Robbie Bach: Microsoft Open House

ANNOUNCER: Ladies and gentlemen, welcome to Microsoft’s first annual open house. Please give a warm welcome to today’s host, Microsoft President of Entertainment and devices, Robbie Bach. (Applause.)

ROBBIE BACH: All right, well, I think that music successfully aged me and lets you know what generation I’m coming from.

Good morning, everybody. It’s good to be back in New York. I will say for those of us who flew in from Seattle it’s a tad early, but I’m excited to be here, and ready to get you started on what I think will be a great day.

Now, I grew up in the Midwest, in Milwaukee. I moved to North Carolina. I went to school in Chapel Hill. But I did some to work in New York.

And when I was here in New York, things were just a tad different then. Just to take you back a little bit, I actually had a pager. I know some of you remember what a pager was. This is better. I worked with an HP 12C, no computers, no spreadsheets, and I was a financial analyst working at Morgan Stanley.

Now, fast forward and come forward 20 – a little more than 20 years, and look at how things have changed. And the technology we are working on today is now about changing industries, and changing people’s lifestyle, and that’s what today is really about, to talk to you about the things we’re doing for this holiday season to really bring new excitement, new ideas, new experiences to people.

So, I want to welcome you to today’s open house. I hope this even is different in at least two ways. First of all, typically at a Microsoft event I would talk for an hour and 15 minutes, be a lot of PowerPoint, at least four or five product managers helping me do demos of all the different products.

So, we thought for today we’d do it a little different. I’m going to spend hopefully only about 20, 25 minutes giving you a brief overview of the products and what’s here at the Armory, and then we’re going to let you experience the products and go out into the different sections of the Armory and see the products in their environment, including a garage, a tree house, and a few other things, but give you a real opportunity to see the technology in action and see the experiences in action. So, that’s the first thing that’s different.

The second thing that’s different is during my talk I’m going to try to give you a little bit of what I would call the director’s cut, give you a little bit of background about how some of the technology was created, some of the inside stories about that, and hopefully if you’re a writer for Teen Vogue or whether you’re a writer for Newsweek or Engadget there will be something in there that will grab your imagination and give you a hook for the stories that you want to write and for the things that you want to share with your readers.

Let me start with one of those, which is about product creation. A lot of times I get people asking me, well, how do you guys come up with these new products, how do you come up with these things. And this is actually a chart, and this is a real artifact from the Windows Mobile development team, which is about product creation and ideation, the process they go through throughout the product team to try to come up with new ideas.

And you never know when you’re going to come up with that aha moment that gives you something new and exciting and different. And as I think you’ll see today, we have that throughout all of our products. This is just one example of how we try to be structured in the way we think about things, but free thinking in the way we come up with new ideas.

So, let’s see what that product has produced, what that energy has produced, and as you can see from our holiday wish list we have a little bit of something for everybody here, something that you can experience in the way that you want to live.

Now, for those of you who are doing early holiday shopping, the good news is, if you’ve got some music diehards on your list, we have some things. Sadly, if you have some workaholics on your list, we have some things for them as well. If you’re a gamer or a channel surfer, we have things for them. And if you’re a busy mom or like some of us are Twilight obsessed, we have things for you as well.

Now, that leads me to my first embarrassing moment of the morning perhaps, which is that I have to admit I am a bit of a “Twihard.” It’s a little bit of a family tradition we have. I have three kids, and I have read with my kids when they were growing up. My youngest is 13, and she and I have read over 30 books together. We are currently partway through the Twilight series.

Now, I have to admit that my daughter is certainly into this, but I’ve gotten a little bit into the Edward-Jacob-Bella love triangle thing. It’s sort of like Peyton Place going back to childhood. It’s a little bit of a funny experience.

But for the record, we just finished the second book and Bella definitely should have gone with Jacob. This Edward guy is just a little too creepy for me.

So, what do I get my Twihard daughter? What’s the gift that I give her for the holiday? Well, I could give her a Zune and trick it out with a Zune Pass so that she has access to all of the music. She might want 6 million tracks on our Zune Pass subscription service. Or I could trick it out with Stephanie Meyer’s favorite music from Muse and Linkin Park and Coldplay and Radiohead. That’s the music she listened to when she was creating the books.

And so this creates an opportunity for a unique connection between me and my daughter about the things that we are sharing together, and certainly the holidays are about those connections.

Now, if you think about Zune HD, you might say, gosh, how did we come up with some of the things we had in there. So, I want to tell you a story about Mixview, which is a feature in Zune HD which basically enables you to discover new music.

We have this real challenge, when you have 6 million tracks, it’s hard for people to find the music they want. So, one of our developers was literally – this is actually literally the drawing he did on a Post-It note, was scribbling on a Post-It note with a way to help people explore and find music. He then went away with another developer, and the two of them created this feature called Mixview, which you’ll see if you go into the Zune section and try it out.

And this is an amazing way for people to explore and find music. You start with Radiohead, and you never know where you might end up. It’s a great chance, particularly if you have a Zune Pass subscription, to be able to explore through the world of music.

So, this is a way I can introduce my daughter to tunes from when I was growing up: Styx, Journey, Elton John. That takes you back a little bit of ways and distance. But it really is an opportunity to make a connection. And that’s how software in Zune is driving innovation.

But, of course, we’re also driving innovation in Zune with hardware, and the Zune I would say is profoundly a beautiful device; not just because it has an amazing OLED touch screen, which is great for watching movies, just a great experience from a touch perspective, but it’s designed to have that same feeling of a Bell & Ross watch, which are designed for pilots and deep sea divers, bomb squad experts, explorers, whatever.

And it’s that funny combination of being a premium device but also being utilitarian and durable. It’s what the team calls delicate but compositionally brutal, an interesting contrast. But when you get a chance to go in there and feel the hardware and the software working together, you’ll get the context of what we’re trying to create, and I think with Zune HD we have created something very, very special.

The sales in the stores are actually bearing that out. We are today struggling to keep up with demand. That’s a good problem, not a bad problem. We’re going to work hard on that for the holiday season.

So, I hope you get a chance to try out Zune HD there. I think when you came in, you should have gotten a gift basket that might have had a little goody for you in the Zune HD family. So, take a look at that as well. Visit the entertainment zone, enjoy Zune, enjoy the things we’re producing there.

One of the other additions we’re making with Zune is we’re actually taking the Zune experience and moving it to Xbox as well. So, this fall you’ll be able to get on-demand movies and TV shows, shown in 1080p, brought to you by Zune, on the Xbox and on your TV.

Now, that leads me to a whole other topic of discussion, which is the whole idea of all the different types of content that our kids have access to today. And when I think about this, as I said before, I’m a father of three kids, I’m also a chairman of the board of governors for Boys and Girls Clubs of America, I care very deeply and passionately about kids. And so we’ve been working very hard to figure out how we keep kids safe.

With Boys and Girls Clubs of America we launched a site called GetGameSmart.com, which enables parents to go out and see what things they can do to understand what their kids are playing, what they’re using on their Xbox or on their PC, and understand how they can be engaged. It also features our award-winning family settings, which come both on Windows and on Xbox, which enable parents to really manage the content that their kids are watching.

Now, I have four older brothers and sisters, some of which are significantly older than I am. They’ve had kids. They have kids who have graduated. They’re grandparents. Their advice to me as a parent was, gosh, you want your family room to be the place that all the other kids want to come, because then you can see firsthand what they’re doing and what they’re experiencing. And I think that whole concept of enabling parents to be more in control is very central to what we’re trying to do in this entertainment space.

So, you ask, in our family, in our family room what are people actually seeing and watching? And on Xbox this year we have a great lineup of products. I think if you go to the Xbox zone, you’ll see great titles: Beatles Rock Band, Forza Motorsports, Madden NFL 10, Halo 3 ODST, Call of Duty, a whole set of products that are really going to be very exciting.

So, let’s take a look just quickly at a holiday ad that will kick us off from the holiday season with Xbox.

(Video segment.)

ROBBIE BACH: So, we know this holiday season people are going to be tightening their belts a little bit because of the economy, and in many cases that means the family is going to buy maybe one large gift instead of a lot of individual gifts, and so we’ve actually lowered the price on our Xbox Elite console by $100, to $299. We’re also introducing an Elite bundle, which for $299 also includes two games, Lego Batman and Pure, which is a motorcycle game, both of which are rated E for everyone, and this really will bring a tremendous value to families and a tremendous opportunity for excitement in the living room.

Now, of course, with Xbox the excitement doesn’t actually really stop in the living room, because Xbox Live is a super important part of our offering.

What’s the largest social network in the living room? What’s the largest social network on the TV? In fact, it is Xbox Live, now with other 20 million members, really experiencing gaming but also experience the social experience around gaming.

Not only are they playing games together but they’re chatting, they’re now watching Netflix movies together. In fact, when we launched the Netflix service on Xbox, a million people, over a million people activated Netflix from their Xbox account.

So, you see real traction not just in gaming but on the places where gaming crosses over into social interaction into movies and into music.

We’re going to be adding Facebook and Twitter support this fall, which I’m very excited about. This is mostly a U.S. audience, but if you lived in the UK or France you’d be excited about BSkyB coming to Xbox this fall, you’d be excited about Canal Plus content coming to Xbox this fall. So, we have a great opportunity to expand Xbox Live.

Now, one of the exciting parts about Xbox Live – and this was actually a little bit surprising to me – is this whole concept of avatars. And this is a huge part of the Xbox Live experience, and people want to dress up and do their avatars individually.

So, if you look on the screen here, you’ll see my avatar in a few different outfits. I don’t know about the cowboy one. I’m not exactly sure that’s me. But people really spend time doing this.

I’ll give you a news flash for Tim Gunn on Project Runway. Xbox Live members changed their wardrobe 150 million times so far since we introduced avatars. That’s a statement about many things I will say, but it certainly shows the excitement and the engagement people have.

Now, one of the challenges on Xbox Live, of course, is how do we match-make people with people of like skills and like interests. And again this is one of those challenges that the developers took squarely on.

One of our developers actually in Cambridge, in the UK, who is a Halo fan, wanted to be able to match-make with people in a better way. So, he actually started creating – and this is literally the matchmaking algorithm that he started to create – so that we could do a better job matchmaking people.

So, if you’re on ladies game night, family game night, if you’re playing one versus 100 – which by the way 200,000 people participate in every weekend – you’re going to get a great game match, because these developers took the time to plow through 425 million game sessions to understand the best ways to match the people and to literally figure out the mathematical algorithms to make that all work in a successful way.

So, this is a clear example where there’s serious technology, serious science behind something that is a social experience, and driving home that social experience in a very, very rich way.

So, our holiday lineup on Xbox is going to be great. You can go over to the gaming arcade, check it out, play some of the games, watch other people play the games; Netflix, Facebook, and some great games coming. We’re going to wrap up this section with a quick look at a new racing title from us called Forza.

(Video segment.)

ROBBIE BACH: So, clearly in my view Zune and Xbox are going to be great products this holiday season, and tech in general, even with the economy, we think are going to be very, very popular. In fact, there was a recent survey that said one out of four adults wants to buy a new computer this holiday season. So, if you do the math on that, that’s 50, 60, 70 million people who want to buy a new computer.

Fortunately, we have an amazing product to market that’s going to be perfectly timed for that, because on October 22nd we will launch Windows 7.

Windows 7 really in one sentence is your PC simplified. It’s about making it easier, faster, and better to get things done. And in 16 days people are going to be able to see that and experience that in spades.

Now, the Windows 7 project, one of the lead development guys on the project, a guy named Jon DeVaan, who I’ve worked with for almost 20 years, and I talked to Jon about what it was like being on the Windows development team, and it’s pretty amazing the scale of the effort: 3,500 engineers, testers, and program managers working on the project for over three years. They talked to literally millions of customers to get feedback from over 200 countries. And really what that feedback boiled down to, as I said earlier, people want something that’s simple and easy to use, and makes it really fast to get at the things that they wanted to do.

So, Jon told me, he said every night, you know, we do a build, we would do a build of Windows 7. The next morning I’d get up, I’d install it on my machine, and I’d start to use it. And he said, the test I’d use was, were things simple, was it getting faster, was it performing better, were people getting to their work and their entertainment faster and in a better way.

So, the team actually came up with something with a tool called Performance Track, and the whole idea was to determine whether they could make the entire product simpler, more streamlined. The word they used is “snappier.” So, is the Start Menu snappier to come up? When you right-click on your mouse, do you get a menu that comes up in a snappier way? Does sleep and resume happen in a snappier, quicker way? The entire user interface and user experience is just that much quicker, that much smarter, that much simpler for people to use.

So, are we simplifying tasks with Windows 7? The answer is absolutely yes. Are we getting it so that people can get at their information, at their entertainment quickly and easily? The answer is yes. And are we making new things possible? And the answer to that is yes as well. Windows 7 for us is clearly an important milestone product.

For me personally being the sort of entertainment guy at Microsoft, Windows Media Center is an important part of the product and new capabilities we’ve brought to the product.

Of course, people today on their PC can see videos and go to YouTube and do all of that, but the experience isn’t really satisfying. Windows Media Center turns your PC basically into a virtual screening room, makes it easier for you to record, play back, pause all the video that you want. In fact, you can find video on other PCs in your home if they’re in the same Windows 7 home group, so you can play video around the house from wherever you keep it, wherever you store it.

And we’ve now just recently added Netflix support to Windows Media Center, so the same Netflix support that I talked about on Xbox is now available on the PC, so no matter what screen you’re working on, you’re going to have access to that video that you want.

So, Zune, Xbox, Windows 7, all very, very important products.

That brings me to our final topic, which is to talk about Windows Phones and the phone market.

Now, my family has a little bit of a challenge that I think many of you can probably relate to, which is we are very widely dispersed. You can see the Bach family crest there conveniently with the Windows flag, the Xbox logo, and the Zune logo on it. It’s a late addition to the family crest.

I live in Seattle, my son is at school in California, my parents and brothers and sisters mostly live in North Carolina, my wife’s brother lives in Ohio, my wife’s mother, who the kids call Oma, lives in the Netherlands. My wife is Dutch. We have a very dispersed family.

And so the challenge for us at holiday time is how do we stay together, how do we participate as a family together.

So, with my son I text. He does not answer the phone. I don’t think he knows what a phone is. He never checks his e-mail. A text, I get a response in 30 seconds, no time flat.

With my wife during the course of the day, we’ll do quick phone calls during the course of the day. Sometimes we have to do it in Dutch because I’m in a meeting, so I don’t want people to know what I’m talking about.

At 6:00 AM in the morning I work out three or four days a week, I’ve got to coordinate that with my schedule at work.

All of these things are done on my phone. So, the phone really has become a central part, along with the PC, of what I do.

So, when we announce today the availability of Windows Phones, it’s a very important event for us.

And the first thing that’s significant about Windows Phones is what I just talked about. Historically, our phone products have been more about business software and about mail support for Exchange and working in the enterprise. What’s changing today is we’re adding to that integration with your lifestyle.

So, the whole idea that your work style and lifestyle are blended together and can both be supported from one product is super, super important to what we’re doing. We want to connect you with the people you care about most, we want to connect you with the information you want, we want to connect you with your entertainment, whether that’s Facebook, PowerPoint, text messaging, e-mail, Outlook, whatever it is, in the car, the grocery store, at home or at work. We want to bring all those things together. So, the first thing is about merging work style and lifestyle together.

The second thing that’s significant about Windows Phones is about choice. Between now and the end of 2009 we will ship 30 Windows Phones in 20 countries. It’s a pretty amazing product lineup when you actually look at it. And this is the best and broadest portfolio of products we’ve ever had.

Now, the key thing about this is what we find when we talk to our customers, they think phones need to be unique and specific to them. Some of them want a big screen touch device, some of them want a small screen, cheap, QWERTY device with just a keyboard on it, some of them want a slider that has the best of touch and the best of a keyboard. They make those tradeoffs. And when you go around a room and ask people to pull out their phone, you’re going to see a huge variety.

So, one of the big benefits of Windows Phones is they offer that choice in spades: physical keyboards, touch screens, both; choice of operators, you’re not locked into one operator. If you want to be on Verizon, AT&T, T-Mobile, Sprint, all of those work. And, of course, different price points. And particularly in today’s economy, some people want to spend the money to get the higher end phones, we have a lot of people who want a basic phone with a keyboard so that they can do the basic things, and Windows Phones span that entire breadth of the offering. So, work style, lifestyle, great choice.

The third thing we’ve discovered about choice is it actually goes a little further than just the device themselves. So, we’ve actually done some very cool design work with some very famous designers, Vera Wang, Isaac Mizrahi, Diane von Fustenberg, Ron Arad who’s an architect, or somebody like Rock & Republic, and actually created custom themes and screens. And you, in fact, can create your own custom theme and screen on your Windows Phone.

And so the whole idea here is phones are personal. They should be personal, they should be customizable, you should be able to get exactly the phone you want with all of our Windows technology built-in.

The third area of importance for Windows Mobile is services and applications on top. The first service we’re announcing today is Windows Marketplace for Mobile. This is the one-stop shop to get added value applications on top of what comes with a Windows Phone.

So, there literally will be hundreds of applications, Facebook, Twitter, and others, all the ones you’d expect, available at the start, and that number will grow dramatically through the end of the year.

There will also be some applications that are unique to Windows Mobile: Critter, which turns out to be a little animal fun app for cats and dogs and kids who want to experience that, or Midomi, which is the fastest way to figure out what music you’re hearing, who the artist is, and then figure out, go to Zune, buy that artist.

So, there’s a whole world of applications that we’re going to add to your Windows Phone experience, again to extend it and make it even more personal.

The second service we’re adding, which I’m personally pretty excited about, is My Phone. Now, My Phone is a free service that basically enables you to recover when you lose your phone.

Now, people lose their phones in the oddest places. The refrigerator or a freezer point here is one that I thought was quite unique. There are some others that are unique as well, which we didn’t include in the PowerPoint.

But with your free My Phone service you’re able basically to take everything that’s on your phone and put it in the cloud on a server where it’s managed and taken care of and preserved.

So, if, for example, you lose your phone, you can go to a PC, click on your phone from the My Phone service, and it will map it for you and tell you literally on the map where it is. So, if you see it driving down the road, you know you left it in the taxi, that’s where your phone is going. Likewise, you can have the phone — even if it’s on vibrate, we can force the phone to ring. So, you can find it, as you’ll see in a moment, stuck in the cushions of the couch, even when it’s in vibrate mode.

Maybe you want to protect the phone, you’ve got some sensitive data, it’s your business phone. So, we can enable you to lock it, we can enable you to remotely wipe it, from the PC.

So, all of this ability to customize your phone is integrated between the PC screen and the mobile screen in a rich way.

And if you do lose your phone and you can’t find it, you go get a new phone, that will synch to the My Phone service and bring down all the things you had there, all of your content, all your customization, and apply it to your phone straightforward.

Look, your phone is effectively like your wallet. When you lose it, it’s a disaster. The My Phone service is there to make sure that you can recover gracefully and always have a tremendous experience with your phone.

So, what I want to do now, what I’m going to do is introduce a video, and this will give you some idea of all of the things we’re doing on Windows Phone, and hopefully summarize the last few points that I just made. Let’s roll that video.

(Video segment.)

ROBBIE BACH: So, that’s what you’re going to see from us starting today on Windows Phones. When I look at my holiday list, I actually do want to get a digital video camera. I don’t have one; I want to get that. I discovered last weekend in Seattle I need some rain gear for playing golf, so I’ll be looking for that on my holiday list. And I also want to get Windows Phones for our whole family. We use the phone a lot, and I think this is going to add tremendously to our ability to communicate and stay together as a family.

So, I hope you’ll go – you’ll enjoy this. There’s actually a tree house behind us here. I hope you’ll go to see the tree house, check out all the Windows Phones, experiment with them, find the one that fits for you and fits with your lifestyle.

Now, I’ve given you just a quick snapshot this morning of the things we have for our fall holiday lineup. There are a whole other set of products in the Armory here that we didn’t talk about today. Go into the garage area. There’s a garage right behind here. Check out the Microsoft Auto product. Two Ford cars in there, the new Ford Taurus, very, very cool.

We have a new product called LifeCam Cinema, first consumer Web cam to offer widescreen high-definition video. So, now I guess when I Web cam with my son, I can see his dorm room in high-def video. I don’t think I’ll be having his mom see that, but it certainly will enhance the experience that he and I could have.

New version of Office which is coming out in the spring, you’ll see that. Bing and the new work we’re doing on Bing is also very exciting. Xbox, Windows Phones, Windows. It is a full lineup of products. I hope you spend a lot of time roaming. Ask questions and take the chance to play with the products.

So, I want to thank everybody for coming this morning. I hope you’ll also come back tonight. We have a great event here this evening, which should be a lot of fun. I’m really proud of the lineup we have. I think we have great things across the full range of products to really lead to an exciting holiday, and as I said at the beginning, take technology and turn it into something very personal and exciting for people.

This is our first open house. We’d like to do it every year so that you can see all our products at once instead of in 15 different meetings. So, give us feedback, things you’d like us to do differently. We’d love to hear that so that we can make it a great event each year.

So, it’s an opportunity to make yourself at home. Today is about that. I hope you’ll feel at home as you go around today.

Thank you very much. (Applause.)