in talking with all of you, who have obviously millions of interactions with customers across the globe and across different customer segments and industries.

The first, being familiar to your people, and that one has been sort of especially gratifying as Microsoft has really moved towards this People Ready vision, which we’ll also talk about in a minute. But this is so critical; I mean, obviously people are at the core of what makes our customers successful, and if we can drive a business application that is familiar, and not only familiar to their people from a UI standpoint but really taking it to the next level with role-based, and we’ve done that in a very meaningful way with AX 4.0.

Fitting with our system, I mean, this is important for small and mid-market customers, it’s critical for enterprise customers as they need to adapt over time and integrate with systems that have been built over decades, whether they’re custom or whether they’re customized systems from other vendors; such a critical element to be able to fit with the systems, not only systems that are built on the Microsoft stack but with some that are not, so another critical element that we’re delivering across the Dynamics product line broadly, and certainly coming home very, very strong with AX 4.0. I mean, hopefully you’ve seen just the rich set of deep stack integration from SharePoint to Web Services to SQL Reporting that we’ve really brought to AX 4.0.

Fueling your business productivity, I mean, I think that the functionality enhancements that I know how we’ll talk to more deeply as we go throughout the day, you know, a lot of times we talk about all the technology enhancements because they’re so rich, but when you look at AX 4.0 and you look at the Dynamics roadmap and what we’re delivering across the board, the set of functionality enhancements that we’ve been able to deliver with our rich investments in business applications is just very, very strong. And then you add to that what our partners have been able to bring to the marketplace, and that’s where we really get at this fueling business productivity.

Decision-making, I mean, it’s interesting, for those of us who have been in this business for decades, which is probably the majority of people here, fueling decision-making and getting at business critical information has always been close to the top, if not the top need that customers have had, and it seems to be the key motivator for customers to move systems. And so our broad use of SQL Reporting and really exposing all the data, not just core financial but all the data across the system in a meaningful way by role and in an ad hoc way as well has been critical. So this enabling confident decision-making by getting the right information to the right people at the right time in a secure way is so critical.

So the Dynamics vision is real, it’s being delivered upon, we’re shipping in AX 4.0, really brings all of these pillars so much to life.

And then you add on to that how well it fits into Microsoft’s overall vision, and then you really start to see why business applications is just such a logical place for Microsoft to invest big and to grow for many, many, many years to come, and I know you’ll hear that from Steve this evening as well. But you look at this idea of making a business People Ready and the Dynamics pillars just fit so well into that, software that’s familiar, it’s connected, not only across our stack but across a customer’s organization as well, the innovation. Widely used and supported, obviously a key equation to that is all of you.

So I want to talk about our agenda briefly for the day. I know you’ve had a glance of it as you’ve signed up for today, but I want to give you a bit of perspective before I bring on our next special guest.

Next I’m going to bring on someone who’s been with Microsoft for a long time, Dave Campbell. I’ll introduce him in a moment. We’ll have out third act and wrap up today.

I also want to talk about Business Ready Licensing, which is our new licensing model that we’re very excited about, and I want to give you some perspective on that. You’ll get a chance to find out more about Business Ready Licensing as you go through the week, but I wanted to give this audience a view into Business Ready Licensing as well.

We then have three very rich breakouts for you to choose from. You’ll have a short amount of time to get to those breakouts.

And then after the breakouts we’ll come back here for two more sessions. We’ll make some announcements and give you some news on new vertical solutions. Hal Howard, who drives development, of course, for AX, will also give you a rich view into our development philosophy, and you’ll get some more richness on some of the things we’ve talked about here.

And then we’ll have a reception, albeit not terribly long, because then we come back here at 7:30 to hear from both Steve and from Satya, and Doug Burgum will be introducing Steve, so you’ll get three executives this evening, and I know that will be a great event. It’s a tight event. We don’t have a tremendous amount of your time then, so we look forward to having you back for the 7:30 session as well.

Just a bit of perspective on Steve. I know when we sent him an e-mail and said, “Hey, can you come in a night early for WPC and talk to our AX partners,” an answer came back very, very quickly. He’s been religious about going to Copenhagen at least once a year, going to Fargo at least once a year, and really seeing the development that’s been happening. So he’s watched this progress along our four-year development journey, and was super excited to do this launch, so we look forward to having him.

So I want to introduce our next speaker. We’re super pleased to have Dave Campbell with us. He’s been with Microsoft for 12 years. He’s been in the database business for almost two decades. He joined Microsoft from Digital. He’s one of 15, one of 15 technical fellows at Microsoft. And he just knows a bunch about this business, and we’re thrilled with the partnership that Hal’s team and Dave’s team have been able to have to really deliver this product.

So please help me welcome Dave Campbell, a Microsoft Technical Fellow. (Applause.)

DAVE CAMPBELL: Well, thanks for the opportunity. It’s kind of interesting to be up here as a SQL guy. And I don’t believe that would have happened two years ago. And in some sense that’s part of the story. There’s been a tremendous amount of cooperation and a tremendous amount of work between the teams, leading up to SQL 2005, leading up to AX 4.0, and I want to share with you some of that, and some of the results of that today. So again thanks for the opportunity to present, and I’ll get in here and talk about some of the differentiators for SQL in the business.

So we always have to pay attention to mission critical abilities: scalability, security, the ability to function, availability, and that’s something that you don’t get to play unless you have a very good presence there. We’ll talk a bit about that today, mostly from the performance perspective, because we have some exciting news to share with you.

Developer productivity is another thing that is really important, has been important, and I think today actually in terms of delivering solutions, and the time to solution is a very, very key part of the story.

In fact, I was at a hardware partner event two weeks ago and got to speak to some of the, if you will, enterprise partners in this hardware vendor, and one of the breakout sessions, the things they highlighted in terms of the most value they could bring from IT, it was time to solution. And people were willing to pay a premium to get to a solution very, very quickly, and that’s something that speaks directly to developer productivity.

And the last thing, which was talked about already today, better business decisions. And if I look at this through the lens of latency, how quickly can we turn around and actually take information into the system and present it in a way that we can make decisions on it.

And we’ve actually moved through several different generations in terms of information. So if you go back 10 or 15 years ago, it was pre-transactional. So at the end of the day, end of the week we collected and summarized data, and rolled it up for analysis. But when we did that, we lost information. Then we went into a world of transactional, if you will, capture, at the point of sale, when someone pressed submit, and that led us to real time analytics, in some sense to see what was happening at the point it happened. We are now moving towards a world of pre-transactional capture, and this lets us have a record of intent, and actually let us predict before the sale happens, before the transaction. And in many businesses today this is sort of the difference between success and failure.

So a couple of real world examples. If you go on an e-commerce site, imagine you’re a commerce site and you can sense someone doing a search for an automobile, and then you can see them visit a couple of auto dealers. With that information, if you can predict that within two weeks there’s a 40 percent chance they’re going to purchase an automobile, that could mean the difference between you succeeding and not succeeding. Another thing in many e-commerce sites, cluster analysis that you see. So you buy a book, others also bought this book, people bought this book.

So this really does make a big difference in being able to put that information in the right form in front of the people to be able to let them make better decisions on a daily basis is really what we’re all about enabling here.

So I want to talk a little bit about the success story in terms of benchmarking. And for me this is really exciting, because ever since it was the second week literally that I came to Microsoft on SQL Server I’ve been working on SQL Server performance in one way or another, and I have the performance team for SQL reporting to me right now. And you can look at benchmarking in databases, there’s a wide spectrum of things that you can do, and one of the things that’s easy to do is just throw a workload at the server that’s not very representative, and a lot of people go off and do that. At the other end of the spectrum you can actually capture the actual user workload and replay that back, and that’s what we do a lot as well.

And what we want to present today is a real world benchmark that is very, very close to what customers will do. And this, once we’ve established this, we can use this for sizing, for configuration, for testing of all sorts of different things.

A key thing I want to present in this benchmark that we’re going to talk about is that it represents real world workloads, procurement to payment. It’s doing things such as discounts, it’s doing things such as sales tax. So it’s real, real application logic being run here in a mix that is representative of a true application.

The volume, we’re going to talk about a thousand concurrent users. Now, that’s pretty interesting, but what I think you’ll find remarkable is when we look at the hardware configuration we’re able to run this on, and the headroom that we have left in terms of actually bumping that number up, 55,000 lines per hour, a lot of activity going on in the database underneath that. In fact, during the course of the benchmark run, we’re putting roughly 3.2 million new records into the database per hour while we’re doing this.

The database volume that we have here that we’re showing as part of this benchmark configuration is somewhat short of 200 gigabytes, and that’s fairly representative for this load.

We want to look at the response time. When we get to the next graphic we’ll sort of discuss this. We want scalability, you want your throughput to scale, and you want your response time to stay manageable. And that was an issue in previous versions, and that’s something that we’ve worked on.

And we want to talk about gains in terms of scaling the solution out with an AX object server that scales out, and we’ll talk about the topology here as we present the next slide.

So scalability in the database space is the name of the game. We have a number of new features in SQL 2005, a number of new features in AX 4.0, and it’s fair to say this is the first release where we’ve brought those two together and worked cooperatively to get the most out of SQL with AX.

So here’s the chart. So I’m going to set up the hardware configuration. The database back-end for this particular benchmark run is a four-way server, four-way dual-core server running with a 64-bit stack. Okay, so one database server, then a number of scaled-out AOS servers.

There are three sets of numbers here, if you will. The first one is one AOS server with 125 users. The second one is a four AOS server, and the last one is eight with a thousand users on it.

And if you look at the graph in the upper right hand corner, you can see that the response time for various things only increases anywhere from, say, 10 to 30 percent looking at it when scaling from 125 concurrent users up to a thousand concurrent users. And that’s really what you want to see, to keep that manageable.

One of the issues we had in previous versions was loss contention. The new architecture, it was new features in SQL 2005 virtually eliminate that, so we can maintain responsiveness even under increased load, so a tremendous difference there.

In terms of the database throughput down here in the lower left, it’s interesting to note the things you want to look for there are linear scalability. As I double the amount of work, do I get double the throughput? And, in fact, if you do the numbers, you do the math on this, that’s what you see.

But more than that, what we talk about in the performance game is these scale factors. So if I double the amount of work I’m putting at the system, and scale out things appropriately, how much do I get back? There’s double the resources, and if you can get 1.7 times back, that’s a good number. Here we’re showing pretty much perfect scalability on this; we double the resources we put on it, double the user load, and we pretty much double the throughput. And that’s an indication that we can continue to scale this out to achieve much higher numbers as well.

So in terms of the highlights, how did we get here? Optimistic concurrency control was a key part of this. So the previous architecture relied on some features from other databases, if you will, to achieve some of the scaling. I guess people know what’s going on there.

So we got together, we worked, we were saying, okay, we’ve got to make this thing work very well on SQL, so we spent a lot of time there. Optimistic concurrency control works very, very well with the new scaled-out architecture.

The database is primed and ready for replication. So every table has a primary key on it. We’ve re-indexed the database, so there’s a set of indexes that makes sense for one database system, there’s another set of indexes that make sense for SQL Server; we’ve re-indexed appropriately and optimally for SQL Server. So, for example, now we’re using clustered indexes where appropriate.

And a number of SQL performance features that were not used previously are now used: things like fast-forward only cursors, touching and closing and such, reducing the number of roundtrips to the database back-end, in some cases porting 50 percent. This allows the database server itself to scale to much higher levels.

Optimal data storage: As some of you know, we had previously right justified, which doesn’t work too well with our VAR chart implementation, so the database is now set up to be less justified such that our VAR chart characters work well with it. And we’ve moved Unicode. So despite the fact that the Unicode representation is larger, by the compression that we’re able to achieve by left justifying it, the database sizes stay roughly the same.

Now, there’s a lot of structural changes in the database to make it perform well for AX 4.0. How do you get there? There is an optimized upgrade utility that will move the database from three formats to four, and a rough rule of thumb we’re seeing right now is order 200 gigabyte database in the order of 24 hours. So that’s been optimized to move things over quickly.

And we also know that there’s a lot of value in this performance toolkit we’ve developed for the benchmarks, and so we’ll make that available to partners as well, such that you can validate sizing and configuration, such that you can make changes to the system and be able to validate the changes from a performance perspective. So a tremendous amount of work in this release in this regard.

And if you think about it, this is a four-way database server achieving a thousand concurrent users. Now, the database CPU load was roughly I think 65, 70 percent, and we could push that up higher, probably add on another two to four AOS servers on that configuration we had right there, and so a tremendous advance right there. So that’s something that will really allow you to penetrate into much larger installations.

Roadmaps: We’re not done yet. So for this release we did a lot of the first things that you would do. We will deepen the support and extend the performance optimizations we’ve made going forward.

So we are working now very closely as a team. What’s really been interesting, a side effect of this work is that now the SQL team and the AX team are working to jointly develop and propose new features moving forward. So we’re working much more closely than we ever have in the past.

There are other opportunities for performance gain that we’ll make use of within SQL. Batch window: So the older architecture was not very well set up for doing batch operations. The new scaled-out three-tier architecture will support that, and there’s more opportunity to enhance that going forward as well.

This next one, the second one from the bottom is kind of interesting in the sense that it represents a better together story across the Microsoft stack. So there’s something known as the ETW. It’s a tracing infrastructure that’s built that SQL will use, that AX will use, such that throughout the entire stack you can trace requests. So you can trace something coming in from the Web server, you can trace it in through the application server into the database server, all the way down to the disk subsystem to find out what’s going on when there are errors or other things you want to chase down. So when you’re trying to analyze latency, is there a problem with the IO subsystem, there’s a problem with an overloaded server, this end-to-end tracing and logging will be very, very helpful for you.

And the last point here is there is a recognition and a lot of work going on in terms of optimizing client-server communication paths. And we realize that we have to do some work there to make that less chatty. There’s opportunity for improvement there in the future as well.

So this next story is really interesting from my perspective as a SQL guy. A lot of what is driving the SQL business today is BI. And I was a core engine guy, but I can certainly see this as much as the next person. In fact, I looked this morning on BarnesandNoble.com, and I searched for SQL 2005 for the book, the best-selling book. Four of the top ten best-selling books were on the BI components of SQL Server 2005. Now, if you go back to previous releases, you wouldn’t have seen anything there.

There’s another story, data mining. Think 10 or 15 years ago, data mining was the propeller heads and the PhDs in the back room. When we announced and we launched SQL 2005, someone looked on Barnes & Noble that day, there were 27 books available on SQL 2005 on the day of launch. The number two top selling book was a book on data mining. Now, I don’t know whether the author had a huge family or whatnot, but I thought it was kind of interesting to see that. And that’s something again that’s driving things.

But what does this mean in terms of the BI offering? It starts at the bottom with SQL 2005, both as an operational data store and as a data warehouse, and then we have the BI components from SQL above that: integration, analysis, and reporting, data mining and other pieces in and around that. That integrates very well with some of the Office components, and you’ll see that. Within SharePoint we’ve seen that.

For those of you who have not yet seen what Excel 2007 can do over analysis services cubed, I’ve got the gray hair, I’ve been doing this stuff for a long time, so it’s not very often that I get wowed at this point. I guess I’m getting old in that sense. But I was wowed recently by seeing how Excel 2007 works with analysis services in the upcoming release of Office; it’s just going to be fantastic. So above that some of the performance applications that will be coming out.

One of the things that you want to preserve architecturally within a stack like this is the ability to enter at various points. You don’t want to entomb the whole thing. And I think the Dynamics folks have done a very good job of being able to enter at various points to make various levels available to partners to be able to extend and augment the system, and we’ll talk about that a little bit in a second.

So if you look at what it means from the Dynamics AX perspective, use of IIS, SQL IIS, information integration from various sources, and we have a very large ecosystem in IIS right now for transformation and data sources to be able to pull data into systems.

Analysis: Well, with SQL 2005 analysis services, and I mentioned before how that works so well this release with Excel. And then reporting, which we’ve seen and we’ll see more of.

So what does this mean in terms of pulling this together? I think there’s one key aspect with respect to AX that is very interesting, and that’s this notion of having a model-driven environment.

So we’ll talk a little bit about Report Builder. When we first introducing Reporting Services, one of the things that people came and asked us for is that’s great, our developers can now develop reports; what we want is our end users to be able to develop reports such that we don’t have to author them for them. So we acquired, we integrated Report Builder in with SQL 2005.

Now, Report Builder requires more sophisticated models such that people who are writing reports as end users don’t need to understand that to actually pull a customer together I need to do a join across three to five tables. So we have something in there called a semantic model definition language. Now, AX has its own very rich data model, and by using that model and customizing that model, it’s a partner opportunity within AX, you can regenerate models out to Report Builder such that as you change the model and augment it, end users can then directly write against that model to do their own reports, further reducing latency. They don’t have to wait for IT to go develop a new report for them; tremendous value in that.

So with AX 3.0 it was the case you go up with the Report Writer, someone would ask for a report, come back around and deliver a report to them. How that changes with 4.0 is the ability to use the report designer and push those reports up into SharePoint and such, and also extend the model for Report Builder; tremendous value in that.

So I’m going to tell you a little story about how Reporting Services changed the way we do the SQL business. If I go back, say, three to four years ago, SQL, like a lot of other businesses, was run from Excel spreadsheets, and mostly from hard copy. So our operational meeting, people would come in and they would deal out the hard copy spreadsheets. And so we’d go do that. And people would look at the spreadsheets and some would look at cell C73 and they’d say, hey, this is like 30; doesn’t it usually run 22 or 23? And someone would say, yeah, I guess it does, I’ll go look into it and I’ll get back to you tomorrow.

And what we did when we got Reporting Services was we started to write reports. So we had a big projector on the room.

Now, the interesting thing, this is kind of a social thing that only happens within our team, as you can imagine, we have some people who can write sophisticated SQL queries and can write good reports, so everyone got into the act. And we wound up with about a thousand different reports, and it was people would say, “No, no, don’t use that report, we can reach a dead-end here, use mine, it’s better.” And so over the course of several weeks or months or so, we winnowed those reports down into a set of operational reports that we can now run the business on.

Now, what is interesting about this, just look at it from the latency perspective. It used to take days for us sometimes to close the loop. Here’s a number that looks fishy. Someone will go, next day come back and say here’s why. Then we say, okay, what’s the real root cause of that? Well, I don’t know, we’ll go look at that, we’ll find out who’s working on it.

Now, what’s interesting is that we are a wireless campus, and we have this room, people sitting down, and a number of people on the side who are on IM potentially to people working problems in real time around the globe. So every other day or so we’ll be talking and discussing a problem, and we can drill down through KPI, drill down into operational data. We’ll be asking a question, what’s really going on here. Someone from the edge of the room will raise their hand and say, “Hey, I’ve got an IM session with Jeff, who happens to be in Europe at the customer site, and I asked him the following question.” So instead of it being days in terms of our ability to close the loop on this, we can actually ask questions and get real time answers. It’s made a tremendous difference in the business.

And that I think sort of sums up and represents the power of BI to be able to close the loop and really change the way that businesses are run; so a fantastic opportunity, and a lot of that shining through in AX 4.0.

So in terms of enablement, how does this come together? So there’s the SQL Server we call it the BI platform. When I got to SQL 12 years ago, it was a core relational database engine, some bulk utilities to load and unload data and back it up, and a client library to go access the data.

Today, we call it a data platform. We’ve got BI that’s integrated in with the system. We integrate with various other components around Microsoft. We’ve got many more types of data that we store in terms of XML and unstructured data inside the database.

Above that, opportunity to extend with Dynamics, and we’ll talk about that a little bit later. And then Visual Studio in terms of the development environment to be able to get in and go down to the lowest level to tweak what you need to develop solutions; a tremendous opportunity for you.

So as we look at that, how this would play out with AX is to have an operational database, generate data marks or cubes out of that, and then use the SQL Server BI components to be able to generate reports, to be able to generate information into Excel for people to do end user analysis, to be able to business scorecard work, and to work with other analytic applications. So in terms of partner opportunity, there’s a tremendous amount of opportunity available.

And one of the things I find interesting, having been at Microsoft for 12 years, is how the platform has evolved. We talk about the platform at large. And for those of you old enough, if you go back 15 years ago, if you were going to do any networking sort of thing, you had to go out and acquire a TCP stack and hardware for your PC. Well, those became part of the platform, and that opened up a tremendous amount of opportunity for others to add value on top of.

There’s a similar thing happening right now with BI. This BI enablement is part of the platform, and it represents a tremendous amount of opportunity at various levels for partners to add value.

And one of the points that’s made on this slide is that there is a CIO survey that’s done on an annual basis. Gartner is the one that does it. Over the last five years, things that have shown up there, security has been near the top of the list. BI and analytics now are right up there at the top of the list. In fact, we had someone on my team who was out and looked and monitors the manufacturing vertical, and she came to my office about six months ago and I asked her what’s happening. She said, it’s weird, I just made the rounds, talked to all the manufacturing ISVs we work with, and she said they all want three things. She said they want portals, they want BI, and the last thing they want is spatial. So I asked her why do they want spatial, and so she went back out and asked, and the thing was with the information systems today, the ability to correlate, they don’t need RFID to enable this, but by from the manufacturing systems being able to know from traceability this component went into this assembly, went into this unit, got put on this pallet, on this truck, they can find out where everything is at any given point in time through the traceability and through the correlation made available in the system. So BI is a key thing driving SQL and AX at this point.

So through this slide, mission critical abilities. We just focused on performance; there are a number of new availability features in SQL 2005 that people will take advantage of, things like database mirroring for disaster recovery, being able to set up another copy of the data at another site for remote geographical redundancy; availability features such as being able to do online restore. I have a single page that goes bad in a database, might be a 2 terabyte database, I don’t need to take the entire database down, I just go back and repair that page online while the rest of the database is providing service.

Developer productivity, this whole thing about time to solution, many, many people tell me this now; if I go back, say, five years ago, conversations, breakfast conversations I had with CIOs, three out of four of them within five or 10 minutes would have been around questions of credibility of the platform: Can I really bet my business on it, will it scale. Those questions by and large are gone now. The questions I get now in those same conversations, three out of four of them are, yeah, I know it can do it, tell me how it can do it faster and cheaper on your platform than I can the other guys.

And if you look at the cost of hardware and the cost of software kind of going to zero, more and more the people cost of the solution and the opportunity cost of not being able to get the solution in place fast enough are more and more a dominant part of what the costs are.

So what we’re trying to do is actually evolve what people think about in terms of TCO. It’s not about the cost to buy the hardware and the software, it’s about the total lifecycle cost and the ability to solve the solutions that you need, solve the problems you need to solve, make the decisions you need to make quickly in a timely fashion. And that speaks to the whole point about business decision and enablement through BI.

So a tremendous amount of work together, I’m really excited about what we’ve done thus far, and I’m really, really excited about the opportunity amongst our teams together moving forward.

So with that, I will close and reintroduce Tami back to the stage, and go from there. (Applause.)

TAMI RELLER: Can you hang around for act three, Dave?

DAVE CAMPBELL: Oh, sure, I’ll hang around.

TAMI RELLER: That would be great. We appreciate the partnership, we appreciate you being here.

Let’s bring back Vince, and take a look at one more scenario. We’re going to take a look at some extranets, and I think he’ll highlight some of the things you just talked about. Welcome back.

VINCE: Super, thanks, hi.


VINCE: So, yeah, so what I’m looking at here is my portal that I typically work on a day-to-day basis. You can see here this is the trading documents that we didn’t quite see earlier.

DAVE CAMPBELL: That wasn’t a SQL problem before.

VINCE: It wasn’t a SQL problem. (Laughter, applause.) It wasn’t a SQL problem.

TAMI RELLER: See, this is a good thing when you have three acts.

VINCE: I worked that out.

So this is XML in the document, won’t spend too much time on it, but it has actually been updated back into Dynamics AX. We can see that on the portal, this is a trade agreement that’s actually been updated there.

TAMI RELLER: Good stuff.

VINCE: It’s good stuff, yeah.

You know, one of the things that we really needed to do as part of this scenario is give Kontoso, which is our retail partner, you know, they’re quite demanding, they need to have access to the information within our system. And so what we’ve done is provided them a portal. Again, it’s all based on the same enterprise portal platform that we have out of Dynamics AX, all built on SharePoint, so it’s the same portal, but it’s role-based specifically for their type of role, which is a customer coming in and looking at our information within our system. So we give them specific items to look at, you know, maintaining their information within our system. You can see that we’re already starting to receive purchase orders, they’re starting to buy off us to fill in their seasonal demand that’s coming up. And we’ve got some relevant best practices documents down here.

What we can also provide them is the ability to change data within our system, so we can see here that we’ve got some specific orders that have gone through the system, so there are some shipments here. So we can give them the ability to change where they allocate their stock. So, for example, they might be receiving a shipment, but then they might need to break that shipment up and send it to different distribution centers. So we can decide, you know, maybe there’s a bunch of geeks up in Seattle that want this new projector, for example, but maybe they want to send some stock up there, and so then maybe they want to send it maybe across to Cleveland, for example. So that gives them that self-service sort of capability to really manage their data within our system. So that’s really what we’re trying to achieve with that.

DAVE CAMPBELL: Did you use the data mining capability to find that out or is that for the next release?

VINCE: We could definitely do that, yes. We’ve got the integration capability, $6 million man, for sure.

So that really gives that capability, and we can really bring on that retail channel, and satisfy that really well.

So one of the other things that I need to do, as Dave was sort of talking about, was I’m the operations manager, I need to find information out about what’s actually happening in the business applications. So I can use tools like SQL Server Reporting Services. Mort a little bit earlier showed us the concept of perspectives that we’ve added into Microsoft Dynamics AX. So he’s gone and built a bunch of perspectives for me as an end user and all of our other business users to use within SQL Server Reporting Services.

So I’m looking at the Report Builder, and this gives me as an end user the ability to build reports. So I can go and create a new report, I can see all my perspectives listed out here, so I could go and find one for like inventory management, and therefore I can find the specific tables that are related to inventory management and write the reports that I need.

So I’ve written a report here, and this is specifically, you know, I read it for myself, but I thought Charlie might actually like to see this report, because what I’ve done is really looked at the forecast between our two distribution channels, you know, Web-based and then retail-based channel as well.

So maybe we might bring out Charlie, and give him a look at this report.

TAMI RELLER: Welcome back.

JEFF MCKEE: Thank you. Hey, Vince.

VINCE: Hey, Charlie.

So what I’ve done here is just had a little bit of a dabble, and we’ve built a report here. So this is just showing us now our forecast between our Web-based and the retail-based channel.

So it’s been a long couple of months, we’ve sort of really benefited from the value of the user enhancements in Microsoft Dynamics AX, so it’s really easy to adapt all of our employees to that. You know, it was really easy to bring on a new supplier with our Web Services capability, and we’ve really been able to meet Kontoso’s needs in terms of providing them a portal to log on and look at information within our system. It’s been a struggle, but we’ve got it, and it was very easy to do with Microsoft Dynamics AX.

JEFF MCKEE: Vince, I was concerned initially about whether we could pull this off, but I see we’ve been able to use Microsoft Dynamics AX 4.0, and bring up A-Datum as a supplier to us. I spoke to the CEO of Kontoso, he was very pleased that we were able to meet those supply commitments that we’re launching for this season, and they really like the extranet capability using SharePoint, having the ability to use the extranet to get visibility to the supply commitments, and then being able to divert those supply commitments to the distribution centers that need the supply the most. So they really enjoy the experience and information they get from Fabricam on this particular VPR 1000. So I want to thank you and the operations team for making this happen.

TAMI RELLER: Great. Thank you very much, everyone. (Applause.)

Good. So I want to thank our demo team for that rich, rich scenario, and hopefully you start to see the great power of AX 4.0 that you’ll be able to bring to market.

I wanted to just spend a few minutes giving you a preview into Business-Ready Licensing, which today is the day that we are announcing Business-Ready Licensing and Business-Ready Enhancement Plan, which really is a quite big and bold move by Microsoft that is extremely customer friendly and partner friendly. And so let me give you the high level view, and then you’ll have many opportunities to dive deep and understand all the specifics so that you can understand its impact on you and its positive impact on your customers.

So what is Business-Ready Licensing? I mean, really boiling it down, we have, you know, if you look at how we price today, and frankly how many of our competitors price today, we have thousands of SKUs, thousands of modules or granules or whatever the term might be, and we’ve really reduced that down to three, the three main packages, and then we’ve poured value, huge value into each of those three packages, and then allow users, customers to scale their system by buying more users. And we also offer it on a concurrent user basis, which gives us a significant competitive advantage over our competitors who predominantly have a named user model.

And so Business-Ready Licensing applies to all of our ERP solutions: AX, GP, and AV, and SL, and it gives us a globally consistent pricing model for our ERP solutions. It’s effective in August for new customers, existing customers can stay on their current path, and over time we’ll give them the option to move to Business-Ready Licensing, but it will be just that, an option. So they will have the freedom to choose whether they stay on the current path or move over to Business-Ready Licensing if that’s what they prefer.

AX specific pricing will be 15 percent higher on Business Essentials and Advanced Management, which are the two primary SKUs, and then there’s Advanced Management Enterprise, which brings ala carte functionality above and beyond those two main SKUs, and at 15 percent higher based on the adaptability and the global features that we’ve been talking about here today.

I also want to talk a little bit about another big announcement, and that is Business-Ready Enhancement Plan, also a very big deal, which delivers simplification and globalization to our enhancement plan. And for new customers it will be consistently 16 percent across the globe. For customers who are on lower priced enhancement plans on some of our other — in some geographies we’ll deliver them the value but the price will go up over time, so it will not have a negative immediate impact on our customers, they’ll get value and have a price change over time, and there are big, big new things that we are bringing to enhancement plans, specifically Customer Source that will be available globally, which is a very rich online tool. It will be an international English site that’s available to all. We will also have 16 localizations with both localizations and local content delivered for all of our 16 largest geographies, and obviously we’ll build that out over time.

We’re making unlimited online training available to any customer that’s on the enhancement plan, and it’s a broad usage in the organization. So if you have a customer who’s on an enhancement plan, they can get as much access to both online training and courseware as they need, so a big, big new value.

We also have things such as Investment Protection, which was previously known as Transformational Assurance, which gives customers the guarantee that they’ll get to wherever we’re going into the future on the roadmap.

We also have a transition credit, which allows customers to move from one of our products to another one of our products with 100 percent investment protection.

So a lot of benefits are being delivered to our enhancement plan customers. You’ll have to learn more and read more to get all of the content and context, because there is a lot.

I wanted to provide sort of the high level view of sort of how to position this in the marketplace, and how we’re backing up that positioning. If you look at the bubbles, that is how it’s being represented to customers, and there’s so much in each of these points it’s hard to get all of it across, but I’ll just touch on it.

Value: I mean, just having a huge amount of ERP value that we’re adding into these three SKUs and making it broadly available to customers is a big point in maximizing the value of your investment. The productivity goes back to the online training that we’re making available, and all the other attributes of the enhancement plan.

And the confidence, just customers knowing that when they invest in a Microsoft solution and their business needs change, they can move, they can either move to Business-Ready Licensing, they can move to a different product line, they can move from Business Essentials to Advanced Management, they have the ability to move and to have their investment protected, move down the roadmap into the future, so there’s a tremendous amount there.

We know this will be good for your customers, we know it will expand your business opportunities. One of the things that we’ve done is sort of drop the scale so it’s much easier and more cost effective for customers to get into Dynamics, it’s a lower priced entry across the board for ERP customers, so we know that presents some new business opportunities to you. Because they’ll get more functionality out of the box, you have more opportunity to really help your customers automate more faster, which is also a business opportunity.

And frankly this is so much easier to understand. I mean, we really looked at this and said how can we as Microsoft really start to bring a transformation, not only with the innovation that we’re delivering, but with pricing and packaging, and that’s what we believe we’ve done with Business-Ready Licensing.

Lots more information to get while you’re at WPC, and online there’s great online training, there’s labs that are happening here, there’s a session that’s happening at WPC, so by no means was this meant to be your readiness five minutes, but it was meant to give you a high level perspective to gain more as you go through the week.

Again, August is when this will be available to new customers, so you’ll want to gear up on this and get your organization geared up on this in the next several weeks.

So that was about an hour and 30 minutes of packed content. You’ll get much more as you go through the rest of the day. We will start the breakouts about five minutes late to allow you to transition to them.

I thank you so much for being here, I thank you for your attention, and most of all I thank you for your investment and your commitment to us. We appreciate the partnership very much.

Have a great afternoon and evening. Thank you. (Applause.)

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