Satya Nadella: Microsoft Worldwide Partner Conference 2006

Microsoft Worldwide Partner Conference 2006
Satya Nadella, Corporate Vice President, Microsoft Business Solutions
Boston, Massachusetts
July 12, 2006

ANNOUNCER: Ladies and gentlemen, please welcome Satya Nadella. (Applause.)

SATYA NADELLA: Good morning. Sanjay on his way out was kidding saying make sure that they notice the speaker changed. In case any of you are confused, we have changed speakers and we have changed topics.

I’m extremely pleased to have the opportunity to talk about business applications, Dynamics and the partner opportunity ahead of us. But before we dive into that, I first wanted to say a big thank you to all the Dynamics, CRM and ERP partners out there. (Cheers, applause.) We’ve had a fantastic year. It’s stellar in all dimensions. Since I’m a business application R&D guy, I happen to read all of the SOX compliance specs, so therefore I can’t talk more about the financial results just as yet, but it’s been a fantastic breakout year across all dimensions of license revenue across customer adds, and for CRM it’s just been the breakout year.

None of that would have been possible without really your commitment and your execution, so thank you very much, and we can look forward to another great year of performance with all the products and all of the work we are going to do together.

So with that, I want to sort of reflect on where we are going, what the opportunity looks like, and how we as an ecosystem together can really capitalize on it.

To understand the opportunity for business applications, the discussion centers around business productivity. The reason why people make purchase decisions around business applications is to drive business productivity.

And we have characterized the challenge ahead in terms of business productivity as the last mile of productivity. And the reason for that is to really understand the challenge of being able to connect what to date have been transactional systems with the world of personal productivity, information work and communications.

Enabling the People-Ready Business

And any discussion around business productivity has to start with people, because if you sort of really have to have the dialogue on business productivity, it’s people and their work that really drives the business productivity and software can amplify the impact of people.

And with that, you have to sort of talk and really understand how people work. So, when you think about how people make decisions, how they take actions, how they gain insight, and then make better decisions, that loop really involves being able to have seamless access to structured and unstructured information, to be able to use things like search across what to date have been islands of information that are locked within specific applications, to be able to be able to get business intelligence in the context of your day-to-day tasks and work and transactions, to be able to collaborate, to be able to allow you to through workflow when it comes to the work at hand. So these are the things that people do on a daily basis based on their roles, and their context in the organization.

So, we have to have a deep understanding in our software, in our methodologies for how we customize, how we deploy software, and really help connect the two worlds of process and productivity.

And, that’s really the vision behind People Ready Business. So, in other words, People Ready Business and the software we collectively will provide for People Ready Business is about connecting people to process.

So, that’s the larger context in which we can frame up the opportunity ahead.

Microsoft Dynamics Products

Now let me talk a little bit about Microsoft Dynamics. First of all, Microsoft Dynamics is a complete suite of applications that spans CRM, supply chain, financial management and human resources. These are integrated across the board, as well as you can sell many of these modules on a standalone basis within the given opportunity at a customer site.

The key thing to ask is, “What is different about Dynamics and our brand of business application?” There are four core technology themes that really differentiate us in terms of how we add value to customers.

The first one is about role-based productivity. We’ll talk a lot about it, I’ll have a chance to show you many demos in this context, but this, perhaps more than anything else, is central to how we think about our design when we build our products. But we also believe this is how we as an ecosystem can connect to really up-level the dialog of business applications around productivity within organizations.

We definitely build the roles-based productivity on top of a great penetration of Microsoft Office tools out there. In many cases already, Office is used for a business process, and we now want to be able to connect up Office with the full fidelity of the transactional systems and its data model and business logic so that you can truly drive up the role-based productivity, and do that such that you really are starting with an interface and a user experience that is familiar to people.

The next theme for us is around portals and collaboration. When you think about business applications, it’s a given that no work gets done in isolation. You want to be able to expose your business applications to customers, to partners using self-service portals to employees. You also want to be able to enable workflow in a rich way across your own enterprise and perhaps even between enterprises. And, this is where we get to build on top of the richness of SharePoint that you’ve heard a lot about during this conference.

SharePoint, especially with Office 2007, provides a set of services called the Office Business Application services that are tremendously powerful in being able to connect transactional systems and really expose portals and collaborations. And that allows us to fuel the next level of business productivity, which today unfortunately is locked up because of the fact that we do not have the transactional systems connected up with Office.

The next differentiator for us is business intelligence. If you sort of really look at historically business applications, one of the criticisms has been that it’s easy to enter information, transactions, but how do I get the ad hoc reporting, how do I get the information back, or how do I get analysis back and get that in context of my day-to-day activities, not some ex post analysis? And, this is where we take advantage of the capabilities of SQL Analysis Services, SQL Reporting Services, Office BI capabilities to really build out contextual BI and help the end users make confident decisions.

And lastly, it’s how do we really enable the customizations, the extensibility, the ISV applications, the vertical extensions, localizations? Because there is no such thing as a canonical business or a canonical business process. Business applications, at the end of the day, have to be deployed with customizations, and on top of it they change in time, because it’s not as if the business will stay constant. So having a very rich fabric of Web Services that allow you to use and environments like Visual Studio and .NET Framework to be able to build and innovate on top of Dynamics is another key differentiator for us, and that allows you to be able to make systems fit with each other.

So, these are the key attributes that not only characterize Dynamics today, but they also characterize the differentiations, and you can think of it as building already on the competencies that many of you in the room already have across the Microsoft stack, and for us to be able to bring it all together where the applications plus the stack really provide additional value to our customers.

The Business Applications Marketplace

We’ve had significant progress in terms of the releases over the last 15 to 18 months. We launched our roadmap, we publicly talked about our roadmap at our customer conference in March of ’05, at our Convergence conference, and ever since then we’ve had some fantastic releases out there in the marketplace.

Today, across our ERP and CRM product lines, so with CRM 3.0, with AX 4.0, with GP 9.0, SL 6.5 and NAV 4.0, we have some of the most competitive products and everything I talked about in terms of the features, the differentiating features, these releases embody them. So we can compete on everything I talked about today.

Based on this foundation of core attributes, products that are out there, shipping, we can now look to sort of really accelerate our growth. And just to really reflect on the performance to date, we announced the Microsoft Dynamics brand approximately six months ago. Our advertising has hit just this quarter. And, it’s really helping us change the perception of Microsoft in business applications. The leads are just starting to come in, in a major way. Some of the growth you’re seeing in CRM and ERP is reflective of it. And overall, we definitely have a lot of traction on the Microsoft brand and the Dynamics brand and Microsoft’s presence in business applications.

If you sort of talk about customers and happy customers as being very correlated to how much traction you have, we had our largest ever customer event called Convergence in Dallas in March. We had over 7,000 customers in attendance. I believe it is the third-largest Microsoft conference. It’s right after TechEd and WPC is our Microsoft Dynamics Customer Conference.

We’ve had a fantastic Q3. As I said, Q4 results will be out in perhaps three to four weeks. We had a great Q3. We had license revenue growth of around 28 percent to 29 percent. And we had overall growth also in the 21 percent range. So, we’ve had good traction in the marketplace with overall growth across the board.

With CRM, we added over 50,000 seats in the last reported quarter. And you can go ahead and compare that with the competition out there, and you’ll note that that’s something that’s really growing at a very fast rate in comparison to anybody out there as well.

So, good traction; so, now the question is, “What’s the partner opportunity ahead of us and how should we think about really taking Dynamics and helping partners build business around it?”

The first thing is Microsoft Dynamics helps you as partners have dialog with business decision makers, any dialog around Dynamics you’re having with CFOs, you’re having with VPs of marketing or sales or operations. So, I think of Microsoft Dynamics as a great vehicle for you to have a very business-relevant discussion around business process and business productivity.

And one way to frame that opportunity up is to talk about three ways you can drive business productivity. The first one is about approaching a business and talking about how you with your competencies, your software on top of Dynamics, can really enable an organization around this roles-based productivity.

Second is for you to be able to go into organizations and have the dialog about how you can take real-world business processes that span structured and unstructured worlds. For example, compliance, product design, marketing campaigns; all of these are examples of things that just don’t live in transactional systems or just don’t live in information worker tools. So these are business processes that span different stacks today, and you can go in with the platforms and the connections we are providing and talk about how you can solve their corporate governance issues or how you can help them get more efficient with their marketing campaigns or product design capabilities and collaborations.

And lastly, about vertical solutions: At the end of the day, people buy business systems to help them solve their core line of business issues. And, the core line of business issues are different by industry, different by every particular business in an industry. And so, vertical specialization is a key dimension of differentiation for partners and a key value-add on top of Dynamics.

So, these are three ways you can build solutions on top of Dynamics. And what I wanted to do is really give you a feel for how you can go about building this by showing you a set of demos.

Roles-Based Productivity

So, the first thing I want to do is talk about roles-based productivity. And, before I do that, I’ll just make a couple of points on the customer research that led us to this work. We were able to go in and observe people at work in great amounts of detail and collect profile information. So, we were able to take a look at order takers, accounts payable clerks, CEOs, CFOs, controllers and collect rich artifacts from their desktop, look at their e-mails, look at what they store in their manila folders, collect all of that information as a way for us to build out our engineering designs.

So, based on all of this customer research we did, we built out what we call the Dynamics Customer Model. This customer model has a couple of different dimensions to it. The first is the individual role. We have approximately 55 roles that we have this detailed profile information for. The second is the department they work in. We were able to collect the variations in organizational charts across five major departments, so we have approximately 20 to 25 organizational charts that we use when we think about our software. And lastly, we were able to build out the process diagrams that represent the work that happens across our systems. We have approximately 155 process areas that we’ve been able to detail out.

So this, what may seem like a fairly abstract customer model, is how our engineers take customer requirements and translate them into software designs.

So, for example, we take this customer model, and apply it on a daily basis to how we construct the user experience. Based on the role, we create the navigation metaphor. Based on the role, we infer the various processes that you are going to work with and thereby promote the activities and tasks. So this is a fairly real design approach for us, and we believe this is a methodology that we can extend out to our partner ecosystem, so we can take this and apply it to how you will approach the dialogue of role-based customization.

Dynamics NAV

So with that, let me go ahead and first show you Dynamics NAV. So, this is technology behind Dynamics NAV that’s going to ship in the first part of next year. So, I’m logged into here our Vista system. And, what you have here is a couple of gadgets that I was able to build to query a Web Service I’ve exposed. So I have, for example — and I’m logged in as an order entry clerk here, so I can look at the account discount or the average discounts that are being given, and if it sort of reaches alarming rates I can go in and then look at that. I can also look at my delayed orders. So, this is a way for you to use the native capabilities of Vista and interact with your business systems and get alerts right onto the desk top.

So, I’ll go ahead and open up my Dynamics clients. And a couple of things you’ll notice. First, it’s a very clean interface that exploits the advances in user experience. You’ll see that it inherits all of the Vista glass and look and feel. The navigation is personalized for the specific role. Since I am logged in as an order taker, I don’t get the full menu and the full navigation, but I have the ability to go to sales orders, sales codes, customers, delayed customers, the things that I work on, on a daily basis.

Also, since we want to minimize the number of distractions, the switches between applications, if you’re an order taker, you know that it’s a very transactional app that you really want and your work is very transactional. We now allow you to be able to compose information from other sources, in this case Microsoft Outlook, and bring that into the context of your Dynamics clients, because you still have your tasks in Outlook. You still have your calendar in Outlook, and you can now get that right here in the homepage. So, if I wanted to take a look at a specific task in Outlook, I can go ahead and bring it. And, this is Office 2007 Outlook, if you will, right access from within Dynamics.

You also have the SQL services report here. So, this is a report that was created using SQL Server Reporting Services. And I wanted to be able to sort of track this as an order taker on a daily basis, so I was able to put this user part right here on my homepage.

I have the top 10 customers I deal with right here again. This is information that’s coming from within my Dynamics system.

On top of that I have my tasks. They are grouped by activities. And we’re taking advantage of a couple of visual metaphors that are getting popular based on Vista. Stacks: So stacks are a good way for you to think about prioritizing work and also representing work. So in this case my tasks or my activities are around new codes or expiring codes or about delayed orders or returns or what have you. So just by looking at the stacks I know where I need to be working. We are also superimposing queues from business intelligence and alerts. So, in this case, it shows me that there are some issues around expiring quotes as well as delayed orders.

So, we’re really bringing together information from a variety of different sources, as well as we are able to compose your tasks into activity groups and bring contextual BI.

So, let’s go ahead and take a look at my delayed orders. And you’ll notice now that I’m in a list. We are exploiting the advances of Office 2007 command presentation. So, here is a ribbon that’s been adapted for business applications, so same concepts. So, you’re on a list, you’re working on a list and you want to take action. You can go up the command presentation. And, in this case, since it’s a delayed order, maybe you want to generate a new code. You want to probably post the order or what have you. These are activities or these are tasks that you want to take on the list, and they’re right there in the ribbon associated with that list. I can go ahead and even take this and export it to Word, write a letter, send it in e-mail or what have you.

The other nice feature here is the Breadcrumb Bar. The idea of in business applications you’re constantly drilling down or drilling around tons of information, and as you do that you want to be able to traverse back and forth in a very rich way and a very rapid way. So in this case, for example, I effectively use the Breadcrumb Bar not only as a way to traverse back, if I wanted to, but also as my navigational queue. So, for example, I can look at all the choices at any given point in the Breadcrumb Bar as a way to look at what other choices in the tree I could have taken or what other paths I could have taken.

So, this gives you a feel for how we’re using some of the advances across Vista with stacks, Office 2007 with the ribbons, as well as the Breadcrumb Bar to really enhance the end-user experience of business applications.

So, the next I want to do is open up one of the forms. And, this is one of the delayed orders. And what it shows you here is a form with multiple sections. So, you have the order header. I can go ahead and collapse the order header. I can work on the lines. I can open up shipping. The other piece is you have additional parts you can compose. So for example, in this case, you have credit information that is a part maybe you have written or an ISV has written that is correlated to the specific form. So, as I am traversing through the customer record, I can have their credit information right there, item information right there. So it again shows you the richness of forms, lists, command presentation and navigations within business applications.

If I go back to my customer list, it shows you again a very standard list with some customizations you have done.

And I have created another customization here, which has a couple of different things. First, you as a partner or an ISV perhaps building a field service application could have changed the data model, added a new field called routing number. That will show up right in our experience. You may have added a new entity to calculate credit scores. That shows up in our experience. You may even have done a customization where you call into Windows Live Local to be able to get at the maps by customer so you can traverse the various customers and look at the location information. All of these customizations get applied based on their policies, and we have a runtime environment and a tools environment that supports this end-way customization and upgradeability.

So, this is some of the technology that we provide out-of-the-box to be able to allow really the construction of rich, roles-based experiences.

So, what I want to show you is how one can take something like this and build out even a richer vertical scenario. In this case, it’s again a very similar application, but a very specific vertical app, built for property managers. So in this case, if you’re a real estate property manager, you want to deal with your vacant property, available property and occupied properties on a regular basis. Those are your core activities. So, if I want to go ahead and look at my vacant properties, it automatically shows you the specific tasks in this activity that you are focusing on.

In this case, I’ve already inspected my vacant property, I’ve repaired it, I’ve cleaned it, but I need to price it. So, if I go ahead and click price, it takes me to the next screen, where I can now look at different pieces of information. I can look at the pictures of the property. I can look at the floor plan. I have all the documents from a document library in SharePoint again here. So, all of the related information is captured, if you will, in this screen.

And now to set price, I can go ahead and hit “Set Price”, and instead of saying, “Go ahead and enter a number,” you can provide a lot more conceptual help and business intelligence. And in this case, what we are doing is adding RSS feeds, a Web Service taking advantage of Web Service feeds from publicly available real estate data to help you set price. So for example, I can have information from or Expo Live or Craig’s List or I can go ahead and add additional fields and superimpose that on top of a Windows Live Local map and look at the various price ranges within the area that I am pricing my property on. So, I can go ahead and zoom in and I can pan. I can go ahead and change, if you will, the market, the area that I’m panning to be able to set price from a block level to the street level and what have you.

So, this gives you a feel for how you as partners can take advantage of the Dynamics platform and the various technologies around it to create these very immersive, roles-based experiences by vertical.

Connecting Systems: Dynamics Snap

The next thing I want to show you is that not only can you build these all-inclusive, rich, immersive experience on top of Dynamics, but you can also make Office super productive in the context of business transactions. So, for example, we have launched something called Dynamics Snap that builds on top of the Office business applications services to really allow you to connect to transactional systems without leaving the natural environment of Office for day-to-day transactions. So, the first thing we built was a vacation scheduler. So, you’re in Outlook, you have already entered your vacation schedule. You can go ahead and commit this back to your back office so that the right deductions happen in the payroll or what have you, and you don’t have to go back into some portal page and enter this information again.

Second, we even added timesheets. So similar concept, you’re on the road, you’re entering your information about how you interact with your customers, how you enter the time spent, the billable hours, and you can go ahead and again commit all of this from Outlook directly back into your Dynamics back office.

The third thing we’ve added is, in many cases, you’re writing business documents, customer letters, partner letters, where you’re referencing rich business information. So for example, you get a customer inquiry on a delayed order, you want to be able to respond to that delayed order, you want to reference the specific order or the line item; you don’t have to go copy, paste, log into a different application and so on, but you can query the entire data model, and get at all the entities of your business application in the task pane of Word or Excel or Outlook and really reference it in your documents.

The last thing is if you are going offline and you want to be able to take a business entity, you are going on a field service call, and you want to be able to take a 360-degree view of a customer with you on that field service call, you can go ahead and extract that using this InfoPath form, and then take that offline, come back and then journal the transactions back to your Dynamics system.

So, these are Dynamics Snap applications that we built out, and we have put them up on gotdotnet and released source to the community. We think that this is another great opportunity for partners to go in and take a look at our source, for you to be able to build out additional Snaps, which really mash up Office and Dynamics for specific transactions, for specific roles and specific industries.

So the combination of what I showed in the Dynamics clients with what’s coming next year, the customizations for a specific retail vertical or the property management vertical, as well as what you can do on top of the Office extensibility framework, gives you a way for you to sort of really think about roles-based productivity.

Managing Business Processes

So then I want to move to the next opportunity, which is about real world business processes. As I said, the best way to conceptualize the real world business processes is to think about all of the places where you have a real need to bring both the structured and the unstructured systems. Marketing campaign information perhaps is in a CRM system, but we know that the campaigns themselves involve a lot of collaboration across the marketing departments and the creative departments, so therefore you want to be able to bring perhaps SharePoint and CRM together.

Same thing with product design; if you are doing product design, you want to be able to collaborate on engineering drawing, on production schedules and what have you. And that again involves you to bring transactional systems as well as information, work and tools.

Corporate governance is perhaps the place where this really is best anchored. It’s a top-of-mind issue for all business decision makers out there. It is about process, it’s about people, it’s about the auditability of the system, the documentation of the system. And it’s got global relevance. So we want you to think about governance as something that applies to publicly traded companies in the United States; it clearly applies across the world, it has downstream implications even if you’re not a publicly traded company. And by definition, it spans structured and unstructured.

So let me kind of give you a feel for how you can use, in fact, the power of Microsoft Dynamics plus Microsoft Office, SharePoint to build out some corporate governance solutions.

So, I’m logged in here as a controller into my Dynamics portal, which is completely natively hosted on top of SharePoint, and right off the bat you’ll see that I have all the document libraries related to corporate governance, so my policies around workflows, my vendor management policies, my Sarbanes-Oxley compliance, my financial integrity documents, all of these are available here. I also have pieces of information that are coming from within my business application. In this case I have the vendor profile. I even have the purchase orders.

So if I wanted to take a look at one of the documents, I can go ahead and look at my purchase order workflow process. And as you know, with compliance, you need to be able to document how your software works. In this case, this is a Windows Workflow Foundation process diagram that actually is used by us to approve purchase orders, but it’s now documented for you to be able to be compliant. I can go ahead and take a look at that. And then when I get back here, I can go ahead and look at the purchase order. And the task at hand is for me to approve this purchase order for $90,000. But before I go do that, I want to make sure that a contract exists, because that’s one of our compliance rules. And I can go ahead and type in the purchase order number and click here, and I get a results set back which includes the document, which is a contract, but also the transactions that we have exposed.

So here is where we have exposed the Business Data Catalog service from within Dynamics, so you can now crawl the Dynamics transaction store and get result sets which are both transactions and documents right here.

And so now let me go back and I’ll go and open this document. I’ll make sure that the right signatures exist before I go ahead and approve this. I’ll close that down and then I’ll go back to my homepage.

And now I’m ready to approve it. So I go ahead and go to actions and hit verify, and at this point it asks me to make sure that I’ve seen the contract that’s been signed. I can go ahead and say yes, and at this point I’m ready to go ahead and hit approve.

So this is a good way for you to see how you can use the power of SharePoint, its workflow capabilities, its capability to compose unstructured and structured information and for us to be able to expose all the Dynamics data using the Business Data Catalog for you to really build out the controller dashboard.

The next thing I want to show is that not only is compliance something that the controller cares about but you really want to be able to collect evidence across all transaction types, across all roles. So compliance is something that we have instrumented across the entire application.

In this case if I’m a purchasing manager using Dynamics, I want to change the priority order of the payment. So suppose I want to go ahead and change the payment priority, and I’ve changed it to one; I now collect the signatures before I can commit it. And this is something that will get journal and this is something that’s auditable. So this is a good way for us to show you how we’re instrumenting the support for corporate governance not only by taking advantage of SharePoint and building out the dashboard that I showed you, but also how it’s part of the everyday transactions within Dynamics.

Building Vertical Solutions with CRM Live

The next thing I want to talk about is vertical solutions. The real estate example I gave you was a way for you to take a role-based experience and customize it for a specific task. But it’s not just specific tasks at the user experience level, but there is great amounts of business logic and business process that’s vertical specific.

And so what I want to show you is a vertical solution that is built by one of our partners. I want to go back. Data Reduction Systems, and Data Reduction Systems was founded in 1985 and they have expertise in data retrieval and archival and specific expertise and vertical expertise in specialization in the pharmaceutical industry. They have built solutions that take what has to date been paper-based solutions and moved it to an online world. They use a variety of different devices, both Windows Mobile, Tablet PCs as well as PC.

And perhaps one of the most interesting things that they’ve done is that their solution today is available as a software as a service model. So they were able to team up with another partner called Streamline Solutions and take their pharmacy application and provide it as a software as a service or a live deployment. All of this was built on top of Dynamic CRM, and yesterday in Steve’s presentation you saw a great demonstration of what we’re going to do with CRM Live. But here is an instance of CRM Live through a partner for a specific virtual context that we are ready to do, if you will.

And to give you a better feel what the solution is and how it got built I want to introduce Marc Chester who is the Vice President for Business Development at Data Reduction Systems, and I would like to invite him up on stage. Hi, Marc. (Applause.)

MARC CHESTER: Hello, Satya.

You know, Satya, I thought it would be a good idea maybe before we jump into our demonstration here to give you a kind of a feel for my fellow partners here for what this is all about. You know, we’ve all gone to the doctor and received samples from the practitioner when we visited the doctor. How did those samples get there? Well a sales representative working for a pharmaceutical company left those samples. And it’s interesting, you’re talking about compliance and corporate governance, and there’s a whole set of federal regulations that go into monitoring this sample movement.

So ultimately what we built is an application called PharmaSync running on mobile devices. And what’s neat about that is we can replace paper, mobilize the applications and make sure ultimately that the sales representative is doing everything to meet corporate governance, to meet the letter of the law.

What’s also important to note is that when we’re doing data collection, it has to go through a validated system, key obviously for this environment.

And one of the things though I’d like to show you is that we’ve taken this data, we can then push it up into CRM, into Dynamics CRM, and what we’ve done is we feel that we’ve really reached out and created a great environment, a single environment experience for the user to really take advantage of.

So traditionally if I’m using paper form, for example, and even if I’m using an SFA tool, I have to sit down at the end of the day and data enter in all that information. Now I don’t think you’d like to do that and think of it, if you made eight or ten calls during the day, that’s a lot of data entry.

So ultimately we’re going to take this data and pretty much real-time or in near time, push it into Dynamics CRM so when the representative logs on at the end of the day all their activity is there.

So what I’d like to show you is some of the custom entities and objects that we built into CRM here. So we start out with something called practitioners. If you think of in a normal CRM engagement or even the way you and I might use Outlook today, for example, everything is either accounts or contact based. Well the world is a little bit different in the pharmaceutical world that I don’t have accounts that I’m calling on. I’m not calling on ABC company, I’m calling on Dr. John Smith and I’m going to leave samples with him and I want to monitor that.

So again this shows you the customization or the ability for us to customize and put custom entities and objects into Dynamics CRM.

We’ve taken it a little bit further that again I mentioned earlier about systems being validated, we also have to lock down sort of thing, again another great feature within Dynamic CRM that as you see here I log on as a representative. I can’t change any of this information, it’s grayed out. And that’s really important because pharmaceutical companies pay a lot of money for this information. Plus it’s important that when I’m making a call on you as a practitioner, you’re licensed in the state of where I’m leaving those samples.

One of the neat things though, again, showing you some of the great abilities of CRM, Dynamics CRM and the things that we can put in here, we can put mash-ups in here.

For example, I can call up a doctor and say, “Where is this practitioner located?” Even better, if I’m doing advance call planning, I can actually start mapping out where I’m going to go that day and what are the practitioners I’m going to see.

What I’d like to do now is even take you into another custom object that we put in here called PharmaCalls. And while I was sitting backstage, and not that your speech wasn’t wonderful, I actually made a call on my device, and then I synchronized. And so here’s the call that I made backstage on my Smartphone. And this is a high level, if you will, of all the details from that call. But I can also with a mash-up show you a rendering of the form that was displayed on the device. And another important aspect of this: I captured a signature – a key component of this whole process is that I need signatures because I need to prove that not only did I leave those samples from a sales perspective, but from a federal governance perspective that I captured a signature. So that’s a great feature that we have within Dynamic CRM.

Now, I mentioned earlier as well as you did that this has traditionally been a paper-based application. What we have provided this paper as a backup mechanism for all of our customers today because my device goes down or in my case I actually lost my device. When you do lose your device, what are you going to do? So you pull out a piece of paper and fill out a form. If certain items are missing from that form what’s going to happen ultimately is that they need to be corrected.

So what we’ve actually built into here is something called My Rejects. So as a sales representative, once again you can log onto the system and you’re in this single environment user experience. You can see the forms that have errors, what are the errors on the form, and then ultimately I’m displaying the paper form for the representative to go ahead and take a look at that and say, “Okay these are the corrections I need to make”, make those corrections, log out of the system.

SATYA NADELLA: And what I’m using here is a live service?

MARC CHESTER: Yes we’re pulling this right now again is a mash up. It’s a great point. We’re pulling this in from multiple servers but again the user doesn’t know that. They’re all within CRM. It’s a great experience for them.

And then if I could just quickly show you one of the other features we love about this is the RSS feeds. And the fact of the matter is that so many managers have, let’s say, responsibility for 50, 100, 150 sales representatives. They’re not going to go on and deep dive into CRM and see what’s going on out in the field. But using an RSS viewer. they can aggregate all this information and pretty much look at it real-time as it’s happening in the field so it’s a great tool for us.

SATYA NADELLA: Fantastic, thank you very much, Marc.

MARC CHESTER: Thank you, Satya. (Applause.)

SATYA NADELLA: So that was a great example of how you can take Dynamics, in this case Dynamics CRM, build out a vertical solution, partner with perhaps an ASP partner, and offer up that solution as a software as a service deployment option.

So this is something that is real today and we believe that something that across CRM and ERP for vertical ISVs and vertical solution partners is a great way to think about their business going forward.

The Opportunity for Industry Partners

The next sort of section I want to spend time on is the business opportunity. So now that we’ve seen how you can build roles-based experiences, how you can think about solving real world business issues like corporate governance, as well as the vertical solutions, what’s the opportunity?

First, as I said earlier, Dynamics opens the doors for dialogue with business decision makers. Having opened the door, you can decide about whether you want to build a Dynamics practice or you can partner up or connect with an existing Dynamics partner. In many cases, if you already have business intelligence or BizTalk or Office SharePoint or SQL expertise, you already are in a great shape and great position to be able to pick up Dynamics and Dynamic CRM.

But in case you want to be able to partner you can do that as well.

So I wanted to give you a very quick feel for how the business opportunity looks like on both these models. The first one is if you build, and I want to use the case study of Iteration2, who is one of our sort of top partners, they started out by the principles of this company had significant expertise and experience in tier one companies and business systems, they had enterprise expertise, so they were able to bring all of that knowledge to bear on Dynamics, take Dynamics where it fit very well in certain vertical areas, and focus locally.

So the first year, or in the first couple of quarters, was all about being able to focus on building a customer base in the Southern California region where they’re based, on top of the verticals that Dynamics was already a great fit for and their expertise was something that was very relevant.

Out of that they built the next level or depth on specific verticals. Since the growing market in Southern California is a rich opportunity, field service, construction, they were able to go ahead and get more specialized in those areas, and expand out regionally.

The step after that was they took the field service solution and effectively made it an ISV solution. So now that’s part of our Industry Builder initiative, and they themselves are building a two-tier channel to be able to take their intellectual property and take that out to the broader market.

So that gives you a feel for how you as a partner can look to extend perhaps a lot of the competencies you have, maybe with other ERP systems, maybe in business intelligence and other areas, and really look to build out a Dynamics practice, and in the case of Iteration2 they have had six straight quarters of profitability given the scale model that they took, if you will.

The next example I want to give you is of two partners, HSO and Sylis from the Netherlands. The interesting part of this story is that HSO and Sylis, the principles of these companies actually met at WPC last year in Minneapolis. They went back to the Netherlands, talked further. HSO had a Dynamics practice. Sylis already was doing a lot of work with Microsoft SharePoint and Microsoft Office. They realized that they had a joint customer called (Dystil ?) Construction Manufacturing in the Netherlands and they wanted to go in with a joint bid. They realized that (Dystil ?) was about to make, stat an RFP process to replace their antiquated ERP system. And HSO and Sylis partnered up and put a joint bid for that opportunity, and they did this with recognizing that any individual bid perhaps wouldn’t have won it but the strength they brought together as a team was something that they thought as powerful and they won the deal. It generated significant revenue for the Dynamics side as well as on the SharePoint. It helped with the EA renewal and what have you.

So this is a great story of how two partners with different competencies can partner up, if you will, in the context of the business challenge and the business problem.

The next thing I want to very briefly touch on is we are going to invest very heavily to generate demand. I already talked about the new Dynamics campaign. The People Ready campaign that we have launched perhaps resonates very well for any Dynamics prospect, because at the end of that day Dynamics speaks to the heart of what People Ready is, which is about connecting people to processes. On top of that we have our own advertising and that campaign that has gotten and started, and we’re gaining great traction.

Later this afternoon, Tami Reller has a keynote where she will talk a lot more about in detail the packaging, the pricing changes that we are making to make our offers even more attractive. And more specifically we are bringing our packaging of CRM and ERP together with a user-based pricing model which we think is going to be very attractive and very competitive in the marketplace.

Our roadmap is exactly the same that we announced in March of ’05 at our Convergence conference. I talked about all the product releases that we have already done and the fact that we have a competitive set of products out there today that embody all the differentiating features I talked about. Going forward you saw how what we’re doing with CRM, with CRM, the Titan release where we will have a live offering as well as an on-premise product providing choice.

All our ERP products will have major upgrades in ’08, called the wave two upgrades where we will go deeper in terms of the roles-based experience, the process capabilities, the Web Service capabilities and a very native Visual Studio development environment around them.

So this is something that we can look forward to and our promise to our customers is that any product of ours that you buy today you’ll get upgrade releases with these technology advances on a very predictable way, and you should measure us by each release that we get out there.

There are a variety of sessions out there for you to be able to learn more about Dynamics, in particular Tami Reller’s session later on this afternoon is one I would encourage you to go, and again to get a lot more depth about the specific Dynamic initiatives in the next fiscal year.

So let me close by saying that Microsoft Dynamics is all about being able to really make People Ready business. It’s about being able to connect people to business process. It’s about our software. It’s about your competency, your software, your methodology. So, in closing, we have great products, great traction. Let’s go out there and make People Ready business real. Thank you very much. (Applause.)

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