Chris Capossela: Microsoft Worldwide Partner Conference 2006

Remarks by Chris Capossela, Corporate Vice President, Microsoft Business Division Product Management Group

Microsoft Worldwide Partner Conference 2006

Boston, Massachusetts

July 11, 2006

ANNOUNCER: Ladies and gentlemen, please welcome Chris Capossela. (Applause.)

CHRIS CAPOSSELA: Well, good morning, everybody. It’s really exciting for me to be back here at the Worldwide Partner Conference. And as someone who grew up in an Italian-American family here in Boston, it’s a particularly exciting day, and I just wanted to take a moment to congratulate Italy. (Cheers, applause.) I know it’s risky, it’s a very risky thing to do, but 50,000 of my close family and friends here in Boston were celebrating very hard over the past few days, so I felt like I had to congratulate them as well.

I am really excited to be here. Last year we had about a thousand partners who were building solutions on top of the Information Worker or the Office System, and here we are a year later with over 2,000 of you in this room today building Office System solutions. The momentum we have behind Office System is really, really fantastic, and I just wanted to take a moment to touch on some of the key points.

Over the last year we’ve had over 400 percent growth in partners who are building on the Office System using our IW competencies. For the 2007 Office System we have over 250 partner solutions already, and as you can see over 5,000 partners have been trained and are using the Office System, the beta 2, with over 500,000 employees inside those partner companies using the beta 2 product as well.

So we’re very, very excited about this. I just wanted to take a moment to thank all of you for your hard work on Office, and I’m really excited to take a look at what we can do to help you grow your business this coming year, so thank you very much.

There are a lot of partners building on the 2007 release. I thought it would be interesting to share one example of what some people are doing. This is a partner Interknowledgy, who has done some amazing work with the Scripps Research Institute to build a collaborative, molecular environment to help the Scripps researchers fight cancer. Let’s take a quick look at that video.

(Video segment.)

(Applause.)

CHRIS CAPOSSELA: It’s a great example of the type of solution that partners can build on top of the 2007 Office System along with [Windows] Vista.

Now, what are the core technology components that Interknowledgy was using to building a system like that? What are the core technology components that you as partners can build into your solution? If there’s a single slide that tries to encapsulate the business components of the 2007 Office System that are interesting for partners, this is it. We really think of Office as going far beyond just the desktop applications working alone but instead the desktop applications working along with servers like Office SharePoint Server, like Windows Server, like SQL Server, like Office Communications Server, and Exchange Server.

And we think about the three core capabilities that we’re delivering with the 2007 Office System: unified communications and collaborations, which Steve did a really nice job showing you with Office Communications Server; business intelligence, we’ve done a lot of work with SQL Server 2005 and analysis services, and reporting services; as well as with Excel 2007 building on top of that platform to make Excel a first class BI client.

We recently also bought a company called ProClarity, which has some high-end BI tools that we’ll be integrating into the Office System as well. So, with this release we’re firmly in the BI business and it’s a tremendous opportunity for you as partners.

With this release we’re also entering the enterprise content management business. Most people think of Office as just their document authoring tool. We actually think of it as a tool to help you manage the content through its entire lifecycle from creation to routing and approval, to archival, to expiration, to publishing, be in every stage in the lifecycle is something we should be able to handle through Office SharePoint Server and the desktop applications themselves.

Now, underpinning these three core capabilities of unified communications and collaboration, business intelligence and enterprise content management are six Office business applications services that we talk about. You’ve already seen some of these services today. Kirk showed you the search technology, along with the Business Data Catalogs as major investments.

Workflow is another major investment that we’re bringing to life with the Office System. Many of you have heard that Office has a new user interface. Not only is it great for end users to get more of the power of our products, but it’s actually far more extensible so you can build your own commands right into our Office user interface far more easily and far more seamlessly.

And perhaps most importantly is the work that we’re doing around our Open XML file format. Rather than storing all of your office documents as the binary file format, .DOC, .PPT, .XLS, in Office 2007 we still support those but by default we’ll save all of our information to an XML file format. That means that you can get at that information through code programmatically, you can have incredible document assembly solutions that you build in your application to piece together a Word document, or a PowerPoint file, or an Excel spreadsheet, from your apps without having to do sort of weird things to the binary file format. So using Office as a front end to business applications is far easier thanks to the XML file format.

We also, of course, build on top of the secure and well-managed infrastructure from Microsoft. So all of these Office System products are built to take advantage of Windows Server and Active Directory and the Rights Management Services.

They’re built to take advantage of SQL Server and some of the great new capabilities in SQL Server 2005. They’re built to take advantage of the System Center family of products to help you manage all of your solutions. So the opportunities here are great, and the technology we’ve built is really, really exciting.

I wanted to spend a lot of my time today exposing you to more of these capabilities so I’ll like to ask Kirk Koenigsbauer to join me again on stage and spend about 20 minutes taking us through a demo of those core capabilities, and we’ll focus mostly on BI and enterprise content management since Steve did such a good job with UC. So Kirk, join us. (Applause.)

KIRK KOENIGSBAUER: Good to be here.

CHRIS CAPOSSELA: You, too.

KIRK KOENIGSBAUER: Hey everybody, I’m back.

So, what I’d like to do is to spend a couple of minutes talking to you about some of the great opportunities with the 2007 Office System where you can build solutions for your customers around enterprise content management, around business intelligence, and around unified communication and collaboration.

Now, we already saw a nice rich demo this morning on the unified communications side, so what I’d like to do is start by showing you Microsoft Office SharePoint Server and some of the things you can do to help set up collaboration environments and team work spaces for your customers.

Here is Microsoft Office SharePoint Server 2007, and what you’re looking at on the screen right now is a team site that we created for a marketing department. Now, you could create these team sites for operations departments, supply chain management, financial services, whatever they might be. Today, we’re just going to walk you through this simple example here of what a marketing team might do to work together.

Now, you’re going to find a couple of different components and templates and Web parts on these pages. The first thing that I’ll point out to you is you have this nice document library that we have here called press releases where the teams can collaborate together on different documents. You can check documents in, you can check them out, you have version control, multiple people can be working on these documents, work on a particular project.

You’ll also see other things on the page as well. For example, in terms of helping keep your team in synch we actually have a new calendar control here and the calendar you can pop up and see all the teams’ different appointments that they’ve got. In fact, you can actually take a team calendar and bring it directly into Microsoft Office Outlook just by going up to the actions tab here and selecting Connect to Outlook so you can make sure that you’re in synch with what’s going on with the team itself.

Now, on this team site we also have set up a listing for different tasks. In the lower right corner of the screen you can see I’ve got a simple task list here. We actually make managing tasks inside of SharePoint much easier with a new template that we’ve created, which lets you do lightweight project management inside of SharePoint itself.

So, here you can see I’ve got a number of different tasks that the Marketing team is working on. I can see who they’re assigned to, the task status, the priority, the due date, percent complete, and then I get this really nice, rich Gant chart here at the top of the screen.

Now, there’s a number of other templates that I want to point out. You’re seeing today on the Internet space in particular on the consumer side lots of people using wikis and blogs as another way to communicate in a really lightweight way. SharePoint has full support for wikis in the next release and we’ve created a couple of nice rich templates that I want to give you a look at.

Here at the bottom of the screen the marketing team is working on a promotional plan. So I’ll go ahead and click on this here. And you’ll see that you can actually — you can actually collaborate on this document, multiple people on the team altogether. In fact, if I want to I can just go ahead and click on edit here.

And inside of the wiki itself notice that I can do a couple of things. First of all, there’s a rich text editor here so I can go ahead and let me scroll this down a little bit, make some changes. Maybe I’ll just go ahead and make this a different font color. I can go ahead and make it italicized. You get the idea here.

When I’ve made my changes, I’m just going to go ahead and click up here, and click on okay. That’s just a really simple way for me to go ahead and communicate, collaborate on this particular document.

Now one nice thing about wikis is that if you look in the upper right-hand corner of the screen you can see there’s a history here. So I’ll go ahead and click on that. And the history actually shows me all the different versions of the document itself or the plan that we’re working on here. And you can actually go back and see those different versions and see the changes that have been made.

Notice you can see different formatting here that’s been added and so forth. And as an administrator you can actually go back up and click on this Restore this Version option to go back to a previous version that’s more applicable to the plan you’re working on.

Now, one of the things that you’ll see towards the bottom of this wiki here is we actually have a link. and this is actually a link to a blog. Another way that people are communicating, of course, is using blogs. And blogs is a little bit of a different model. It’s more of a published model, and then people go back and actually comment on items. And here you can see in SharePoint we have full support for blogs. And I’ve got a couple of different blog entries here.

Now, one of the top requests that we’ve heard from the Office System itself was to be able to use Microsoft Word as a way to go ahead and manage your blogs and write your own blogs and publish them. So, I want to give you a look at what that looks like.

I’m going to switch over to Microsoft Word, and I’m going to go up to the Office button here and click on new. And we have a new template that we’ve created for blog entries. I’ll go ahead and double-click on it, create. And here really simply in the Word environment I get all the nice rich controls that Word has. I can go ahead and create my blog post. So I’ll go ahead and type, “Welcome to WPC” in this example. And then I’ll actually go ahead and take advantage of the ribbon, go ahead and insert a quick picture. I can go ahead and resize that.

I’m showing you this because I want to make sure you understand that you can actually use some of the rich formatting capabilities here to go ahead and post my blog. So I’ll go back to the blog page and before I click on publish, I just want to point out that I can actually use Word to publish to any blog, whether it’s SharePoint or I can go up and pick any provider, MSN Spaces, Blogger, any other site on the Internet if I want to.

I’m going to go ahead and click on publish. Minimize Word here for a moment. Hit refresh and there you can see in SharePoint I have that new blog post coming directly from Word.

CHRIS CAPOSSELA: Very cool. (Applause.)

KIRK KOENIGSBAUER: Great. So there’s really a lot of opportunity here in the collaboration stage for you to work with your customers to assemble together these types of team sites with things like tasks and calendar controls and using blogs and wikis and so forth. So I really encourage you to take a look at it.

The next thing that I want to do is spend a little bit of time talking about the opportunities in the business intelligence space. Now, Microsoft has a fantastic platform for business intelligence with SQL Server 2005 and the Office System that ranges across data warehousing, performance management, and, of course, reporting and analysis.

Now, what I’d like to do is to focus on this particular demo around some of the reporting and analysis and dashboarding capabilities that are provided by Office.

Where I’m actually going to start is inside of SharePoint again, and I’m going to go to a new library type called data connection. Now in this particular scenario what I want to go do is build a report on some of my Internet sales, and to do that I want to pull information out of a SQL Server 2005 analysis cube.

There’s a new way inside of SharePoint to make connecting up to those kinds of data sources really easy. They’re called Office Data Connection Libraries. Now, Office Data Connections have been around for awhile. You can install them locally on different machines and configure them so that you can connect up to different sources.

But with SharePoint and having them integrated with SharePoint now you can make them broadly available to everybody in the customer’s organization to make it really easy to go ahead and synch up to those back-end sources.

So, let’s go ahead and take a look at how that would work. Here I’m going to go ahead and pick this customer and sales data that we’ve got here. And it automatically opens up Excel. And because this data is relational and coming from analysis services, Excel actually knows and suggests that you actually go ahead and create a pivot table with the data itself. So I want to show you the new pivot table capabilities in Excel and how easy they are to use, certainly just as powerful as before, but you’re really going to love, I think, some of the usability improvements that the team’s focused on.

So, here over on the right side of the screen I can go ahead and pick the data that I want. Let’s say I want to look at my Internet sales, so I’ll select that. And then let’s say I want to go down and look at all this information over the last calendar year or the last couple of calendar years, so I’ll click on the Calendar button. And then I can actually go down and pick the type of data that I actually want to see. And I want to look at information on product categories and then the actual model lines themselves. And watch how simply I can go ahead and create that pivot table here inside of Excel.

Now, I can also take advantage of the ribbon. You’ll see in context it pops up commands here for me to go ahead and design that. So perhaps I want to go ahead and do things like maybe add a banded column or maybe pick one of the new automatic formats here. And watch as I hover over them they change in the background. These are called live previews here.

So I’ll go ahead and pick one here. And I’ve got my pivot table created. You can clap, it’s okay, really. (Applause.)

Now, when we think about creating reports like this, one of the common things that happens next in the process is you go and send this out an e-mail or you put it up on a file share so that other people can get access to the information. And that’s a perfectly fine way to do it but there are some challenges with it. As soon as you do that you lose control of the content, you lose control of the formatting, you lose control of those back-end connections that people set up, people can change the formulas; you really lose the integrity of the data itself.

I want to show you a new capability inside of Excel that allows us to take this pivot table or a workbook or any chart, any type of content in Excel, and publish it up to SharePoint site where that content is rendered on SharePoint and the calculations and all the index and so forth is done right on the SharePoint Server itself.

I’ll go up to the Office button again, click on publish and select Excel services. And here I decide where I want to go put that particular workbook that I’m working on or go ahead and just click on save. And this is going to go ahead and take that information from my local machine and move it up onto a SharePoint site.

So I’m not running — at this point I’m just running in the browser, you can see I’m running Internet Explorer here. I have the opportunity here to use the filtering capabilities of this pivot table, I could expand these different years here if I wanted to. You get the full readability here of the file itself, but you have this single version of the truth up on the SharePoint site.

You can use your customer’s infrastructure for running calculations and so forth. It’s really, really a very powerful capability. And again, we call this Excel Services.

CHRIS CAPOSSELA: Built right into Office.

KURT KOENIGSBAUER: Built right into Microsoft Office SharePoint server.

Now, where this becomes really powerful is that you can actually use this capability to go ahead and create rich dashboards and scorecards for your customers. So let me go ahead and give you a look at what that would look like here.

I’m going to close this for a second and move back over to SharePoint. And I’ve already created a quick dashboard here for you to look at. And I want to point out a couple of the different Web parts that you see on the page. The first Web part that you see is what we call the Key Performance Indicator or KPI Web part. And with this particular Web part you can go ahead and create KPIs, and those can be created from a variety of sources. They can come from data in a SharePoint list, they could come from that Excel pivot table that I just created, and put it up on the server. They could, of course, come from SQL Server Analysis services. All of your KPIs are rendered automatically right here inside of SharePoint, or you could, of course, manually enter them yourself.

Now, with SharePoint you can also do things like connect your Key Performance Indicators with unstructured data like this blog as an example. So the CFO could actually be commenting on why some things are going well and some things aren’t, to provide more context to the actual information itself.

Now, towards the bottom of the page you see this nice chart that we have here. Again, this is provided by that Excel Services capability. And then what’s driving this entire page is this area here called reseller list. Now this is actually a filter Web part inside of SharePoint that’s driving the content on the page.

Now, it’s getting this information on the resellers from a feature I showed about an hour or two ago, called the Business Data catalog. And this is the capability that unlocks that information in those structured line of business applications and can bring it into SharePoint. Now, I showed you using it inside of a search application; here we’re actually showing you how you can use it as a part of a dashboard or a scorecard. And again, I can just go ahead and click through and drill down into the detail itself.

Now, what I want to do around Business Data Catalog in this case is actually just show you under the covers how easy these are to configure. Now, you can set up these Business Data Catalog connections through a simple XML configuration file and then you can manage those through a Web-based environment. So let’s go ahead into the central administration page of SharePoint here, and I’ll show you how you actually can set up the same kinds of connections that we’ve got.

Now, at the bottom of the page you see it says Business Data Catalog, and here I have a variety of different things I can go ahead and do with them. I’m going to go ahead and click on view applications. Now, an application is actually that single instance of the connection to that line of business system. Now, again, we provide connectivity to Microsoft Dynamics CRM, SAP, Siebel, right of the box. We expect you all to write more of these things and we’ll write more of them too. But here you can see I’ve got four set up for this particular SharePoint site.

I’m going to go ahead and click on Adventure Works and we’ll take a look at that one. Now, as you look through this, you can see that I can actually go ahead and control the permissions, I can actually go ahead and manage them. I can check Windows Update, I can close that.

You can see here I have the business entities that I’ve actually exposed in the XML file itself. So I’ll go ahead and click on this reseller one to give you a sense of what that looked like. And here you can see a couple of things I want to point out. One, you’ll see that we’ve labeled it as crawlable, so this is actually what makes this Business Data Catalog information show up in your search results.

You can also see all the fields and properties that we’ve pulled out along with that particular business entity, things like the address, the contact information and so forth. And then towards the bottom of the page you can actually manage any relations that you have between these and you can actually see those custom actions.

Now, if you remember the custom actions I did in the search demo where I actually took some of the Business Data Catalog information and actually used it to create a nice rich chart using Virtual Earth, I’ll show you exactly how I did that. I can go ahead and click on view map. That’s the custom action that I created. And then here you can see I’m just simply passing in this URL a couple of parameters.

Now, again I don’t have to write any code to do this, I can just pull those parameters right out of this page here in the Web-based environment, and so it makes it really easy to setup these different custom actions.

So, I’ve just scratched the surface here in the business intelligence space. I haven’t talked about data warehousing, I haven’t talked about performance management, but hopefully you can get a sense here of using things like SharePoint, Excel, Excel Services and SQL Server 2005, how you can really create this rich environment for your customers to get access and insight into this type of content.

Now, the last area that I want to spend a few moments around is our around our investments in the enterprise content management space and how you can really help your customers secure and manage their content.

I’m going back here to that marketing Web site that I had and I want to drop us into this document library here called Press Releases. Now, inside the Press Release document library itself I want to just point out a couple of quick things. First of all, you can see we expose all this rich metadata here. This comes directly from the document itself, and you can decide how much of that you want to expose. In this case, its super helpful for you, you can actually sort on it, you can actually see who created the documents and so forth.

You can look at any one of these documents, we call these actually list items inside of SharePoint, and you can actually manage their permissions on an item-by-item basis not just at the folder level. You can check these in, you can check them out. You should clap at that. (Applause.) I should also point out we’ve added a new Recycling Bin, the number-one request inside of SharePoint.

So there’s a number of different innovations that we’ve made here that really makes this a really great platform for people to check in, check out documents and manage them.

Now, there’s another very important concept inside of SharePoint that I want to mention in this content management space and that’s called content types. Now, what content types do is they allow you to basically bundle together, for a document library, things like workflow, things like metadata requirements, things like a template, things like policy management, so you can really help control the type of content that is uploaded into these repositories.

Let me go ahead and give you a look at how this would work. Here I’m going to go head and open up this file called Adventure Works Acquires Fabricam. And I’ll go ahead and click on edit, so we can pull this into Microsoft Word.

Now, what you’re going to see when this loads is a couple of different things. The first thing you’ll see is this document information panel at the top of the page. So when I talked about metadata, one of the things that we’re trying to achieve is to help users create their metadata or manage their metadata while they’re actually working on the document at the time of creation, as opposed to trying to do it in some other application.

So, here you can see we actually have this nice, rich panel at the top of the page that you can set up for your customers to capture whatever type of metadata they want on that kind of content. So here we’ve got a title, I’ve got the owner of the document. You’ll see you’ve got these nice pick list here, I can actually pick one when I actually want to send this thing out, and so forth.

Now, I’m actually going to go ahead and change the title of this one just to show you that this metadata can also be bound directly in the document itself. So watch as I click out of the field itself, you can actually see that goes ahead and updates the document.

Now, you can also see that this document is under policy management, it’s under workflow. What I’d like to do first is make sure that this document is really ready to be approved and to be published. And so I’m going to take advantage of a nice new set of menu options here in Office called finish. And you can do things like restrict permission of the document, making sure that it doesn’t leave the organization if you want, using IRM protection or Information Rights Management. I could add a digital signature if I’d like. I could go ahead and actually mark the document as final, as read-only so that people don’t go ahead and write content to the document.

What I’m actually going to do is go ahead and inspect the document. And I’ll save the file first. And this is going to pull up this new tool that we have, which will actually go through the document and strip out all kinds of content that you may not want to actually have in your final version: things like comments and revision marks, personal information, custom XML data, headers and footers. I’ll just check a couple of these that I don’t want to inspect, go ahead and click on it, and you’ll watch as Word will actually go through the document and notify me that I have this content and give me an option here just to pull them right out of the document itself.

So now I can rest assured that this document is ready to be published. Fantastic. (Applause.)

Now I’m going to go ahead and move this document to the next stage in the workflow, Chris talked about workflow as one of those Office business application services and SharePoint utilizes Window’s Workflow Foundation for it. I’m just going to go ahead and click on approve and this will go ahead and move the document to the next stage in the Workflow.

Now, what I’m going to do is actually go back to SharePoint and watch in the upper-right corner of the screen, it actually has already changed here; it’s now listed as approved. I can actually click into this and actually look at the entire history of this particular document in terms of how it moved through the Workflow. I can see different tasks that were created, I can see who those tasks were assigned to, who approved it, who rejected it and so forth.

Now, as I mentioned, SharePoint uses Window’s Workflow Foundation. You might be wondering how can you create and customize and manage workflows in SharePoint? There are a couple of different ways to do so. Inside of the Document Library itself, just through the Web-based environment I can go to document library settings, and here on this particular properties page here there’s an option for workflow settings, I can select that. And here is that workflow that I actually used called Press Releases, but I could go ahead and add a new one if I’d like.

And we actually ship six out-of-box workflows as a part of SharePoint Server, workflows for things like approving documents, collecting feedback, signatures, disposition, legal hold and so forth. It’s just very simple to go ahead and create a unique one here. I can just type WPC, we’ll go through, create a quick approval process here.

And you have options for things like defining whether it’s a serial or a parallel process, you can define who’s going to approve the document, who may be cc’d on the document, the option to say how long people have between tasks and so forth; so a really nice, simple, Web-based environment that you can use.

Now, you can also use things like Office SharePoint Designer to create workflows. In fact, using Office SharePoint Designer, which is based on the FrontPage code base, and an evolution of that product, you actually can write and customize workflows without writing any code whatsoever. Or you can use things like Visual Studio to go ahead and write actually really complex workloads, if you’d like. And, in fact, you can actually create those workflows and have them show up here in the SharePoint Administration Page itself. So that’s a very powerful capability too.

Now, the last thing I want to talk a little bit about is how you can actually extend this enterprise content management platform that we’re providing to do lots of other types of things out of the box. In fact, one of the things that we’ve done is we’ve actually created a way to reuse content, specifically PowerPoint files, broadly across a customer’s environment with a new capability called PowerPoint Slide Libraries.

Now we’ve decided to ship this one, there is certainly lots of other things you could do to build on top of this, but let me go ahead and give you a look at what that would look like.

Let’s say that I’m working on my PowerPoint presentation here, I’ve got four really nice slides that are done, and I want to go ahead and add a couple of other slides. And I know that other people in my organization have built those slides, they’re approved, I want to go pull them into this particular document.

I’ll go back to SharePoint, click on Orion 2007 Slides, and this is actually a document library that is specifically designed for PowerPoint slides. So basically you take a PowerPoint presentation, put it up into one of these libraries, SharePoint will actually deconstruct the file and create a list item for every single slide.

Now, what’s great about that is if you click on these, you can see that you can manage these on an item-by-item basis, you can check them in, you can check them out, you can set up alerts if any of that content changes; you have very, very powerful capability but also very, very straightforward.

I can go ahead and pick which ones I want to have in my presentation, I’ll just take these three, go ahead and click on send the presentation. And I have an option if I want to create a new presentation or if I want to put it into an existing one. I’ll just go drop it into this existing one here, and here you can see these dropped right into my PowerPoint Slide file itself.

CHRIS CAPOSSELA: This is one you definitely want to clap for. (Applause.)

KURT KOENIGSBAUER: Okay, so one last thing I want to point out on this too is because of the integration with SharePoint we can actually keep track if any of this content changes on the server. That’s one of the really powerful things about this. So, for example, I can actually go ahead and check this to see if any of the slides have changed, and, in fact, one of the slides has changed, there’s a newer version up on the server itself. I can either replace or append it; in this case I’ll just click on yes, go ahead and replace it and make sure I have the most up-to-date content.

So I’ve shown you a lot, there’s a lot of content here, I know it’s a lot, and I know it’s also getting close to lunch. But in any case, there is a tremendous amount of opportunity here for you to build solutions around enterprise content management, around business intelligence and around the unified communications and collaborations space.

Thanks for your time and have a great conference.

CHRIS CAPOSSELA: Great job Kirk. Well done. Appreciate it.

So that really just is a kind of a fly-by of what we’ve built. Obviously, we’ll be going in for a lot more detail in the Information Worker Value keynote that is today at 3:00 and there is one tomorrow as well. We’ll get to show you what partners are doing on top of the Office System and go into a lot more detail. But I do hope that gives you a sense of the technologies that we’re building and how we’re trying to really unleash Office and the things that the system can do to help you grow your business.

Now I want to just spend the last five or so minutes of my speech talking about what we’re doing to actually build your business, not just from the technologies standpoint, but actually what we’re doing around our sales and marketing campaigns for partners.

So with the 2007 Office System you can see that we will do a lot of work to create demand for these products. In the consumer space we’ve added a new SKU called Office Home & Student, and we’ve added that into the OEM and system builder channel, as well as the retail channel, so a great opportunity for our OEM and system builder partners. And we’re working very hard to expand Trial, Office Trial, where people can just download the bits or get it preinstalled on a PC, and experience the product, because this is one of those things that when you play with it you get very addicted to the new user interface, you really fall in love with what it can do. So we think we have to get the product in lots of people’s hands.

At the high-end, for midsize and enterprise customers, Steve did a nice job talking about Office Enterprise, Windows Vista Enterprise, and the Enterprise CAL as the core things that we think we’ll try to license with our customers to really get new higher value products out into our customer’s hands. So the Enterprise CAL is really a critical way to sell a lot of these servers that you’re hearing us talk about, without having to sell individual CALs for each one of the servers.

Of course, we’ll be spending a tremendous amount of money and energy on our big launches of Vista and Office and Exchange and the customer campaigns that Alison talked about are really critical. Through the launch efforts we’re hoping to touch about 250,000 IT professionals, business decision-makers and technical decision-makers, and so participating in those launches with us is a wonderful opportunity for you.

In the middle of the slide you see that we’ll also have a small business PC campaign with Windows Vista and with Office talking to small businesses and why they should buy both of these products together. Traditionally, Office has been something that our hardware partners have attached to PC sales with some success, but we feel like we can do a much better job there.

So today, I’m very excited to announce a new program that we call the Office Ready PC program, which gives our indirect OEMs and our system builder partners a much better way to participate in attaching Office at the point of sale of their PC, and if they don’t attach at the point of sale, it gives them a chance to have the customer try Office on their PC pre-installed. And if the customer wants to buy it, they get a chance to participate in that after-PC purchase sales cycle. Today, about 50 percent of small businesses buy Office within 60 days after they buy a PC. So, that’s a lot of potential business that our system builder and indirect OEMs aren’t getting to participate in. Office Ready PC is designed just to make that happen. So, we’re very excited about that as well.

Now, how are the ways you can expand your business? Well, for many of you, it’s important to understand what the services opportunities are around the Office system. Steve did a nice job talking about some of the businesses that we’re entering here. You can see search, you can see data visualization, enterprise project management, portals and collaborations, unified communications, et cetera. We’ve done a lot of deep research with our subsidiaries around the world talking to people, partners, who have built businesses on Office 2003. And by working with IDC and a lot of our own internal research, what we’re seeing is there’s just a massive services opportunity around the Office system, about $148 billion in professional services in 2007.

The other thing this research taught us is that we have a huge capacity need for partners to increase their capacity in delivering solutions on the Office system, and that’s something that I’ll talk about a little bit more.

So, at the high level, the macroeconomics of the professional services are incredibly interesting. But a lot of partners, it’s more interesting to look at the microeconomics. What do these deals look like if I do a portal deal or a search deal or a BI deal? What are the properties of one of these deals?

Well, one of the things that we’ve found through this 18-month research project with over 20 countries around the world was that these Office solutions are often very rapid solutions that you can do very quickly and do many of them in one customer. And, they lead to a much, much bigger deal down the road.

We’re seeing partners who have built a business around, let’s say, the portal’s competency. It takes them about four months from when they decided to build the practice to get to their very first portal deal. So, it’s a relatively quick ramp.

Many of them are telling us that they’ll do literally 25 deals in six months inside one company. They’ll do a search solution in one group that will then lead to an enterprise content management solution in another group that’ll lead to a collaboration solution in another group. So, it’s a very quick turn, high velocity that leads to much, much bigger deals down the road.

These partners have told us that it takes them about ten months after they start one of these practices to get to break-even. The average deal size tends to be about a 20 to 40 percent net profit to the partner. And they get about a 500 percent return on the practice itself once they reach that two-year mark of the practice existing.

So, the microeconomics are very, very interesting here, and we think there’s a huge opportunity.

I’ve outlined some of the key opportunities at the bottom of this slide: search, collaborative workspaces, secure instant messaging, dashboards of Key Performance Indicators, integration with line of business systems, et cetera, et cetera. So, we’re very bullish on your ability to build a new business around all of these opportunities.

We showed you a demonstration of search earlier today. Search is one we’re very excited about. And we’re so excited that we’re announcing here at Worldwide Partner Conference a quick start for Microsoft Search where we’re inviting partners to go to quickstartmicrosoftsearch.com, sign up for this, and this is a place you can go to too get content, technical content and readiness material on becoming a search partner to do these types of implementations inside of organizations. We’ll have a case study contest, et cetera, but this is something you can do and do right now.

The other thing I wanted to mention was that when I talk about 20 percent capacity, we need a lot more capacity. Some of that capacity will come from our existing partners who are growing and trying to hire, but a lot of that capacity will come from many of the people in this room who are already great at doing Exchange solutions or already at doing Great Plains solutions or SQL Server solutions. And you can then add onto that Office SharePoint Server as Quest Software has done, you can add on SharePoint as DAC has done. They’re also adding on Office Performance Point Server, which is the Business Scorecard Manager product that we’ll be brining out in the next year to do higher end performance management. And you can see obviously SharePoint is something that is common across all of these partners. But if you’re already a Microsoft partner, you should take a hard look at Office to see how you can expand your business.

Just to sort of try to give you one added incentive, I’m going to ask all of you to take the Office 2007 challenge where if you achieve the IW competency before January 1st, we’ll give you technical betas and then free versions of the final product of Office SharePoint Server, Office Communications Server, Office Performance Point Server, Office Project Server and Office Live, which I’ll get a chance to talk about a lot more tomorrow. So this is a great incentive for you to take a look at that competency and get IW competent by the end of this year.

So to summarize, I really encourage you to look hard at the Office System. There’s a tremendous partner opportunity here. Achieve the information worker competency, go download beta 2 of the Office system, of Vista, of Exchange Server. Check out all of this readiness curriculum that we’ve built to get you ready to build new businesses here. Start building the solutions, and then help us amplify our launch, help us amplify our customer campaigns.

We’ll get a chance to talk in a lot more detail later on today at 3:00 when I go into detail through our IW value keynote. With that, I want to thank you very much for your time, and let’s go grow in businesses next year. Thank you. (Applause.)

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Microsoft Project Conference 2009

A transcript of remarks by Chris Caposella, Senior Vice President, Information Worker Product Management Group, speaking at the Microsoft Project Conference 2009, Phoenix, Ariz., Sept. 16, 2009.