Remarks by Microsoft Chief Executive Officer Steve Ballmer during Convergence 2008, Microsoft’s annual Convergence customer conference, March 12.
March 12, 2008
STEVE BALLMER: Well, thanks. It’s a real privilege to have a chance to be with you today. I want to start by saying thank you, thank you, thank you to everybody for taking time and coming to join us; to our current customers, thank you; to our prospects, thank you in advance particularly; to our partners, thank you all for being here today. We really, really appreciate it.
Michael was giving me that nice long tenured blah, blah, blah introduction, and I’m sitting backstage thinking there’s just one thing — one thing I wish he’d put into the introduction that he omitted. The biggest decision I’ve made — unless we close this Yahoo! deal — (laughter) — the biggest decision I’ve made as CEO was pushing into the business applications area; one of the best decisions I’ve ever made, one of the most important decisions I’ve ever made, and the reason that brings us all here today, and I’m darn excited about what we’ve done, what we can do for you, and certainly our long term commitment to the area. So, with respect to the 28 years of being here, it’s really that decision that I want to highlight for this audience today.
I thought I’d take about 45 minutes, and give you kind of a high level context on how I think about what the company is trying to do in general in business, and specifically in the area of business applications, and then from there have a chance to open up and take some of your questions and thoughts and comments.
I want to start with a few comments about the mission of Microsoft. When we started many, many years ago, I’m not sure the company actually had a mission. By the time I got here in 1980, Bill had invented this mantra, a computer on every desk and in every home. That was a great mantra for us for a number of years. Certainly we don’t have a computer on every desk and in every home globally even to this day.
But as we broadened out over the last 10 or so years the ways in which we’re trying to bring value to the consumer and to business, we reset to the basic founding principle behind Microsoft, that software was an amazing thing, an amazing innovation, and that our core capability in software would let us innovate and add value broadly to society.
So, today, we don’t talk just about a computer on every desk and in every home; we talk about enabling people and businesses throughout the world to realize their full potential. Part of that is putting a computer on every desk and in every home. Part of that relates to what we now call our People Ready messaging for business, talking to businesses about how to empower their people to add the greatest amount of value to the business. Part of that is about what’s going on with entertainment, and the transformation to the Internet; but enabling people and businesses throughout the world to realize their full potential.
Technology is a grand enabler of productivity, of collaboration, of insight, and of communication. As we sit here today, we will talk a lot about business process and what you are trying to do in your business, and how technology can help. But at the end of the day the measure I think you have to ask on any investment you make with us or anybody else is, are we getting more done more effectively, are my people better able to do their jobs than they were before, are we being smarter and better in our product design process, our supply chain, our customer support activities. That’s what really binds us and brings us together here today.
We empathize, as a business ourselves and as a provider of technology tools, we empathize with what’s going on in global business today. We recently were involved with PWC (PricewaterhouseCoopers) in a survey that they did of about 1,400 CEOs in over 45 countries around the world. The two biggest concerns people were dealing with, frankly, was the complexity of business and the globalization of business.
As you think about it, there’s a lot that comes with that. Globalization: new customers and new markets. People want to go beyond outsourcing and their use of a global talent pool. From the biggest to the smallest company, essentially some aspect of most businesses is global. Whether it’s the vendors you work with, the trading partners, the customers that you have, the businesses have gone global, and people want tools to manage and effectively corral that global environment.
Business is becoming more complicated. We tend now to focus more on our specialties in business than ever before, which extends and complicates our supply chain.
More and more businesses of all sizes are dealing with the issues involved in mergers and acquisitions.
And all business around the world are dealing with an increasing scale and scope of compliance obligations, from financial reporting to environmental to many, many others.
And, of course, with the economic conditions, particularly here in the United States, starting to switch, and become a little bit tougher, people have to stop and say, what do I do when the going gets tough? Do I retrench partly, but do I also innovate, do I push forward, do I look for new sources of revenue and new sources of opportunity, and I think the answer to all of those questions is yes.
At Microsoft we think the best way for a business to deal with the challenges and opportunities in global business is to enable its people — each and every one of you need to enable your people to do their very best job, to give them the tools, to give them the information so that they can get the insights they need to make the right decisions, so they can come together and collaborate with other people inside your own organization, or across your supply chain, to be more effective.
So, as we talk today, we’re going to talk a lot about business process, but we’re going to talk about business process in the context of how people get engaged and control the process, not how the process takes over and controls the people.
It is interesting, in many businesses — I did a panel yesterday with the CEOs of 120 small and midsized venture capital backed companies. I asked the CEOs how many of them had ever actually sat down and used a real screen that came directly out of the ERP system. The answer was not many, really not many. And yet they were each keenly interested and keenly concerned that their ERP systems, that their CRM systems give them and give their people insight into what’s really going on into the business, as well as imposing a tight operational control over the business itself.
As we think about what we’re trying to do in our Dynamics product line, it’s this kind of mental framework of the People-Ready Business that really dives us in many, many ways.
I think about the history of computing really in four different buckets, and it’s very apropos to the discussion of where we go next with line of business applications and in the People-Ready Business.
The IT industry really grew up on the right-hand side of this chart: business applications. That’s where the initial mainframes came, that’s usually the first thing that a business invests in when it forms: ERP, supply chain, logistics, HR, payroll; very, very important.
About 20 years ago, it became clear that the personal computer was an amazing innovation, and all of a sudden you got this huge investment on the left-hand side of this chart, in personal productivity, tools that people could use to write their own documents, do their own spreadsheets. These were two different worlds, two different islands.
Eventually a little infrastructure spawned up that would help you manage these things consistently, particularly as line of business applications move from the mainframe to UNIX and now to at least significantly in a market share sense to the Windows platform.
And yet there is a missing element, if we’re really going to bring this world together. A lot of what’s out there in the line of business applications systems, in the ERP systems, is not very available to people where they really live, which is in the personal productivity systems, in the Outlooks, in the Words, in the Excels, on the PC itself, in the browser.
We have been very focused in as a company from the Office side, from the SharePoint side, as well as from the Dynamics side, in filling in that white space in the middle. How do you connect people so that they can from their personal productivity environment look into what’s really going on inside the business, inside the business applications? How do you let people collaborate not just informally but how do you let people collaborate in a way that interfaces to the line of business systems? This invoice, we get a complaint about an invoice, how do you pull the invoice out of the system? How do you let people collaborate, e-mail it around, put it on a collaboration side, annotate it, and put it back? How does budgeting work? How does discussion of new pricing work? All of that somehow lives in this space for BI, for workflow, for ad hoc teamwork, between personal productivity and the apps platform.
We think that by adding value in that white space, whether it’s from the Dynamics point of view or from the Office and SharePoint point of view, is the biggest source of new value-add that Microsoft can bring to the People-Ready Business.
You see that in what our design points are in Dynamics: adaptability and continuous optimization of the system; moving to what we call this role-tailored user interface, where we really think through who are the various people who need to use the line of business systems, and how do we project out what they need to do for analysis and teamwork and productivity individually. How do we extend the line of business platform, Dynamics, with ad hoc workflow and structured analysis, and how do we allow this to all come together in some kind of an integrated way? I think there will be more value created in this green area than anyplace else other the next few years.
So, while we will talk to you every year at Convergence about the things that we are doing to extend our application functionality, deeper, more function points, different verticals, different industries, we’re not going to lose sight of the fact that it’s only by enabling that information to get analyzed and worked on by your people, that fundamental value will get created inside all of your organizations.
Microsoft Dynamics Design Principles
Microsoft Dynamics design principles reflect that point of view. We start with the user and the end user’s view of how they can be productive in a business applications context.
Usability: You see us moving all of the Dynamics applications to support the Office 2007 user model, with the so-called Ribbon user interface at the top. We think we can let more people get access to more capabilities, including important capabilities like business intelligence that make them more productive.
We’re extending all of the Dynamics applications to work on mobile devices, Windows Mobile, to give people on the go access.
And we’re making sure that the comfortable and familiar portal style, browser style user interface, made available by our SharePoint technology, is available so that people can get intelligence out of the business applications, whether it’s through Microsoft Office style applications or the direct user interface to the Dynamics system through the SharePoint Portal type services.
Number two, for analysis and teamwork, by extending Dynamics for ad hoc workflow using the new capabilities in our SharePoint system, we’ll allow people to do some kind of ad hoc collaboration and workflow on an invoice or a bill or something else, a budget, and then resubmit it to the Dynamics system.
By extending the search capabilities in SharePoint to integrate with Dynamics, people can just sit there in their browser and do a search and find the right information wherever it may be stored inside the Dynamics system.
By integrating Excel’s fundamental business analysis and reporting capabilities with the work that we’re doing in Dynamics, Dynamics sitting on top of our SQL infrastructure, our PerformancePoint tools for budgeting and scorecarding and reporting, we really put together a very tight capability to let people sit there in the tools they understand, and get access to and understanding out of Dynamics business data.
And last but certainly not least, from an applications platform perspective, we continue to improve our core applications reliability, scalability, and performance by having them sit on the most modern infrastructure. For example, the new Dynamics AX 2009 products, which we will ship by the end of June, shows about a 70 percent performance improvement when it runs on top of the new Windows Server 2008 and SQL Server 2008. We’ve integrated with the new customer reporting designers in Visual Studio 2008. And based upon fundamental advances we’re making in the simplicity of Windows Server, in lower end, more targeted versions of Windows Server, like our so-called Windows Server Essentials product that ships this year, we’ll bring greater simplicity for all of you in the installation and management of the Dynamics environment.
So, the underlying fundamental underpinnings, by building off of Office and SharePoint, by building off of Windows Server and SQL Server, we’re able to deliver you a product that does more, takes cost out from an IT perspective, and does more for your users in terms of giving them real access to information inside your line of business systems in a transparent and simple way.
We’re proud of the foundational work that we’re doing. It’s not enough. Each and every one of you is going to analyze and evaluate in my industry, for my business, does Microsoft have the vertical functionality that I need, does Microsoft have partners who fill out the capabilities that I need. But once that has been established, your ability to give real value to your business based on that line of business process and capability we think is substantially enhanced because of the strong foundation on which Dynamics is built.
We have our strongest lineup ever. Microsoft CRM 4.0 we shipped the end of last year. Microsoft Dynamics AX 4.0 has been well received. And as I said, the 2009 version is right around the corner. The Microsoft Dynamics NAV 5.0 product has been unbelievably well received, very excited about that. In our last GP release we pioneered a number of important new technologies, specifically in this role-based user interface that we think is very important. And we continue to have a strong, strong base of customers on our SL 7.0 version, particularly in some industries where services and project management are super, super important.
I get asked many times by our customers and our partners, are you committed to this strong lineup, and the answer to that question is yes. We have a long term view for every one of these products in terms of how we enhance it and bring new functionality, and drive it forward.
You will see us being smart. We’re going to adopt the same smart approaches in each of the product lines. We love role-based user interface; expect it everywhere. We like great reporting, business intelligence, and SharePoint integration; expect it everywhere.
But in terms of the specific customization models of each product, in terms of the specific application functionality of each product, they will all continue to be enhanced well, well, well, many years into the future.
We have a lot of work that we’ve done in each of the most recent releases of these products. We’ll have a chance to show you, to talk about much of that over the course of Convergence. Certainly in his keynote, Kirill Tatarinov will have a chance to be much more specific about each of the products.
To give you something of a sense of how we can bring all these products together, how we can deliver on the vision of the People-Ready Business, and really put information and insight into the hands of people, I thought we would have a few of our folks come onstage and do a demonstration for what the call center of the future might look like, based on these products and these design principles.
So, I’d like to invite Heidi Easler, Senior Program Manager from Microsoft, Mike Ehrenberg, one of our few distinguished engineers, and Jonathan Farmer, Senior Marketing Manager, to come onstage and demonstrate for you the call center of the future. Please enjoy. (Applause.)
MIKE EHRENBERG: Thanks, Steve. Good morning. Thanks, Steve.
In October we announced the Microsoft unified communications platform and integration of the presence and click-to-communicate features in both Dynamics CRM and Dynamics ERP.
Well, since then, the unified communications team and the Dynamics team have been working together to enable even richer experiences where people’s communication and their software meet.
We’d like to preview this morning some of those future capabilities, and I hope you’re really going to enjoy it. We’ll do this looking at a fairly typical scenario. We have a salesperson who’s getting ready to call on a customer, and at the same time that customer is going to be escalating an issue with customer service.
In order to do this we’re going to meet three people from Fabrikam, our hypothetical furniture company, and that’s Jonathan in customer service, Heidi, who’s a product designer, Nancy, our salesperson in the field, and, of course, we’ll get to meet Chris, who’s our customer with Wide World Importers.
We begin with Nancy on her way to go see Chris about a new opportunity. Now, Nancy uses Dynamics CRM, and that helps her prepare for the call by bringing together customer contact information, current proposals, service case history, open cases, and even customized reports about sales and pipelines.
Now, with Nancy en route to the customer, Chris realizes he needs to make a change to a current order, and he initiates a call to Fabrikam.
JONATHAN: Thank you for calling Fabrikam. This is Jonathan. How may I help you?
CHRIS: Hi. This is Chris Schindler calling from Wide World Importers. We placed an order about two weeks ago for some custom-made sofas, and unfortunately we just realized that we need to make a change.
JONATHAN: No problem, Chris. I can see your order right here. Let me see about getting someone on the line that can assist you with this a little bit further.
MIKE EHRENBERG: Now, Jonathan, our call center agent, uses Dynamics CRM as well, and as the call came in, the system automatically recognized the caller, and immediately popped up the appropriate customer record. Jonathan gets a complete snapshot of the customer, tailored to his role, and is provided with navigation to any additional information that he might need. Jonathan is able to see details about the caller, upcoming appointments, a service case history, and open orders.
Now, Jonathan realizes that he needs help from a product designer with this call, and here we use an advanced new system agent that takes advantage of the presence information from unified communications to find the first available member of the product design team. In this case that will be Heidi.
Jonathan contacts her first using Instant Messenger and sharing the context of the call, and then conferences her in with the customer. There’s no more having the customer having to re-identify themselves and restate their question. We protect the context of the call as we bring Heidi into the collaboration.
JONATHAN: Hi, Chris. I have Heidi on the line from product design. She’s going to assist you further with making that change.
MIKE EHRENBERG: Now, Heidi uses Dynamics ERP, and answering customer calls is not her primary job function, so she gets a different experience that’s designed for information workers.
Notice also that the information in Heidi’s call panel is different, tailored to her role and it’s specific to this customer order. When Heidi gets the call, she immediately sees the order, she sees the project plan, and she sees any related purchase orders. The information is specific to the task and right in the Communicator panel, and any other information she might need is just a single click away.
HEIDI EISLER: Hi, Chris. This is Heidi in product design. I understand you need to make a change to an order.
CHRIS: Heidi, I didn’t realize I’d be speaking to you directly so fast; that’s great. So, listen, I hate to do this to you, but the sofa length we specific needs to be two inches shorter.
HEIDI EISLER: That won’t be a problem, Chris. I see that your sofa is still in the design phase and hasn’t yet been passed to manufacturing, so we should be able to make that change for you without any issue.
CHRIS: Oh, that’s great, and we’re really hoping to still get the order on time per the original plans.
HEIDI EISLER: It looks like the order is scheduled for delivery next week, and with this change we can still make that delivery date. So, I’ll have our sales team contact you with an updated estimate on price.
CHRIS: That’s fantastic. I can’t believe it was that easy to get those changes and still be on time. Thanks, Heidi.
HEIDI EISLER: You’re welcome, Chris.
And, Jonathan, is there anything else you need from Chris?
JONATHAN: No, I have all the information I need right here. Thank you very much.
HEIDI EISLER: Have a great day.
CHRIS: Thanks, everyone.
MIKE EHRENBERG: So, with this information about the project and the schedule at her fingertips, Heidi is easily able to decide that the change won’t affect the delivery schedule. She clicks on the project link, it takes her to the right place immediately in enterprise portal where she’s able to initiate the change order.
Now let’s jump back over to Jonathan, where he has a few housekeeping tasks to take care of before we finish up.
Now, Jonathan, the first thing he wants to do is update the order and categorize what’s happened today. With Dynamics and unified communications he’s able to capture the call, what kind of call it was, and even a reason code for how it was completed. In the past, all of this information would just have been lost because it was outside the software, but here we’re able to capture that and use it for future analytics.
Finally, Jonathan noticed earlier in CRM that Nancy has an appointment today with Chris, and he’s able to update Nancy about the issue, and allow her to arrive at the customer informed and greeted by a happy and satisfied customer.
The Dynamics role-tailored user experience and unified communications delivered this together, improving both productivity and driving results.
Now, you’ll hear a lot more about our capabilities today in both of those areas throughout Convergence, and we want to thank you for the opportunity to share with you the work we’re doing to drive this vision forward in the future. Thanks.
STEVE BALLMER: Well, great. I hope the demonstration gave you some sense of the strength of the integrated platform, and why it is valuable to think end-to-end about the line of business applications all the way back to the basic end user experience that people want and expect.
We’ve had a lot of great customer experience at this stage with what we’re doing with CRM. I want to have a chance today to let you hear from EDS. EDS is a provider of call center and CRM services for Fortune 2,000 class companies around the world. Microsoft and EDS have had an incredibly productive partnership for over 20-plus years, that started with everything on the desktop, in the datacenter, and now in the line of business space. EDS was Microsoft’s Partner of the Year last year for advanced infrastructure solutions. I am incredibly honored and pleased today to be joined by Ron Rittenmeyer, the CEO of EDS, and he’s here to talk about an expansion of our partnership around CRM. So, please welcome Ron Rittenmeyer of EDS. (Applause.)
RON RITTENMEYER: Well, thanks, Steve.
I’ve got to tell you I’m very excited and very proud today to announce that EDS will be a key strategic partner with Microsoft, with Microsoft CRM, and we will do it globally, and we’re very excited about it.
From our standpoint we manage probably more Microsoft software than any other company in the world.
STEVE BALLMER: You sure do.
RON RITTENMEYER: And we’re pretty proud of that as well. We do that over 3 million desktops, and about 100,000 Windows-based servers.
STEVE BALLMER: Three million desktops, 100,000 servers; those are big numbers.
RON RITTENMEYER: Big numbers, big numbers.
STEVE BALLMER: That’s great.
And how do you see this whole CRM thing playing out?
RON RITTENMEYER: Well, you know, we look at CRM, we’ve watched Microsoft for a long time in this space, and we’ve spent a lot of time with you, as you know, on that project, and we’re pretty impressed. It’s clear to us we see the entire Dynamics thing as definitely an enterprise grade solution. So, we’re pretty impressed by that. It’s mature. It’s really made its mark.
CRM from our standpoint is something we see as our fabric. It’s probably not known to a lot of people, but we manage about 26,000 contact agents, contact center agents. We do it in about 26 countries, managing roughly 450 clients, and we do it in 48 languages.
So, I think we understand customer interaction, and we see doing this across applications, implementation, hosting, contact center services, and industry BPO, which we’re very big in.
So, from our perspective we think the product is an excellent product, and we think it’s mature. I said it’s enterprise grade, and we really do believe that. It’s flexible, it’s scalable, it’s user friendly, and most important to us it’s really easy to implement.
So, we’re very excited. When you combine that product with our sales guys, our sales men and women across the globe, we think we can bring to our customers such a value-based experience that this is going to be a very powerful tool. So, we’re very excited.
The other thing I’d say is that we’re going to kick it off in North America and Western Europe, and then we’ll see where it goes from there, but that’s clearly where we’re going to start.
If you look at the number and you look at the projections, and you put some realism in that, I mean, I could see us easily training and deploying over 300 Microsoft Dynamics CRM consultants over the next couple of years, so I think it’s pretty exciting.
STEVE BALLMER: I guess you get to have the fun to talk a little bit about one of the lead customers for Microsoft and EDS in this realm.
RON RITTENMEYER: Yeah, one of our customers is Department of Works and Pensions in the UK, a very big customer we do a lot with, and a very important customer when you think about their mission in terms of what they provide to people in need, pensioners, et cetera. So, it’s a very important customer to us at a lot of levels, both ethically, morally, as well as business.
We have just completed the largest government, and I would say one of the most complex, government implementations using Microsoft CRM. One of my mottos is results count, and this thing was flawless. So, you know what, results count, so I’m pretty excited about it, and I think it’s one of many, and we’re off to a heck of a start with you.
STEVE BALLMER: Super, super. Thanks a lot, Ron, appreciate it.
RON RITTENMEYER: Thank you. (Applause.)
STEVE BALLMER: Ron is being a little modest. This Department of Works and Pensions department is one of the largest government agencies in the world, and the opportunity for us to support EDS in that design win is amazing. But I think it also speaks a lot to the new applications, frankly, that we’re all finding for CRM. CRM stands for Customer Relationship Management, and yet increasingly we think about XRM, helping people manage all kinds of connections and relationships of all forms: government to citizen, politician to constituent. There are many, many things, many interesting applications that our partners and customers are finding, and that we’re now supporting, with the Dynamics CRM products.
Let me now look forward to one of the biggest industry trends that we are still early stage on, but one that I think is impactful and important, and that’s the migration from a world of software to a world of software plus services.
Today, there is, essentially, in our world four basically different models of computing. There’s the desktop and PC model that we all know and love, great tools, rich user interface, instant responsiveness, the user feels in control and empowered. People love their PCs.
There’s the Web. People like the fact that they can click and do whatever they want. There’s hardly any installation required. They get kind of seamless updates. And the whole world seems open. There’s a technology infrastructure that supports that.
There’s the enterprise server and datacenter model, where IT is in control of management and compliance, reliability and security.
Frankly, there’s also the world of devices, of phones and TVs. Particularly in business mobile is yet again its own computing environment with its own software stacks and operating systems and the like.
The future of computing is to bring together these four models, where you get the best of the desktop, the best of the Web, the best of environment control and management and the best of multiple form factors into one model.
So, as you think about applications like Dynamics ERP solutions, Dynamics CRM solutions, Microsoft Office or whatever the case may be, you don’t have to think about these distinctions. People will get the richness of the desktop with the control of the enterprise, with the deployment simplicity and availability of the Web, and on any device. This really is the future of our industry in terms of one of the most important underlying technology trends.
In our Dynamics product line we are trying to move to embrace that right away, and you see that particularly in what we’re doing today with Dynamics CRM, but you’ll also see that across our ERP and other product sets.
First of all, these are your business processes, your processes. You have to be able to describe them, to customize them, to implement them in any way you want to, no matter how this gets deployed across desktop, Web, server and mobile.
You need to decide where you want them. Do you want them inside your own datacenter? Do you want them hosted by one of our business partners? Do you want them to be out in the cloud on Microsoft servers? Or, do you need a certain combination? You might say, why do I care? Well, there’s a combination of cost factors, compliance and risk factors. You may have proprietary software in your business that’s a form of differentiation that you want to keep more private. There’s speed and time to market. It will be much faster in some cases to take advantage of a cloud-based service than it will be to instance a given application inside your own datacenter.
So, there will be a combination of factors that may make you want to embrace various deployment options, but the fact of the matter is we need one technology platform and a consistent set of applications that move in this direction, and we’re absolutely committed and moving that direction with all of our offerings.
With our new Microsoft Online offering, you can get Exchange and Office communications capabilities and SharePoint capabilities in the cloud from us. We have over 200 partners hosting Dynamics solutions in the cloud. And, of course, all of our products today are available for you to buy and instance in your own datacenter.
Dynamics is a key part of how we move into the world of software plus services. We’ve been building sales, marketing, and service processes. The CRM 4.0 product we have been bringing to this cloud hosted, software plus services infrastructure. We’ve had over 500 customers testing that service in recent months, and we will formally launch for fully availability in the United States and Canada Microsoft’s Dynamics CRM Live over the course of the next few months. It will be available this quarter by the end of June.
It’s not the only service that we plan from Dynamics in the software plus services space. Kirill is going to talk about some adjacent services that we’re launching. You should expect to see more from us in ERP and other areas as we move into the future.
Demonstration: Dynamics CRM Live
What we’d like to do now is give you a little bit of a demonstration of the Dynamics CRM Live product that will become available this quarter. To do that, I’d like to invite up onstage Bill Patterson, Director of Product Management for Microsoft Dynamics CRM. Please welcome Bill. (Cheers, applause.)
BILL PATTERSON: Thank you, Steve.
In building on what Steve describes as software plus services, Microsoft Dynamics CRM Live is taking the information, speed and ability of online services, and combining that with the familiarity and productivity of your everyday desktop applications. With this new way of managing customer information, we’re going beyond creating online sales systems and taking our information to new heights by enabling business professionals to share customer information with team members, to define and automate their business processes, and to streamline and simplify their communications with customers.
In this morning’s demonstration, I’m going to play the role of an event marketing manager. As an event marketing manager, it’s my job to help plan and manage large marketing events such as this one.
As an event marketing manager, I find I’m always on the go, and so I need a system that’s not only easy to use, but accessible from online applications like Internet Explorer. I can come in and log into CRM Live all over the browser. We’re using Windows Live ID to safely authenticate and identify myself so I can securely access my custom information.
Once I log into the CRM Live system, I have full access to my sales so I can look at my sales opportunities or leads, my marketing, I can go and look at my marketing campaigns, and also my customer service information where I can track and resolve two issues that my clients are having regarding our marketing event.
More importantly, we can define custom business processes such as online event management where I can manage the events, the locations, the sessions, and then also see all of the attendees who have attended those events.
Now, this is great information. I love working over the browser. But more importantly, I find to be productive I prefer to work in the desktop application I know and use every day, Microsoft Office Outlook. This is where I go to get all my e-mails, my communications, my tasks and my calendar appointments just here in my desktop application.
Now, what just happened – CRM Live automatically connects to the Outlook application. So, in real-time I’m getting that same functionality of events and marketing, sales and service, right here into the desktop.
You’ll also notice that this morning I have an e-mail from one of my customers. This e-mail was automatically tracked by the CRM Live connection inside of Office Outlook to automatically tie this information into Ted’s record in my CRM system. So, I’m getting a full correspondence, full communication history with Ted in my CRM Live system.
STEVE BALLMER: You got that just by punching the “tracking CRM” button in Outlook.
BILL PATTERSON: I did, Steve. Actually you know what, getting contact information into CRM in the past has been a challenge. I used to have to take this information out, export it to a file, give it to my IT person, and hopefully they have the time to get it into my system. Watch how easy we’re making it to get contact information into CRM Live for business professionals today. One button. Oh, I found a duplicate. I even have real-time duplicate tracking when I go and import that record into CRM. So I can go and save this record. I can go ahead and process this duplicate record. The CRM system has the intelligence built into Office to help me do my job more effectively. I’ll just go ahead and cancel him, and him. Why don’t we go to tasks. This is where I go now to manage my personal
STEVE BALLMER: The guy doesn’t have enough customers, he’s canceling them all.
BILL PATTERSON: That’s no problem. In addition, CRM Live delivers my personal work to me right here inside of my desktop application as well. So I can come in and see that I have tasks or activities to perform in order to do my job. Again, guess what, it’s tracked in CRM, real-time, automatically sending my work to me on the desktop application. Now, if I wanted to actually find out information about this particular event, I can come in and view that information in real-time without having to leave the desktop. So here I can find the information about my event, how many attendees I’m expecting, where the location is. Now, I might not be from this area, and mine might need to provide expertise or better information about where the local event is being housed. So in real-time I can combine other online services and applications into this experience, and overlay services like Microsoft Virtual Earth Service into CRM Live to get better information for my customers. How about this: What if I can view this information in a 3D format? I can see additional perspective. I can tell you how high the buildings are that our signs need to go for that event in the advertising. So I can go and sort, and zoom, and really overlay new experiences here into CRM Live to be more informed as that business professional.
Now, I also mentioned that we automate business processes for these businesses. Event management is a custom process that we built into the CRM Live Service. I can come in and look at all of the work, all of the steps and activities that are needed to plan, manage and follow up with customers once they’ve finished that event.
STEVE BALLMER: This is a customization that any customer could build on top of this CRM Live system.
BILL PATTERSON: That’s right. Any of our customers or partners use our declarative workflow tools to come in and define new processes for their businesses here in this application.
It looks like the only thing I have to do to complete this event is send the event thank you letters. What application should I use to do that? I think I should probably use Microsoft Office Word. So I can come in, in real-time, again, not leaving this information, and let me sort these to the ones that are assigned to me. I’m going to go ahead and select a couple, and with one button I can now come out to Word, use a template that’s already been provided for me, select some data from the CRM Live system, and hit OK. And now what’s going to happen is, Word is automatically going to take this information from the Internet, download it onto my desktop, so I can now be more productive with this application. I can come in, insert data into this actual Word document, so when I get the contact name, and the event name that they attended, so I can personalize this content, and here we go. I’m now previewing this information in real-time – these are my letters – complete my merge, edit, and as I hit edit CRM Live, again, is aware of my presence inside of Office. It’s going to say to you, what do I want to do with this information, do I want to take this data and send it to CRM Live? Sure I do. I want to have a full relationship history with this customer record. So it’s saving all of these documents, and producing all this information, and sending them up to the online server so that I have that full information here.
So my mail activities were tracked in CRM. If I come back to the CRM Live system, and I just open up one of these attendees, you’ll notice I have a full interaction history, when the document was created, who created the document, and the document itself is attached and uploaded to that CRM Live instance.
So I hope that over the course of just a few minutes here, you get the sense of this powerful work automation system built between CRM Live and the familiar desktop applications so that the business professionals can be more productive managing their work. Thank you very much. (Applause.)
STEVE BALLMER: Why Microsoft? As you consider various ERP or CRM solutions, it’s a very good question. We’ve been in this business now for about seven years, and I still get asked, is Microsoft a serious player in business applications. I promised our folks that if I achieved one thing, and only one thing in our talk today, it would be for you to understand absolutely our commitment, our seriousness, and the same long-term approach we will apply to the field of business applications that we have done with everything else we’ve ever undertaken from Windows to Office to our server and enterprise business. This is mission critical for us. We’re not tracing every aspect of business applications, but what we do, our focus in on mid-market and smaller company ERP, our focus in on ERP and supply chain, specialty solutions in the enterprise, our focus in on subsidiaries and enterprise divisions, our focus in on CRM everywhere, our focus on making these things really usable and really valuable is absolutely 100 percent.
We’re going to do the same kind of job we do everywhere else. We’re going to bring raw innovation to these issues. We’re going to bring integrated thinking about how ERP and CRM fits in the broader context of what people are trying to do with information technology. We’re going to support major industry transformations like the move to software plus services, and we’re going to do that, as I said, with the same kind of long-term commitment and approach and tenacity that we apply to everything else.
I’m excited about our performance in this area. Our business is growing roughly 20 percent a year. We’re growing much faster than the market in general. We see so much opportunity in so many industries with ERP. We see so much opportunity, literally many, many tens of millions of people who could benefit by the kinds of technology that we’re building in Dynamics CRM. And we’re not going to be content until we’re able to deliver the kind of innovation and package it with our partners in the way that makes it meaningful to everybody who could properly benefit from it.
So we’re excited again to have you here at Convergence. We thank those of you who are customers for your support. We thank those of you who are partners for your energy, support. And certainly we welcome those of you who are prospects to this show, and hope we get an ongoing opportunity for an absolutely great dialogue.
I’m going to have a chance to take some questions here in a minute, but before I wrap this up let me, again, say thanks, we appreciate and welcome you to Convergence. (Applause.)
Michael Parks is going to come back on stage and join me. I think we had a chance to take some questions in advance over the Internet, is that right?
MICHAEL PARK: Well, we had about 400 questions come in. So we have about 20 minutes. I was thinking we could get through maybe 200 of them in 20 minutes.
STEVE BALLMER: You’d better get somebody else to answer. I’m a long answer guy, not a short. But, we’ll do our best.
MICHAEL PARK: All right. So for those of you who we don’t get to, one of the commitments that we will make to you is you’ll get an individual response via your e-mail for the questions that we can’t answer here today.
STEVE BALLMER: And if you have a question that you didn’t submit, and we don’t get to, I’m Steveb@Microsoft.com. Feel free to send me a piece of mail. What’s your address?
MICHAEL PARK: Michael.Park.
Michael.Park@Microsoft.com, we’re both happy to take any questions you might have.
MICHAEL PARK: That’s right. All right. Why don’t we get going. And I promise to be nicer than Guy Kawasaki last week at the MIX Q&A session that we had.
All right. With Jeff Raikes leaving, and a pretty sharp guy, Stephen Elop coming in, a lot of people are interested in knowing where you see the Microsoft Business Division headed as we look out into the future?
STEVE BALLMER: Yes, I’d say I had a chance to talk about our strategy during my talk, and everything I said I mean. And I don’t think there will be any change to strategy based upon the fact that we’ll have people switching, we brought an incredibly talented person on board, Stephen Elop, who came to us from Juniper and Adobe and Macromedia, who will be running both our Office business, as well as our Dynamics business. But, the strategy is clear, I’m excited about where we’re going, and I think customers can invest in that strategy knowing that we’re going to be very consistent about it.
MICHAEL PARK: Great. We’ve got another question from the fabulous Andy (Babulous ?), and his question is, tell us about your strategic thinking behind the Yahoo acquisition, and what relevance does that have to this type of customer audience?
STEVE BALLMER: Well, I’m not sure I’ll make it directly relevant, except to say everybody in here is not only an IT person, or a business decision maker, but everybody here is also a user of information technology, and at least statistically you use some other guy’s search product more than you use our search service. And we hope to continue to change your lives in every way. We think the acquisition of Yahoo facilitates that in a few ways.
Number one, we continue to seek more scale in the search business. Search is a scale opportunity. The more users you have the more advertisers you have, frankly, the more advertisers you have the more relevant you can make the advertising you put on the page. When you see a search page, you’re not just judging our work, you’re judging our work, and the advertisements that we had available to put on the page. So we see a lot of opportunity to enhance critical mass in search, and in advertising overall through the acquisition of Yahoo. Obviously, that’s a work in process. And I don’t think I will share much confidential about that today.
MICHAEL PARK: Okay. We have another question from (Yorg Vhad ?), and Yorg is interested we’ve been known for eating our own dog food. And Yorg is interested in your perspective about some of the internal learnings that you might be able to share with the audience on what we’ve learned from deploying ERP and CRM internally, and what our plans are there.
STEVE BALLMER: Yes, we use Dynamics AX for all of our supply chain and manufacturing on Xbox, which is great. It’s been an absolutely phenomenal experience. And I think it is a good what should I say I think it’s a good representation of what I think a lot of large enterprises might want to do. The backbone fabric, and I’m not talking about he largest of the large, Microsoft is certainly one of those.
In the largest of the large companies the backbone, financials, et cetera, may get hooked together by an SAP, or an Oracle, whatever the case may be. But, you will have divisions or processes, frankly, where it is just simpler, and easier to take Dynamics AX, or one of our other ERP systems, and customize it, and tailor it for a specific process. That’s what we’ve done for our Xbox supply chain operations. We integrate the results in with the SAP system, and it was a very wise choice for us, as opposed to trying to force-fit our supply chain, which just didn’t need all of the overhead and complexity of the full SAP configuration. So one good example.
The other thing I’ll highlight with CRM, we are a long-term user of Siebel and Clarify. We are not a long-term in the future user of either product. We are in the (applause) we are in the process of doing conversion. We have to do those thoughtfully, as any of you would. We’ve moved about 4,000 of our CRM users over to Microsoft CRM. I’ve got to tell you, it’s been fantastic for those people.
I announced in our sales conference last year that we were moving the rest of the sales force over to Dynamics CRM. It was the single biggest applause that we received from our own people, which is rare. Usually our own people love our products in the hands of their customers more than in their own hands. Yet, the chance to move off of Siebel with its complexity, and blah, blah, blah, user interface, phenomenal response. So we’re moving all of our call center agents, all of our sales force over to Dynamics CRM.
MICHAEL PARK: I can personally relate to that blah, blah, blah, we’re really looking forward to that.
STEVE BALLMER: We’ve got get Michael converted soon.
MICHAEL PARK: There’s another question from Mark Perry, and I’m sure it’s top of mind for a lot of you relative to CRM, and that’s a lot of customers now are considering CRM, and they’re looking at Salesforce.com, and they’re looking at MS CRM. I’m curious to your thoughts on how should consider it. You had some good words about it in your e-mails, can you give us some more thoughts there?
STEVE BALLMER: At the end of the day, you’re going to look at the solutions and decide what you think is best, and I respect that. If I was to highlight some notable and important differences between our CRM and Salesforce, number one, they are only available online, we give you flexibility in how you choose to implement. I think that’s actually very important.
Number two, almost all CRM processes are best customized in some way. The simplicity, yet power of customization that’s built into CRM 4.0 is unparalleled. I don’t think you want to sit and write a lot of code. We’ll make that even more and more possible in the future, but you are going to want a lot of customization of the process. We’ve got a very good set of tools to let you do that.
Number three, we really are well integrated with Outlook, Word and Excel. You tell me a sales person who really doesn’t want to live in the browser, in Outlook, in Word and Excel, I think you’d be hard-pressed to find that person. Your users will appreciate our interface, and by the way, if you want a cloud-based implementation, we’re about half their price, and if you want an on-premise based implementation, it just depends on how efficiently you think you can run your CRM system. Certainly, price is absolutely an advantage for Microsoft.
MICHAEL PARK: Nancy Stoddard has another question that I thought was quite interesting. What is Microsoft’s strategy to address worldwide environmental and sustainability issues?
STEVE BALLMER: Yes. Let me break it into four issues. Microsoft is a company, like any other large company. In terms of our own use of power, the things that we are doing as a company, I think we’re right out there on the leading edge, whether it’s solar-powered facilities, new bus transportation options for employees, the work that we’re doing by and large there I would say is first rate.
Second, we’re a hardware company, and we’re trying to be leading edge in terms of the way we think about products like Xbox, et cetera, and their recycleability, and sustainability. We’ve got an amazing program that is leading to good results.
Number three, we build software products that actually drive power usage. The work we’ve done, for example, in Windows Vista and Windows Server 2008 to reduce the power consumption that any of you will see from those products is quite strong. We have more we can do, but it’s quite strong. We are an operator of data centers, and we are being very environmentally smart about the way we build those, and where we build them. We put them near cheap, renewable power, and we build them in a way and actually measure very carefully how much total power gets lost or dissipated through the data center, and are pioneering new data center techniques for sustainability.
And last, but certainly not least, in the longest of runs, the answer to most of our environmental and sustainability issues, I think, is new science. It’s not just conservation. We do need new science that gives us new sources of energy that are far more environmentally sound. And we have major initiatives in our product line to continue to extend our tools to support the biological, the chemical, the physical sciences so the scientists who will really solve these problems can drive that scientific research even faster.
MICHAEL PARK: Doug Davis has a question about our enterprise strategy, the app space, as we all know, up there has been dominated by SAP, Oracle, and IBM attempting to do services around that. What Microsoft investments are you thinking about relative to our products to secure leadership in that area of the market?
STEVE BALLMER: Today, Microsoft actually is the leading provider of enterprise software. We passed IBM, we passed Oracle, we passed SAP, total dollar volume. I’m not saying that’s a well-known fact. It’s probably not a little kept secret, but it’s not a well-known fact. And I think our job has to be to continue to extend our footprint in the enterprise, broader sets of solutions, you see that as we add security software, BI software, SOA software, portal software, we continue to extend CRM, the work we’re doing with our Dynamics ERP line in certain enterprise applications, the work we’re doing with products like Duet that we do with SAP extending essentially our value in big enterprises. So we’re very, very focused in on it. And I think we have a big footprint. We’re going to continue to extend what we do, and we’re going to continue to compete very, very aggressively.
Today I feel like SAP, in what they do, is quite strong, of course, and we’re quite strong also with them, sometimes competing, and sometimes coexisting. With Oracle, we primarily compete, and we’ve got a lot of upside, particularly in the database area, even though we sell about 70 percent of all the databases on the market, we’ve got a lot of upside versus Oracle that we’re focused in on. IBM is the most interesting, because frankly none of their actual software product lines is today that strong. WebSphere is not that strong. DB2 off the mainframe is not that strong. Notes is not that strong. Tivoli is not that strong. And yet, because IBM has the services agenda, they’re really more of an enterprise services player that just doesn’t love our software very much. And so we tend to love guys like Ron Rittenmeyer and the EDS team a lot, because we like to see guys who are willing to do enterprise services with our software.
MICHAEL PARK: Paul Connolly has a question about just your personal leadership style. How do you lead, motivate, and measure the effectiveness of those who report to you?
STEVE BALLMER: I don’t know that I’ll be able to give pithy wisdom in a minute-and-a-half from the stage. I think we all deal with that. I think at the end of the day, most people respect a few things in a manager. Number one, they want appropriate independence. Number two, though, they want an appropriate challenge. They have to be held accountable. They want a lot of honesty. And I actually think most people, while they don’t want to be micromanaged, appreciate a boss who actually understands what they’re doing, and is available for brainstorming and sort of the creative process. Certainly as a manager, those would be the things I focus in on with my directs. Now, by the time you get to the 80,000th Microsoft employee, the same techniques don’t work. If I was to put this in a CRM sense, I think you sell to your directs, and your directs to directs, and you market to your 85,000th employee. So it’s a different technique for different kinds of employees, and how you reach them and relate to them.
MICHAEL PARK: Thanks. Last question from Carol Pierce. Bill Gates is formally going part-time this summer. How are you feeling about that?
STEVE BALLMER: Well, I think for my golf game, I wish I was going part-time. But I love what I’m doing. I love it. I’m here. I’ve told our folks, I’ll be here full-time for another ten years, nine years now. I’ve got a third grader, I want to make sure he gets to college before I do anything different. I think it’s wonderful for Bill Gates that he’s got a passion for the work he’s doing with the Bill and Melinda Gates Foundation. Certainly I think that is also very important work. We’re excited we get to keep him part-time, and I know the whole world will benefit from the full-time work he does at the Foundation.
MICHAEL PARK: Well, we’re out of time, and I think on behalf of the entire audience, Steve, I want to thank you for taking the time to be here with us today.
STEVE BALLMER: Have a great Convergence. (Applause.)