Steve Ballmer: “A New Day for Business” Launch Event

Remarks by Steve Ballmer, CEO, Microsoft Corporation
“A New Day for Business” Launch Event
NASDAQ MarketSite
New York, NY
November 30, 2006

STEVE BALLMER: Well, thanks. It’s an honor and privilege to have a chance to be here, and I want to thank all of you for taking the time. I probably should say, it’s an exciting thing to finally be here, and that’s probably all I’ll say about the past, but we couldn’t be more excited to be doing this launch, this introduction of by far, I would say, the largest wave of products we’ve ever kicked off, and all anchored around the most significant releases that maybe we’ve ever done, and certainly we’ve done since 1995 of our two flagship products, Microsoft Windows, the Windows Vista release, and Microsoft Office 2007. Each of these products sort of, if you will, finds new ground in a variety of ways. Today we’re kicking off what we call the Business Launch of these products. They’ll be available to consumers at the end of January. We’ll come back and launch them for the consumer audience. And, frankly, today we’re going to talk some about the basic core products, but we’re not going to talk about everything that’s in these two products, because as we come back at the end of January, we’ll talk to you more about some of the things that we’re doing with software developers, some of the things that we’re doing in the consumer market, and we’re really going to focus today on kind of the basic meat of these products, and all of the many additional products that we’re bringing to market around Windows Vista and Office 2007.

This is the biggest launch in our company’s history, that’s for sure, and, frankly, I think these are the two most significant releases we’ve ever done of these flagship products in terms of the depth and breadth of functionality that’s built in, the new scenarios that get enabled, both today, as I’ll talk about on the business side, but in the consumer side as well, as we move forward.

We started in some senses with a worldview about what’s going on in business. And as I talk about Vista, and we talk about Office 2007 in this context, it’s probably important for you to understand kind of where the motivations were coming from, what were we thinking were the key things that customers were trying to get done and, therefore, what were the key trends we needed to really factor in.

Certainly the world is changing. Organizations are far more transparent, if you will, and distributed than ever before. It’s hard to decide kind of where a supply chain ends, and where a company begins. Companies are more physically distributed than they’ve ever been before. And IT and certainly what we do with information needs to extend across company boundaries and across geography in a variety of new ways. People suffer from information overload, there’s no question about that. When you do the kinds of panels that we do with end users, particularly business end users, the amount of information that people feel flooding over them, e-mails, voice mails, IMs, news feeds, alias distribution, there’s certainly a number of factors. And people are saying, look, we want to be in control of our information, we want to be in control of our lives, and we really want to be able to work with this stuff flexibly and fluidly with everybody we see around the world.

We talk about a concept that we call the People-Ready business. People-Ready business is really, in our mind, a business that recognizes very much that people are its number one asset and say, how do we give people the tools they need to deal with the issues, and to accomplish the goals of the organization. Everybody in most companies benefits by having proper tools, and proper access to information to make better decisions. One of our lead customers for Windows Vista and Office 2007 is the oldest bank in the world, Monte dei Paschi di Siena Bank, they claim they banked Christopher Columbus before he came to America. I don’t know, can’t tell you. But I was with the CEO, and he was explaining to me exactly how, even in their branch environment today, arming the teller, if you will, with better information is a job one priority. And I asked why is that, he said, well, as we’ve moved to call centers and ATM and Internet banking, we’ve taken all of the simple transactions out of the branch. So now when somebody really walks into our branch, our people have to be prepared to handle complex customer service issues. Our people have to be armed with the right information to upsell those people exactly the right product. And in the People-Ready business, and in the environment of information overload, and more transparent organizations, giving people better tools to do their job is a bigger deal, I would say, today than ever before.

And so as we’ve focused in on Office 2007, and what we’re doing with Windows Vista and the wave of products around them, our focus has been on how do we simplify how people work together across the world, across organizations. How do we make it easier for people to find the information and improve the insight that they get to take action to reduce costs, sell more product, provide better customer service, design new products. In this world of Sarbanes-Oxley, and increased regulatory issues, how do we help people better protect and manage information, particularly in a world in which company boundaries are much less secure, so to speak, from an information perspective, managing information and content is more important today than ever before. And, of course, there’s the constant pressure in business to reduce IT cost and improve security. And those are, if you will, the pillars, I would say, of the People-Ready business, but also the design pillars that we had in mind from a business customer perspective as we built Windows Vista and Office 2007, and the whole set of products that we will roll out starting today.

So with this really as kind of the core proposition, four pillars, People-Ready business, how does the launch come together? Start with upgrades to the basic products, Microsoft Windows and Office. At the end of the day, we have to start with the notion that every version of Windows and every version of Office has to make end users more personally productive. We have to improve the end-user experience. That’s a consumer phenomenon, that’s a business phenomenon. That’s everyplace. That is not restricted to the business customer.

At the end of the day the first experience that everybody in this room, and most people have with these products isn’t going to be necessarily all of the new business value for the People-Ready business. You’re going to sit down and say, how do I like these products. Does the UI make me more productive? Can I get more done? Are there features here that help me do things that I care about in my personal life? So in a sense, if you just evaluate how good are these upgrades as basic personal productivity tools of Windows and Office, I think they’re phenomenal, and we’re going to have a chance to show you that and talk about that a little bit more. A lot of the dialogue, if you will, that we’ve had with folks has been primarily on that issue.

In fact, if I kind of read press coverage, investor coverage, a lot of the discussion sort of begins and ends with that point, and people miss the fact that there’s this depth of other innovation that’s coming on the back of and enabled by Windows Vista and Office 2007. We have upgrades to our flagship server product, our SharePoint Server for collaboration, our Exchange Server for e-mail and communication. Both of those products get upgraded. We’re not changing Windows Mobile at this time, but we think about it as another core part of the user experience and the personal productivity environment, certainly for people who work we think of it as a very important part of their overall now experience with the Microsoft family of products.

In that framework, though, there’s a bunch of additional innovation beyond the upgrades to the flagship products. We have new enterprise versions of both Microsoft Windows and of Microsoft Office, Vista Enterprise and Office 2007 Enterprise, with new capabilities that customer can choose. Some customers will remain with our business version of Windows, the so-called “pro” version, some people will choose the additional capability that you get in our enterprise version.

We also have enterprise versions of the new server products. So there’s a set of new enterprise services for Exchange, and a set of new enterprise services for Microsoft SharePoint, but in addition we have a whole set of new applications, clients and servers, that we’re also bringing to market, many of them today and the rest of them over the course of the next year, that are all enabled by the core innovation in Windows Vista and Office 2007. When all is said and done, and I’ll go through this at the end, there are about 30-plus new products that will come to market for business customers as a result of this wave of innovation. They’ll come in a variety of forms, and I’ll touch on that again later.

Since it really does, if you will, all start with the user experience, at the end of the day people are going to look at the new Windows, they’re going to look at the new Office and they’re going to decide, as I said, does this make me personally more productive. If they do, people will say come on to their companies, let’s go, let’s move. The companies will simultaneously be evaluating the value that we bring in communication and business intelligence, and security, and content management, and we think that’s what creates the demand. Businesses have to pull and users and consumers have to pull, and it all starts with the basic end user experience with Microsoft Windows, and Microsoft Office, which I think has been dramatically upgraded.

To have a chance to share that with you, and show it to you, I’d like to welcome on stage with me Julie Larson-Green. Julie is a vice president who led the design team for the new user interface in Microsoft Office. She’s recently moved over to the Windows team, where she’ll be leading end-user design and overall specification for new Windows releases, but Julie led the effort and she’s going to show it to you in its best light. Please welcome Julie. (Applause.)

JULIE LARSON-GREEN: I am super excited to be here to show you what we’ve done with Windows and Office. More user data and customer information has gone into building these products than any other products ever before. We’ve had billions of sessions of data from the customer experience improvement program in Office that went into coming up with the design, and really made us confident with our 5 million beta users, that this is something that’s really going to make people more productive, and let them get at the information they need to do their jobs much quicker.

So here we are on the Vista desktop, and on the right-hand side you see the Windows Vista sidebar. The sidebar is just one of the ways you can get to the information that you need to do your job more quickly. So if you go in and add things to the sidebar, like calculator, it’s always right there in your fingertips, to get access to doing calculations or anything like that. You can add weather, all kinds of other kinds of objects to it that help you get to the information and data that you use frequently, and reduce the number of clicks it takes to get there. It’s also a developer opportunity to create new things that people want to see at a glance.

Down here is the new Start menu, it makes it much easier to go and find the programs that you’re looking for to launch. Instead in the past you had to go out and fall of the end of that fly-out menu, but here you just click, and it stays all in place, and you can scroll back and forth. But, the big way that you’re going information and data is with search.

So here I’m going to type in the word “sales,” and it’s going to show me everything that contains the word “sales”: mail messages, documents, programs, et cetera. I’ll go to see all the search results, and I can continue drilling into search results from here. I can type more qualifiers on the search. I can search by author. I can sort by folder, by document type, or by the date modified. So I go into date modified, I get the calendar view, and I can zoom out, and into even different years, then back in, go to this month, go to see everything I did yesterday, and it’s filtering in the background to help me get to that information much more quickly.

Now, search isn’t the only way to get to the data that you want to use, you can also browse for it. So in documents, pictures, music, and games you can go in and browse for the information that you’re looking for, and here we help you by allowing the search in the same place, you’re going to find search throughout the system, you can drill down into different folders, and use the breadcrumb bar up at the top to get back to the different places that you want to go, and see the full tree of where all your information is. You can also use the live icons and live preview to make sure that the document is exactly the one you want to get to, without opening the document in the application.

Of course, you can type in and either click to launch your applications, or you can just type – for the less frequently used things you can type in the name of the application and bring it up. So here we are in Microsoft Office, and across the top we have what we call the ribbon. It shows you the big parts of the program, so page layout, references, mailing, review. It’s one place to go to find all the formatting functionality, all the authoring functionality in the application. Underneath the Office button is a place you go to do things with your documents. The different ways you can print it, how you prepare it to share with others, how you enter into business processes is all right here underneath the Office menu.

Let me go ahead and open a document, in file open you see the same view that you saw in the document explorer that helps me to search for the things I’m looking for, and make sure that it’s the file that I want to open right before I open it. So I’ll go ahead and click this open. Here on the home tab it has over 90 percent of the things that you do on a regular basis to your documents, and using that Customer Experience Improvement Program data, we were able to make sure that these are the common things that you use, and it should look very familiar to you, and make it easy to make the transition. So it’s very similar to the standard and formatting toolbars that you see today in Office 2003.

I’m going to select some text, go up and it works just like you’d expect, but then you start seeing the live preview giving you an idea of what things are going to look like before you do it. You’re going to find that all over the system. In fact, with styles, it’s much easier to experiment and make sure it’s exactly what you want it to be before you do it. It makes it very easy to create a great looking document to help convey the information that you want much more easily to your audience.

A lot of people put pictures in their documents. So I’m going to and insert a picture, give you another example. So as soon as I include the picture, all the tools for working with a picture come up. And this is what it comes up with in 2003, not really how you want it to look in your document. And a lot of times in the Customer Experience Improvement Program data we would see people undo at this point, and then try it again, and then undo it again. And so we wanted to make it much easier to work with the objects that are in your document, and that takes the guesswork out of going into the dialogs and figuring out how to do the text drop to get it to go where you want. So we just visually show you where it’s going to go, and then when you decide where you want it, you just click, and there you go. And so you just spend most of your time formatting just by visually looking over how you want it to look.

Let’s go into Outlook, and I’ll show you what we’ve done there.

STEVE BALLMER: I saw a very good sign, by the way, one of the photographers nodded at the functionality around pictures. I consider that good feedback.

JULIE LARSON-GREEN: Good. So here we are in Outlook, and it’s the place to go to find all the information that you want to work with. When you use a mail message, or create a mail message, you get the authoring environment for creating a mail message using the ribbon. Across the top it has all the commands available to you for creating a mail message, exposing them much more, and letting you see all the different things that you can do to it, and the full power of Word as your authoring surface.

I’m going to go and go back to the Outlook shell, and in the Outlook shell search is also very important here, and it uses the same technology as the Vista search to make it really easy. I’m going to type in “sales,” like I did before, and it’s going to highlight for me everything that’s sales, and I’m going to open up a mail message here from Willis, and it looks like he wants me to meet with him tomorrow. So I’m going to go ahead and flag this as something I need to do, and it’s going to add to my to-do bar on the right-hand side. And the concept here is very similar to the sidebar for Windows Vista where it shows you at a glance the information that you need throughout the day. So instead of having to flip to your calendar more frequently, you can just see what your upcoming appointments are very easily.

I’m going to go into my calendar view for today, and you can see that the tasks that I need to work on are on my calendar, and since he wanted to meet tomorrow, I can go ahead and drag it up here, and schedule a meeting with him for tomorrow for my task.

Now, I’m going to go back and look for a PowerPoint presentation that I need to do some editing on. So here is from Jared, my e-mail, and I’ll just check real quick with Live Preview to make sure that’s the one that I want. Yes, that looks like the one we need to edit. So I’ll go ahead and open that, and here’s the ribbon in PowerPoint. And the big things that you see across the top are design, animations, slide are the big parts of PowerPoint, they’re unique to PowerPoint. Here I go back to home, which is the place I’m going to spend the most of my time, and I click on the second slide, and I’m going to show you some features that were made possible by the new user experience.

In the past, this would have been a very difficult feature to do. So the new UI isn’t just about rearranging old commands and making them easier, it also enables us to do new features in new ways that are more accessible to customers. So here I’m going to go turn this into a diagram. I’m mousing over, I can see all the different ways that I can make this list, select that one there. And, again, I get the tools for editing the diagram once I insert the diagram. So it makes it very easy for me to customize this. I can go and change the colors to make it colorful. I can go and change the style. If I want to further customize it, or add more data to it, I’ll just type in the word “clear” and it knows how to do the right thing to create that. If I wanted to make this design more my own, I could go into the design tab and go in and start playing around with Live Preview until I get it exactly how I want it to look. I’m going to go ahead and select this one here. All these tools are available across the applications. So the smart art tool, the diagramming tool, the picture tool, I’ll go ahead and insert a picture here and show you that it’s the same tools that come up. There I am with the same tools, and I can go ahead and format that, and there you go.

I’m going to go to my last slide here, and I’m going to update this chart in here, because this chart is out of date. So I’ll go ahead and delete that. And I’ll go over to my Excel spreadsheet, and I’ll show you how we implemented the ribbon in Excel. So across the top here, formulas and data are the big things that are different about Excel, and so we expose all that functionality to you right in the one place to go to find everything. So applying the notion of galleries to Excel was fun because it’s not only visual styling, but it also does calculations around the way. So I can do my top 10, my top 10 percent, common operations that make it very easy. To visualize the data, I can use the Live Preview to go ahead and help me see what numbers are big, and which numbers are small. I can go in here and do conditional formatting with color scale, and very easily see what the big numbers are and what the small numbers are. I can also use icon sets to go and change the data, and help me look at how things are trending, and where things are going.

So, I needed to get a chart for my other PowerPoint presentation, so I’m going to ahead and insert a chart now. And the chart graphics have also been updated, so you can do a lot more visual charts. I’m going to go ahead and take that chart. And I have the full power of the charting engine here. I can change the design of the chart, I can change the layout of this chart. If you’ve ever tried to layout a chart before, it was very difficult to get all the positioning just right, and now it’s very easy. I can tweak individual elements. I can go and format each individual thing. So the full power of Office is there, you just don’t have to think about the tool nearly as much when you’re trying to get your work done. You’re concentrating more on the content, and how you want to convey the information to the people that you’re sending your documents to than you are on how you use the tool.

I’m going to go ahead and select this. I’ll go back to my PowerPoint presentation, and I’ll paste it in. Do that again. And there’s just a little tiny bit of all the things – of some of the things that are in the Office user interface, and thank you very much for having me show it to you today. I hope you enjoy it. (Applause.)

STEVE BALLMER: One of the most common things we hear from our business customers about Office is, I’m not sure our users get full value out of the product. I’m not sure whether they know more than 15 or 20 percent of what’s in there. What we have found with all of the beta test studies, and customer improvement data we’ve gotten is, the people are actually taking advantage of a much wider set of Office functionality with the new user interface than ever before. I don’t know whether it’s apocryphal or not, but it’s gotten kind of legendary already inside Microsoft. Bill was sending Julie and the team some feedback and said, boy, I love the new ribbon user interface, it’s great, blah, blah, blah. And I like these new features you added to Excel. And they responded and said, Bill, we didn’t add those features, they’ve been in Excel for, I don’t know, two releases. And Bill said, no, no, no, you’re wrong, I’m an expert Excel user, you added these features. And they had to say, no, no, no, we didn’t just add those features. So even for the most expert of users, I think the new user interface really lets people take control and get the full value out of the toolset that maybe only some of the highest end users have been able to exploit to date.

I also feel quite confident that the technology, the user interface approach with search, and with the ribbon, are two things that we are likely to see a lot of companies carry over in the user experiences that they provide on their applications and Web services.

With that user interface and user experiences context, I want to now switch and talk about some of the issues from the businesses’ point of view, and I want to go through each of the four pillars I talked about, simplifying how people work together, finding and analyzing information, managing content, and cost and security.

If you look at what we’ve done between Vista and Office, and the accompanying over 30 products, we’ve done a lot in the ways in which people will work together. Unified Communication is a theme, you’ll see that theme not only in the user interface technologies in Office, you’ll see it in our Office Communications Server, you’ll see it in the Enterprise Editions of Office Communications Server and Exchange. You’ll see us moving into the market, not just for e-mail and IM, but also voice is enabled by what we’re doing. The VOIP technology will ship next year, it’s not immediately available. And video and video conferencing technology will also be available based around Windows Vista and Office 2007.

Staying in sync with information, people have properly found good value for wikis, for blogs, for RSS out in the Internet. With the technologies in Office 2007 and our new SharePoint products, we bring some of those innovations comfortably and conveniently into the business world. And certainly one of the things we hear people clamor for is to have the same kinds of capability inside their companies that they feel like they can get as consumers out in the world at large. Getting that sharing is very important if we’re really going to put people in control of information the way you really want to in a people ready business.

Collaboration and workflow is very important. We’ve stepped up the collaboration capabilities in SharePoint, and for the first time we’ve entered the business of providing workflow technology. So, if I want to create a custom workflow for handling an exception, we have an invoice that somebody has a complaint about, how do I route it around, how do we collaborate, how do we decide what the right thing is to do with that invoice, and then how do we return the collection back to our ERP system is an example of technology-enabled with Office 2007, Windows Vista, and the rest of the new products.

Working remotely, on the go, mobile PC. Today, we’ve made a lot of improvements, I thought, in XP for wireless networking, and yet if you look at what we have done with Windows Vista, I think everybody is going to find it far more convenient to hook up and connect in a variety of different places to a variety of different wireless networks.

Second area, finding information and improving business insights. People want to be able to get at information. Most companies and most users in most companies will tell you they feel like information somehow is locked away.

I still love to tell a story, it happened to me a couple of years ago now, I was sitting on an airplane next to a fellow and he looks at me reading a bunch of stuff that clearly had a computer feel to it, and he said to me, do you work in the computer business? I said, yes, I do, and I was a little afraid I was going to get a help-desk question. Then he said, we have a lot of computers in my company. I said, that’s great, that’s fantastic. He said, I have a small question, my job is setting the price of auto insurance for my company in the state of Colorado. It’s a state-by-state regulated business. And he says, I want to charge people more for auto insurance if they buy it between Christmas and New Year. And I said, yes, what does that have to do with me? He says, well, my theory is that people who buy car insurance the last week of the year are people who are planning on drinking too much on New Year’s Eve, and I know lots of ways some place in our computer system we actually know what our real claims experience is. And he said, why don’t you guys make it easy to find the information we want?

That basic theme, finding information, letting people analyze it, and unlocking it is important, and we take tremendous strides forward with this wave of products. With what we’ve done in Office and SharePoint, the ability to search for documents, for e-mail, for people, I’m going to talk a little bit more about that, whether it’s inside your company, or inside on your own desktop or on your company’s servers, we enable that. You can literally look through your whole Exchange inbox, searching, finding, finding documents that live any place in your company’s intranet. We build a powerful connector architecture that will actually even let you look inside structured applications. You want to look inside your SAP system, or inside your Siebel system, you can do that with the same SharePoint search technology as you would to search for any other document or e-mail.

Because of the way we’ve done SharePoint for collaboration, we are encouraging people and companies to essentially create the equivalent of a MySpace, let’s call it a My Site, for people to have inside the work environment. And on my SharePoint My Site, I can describe who I am, I can describe what expertise I have that are relevant to the company. The ability then to dig in, to find people, to find people who have the right expertise, to help me solve a business problem, it’s a very important part of the innovations that come with this wave of products.

If you take a look on the decision making front, what we’ve done in Excel, what we’ve done in Excel with SQL Server, what we’re doing with search is all about letting people get at that information, explore it, and analyze it. I spoke recently at our SQL Server user’s group meeting, and we showed this add-in, set of add-ins, that we’ve built for Office 2007 that work with SQL. And the ability to dig in, find data, model it, visualize it, is incredibly powerful in the product.

We built in rich integration with XML and Web services, so that you can get at data that is not in the Office environment, and pull it into the Office environment for your own personal use. It’s a big theme we hear from people. We’re comfortable with the Office productivity tools. How do we get the Office productivity tools to do more for us as it relates to business processes, business information inside our own company. So there’s a tremendous amount of technology in here, search, portal, business intelligence, visualization and analytics, which do a lot to improve people’s ability, if you will, to find information, and get important insights in the business.

To demonstrate how some of these concepts can come together in this technology platform we thought we would have one of our customers come on stage and show you some of what they’re doing. We’ve been working with the Scripps Research Institute, which is in the San Diego area. They do a lot of work in cancer research. They’ve been working with a Microsoft partner, InterKnowlogy, on a solution for some of the things that they’re trying to accomplish in terms of cancer research. The application that they’re going to show you takes advantage of new graphics and display technologies in Windows, new collaboration and data mining capabilities that are in Office, and they’re going to show you an application that I think they’ll say was built by about two people, two, two-and-a-half people, in about six weeks of time.

So please welcome on stage with me Tim Huckaby. Tim is the CEO of InterKnowlogy, and Peter Kuhn, Ph.D., from the Cell Biology Institute at Scripps. (Applause.)

PETER KUHN: So at Scripps Research Institute, as Steve was just mentioning, we’re down in La Jolla, we are one of the largest not-for-profit biomedical research foundations in the United States. My lab at Scripps Research itself is focusing on identifying cancer cells in blood circulation of patients, and we’re trying to identify and characterize proteins on the surface of these cells, and utilize that as an approach to develop effective diagnostics and therapeutics.

The ultimate goal of this type of research is, of course, to make cancer a managed disease. So that’s kind of the umbrella under which we are working. Obviously this is a problem of sufficient complexity that I can’t claim, and it’s impossible to do this as a single lab, or as an individual researcher. So our problem really is, we need to collaborate with other people in the field, across the hall, halfway around the world.

This complexity is, of course, increased by the fact that we’re looking at protein molecules, which are really three-dimensional molecules. So we need to be able to actually attach data in three dimensions, and share it with others. And this is roughly the problem setting that we approached Tim at InterKnowlogy with, and what they came back to us with as a solution is what Tim will be showing off now, and the example that he will be showing is a real, live example, out of the lab that we’re working on right now. We were trying to block a protein that is sitting on the surface of a cancer cell.

TIM HUCKABY: Peter’s group is using some amazing technologies to find cancer cells within blood, and to develop some new drugs. They have many high-tech toys, believe me, that have allowed them to stare at molecules in 3D. But, what they didn’t have is a way to tie that 3D view to the research itself. What you’re seeing here is a Windows Vista application that solves Peter’s 3D and collaboration requirement.

So let’s pretend I’m a researcher. I’ve done some research in a Word 2007 document. Like you guys, I don’t know where it is on my computer. I did it disconnected. So I’ll use Windows Vista’s desktop search to quickly find my research and, sure enough, there it is right there. Now I’m going to drag and drop this Word document right onto the 3D surface of the cancer molecule. What this does is pins that research to that very spot on the cancer molecule. This is what Peter’s researchers didn’t have and so desperately needed. By the way, that research document, that Word 2007 document is now persisted in SharePoint 2007.

PETER KUHN: And that’s important for us, because obviously when we work with other people, say a chemist in Austria, she might not have the application installed, she might only have a Web browser on her machine. So with this approach, this solution, what that allows us to do is give her access to the system, and just use a Web browser to get to the actual data itself.

TIM HUCKABY: This is why using SharePoint 2007 is so crucial to the solution. This allows researchers to share information across geographic and organizational boundaries. It allows them to search shared research quickly and effectively.

PETER KUHN: So now of course if you go back to the actual application, if that collaborator of mine, if she has the application installed, she now has the research report that is attached to a particular part in three dimensions. She can go through that, she can understand what the context of that is in 3D, and she can now go back in and actually add her own notes to that, her own thoughts to that, because she might have another experiment that she wants to design around that.

So what you see Tim doing now is, rightmouse click, add note. And that simplicity of it is also very important, because again what you’re seeing here is really – it’s live. This is how we work with the application, that’s how simple it is, and that was important for us, because we wanted to have a close to zero learning curve leading up to this. We believe that that simplicity is quite revolutionary for the type of work that we actually want to do.

TIM HUCKABY: The greatest thing about this application in my opinion, Steve mentioned, is how quickly we built it. This was built with two developers, and a half-time program manager, project manager, in about six weeks the initial prototype was done. In fact, that 3D Windows Presentation Foundation control you’re staring at here was built by one developer in two weeks. That type of developer productivity was unheard of before these technologies existed. By the way, we have big plans for this application, we’re pretty excited about it, not the least of which is the integration of Windows workflow to the great new features of Exchange 2007, to allow us to handle Peter and his group’s most complex workflow needs.

PETER KUHN: Now, with that pace of development, of course, the reason why we’re excited about this is because we believe that we finally actually get our hands on tools that grow alongside of our research. And that is, of course, exactly what we are looking forward to, in terms of using it as an application in the future. I think everybody is probably agreeing with this today that curing any disease in the future will require the scientists working on this to be able to share their research data with others, in the relevant context, find research results quickly, and be able to communicate back and forth in this context rich sort of environment.

And just to close this out, again, to finish off that umbrella statement that I made in the beginning, keep in mind that about one in seven women in the United States will suffer from breast cancer during her lifetime. So, we really don’t care what it takes, as long as we get our hands on technologies that allow us to move that discovery process faster forward so that we can make cancer finally a managed disease. (Applause.)

STEVE BALLMER: The number of essentially technologies that the guys showed you there is really quite large. And for those of you who like to get more technical, I know we have some in the audience, they’ve used the new presentation capabilities, Windows Presentation Foundation, they used the annotation surface that it provides, they used new collaboration capabilities that come from Office and SharePoint, and all of that was instrumental to the kind of productivity that enabled that application to quickly come to the fold.

What I would like to do now is invite on stage Diane Prescott from our own team. Diane is going to give you a little bit of a feel for some of the things that we’re bringing to market in Exchange, and how that’s enabled both through Microsoft Outlook, and Windows Mobile.


DIANE PRESCOTT: Thank you very much.

So what I would like to do over the next couple of minutes is do sort of a lightning tour through some of the ways that you can access data on Exchange Server 2007. Now, like so many people, I spend most of my day in Outlook. So I’ll be working in e-mail, maybe setting up meetings. And we’ve done a lot of work to make sure that the Outlook experience is both pleasant and productive. And one of the ways that we’ve done that is, we’ve included, for example, the voice-mail player directly into a message here in Outlook.

Now, we know that people don’t always have time to be at their desk working on their Outlook mailbox. And sometimes maybe they’re traveling and they’re in the car. They want to have another way to access their data. And so we have Outlook Voice Access, which will actually let you dial in and manipulate your e-mail, your calendar, et cetera. And what I’m going to do in just a moment here is dial in, and we’re going to have it read some e-mail, and then also I’m going to do a quick update to my calendar, and you’ll notice that not only will it read e-mail in English, it will actually dynamically detect when a foreign language has been used. So it will actually pick up the correct language here.

And we have a special guest to help out with our demo today, this is actually my production box.

BILL GATES: Hi, this is Bill Gates. Welcome to Outlook Voice Access. To access your mailbox, enter your extension.

DIANE PRESCOTT: Diane Prescott.

BILL GATES: Please enter your PIN, then press the # key.

VOICE: You have no new voice messages, and no new e-mail messages. Please say voice mail, e-mail, calendar.


VOICE: Opening your mailbox. First, a message from (Michael Cloy ?), titled – (inaudible)  arrived on November 20th. I’m going to read the following e-mail message in Dutch. If this is not the correct language, please say, select language. (Dutch spoken.)


VOICE: Returning to the main menu. Please say, voice mail, e-mail, calendar.


VOICE: And which day shall I open?


VOICE: Opening today’s calendar. You have a meeting that you organized from 10:30 to 11:30 in New York City.


VOICE: Next, a meeting that you organized from 1:00 to 2:00 in hotel conference room, titled “Demo Review.” You can say, next, cancel meeting, send and I’ll be late message.

DIANE PRESCOTT: I’ll be late.

VOICE: OK. How late do you think you’ll be?

DIANE PRESCOTT: Fifteen minutes.

VOICE: Fifteen minutes, is that right?


VOICE: All right. I’ve sent a message to all attendees that you’ll be 15 minutes late. By the way, you can save time in the future by saying things like, I’ll be 10 minutes late. Continuing the calendar.


VOICE: I heard you say goodbye, do you want to end this phone call?


VOICE: Thank you for using Outlook Voice Access.

DIANE PRESCOTT: So we have the new Outlook Voice Access. We’ve made great improvements to Outlook and we’ve also made some improvements to Outlook Web Access, to ensure that you have that same rich experience that you’re used to when you’re in the Office. Here you can see that player for that voicemail message. Now, I had actually gone in for my Outlook Voice Access and set up the default folder to use as that language folder, so that I could show you the cool message in Dutch. And one of the other options would be mobile devices. Now, say I was on my way to a meeting here, and I managed to leave my cell phone in a cab. It’s lost. There’s important company data that’s on that device, and I want to make sure that that company data stays secure. So what I can actually do through Outlook Web Access is go in and wipe that device remotely, and I don’t even need to call the help desk to do that.

Now, speaking of the mobile device, I have my very stylish little Cingular Blackjack here. And what we’re going to do is my manager actually wanted an update on how things were going with the demo. So what I can do is go in and actually dynamically check online. So it’s going to search against the greater than 70,000 users in the Microsoft global address book to pull up my manager’s name here. So I can select that, and then go ahead and send this message, because so far things are not bad. So I’m incredibly excited about all the cool features that we’ve put into Exchange 2007, and there’s a great synergy here with Office and with Windows. And I’ve been looking forward to hearing how all of you enjoy getting to use those features.

Thank you very much.

STEVE BALLMER: We talked a little bit about the user experience in the first two pillars, about unifying communication and people to helping people find information. I want to move now to some of the things that are perhaps a little bit sometimes more in the backroom, helping people protect and manage content, and then cost and security.

There’s a statistic, which frankly stunned me: More than 93 million records containing sensitive personal information have actually been breached somehow just since early 2005 itself. It’s really quite an amazing number, if you will, and if you think about the number and places where organizations now feel a need to better and more securely and sensitively manage information, it is really quite extreme.

With Office 2007 and the related products we bring a lot of new technologies to market that really help you do records management, document management, and Web site management.

We have new technologies for SharePoint and for Exchange to help you manage e-mail and other document retention and rights management so you don’t get in a position where someone questions you, the IT systems are managing information policy very formally.

We’ve built technologies into Windows Vista, the enterprise version, that really helps you encrypt your disk drive in a way that is quite secure.

People walk out of the – can walk out today with USB sticks with important information on it. Some IT directors we know have actually gone so far as to stick glue in the USB ports on people’s computers. We now give you the ability to control by policy who and who cannot remove information from their own machine on a USB stick.

For information collection in a formal and organized way that fits and can be managed in a systematic way we bring new technologies and new products to market as part of this wave to do electronic forms and forms management and helps to reduce the manual and paper-based labor that sometimes makes it so much harder to protect and manage content. And there’s a variety of new products and new technologies across the product line for that purpose.

And last but certainly not least, there’s always cost and there’s always fundamental security pressure. We think something like 3 to 5 percent of what U.S. businesses spend on IT, they’re spending on security. Windows Vista is the first Microsoft operating system developed under our so-called SDL or Secure Design Lifecycle. And we think what that should mean in terms of the reduction in the number of vulnerabilities that ever present themselves will really be quite dramatic.

From an identity and access point of view we’re moving forward with Network Access Protection so you can really control and quarantine who comes on to your network and how.

We’ve integrated new CardSpace we call it technology that will help you manage your Personal Identifiable Information so that when you go to present, it can be stored on your machine but protected in a very confidential and private way.

We have new technologies as part of this wave for managing and monitoring what’s going on on Windows client and what’s going on on SharePoint and Office Communications Server and Exchange Server, servers that’s a big step forward.

We’ve built anti-spyware technologies, Windows Defender, into these products.

We have our first wave of client- and server-side security under our Forefront brand coming to market.

IE 7, of course, has done a lot of work in the area of anti-phishing technologies, which we think are very important.

And so if you just go through the list, from a security and IT cost perspective, management, security, deployment, monitoring, one of the biggest features is one of the simplest. We get to the point now where there’s a single on-disk image for Windows Vista, which saves IT managers incredible amounts of time, taking care of and track of the various different images of Windows that they might choose to deploy by language, et cetera, across their enterprises. And we think this represents a significant step forward in terms of total cost to a business customer.

We’ve been working with literally tens of thousands of customers on the broad set of business issues and business opportunities in Windows Vista, Office 2007, and the related products. We’ve done, as Julie said, over 1 billion individual customer sessions where we have collected data about what’s really going on and how they’re really using these products. We’ve had over 5 million beta users for the products. We had instrumented feedback through our customer improvement program that comes back to us on a systematic and regular way.

Here’s a list of just some of the enterprise customers that we have worked with on the development of Windows Vista, Office 2007, and the other products in this wave: Paccar, Hilton, Chevron, Bell Canada, Barnes & Noble, Monte dei Paschi di Siena Bank from 1472 it says right there on the chart, CEMEX in Mexico, and the list goes on and on; from smaller businesses on up to some of the biggest, most global companies in the world, these companies, like Scripps and others, are now moving into deployment phases in various parts of their companies with these core and key technologies.

Bur rather than just have me talk about that, we thought we’d have two of our customers come join me on stage to talk a little bit about how their companies are using Windows Vista and Office 2007. And so joining me will be Michael Wolf, president and COO of MTV Networks, right across the street here; and Shaygan Kheradpir from Verizon, also here in the greater New York area. So please welcome Michael and Shaygan. (Applause.)

Maybe I’ll start, if it’s OK with you, Michael, and tell me a little bit about the role of innovation at MTV Networks in general.

MICHAEL WOLF: Well, we’re a company, we operate networks, MTV, Nickelodeon, Comedy Central, and the hallmark of the businesses that we operate is about made fresh just in content. Every day we’re creating new information, new content, new experiences for our consumers. And so we always have to be on the edge. Our consumers are on the edge, they expect the latest from us.

And so what we’re trying to do by using these products is to ensure our people can collaborate, they can use the best tools to make sure that we, in fact, continue to be on the edge and that we’re ahead of our audiences, we’re ahead of the curve in terms of what’s happening with society, and we’re able to be able to get those people to work together and create.

STEVE BALLMER: Well, as the father of three boys from 7 to 14, you’re doing a great job, I know in our house, of capturing mindshare.

How are the new products that we’re talking about today helping you support that innovation mission?

MICHAEL WOLF: Well, a couple things. One of them is that our people are addicted to e-mail, and the use of Outlook and our ability to use Outlook and all the features around it as a collaboration tool. But it’s a lot of the other sharing. It’s the fact that our people will be able to collaborate when they’re creating scripts, and that somebody who’s in Mumbai can work with somebody in London and at the same time somebody in New York in creating a show together that we can then the next day make sure we roll out around the world in a way that nobody else can.

STEVE BALLMER: And what would you say to other companies that are taking a look at some of these technologies to help them gain competitive advantage?

MICHAEL WOLF: Well, I mean, I can’t imagine, this is going to be table stakes for anybody who wants to be in our business to be able to have these tools.

STEVE BALLMER: That’s great. Well, thank you very much, appreciate that.

Shaygan, Shaygan and I have known each other for many, many years, and have done a lot of work together. Verizon is one of our very largest customers for Microsoft technologies around the globe. Tell us a little bit about security efforts at Verizon and how you think maybe some of these new technologies can help.

SHAYGAN KHERADPIR: Well, first of all, Steve, our congratulations on Vista. It’s a great product.

In Verizon we support in IT and deliver products to about 200,000 employees. But we also do the same thing for millions of our consumers on broadband. And as you mentioned, the line between home and office is blurring very, very rapidly.

So what they want from us is distraction free, worry free work. And obviously we don’t want to get in the way of their productivity, but one thing I think people are missing a little bit is with the massive mix that Vista is unleashing, and with the massive MIPS that Verizon is delivering through the fiber network, those two things are coming together at the right time to create the perfect high-definition storm that we don’t want to get in front of and disrupt, and I think that’s going to change the world.

So what we see in your security suite is really what we expected, which is a quantum jump in your layered security infrastructure that helps with that. I mean, you have now built within the operating system and within the architecture a security infrastructure that makes me a lot less worries, and it’s going to be a lot less costly to our consumers who have got things like what we call now UAC, User Access Control. It’s a great tool. BitLocker and as many of you know, encrypting laptops is a slug, right, today, and with BitLocker built in I know I can worry a lot less about laptops being stolen. And your Digital Rights Management, if I want to send you a file and specify only Steve can open it, and by the way Steve can’t print it.

And the same technology, by the way, talking about the blurring of the lines, our consumers care about. For example, on Digital Rights Management we want to be able to transfer media — movies, music, data — from the PC to our TV product, FIOS TV and vice versa, my DVR recording from my DVR onto my PC so I can empty out the DVR and so forth and so on.

So, you’ve done, as we expected, a great job and really a quantum leap in security and privacy for us.

STEVE BALLMER: Talk to me a little bit about mobility. I visit Verizon, I don’t see a lot of people around the headquarters. It feels like you’ve got a lot of people out in the world working with customers. How do these products help you with the mobile workforce?

SHAYGAN KHERADPIR: Well, on the mobile side, as you probably know, in Verizon now we pretty much solely issue laptops to the knowledge workers. We’ve moved away from the desktop for the reasons that we just mentioned. And with that, it’s great, but a couple of things we’ve got to get right. One is encryption of data on the laptop. We talked about BitLocker; it’s a great help to us. But also when people take their laptops with them, they do work offline at home, on the road, and then when they come back to work we want to synchronize that with our file servers sort of seamlessly, and you’ve done a great job of that. And last but certainly not least, when I tell a laptop to go to sleep, it actually now goes to sleep. So congratulations. (Laughter.)

STEVE BALLMER: As you look at this blurring of the home and work environment, are there other technologies that you see important to enable that trend?

SHAYGAN KHERADPIR: Yeah, absolutely. What we see is the innovation now is sort of the flow of innovation is reversing. It used to be from sort of businesses into consumers, and now innovations are flowing back like blogs and logs and mash-ups and Web services and so forth and so on. And, for example, I run a video blog for the IT folks in Verizon, and it’s been like the best thing in terms of communications. They don’t come to see what I write, they come for the videos.

Now, the videos today, the multimedia are pretty much narrowband or small, the fidelity isn’t that high. With Vista and with FIOS, the fiber optic network, 100 megabits to the home that Verizon is doing, now we can actually transform that experience into a high-definition consumer-oriented, impulse-driven experience.

So imagine, today if I want to upload a video to your site, to YouTube, whatever, if it’s a high-definition 10-minute clip, which is typically what people upload, in today’s –

MICHAEL WOLF: We’re hoping it’s less. (Laughter.)

SHAYGAN KHERADPIR: It turns out more now, but OK. (Laughter.)

It takes about – to do a 10-minute HD clip it will take you – if you are not on Vista and you’re not on FIOS, two hours to upload and an hour to download. An hour download means you can’t start watching it, a 10-minute clip. That is not an experience that’s going to work.

Now, you get FIOS fiber-optic network to your home, and with the TCP/IP innovation that you have on Vista, and with your multimedia authoring tools, and a whole suite of other things, the planets have aligned so you get this perfect storm.

So guess what, high-definition video, you can upload 10 minutes in about two minutes, two to three minutes, and you can download in less than a minute.

Now, this is what’s going to open up the world from text and small pictures and even smaller videos to truly a high fidelity, impulse-driven world, which we think is really going to change business and is going to change the quality of life.

STEVE BALLMER: Any other advice you have for CIOs out there?

SHAYGAN KHERADPIR: You know, just pay attention to home and life and business. The lines are blurring. Get on with the innovation, get on with the innovations of blogs and logs and so forth and so on, because that’s going to transform not only the experience of your customers but the efficiency and the experience of your business and your employees. But you’ve got to get the right tools. With Vista, with FIOs, high bandwidth, high MIPS engine, just get on with it.

STEVE BALLMER: Super. Thank you guys both very, very much. (Applause.)

I think particularly as Shaygan talked at the end about the blurring of home and consumer, a lot of what we’re talking about today is the benefit at business that as I said earlier we’ll come back and talk a little bit more about the a lot of the exciting things particularly that Vista enables in the consumer world later.

Before I wrap up, I want to share with you also some of the enthusiasm we see from our business partners, from system integrators to developers to ISVs to hardware companies to the chip companies. There’s a lot of enthusiasm about what we’re doing with Windows Vista and Office 2007. Here are just some of the guys who have really committed themselves to innovating around Windows Vista and Office. We’ve got about half a million partners worldwide on board with these new products. And I’m going to let you hear a little bit for yourself from some of our partners. So, please roll the video.

(Video segment.)

STEVE BALLMER: That gives you a little bit of a sense of some of the reactions from some of the important partners out there.

Today, we are, as I said, this is the biggest launch we’ve ever done, and I want to talk about all of the products which are part of this launch. The products on the list behind me are all available today: Windows Vista, of course, Office 2007, of course, but also the new enterprise versions of both products are available, the new Microsoft Office SharePoint 2007, Exchange Server 2007, Unified Messaging Services for Exchange, new products, Exchange Hosted Services, a new security product for Exchange, Forefront Security for Exchange available today, Office Project Professional version, Visio Professional, InfoPath, OneNote, and Groove, all upgrades of existing products; Excel Informed Services for SharePoint is new, Office SharePoint Server Search product focused just on search tasks is available today, Forefront Security for SharePoint, new version of a new product that does SharePoint design, helps you design Web sites, Office SharePoint Designer 2007, new rights management technology that supports Office 2007, Project Server, Project Portfolio Server, the new e-Forms Office Forms Server product available today, and a new version of the Groove Server.

Coming over the course of the next year and adding to this bundle of products will be a new version of Microsoft Office Communicator, the new Office Communications Server; voice call management will be an add-on product to that, which will be available this year. I’m very excited about what we’ll be able to do, particularly in VoIP and voice communications and video inside corporations, as well as spanning outside the enterprise. Shaygan was talking about the bandwidth and the speed. You will really be able to have I think first class videoconferences at reasonable prices and greater accessibility by the time we’re done this year.

Rounding out our business intelligence suite we’re going to bring a performance management product to market built around Office 2007, PerformancePoint. We have a set of new data mining add-ins for Office 2007 that will be available here in the not too distant future. We have additional management and security technologies for the desktop, Windows Desktop Optimization; the anti-virus technologies and other client protection, and then additional management, both deployment and monitoring and operations products targeted at Windows Vista and at Office 2007.

When you add it all up, there’s over 30 products there, and I haven’t mentioned some of the hardware products that we have that fit around this like our new Roundtable videoconferencing camera and some others.

So, we talk a lot about Windows Vista and Office 2007, but between the upgrades to those products, the upgrades to other products, the new enterprise services that we’re bringing together, and a set of products that are really all brand new areas, I think we really have the most comprehensive line-up our company has ever put in place.

We think when you take this in its entirety, you start with this notion of the People Ready business and how we deliver it, in terms of [Windows] Vista and Office 2007, we have an unprecedented depth of innovation in those products, and then when you add on the other 30 additional products, enterprise versions, upgrades, new clients and new servers, we think it really is a new day for companies that aspire to make people their number one asset and give them the tools that really gets that done.

We’ll look forward to some discussion and question and answer, and, of course, we’ll look forward to meeting with you again when we do our consumer launch the end of January, and machines become generally available.

Thank you all very much. (Applause.)

JOHN PINETTE: So, we have some time for questions. We have mike runners I believe. If you’d please identify yourself before you ask your question.

QUESTION: Given the fact that this is the most important product launch in your history, as you said, with what kind of marketing budget will you support this launch, also given the fact that it was once a Windows version which was supported with half a billion dollars of marketing?

STEVE BALLMER: Yeah, this will be the most widely marketed launch of any set of products Microsoft has ever done. Most of the marketing will break and launch in time, if you will, for the consumer availability. We want people to be able to go out and buy the product. We have a set now of over 300 seminars and road shows that we’re doing for business customers that we’re kicking off as part of this kick-off here today. But the real end user and consumer marketing will break starting on January 30th when we make the consumer launch.

QUESTION: But how many dollars? Is there any figure you can give us?

STEVE BALLMER: Under the regulation FD disclosure I have to remember whether we give it a number. It’s hundreds of millions of dollars. It’s a very big number. It’s more than we spent on Windows 95 and Office 95.

QUESTION: Can you give us a little more detail about how you plan to educate consumers, because Windows Vista is probably well-known among high-tech savvy folks, but not so well known among the consumers?

STEVE BALLMER: Yeah, actually I’m not sure I’d agree with that. I think actually we’ve got a lot of interest that we’ve seen certainly amongst leading edge consumers, of which there are now millions of people. When you get to a world where today there’s a billion computer users around the world, you have tens of millions of sort of leading-edge users who really get out and look at new stuff. That group of people will help bring along their friends. I certainly think you should expect to see most new consumer PCs after January 30th will come with Windows Vista, they will not come with the older Windows XP version, and so we’ll get a cycle in which I think consumers will get the product, people will buy new computers, they’ll love the product, they’ll go out and upgrade, and that will all be part of the education process.

QUESTION: Earlier in your presentation you said that there wasn’t going to be an upgrade to Windows Mobile at this time. Could you explain why, and what the timing would be for that?

STEVE BALLMER: Yeah, we’re doing Windows Mobile upgrades roughly once a year. That’s about its cycle time, if you will. And because of the way the software has to go with the phones through a certification process at companies like Verizon and others, we just recently finished a release, but you won’t see the results of that in market probably for a little bit longer period of time, not more than a year, but a little bit longer period of time, just based upon the cycle time with the hardware manufacturers and with the wireless operators.

QUESTION: You said that there won’t be this long of a development time until the next OS, and yet you’ve also here explained why Vista is such a big break from XP. That being the case, what is sort of left to pursue in the next OS, what sort of could even be possibly – you know, given the huge revamp you’ve already done, how can you do another one that meaningful in even less time?

STEVE BALLMER: I can give you – well, the time is sort of a funny thing. The tail between [Windows] XP and [Windows] Vista is really sort of three periods. There was a period where we were working hard on a variety of new technologies, but probably trying to do new things and integrate them together too quickly, and we just lost some cycle time. Then we did a service pack in one year, very focused in on security that I think we did a very good job on. And then we did most of what you’ll see in Windows Vista in about two and a half years, drawing on some of the incubated technologies from before.

We will continue to do exciting new releases. There’s a lot more that we didn’t get to that we would have loved to do from an end user perspective.

The amount of new hardware innovation that needs to be supported is really quite dramatic. You know, Shaygan talked about networks. The fact of the matter is he was very kind of the improvements in our TCP/IP stack, but they’re pushing the sort of network capacity even faster and want to see ongoing improvements in the networking infrastructure. People want to see ongoing improvements – Paul Otellini was quite kind, but the shift now in processors is away from single core to many-core processors. That requires the operating system, the development tools.

So the hardware has a bunch of work we still will need to do, there’s a lot we want to do for the IT administrator to continue to make these systems simpler to deploy, simpler to manage, cheaper. There’s a lot we’re trying to do for the software developer. People will remind us that we want some storage and file-system innovation. That was part of the original “Longhorn” thinking; it’s not part of this product, there’s plenty to do certainly on that front. There’s more to do in terms of graphics and presentation and video in the core operating system. And then, as I said, from an end user perspective we took great strides forward, but there’s still so much more to do.

You wrap all that also in the context of this move of the world from software to software plus service, and how you do service enablement inside of Windows is a big theme. You can see what we did in IE 7 to enable search to be integrated into the Windows and browsing experience, and there’s a lot more service enablement I think you can expect to see from us.

QUESTION: Hi, Steve. Welcome to New York. Has anyone done a calculation on the man hours behind Windows Vista?

STEVE BALLMER: No, not the man hours, nor the man years, nor the man days, nor the person days or person hours or person anything else.

I mean, the truth of the matter is it’s hard to tease it apart. When we were working hard on Windows XP SP 2 all of those technologies wound up in [Windows] Vista. Some of the things that we had scheduled for [Windows] Vista and would have been part of our accounting we decided that we would ship in other places. There are technologies that we’ve built in other parts of Microsoft, and we integrate into Windows. So we don’t do that kind of formal project accounting, it’s not that valuable to us, but I think it is fair to say it is many, many thousands of man years or person years of effort that went into creating Windows Vista, and it is thousands of person years that went into the creation of Office 2007, let alone the 30-plus other products that we’ve talked about today.

QUESTION: Windows Vista seems to be much completely different and certainly much better than XP, but the people spent hours learning how to use XP and 98 and previous versions of Windows. So are you going to have corporations pay training for the employee so that they get used to the new Windows Vista or will you let them alone with, OK, guys, you have to learn this new fantastic OS now, but do it yourself on your personal time or on our corporation time? What are you going to do, vouchers help them with that? How is it going to do?

STEVE BALLMER: Well, two things. No. 1, we have a broad range of partners who are doing training, training classes, online training, who will come do corporate training, so there will be a good – Microsoft doesn’t need to do this ourselves, we have partners who really are in this game.

For our customers who are let me call them our most accepting customers, our best customers, those who are part of our Enterprise Agreement program and our Software Assurance program, they do get certain kinds of credits that they can use for a variety of our partner services and I’m sure some of them will take advantage of these training services.

QUESTION: My question is, what sort of benefits can companies expect to see from deploying both Vista and Office together, rather than that they wouldn’t get from just one of them?

STEVE BALLMER: Well, each of the products brings its own distinct benefits. I didn’t try to tease those apart terribly hard today, Julie didn’t either, we showed you one integrated thing. And my suspicion is that most of our customers will evaluate separately but will probably deploy more typically at the same time. Why? Because people will find that that’s the lowest cost way of getting from here to there.

So certainly you can deploy them independently. Office 2007 runs on Windows XP. You can deploy old versions of Office on top of Windows Vista. But I think typically people will deploy these things together, but we support all of the modalities.

QUESTION: You talked about there’s no boundaries of the countries. So for this January 30th launch, is that an international launch all over the world?

STEVE BALLMER: Yeah, the January 30th launch, as this launch today, is a global launch. We have people fanned out in Paris, in London, in Munich, in Beijing, in Tokyo around the world, and so will the consumer launch.

QUESTION: So when we do the voicemail thing in Japanese from Japan, we can get that message in Japanese?

STEVE BALLMER: I will double-check that Japanese is simultaneously available. I would be shocked if it wasn’t.

QUESTION: What did you learn from the delays of Windows Vista for the other upcoming projects?

STEVE BALLMER: Well, I think the key thing that we learned, we learned actually now a number of years ago. In a sense I think [Windows] XP SP 2 was done very rapidly, I think Windows Vista, the last two and a half years of Windows Vista was done on an appropriate schedule.

You need to give new technologies time to incubate before you try to integrate them all together. We tried to do a new user interface on top of a new presentation service with a new file system with new communications infrastructure, and a new programming model simultaneously. What we’re doing now essentially is letting each of them come to market individually, getting some market feedback, and then doing the integration as opposed to trying to do it all at once.

QUESTION: Steve, it seemed like Paul Otellini was talking about the Wintel being alive and well, things coming out at the same time, and you can put AMD in this also. Do you think the processor guys are ahead of the software guys in this? I mean, you seem to suggest that –

STEVE BALLMER: I mean, in a sense –

QUESTION: – the iterations –

STEVE BALLMER: In a sense, yes; in a sense, no. I mean, people love to debate, and there are people who will debate whether you will continue to want client processing power. I’m a strong believer people will want to have processing power in clients, in addition to servers and services. Intel and AMD are both working on approaches now where essentially they give us more power in a very different form than ever before. We kind of like the old form of Moore’s Law really well, which meant processor speed just doubled every year and a half. That was a really nice thing for software guys. Now they’re going to give us more cores, not just more processor speed, and that puts more burden on not just us but everybody who writes software to write it in a different manner that’s able to take advantage of the power.

So each of us is innovating, the chip industry and the software industry in our own way, and yet we’re trying to work closely to make sure that the hardware innovations are all available, if you will, to the software folks.

QUESTION: A lot of the surveys I’ve read of IT managers suggest that they’re going to wait to deploy Vista until the first service pack has come out. Do you have a schedule right now for when a service pack might come out for Vista? (Laughter.)

STEVE BALLMER: Well, it’s one of these funny questions. Of course, we should never need a service pack for Vista ought to be my answer; we’ve built the highest quality – and this I strongly believe – we’ve built the highest quality, most secure, most reliable Windows operating system ever. Of that I am sure.

Now, does that mean that there will not be a need for service packs? In all likelihood we will take that feedback back and then make a decision. You certainly don’t make a decision to do the service pack 1 release before you have any feedback from customers on the initial release. So there is no current schedule. There is some thinking, our folks are getting feedback as we now proceed to market, and then there will be an appropriate time.

The truth is we have a lot of customers in the business world who are anxious to deploy. I do not think we’re going to have most – well, numerically we will have a stronger upgrade cycle I think, I’m sure, for Windows Vista than we had for Windows XP. That doesn’t mean 60 percent of business desktops are going to switch in the next year; it will just be a stronger, faster upgrade cycle than before. And certainly I know there are many, many businesses out there that are going to deploy Windows Vista kind of right out of the chute, if you will.

JOHN PINETTE: Steve, thank you very much.

STEVE BALLMER: Thank you, all. We appreciate your time and energy today. (Applause.)

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