Stephen Elop: Tech•Ed Europe 2009

Remarks by Stephen Elop, president, Microsoft Business Division
Tech•Ed Europe 2009
Berlin, Germany
November 9, 2009

STEPHEN ELOP: Thank you. I am indeed honored to join you here today. As Achim said, this is, of course, an historic day and an amazing time to be here in Berlin with all of you, commemorating a moment that’s so important to Germany and to people around the world.

Just two days ago, and for the first time in my life, I stood in front of what remains of the Berlin Wall, and I was reminded what a rare moment it was 20 years ago.

Now, it’s important to acknowledge the significance of those events that did happen here 20 years ago. However, quite clearly in no way does our discussion today or anything we’re going to talk about compare to the events that took place in Berlin and across Eastern Europe back in 1989.

So, simply, I would like to acknowledge the significance of this day, and to express my gratitude to you for providing me with this opportunity to talk today, 20-year celebration, a round of applause for what Germany has accomplished, please. (Applause.)

Now, one thing we do know from history is that change is a constant. Once again, we all find ourselves in a period of transformation. Organizations and individuals, including all of you in this room and others throughout the world, are faced with a moment of generational change. Shifting demographics are redefining the workplace. For example, this is the first time in history that the workforce has spanned four generations. Young workers enter with an entire set of expectations that are different for information technology than their predecessors had even just a decade earlier.

And looking out further still, those individuals who will join our teams in the years and decades to come will use tools and techniques to communicate and collaborate that are well beyond anything that we use today.

All of these factors present a challenge for each of you as we work to meet the very different and sometimes divergent expectations amongst these different generations of workers.

Beyond demographics, these generational changes also include the arrival of new technologies, including cloud computing, virtualization and increased automation.

These represent a sea change that is affecting every worker and every organization. To be candid, these changes will affect all of us in information technology: me, you, our current jobs are going to change, and also our future roles.

And, of course, adding to all of these dynamics of disruption we have the world economy. We are past the point of trying to figure out what exactly happened: It happened. Now, we are working to adjust to a new normal, and what this means for our organizations and for all of us as individuals.

In this environment an effective response requires efficiency, which often equals cost cutting. However, real sustainable growth is not going to come from simply cutting costs. Companies cannot save their way to success. It just doesn’t happen.

Instead, achieving new efficiencies and growth will come from improvements in productivity, enhancements in secure collaboration, communication, and generally in how we all work together, as well as new innovation that comes from this improved productivity. And these enhancements need to be delivered in a way that help meet our customers’ security and compliance needs.

This combination of cost savings with improved productivity and innovation is something we at Microsoft refer to as the new efficiency — the new efficiency, and you’re going to hear those words repeatedly during the course of the next little while.

Now, in the past week, I have had the opportunity to meet with leaders of corporations and government institutions, both here and across Europe, and also in India.

As an example of an institution embracing the new efficiency, the United Kingdom government is looking at ways of consolidating the delivery of IT services across multiple government departments, while leveraging cloud computing to make that possible. That’s a big change.

In India, global system integrators like Wipro are defining new service offerings that target specific vertical markets with new forms of business process outsourcing, allowing costs to go down while increasing productivity through massive economies of scale. That’s what cloud computing is all about.

Now, in a few minutes, I’ll invite members of this IT community onstage for a discussion of how they are responding to these generational changes, and how they are leveraging technology to deliver incremental business value.

However, before we do this, I’d like to make things just a bit more interesting, liven things up a little bit, through some audience participation. I would like everyone in this room, 7,000 of you, to look under your chair. Three of you will find something special. Take a look under your chair.

OK, are we starting to find three people? Hey, lucky individuals! Got a couple people starting to move forward. We want you to come up and join us up here. I’d like to invite all three of those lucky winners to join us up here in front where they are going to experience the new efficiency firsthand. Please, over here. See, we’ve got chairs, we’ve got refreshments, we have adoration. (Laughter.) We have all of those things. The best seats in the house, look at that, being escorted up there. And we have a third person coming up right now. That’s fantastic. Please, sir, get comfortable. You’re going to have a great time there.

Now, for the rest of you, for everybody else, I’m sorry, we only had so many leather chairs, so many steins of beer, only so much to go around, but I want you to just pause for a moment because we’re going to a wondrous place, a place depicting what the new efficiency can actually look like, a place that is a bit in our IT dream.

For our first dream today let’s imagine a world where everyone in our organization, everyone that works around us, fully recognizes and appreciates you, loves the strategic value that is being delivered by the IT professionals like all of you. Let’s have a look at this first IT dream.

(Video segment.)

STEPHEN ELOP: What do you think, perhaps someday for all of you? Oh, tough audience.

OK, so we’re having a bit of fun with these IT dream sequences. We’ll revisit these a few more times during our discussion.

However, now what I’d like to do is to set the context for the rest of our discussion today. We’ve invited a few members of the audience onstage for a discussion of how they are coping with the generational changes defining today’s business world, and how they are leveraging information technology to gain strategic advances for their organization.

First of all, it’s great to have all of you here onstage joining us. We have quite a diverse collection of individuals here, as you’re about to hear. We have the financial services industry represented, we have the oil exploration industry represented, and we have zoos represented, as you’ll hear a bit more about.

So, could each of you please introduce yourself, a little bit about your organization, and then we’ll take the questions from there.

Hi. I’m Petter Wesland from Statoil .

STEPHEN ELOP: The oil company.

PETTER WESLAND: Yes, that’s right. I’m a lead advisor covering the Windows ecosystem and storage systems.

Statoil is an international energy company. We operate in 40 countries. We have 30,000 employees and 10,000 consultants. We have 40,000 PC clients under central management.

STEPHEN ELOP: And scattered all over the world —

PETTER WESLAND: Oh yeah.

STEPHEN ELOP: — in some of the strangest places on the planet, and we’re going to hear more about that in a second.

CARL-MAGNUS HALBERG: I’m Carl-Magnus Hallberg. I’m senior vice president at NASDAQ OMX where I run the global IT services unit.

As a company, NASDAQ OMX is the world leading exchange company today, and we’re delivering trading exchange technology, and private company services to more than 3,700 companies in six continents, where Microsoft is one.

STEPHEN ELOP: Ah, very good, very good.

PHIL MORRIS: I am Phil Morris. I’m IT manager with Chester Zoo. We’re the largest zoo in the U.K., one of the most visited zoos. We have 1.3 million visitors per year.

STEPHEN ELOP: Well, I’ll tell you one story about Phil. So, Phil was explaining how 50 kilometers of fiber optic cable could be deployed across the Chester Zoo, including the installation of wireless video cameras in various cages.

You are the only IT professional I know that has ever been attacked by the monkeys, like literally. (Laughter.) True story, true story. OK, so you think you have it tough.

So, I’d like each of you to spend a minute perhaps sharing with us how your organizations have responded to the generational shifts that we’ve been discussing, and perhaps, Carl-Magnus, you can start out.

CARL-MAGNUS HALBERG: Yeah. For us the last couple of years have been a tremendous growth in trading volumes, where one of the key issues for us has been to live up to the performance environment put onto us.

So, I guess at the end of the day kind of with the global competition we are in is to be able to do more with less. And we are constantly seeking to use new technologies to improve both our performance requirements, productivity requirements, and to find new revenue sources.

One of the initiatives we have actually been participating with this year is the Microsoft TAP program in the Exchange 2010.

STEPHEN ELOP: Excellent.

CARL-MAGNUS HALBERG: So, our engineers here today, represented by Frederick and Kim, have promised me 60 percent cuts for my storage costs next year.

STEPHEN ELOP: Sixty percent, that’s excellent.

CARL-MAGNUS HALBERG: And be able to grow the inbox size fortyfold.

STEPHEN ELOP: Forty, four-zero.

CARL-MAGNUS HALBERG: Yeah.

STEPHEN ELOP: Excellent, excellent, great service to your customers, that’s fantastic.

PETTER WESLAND: OK, like many companies today, we have had cutbacks on projects, but we have had great savings on application consolidation, to consolidate applications with overlapping functionality.

But we are a big company. We are located all over the world. We have users on oil platforms in the North Sea, we have users in developing countries with poor communications technology, and we need to have all these users to collaborate better together. But we have great challenges with the problems with the communication latency.

STEPHEN ELOP: Oil platforms have fiber optics, but the middle of Africa is not so lucky.

PETTER WESLAND: Yeah, that’s right. So, it’s very different around the world. And we need to find technology to address these challenges.

Among other things, we are planning now to deploy Windows 7, which has an interesting technology to address these issues, BranchCache and enhance the offline folders and SMB2 protocols.

STEPHEN ELOP: So, really helping in those low-bandwidth environments.

PETTER WESLAND: Yes, absolutely.

STEPHEN ELOP: That’s fantastic.

PETTER WESLAND: And also with DirectAccess we can let our users have a seamless experience when accessing corporate services, whether they are connected to the corporate network or through the Internet.

STEPHEN ELOP: Very good, very good. Phil?

PHIL MORRIS: Well, as a nonprofit organization it’s always a struggle to get footing for an IT project. We’ve recently installed a virtualization project which saves 11,000 pounds in electricity savings alone, and that’s probably another of the dilemmas that we have is that we want to grow but we also have a commitment to agree on agenda, and we look for technologies that allow us to marry those two together.

STEPHEN ELOP: Very good. Now, carrying on with you, Phil, you represent definitely an interesting case study. When I think of IT, I don’t quickly think of the zoo environment. However, you’ve taken some really important strides to incorporate the next generation of information technology into your organization. And I’m guessing it’s a tough environment to try and introduce these new ideas, ask for the money, try and go after those big IT investments. How do you sell these types of projects? I’m sure it’s something that everyone in this audience faces every day.

PHIL MORRIS: Well, applying for funding for any IT project, I think they’re always notoriously difficult. This project that we ran ourselves was probably one of the more easy ones, because the savings were very tangible, and it was very black and white in what I could justify.

STEPHEN ELOP: You could see the return on investment.

PHIL MORRIS: You could see the return straightaway. The payback was under three years just on the electricity and the hardware savings alone, and that didn’t include any of the feature benefits and the robustness and reliability benefits that comes with the project.

STEPHEN ELOP: That’s great. We’re going to be talking a lot today about the cost savings that make a lot of these business cases a lot easier to make, so that’s great.

So, Carl-Magnus, a question for you. Your organization is built on technology. You shared an interesting fact, something that I’m sure everyone in this audience is jealous of. Your organization has 50 percent IT staff, 50 percent of the organization is IT, of the whole company, so that’s pretty cool. You’re essentially running an IT organization, even though we see it as a stock market. In that type of business what do you see the role of IT being?

CARL-MAGNUS HALBERG: First of all, as you alluded to, IT and technology have to be simply core, and it’s core to our heart. We have to show that our IT professionals, our IT staff are fully aligned with our business side. If we don’t meet up to the performance requirements, being an online company, order flows might one day to another go away.

If we are not able to invent new functionality or features to new market opportunities that arise, competitors can do it, et cetera.

So, for us the important thing is to ensure that we as IT professionals live and breathe the business logic every day, and we work basically hand-in-hand.

STEPHEN ELOP: Just be close to the strategy, be working with the whole organization on those things. That makes a lot of sense.

Now, Petter, as you look out five to 10 years from now, what are some of the technologies that you’re thinking about the most? Give us a bit of the longer-term perspective.

PETTER WESLAND: Yeah, in the longer term I’m sure that cloud computing will be one of the main topics in the years ahead.

STEPHEN ELOP: Yeah, cloud computing seems to just be on everyone’s mind these days.

PETTER WESLAND: Oh yeah. But we know we need to adjust our infrastructure, our IT infrastructure to this area. And also we need to do adjustments in the governing policies when we are going to move or put our internal information out in the cloud.

STEPHEN ELOP: A lot of questions around that, that’s right.

PETTER WESLAND: But on the technology side we need to look, especially look into the identity and access management, and other integration technology with the cloud.

STEPHEN ELOP: Very good. So, one final question that I’ll ask of all of you: What opportunities do you see in this disruptive environment, the economy, technology, and everything else that’s going on, for all of these people in this audience to advance their careers, to take that next step to better help their organization? Phil, why don’t we start with you?

PHIL MORRIS: Well, it’s not a magical set of techniques; it’s just a question of recognizing the opportunities and taking them. I watched your video, the final vision, future vision with all the touch screens and the glass and everything, and we’re running a project called Natural Vision where we will like to see that kind of technology implemented within the dome that’s going to be the largest bio-dome within Europe. So, I’m sure we’ll be coming back to you to talk about that again.

STEPHEN ELOP: Very good. Petter?

PETTER WESLAND: Yeah, we see great opportunities in unified communications technology, and also in social software for enterprise.

But at this conference there are a lot of great sessions about great technology, and I advise the audience to pay attention to the security feature in all these products.

STEPHEN ELOP: Yeah, security is becoming pretty important for all of us.

So, gentlemen, thank you very much for sharing with us. Please, a round of applause for our audience participants. Thank you. (Applause.)

OK. So, I’ve got to do a quick check in. Luxury chairs, how is it going over there? The massage chairs are working. The beer has been delivered. The new efficiency is reigning. That’s great. You guys look really good.

So, as you can tell, we’re all in good company. As we’ve just heard, organizations from across Europe and around the world are working to adjust to these generational changes, and to our new business environment. They recognize that IT can be a strategic asset, something that enables you to achieve these new efficiencies, by cutting costs through lean initiatives aimed at streamlining operations, by delivering demonstrable value to your team through the delivery of IT benefits that are tangible, like larger e-mail mailboxes, and by up-leveling IT operations overall, moving beyond the fundamental tasks and shifting focus to larger and more strategic initiatives, such as improving internal collaboration, integrating with social networking tools, and embracing the cloud.

At Microsoft, we understand this as well. This year, we are introducing a new wave of products that reflect the feedback that we’ve received from all of you, and millions of people like you from all over the world. I believe these products reflect Microsoft’s commitment to helping all of you do your jobs just a little bit better. I believe this new wave of products provides you with an opportunity to surprise and delight your users.

No longer will you have to say no to portable USB devices in the workplace. No longer will running a virtualized infrastructure seem somehow too complicated. No longer will you have to say no to larger mailboxes for people. This is your opportunity to say yes to many of those requirements. It all begins with what users interact with the most, really the center for productivity in the workplace, the personal computer.

For a number of years now, we’ve been talking about how we can optimize the desktop experience, and help relieve the age-old tension between users and IT departments. Think of this tension as a balance between flexibility on one hand, and control. On one hand, users want flexibility, they want to use their personal computers and devices in ways that fit their needs anytime, anywhere.

On the other hand, IT departments want control. In fact, it is your job to take control, to streamline, to secure, to optimize, to make this an environment that is appropriate for the corporate world. Of course, it’s also your job to bridge this gap so you can say yes more often. That’s where Windows 7 comes in. Over eight million end users and IT professionals used the Windows 7 beta version and gave us very clear, very useful feedback. The result of all of that feedback, Windows 7 users are finding that the PC is now faster, more intuitive, and has easy-to-use features, including the simpler, more intuitive user interface, easier processes for connecting the wireless network, and more powerful search on the desktop, all of these help to boost productivity, and make end users happy.

The overall reactions to Windows 7 has been just amazing. Those of you from the United Kingdom might have heard that pre-orders of Windows 7 broke local records. Windows 7 is the best selling pre-ordered product of all time on Amazon U.K., dethroning Harry Potter. And for the rest of the audience, in the U.K. it’s Harry Potter used to be king. It is now Windows 7.

Now, of course, we are also receiving tremendous feedback from enterprises, including BMW, Distronics, Samsung, T-Mobile, Continental Airlines, and many, many others. One thing that businesses are very excited about with Windows 7 and the Microsoft Desktop Optimization Pack, or MDOP, another great marketing word, is the tangible way that these products help to save us money. Based on the studies that we have done so far, early customers are seeing IT cost savings in the range of 73 to 127 euros per PC per year. And if you start multiplying that across all of the PCs in your organizations, there’s the business case to go forward with the deployment of Windows 7.

Now, what drives these savings? It’s the little things, like group policies that enable power consumption savings, and some big things as well, like making mass deployment and management of personal computers much simpler, and less labor intensive to all of you. Windows 7 and MDOP give IT pros the tools they need to significantly improve desktop management and support, bolster security, bolster data protection, while enabling the flexibilities that users want.

For example, one of my favorite Windows 7 features is something called BitLocker To Go. This helps you to secure data on removable storage devices and USB sticks. With BitLocker To Go, you can worry less about the sensitive company information that’s been left on those USB drives.

Now, to help describe the benefits delivered by BitLocker To Go, I would like to return again to our fantasy world of IT dreams. As you watch this next short video, imagine how nice it would be for each of you if you no longer had to worry about those thousands of USB sticks, all with some bit of sensitive company information on them, that are left on airplanes, at restaurants, or in Tech•Ed lounges. Just imagine if you no longer had to take drastic measures to secure your company data, such as implementing unenforceable policies, or even using laser beam security systems to protect them. Imagine a world where software takes care of this for you. Have a look.

(Video segment.)

I don’t know. I think the idea here is clearly, you don’t have to go to extreme measures any longer like ninja-proofing your IT. Windows 7 will do this for you. Now, there’s plenty of opportunity this week at Tech•Ed to learn more about Windows 7. Be sure to take advantage of this opportunity, and learn as much as you possibly can.

Now, of course, beyond Windows 7, there are examples of new technologies that are playing a role in defining today’s world of business. Perhaps the most significant of these is cloud computing. Now, there’s nothing the computer industry likes better than a new idea. Cloud computing is the latest example, and companies large and small are jumping into this fray. And while more and more companies start moving a portion of their businesses to the cloud, there is a debate, there is a debate and argument, if you like, that’s going on out there in the industry.

There’s actually no debate about whether the cloud is a great technology evolution, because it is. The benefits of increased productivity, cost savings, and improved efficiencies, all of those things plus the ability to support and empower a broader range of users, all of those benefits are very clear. The cloud is here to last, and it’s going to be an important element of what we’re doing.

Rather, the debate is about how soon companies should begin moving mission-critical computing capabilities or parts of them to the cloud. I believe, however, the cloud cannot be all things to all businesses. There is a desire among many customers to avoid a technology ultimatum. All of that application has to be in the cloud, or nothing at all. No, that’s not the right way to think about it. Instead, we believe a mixed approach is more important, with the choices afforded by software plus services. We believe that’s a far more flexibility and realistic scenario for most organizations.

So, it’s smart to focus on what customers want, and their readiness to embrace the cloud for various applications in the context of their circumstance. This is Microsoft’s approach to empower our customers with the power of choice, the power of choice to decide which option is best suited for their individual circumstances, on premises, hosted by Microsoft, hosted by our partners, or by a combination of all three of those different options. That’s the power of choice.

More and more every day, this approach is attracting many new customers. For example, just last week we announced the amazing reception we’re seeing with Exchange Online, Exchange in the cloud, and companies around the globe, like Aeon, and GlaxoSmithKline, and McDonalds, Rexall, Tyco Flow Control, many others, they are choosing Exchange Online in the cloud in conjunction with Exchange Server on premises quite often. Regardless of your current perspective on cloud computing, I encourage you to stay informed, informed about this opportunity that will help define the future of IT.

Starting November 10th, The Economist Magazine is going to host a week-long debate between myself and the CEO of Salesforce.com, where everything has to be in the cloud, there’s going to be a debate online. Please join in, participate in the debate, and decided for yourselves which approach to cloud computing is best suited to your organization.

OK, so clearly there are many reasons why we at Microsoft are so excited about how new technologies will make a positive impact on your organization. The good news is, for you, that this is new wave of innovation is far from complete. There’s much more to come.

Today, right here in Berlin, we’re taking another big step forward. We are announcing right now, on a worldwide basis, the release of Exchange Server 2010 coming available today available to everybody. This newest version of Exchange introduces significant innovation that reduces costs, protections communications, and delights e-mail users. Also, this is the first Microsoft server that has been built from the ground up for software plus services, for on premises, and the cloud. Now, IT pros and e-mail users are telling us that this is the best release of Exchange ever. Early adopters are reporting dramatic cost savings with the new Exchange, cutting costs by up to 70 percent, 7-0, thanks to new performance innovation. And they’re telling us that employee productivity is up, in some cases by as much as 75 minutes per week per user thanks to features that eliminate inbox clutter and streamline communications.

What we’d like to do right now is to demonstrate this value to you. Please join me in welcoming Julia Weiss, the director of Exchange Product Management, who has joined us here from Redmond, Washington, for a bit of a demonstration. Julia, come on up. (Applause.)

JULIA WHITE: I’m going to show a number of new Exchange Server 2010 features and capabilities that best demonstrate how this latest release can help you achieve the new efficiency. Let’s start by looking at how Exchange 2010 helps you lower your IT costs.

Stephen, for the purpose of this demo, you and I work at the Contoso Company.

STEPHEN ELOP: Very famous, Contoso.

JULIA WHITE: We’re in the middle of our Exchange 2010 rollout, and as part of that we’re moving our mailboxes from our private environment into production. Now, thanks to the new online move mailbox feature of Exchange 2010, I can execute this migration at any time without disrupting the user.

STEPHEN ELOP: So, what this means for you is, as you do your upgrades, as you’re actually moving from one environment to another, you can do it on your schedule, on your timeline, and the users aren’t even going to know this is going on.

JULIA WHITE: Precisely.

STEPHEN ELOP: Beautiful.

JULIA WHITE: Yes. And to demonstrate that this works, I’m actually going to move the mailbox that I’ll be demoing on for the rest of the demo while I’m doing the demonstration so that you can see that I stayed connected and productive the entire time.

So, here I am within the Exchange Management Console. I simply select my mailbox and initiate the move. I’m going to move my mailbox from this private server onto the production server. I’ll go ahead and accept the default configuration, and by clicking here, the mailbox move is underway.

STEPHEN ELOP: OK. So let me just get this straight, we’re doing a demonstration, 7,000 people, and you’re doing this while the mailbox underneath this entire demonstration is in progress?

JULIA WHITE: Yes.

STEPHEN ELOP: So, with capabilities like that, throw in some cost savings, make it really possible to say yes when users come asking for things, like larger mailboxes?

JULIA WHITE: Exactly.

STEPHEN ELOP: That’s very cool.

JULIA WHITE: And you see here in the move request views that the mailbox move is, in fact, underway.

So now I’ve opened Outlook 2010 to show you some of the new inbox management capabilities that will help you boost productivity. Much like you, I get a lot of e-mail every day, and like most my inbox is sort of in date view, as you can see here. Now, as I scroll through, you can see how difficult it can be to individually read, prioritize, and act upon each of these messages. Well now, thanks to Exchange 2010, in a click the new conversation view automatically rearranges my inbox into a much more manageable number of conversations.

STEPHEN ELOP: And if I’m looking at the numbers correctly, that just cut your inbox essentially in half in terms of how you’re dealing with that.

JULIA WHITE: Absolutely.

STEPHEN ELOP: OK, is that going to help? Applause? Something? (Applause.)

JULIA WHITE: If I take a closer look at the conversations, you can see all related messages are grouped together. The topic of the conversation here at the top as well as the number of unread messages as indicated by the number 2.

Now, if I scroll through the conversation, you can see how easy it is to follow the flow of the conversation even when it branches into different threads as people reply. And if I move a message into another folder, you can see the conversation remains intact.

STEPHEN ELOP: That’s looking across all the folders. Very cool.

JULIA WHITE: Precisely. And if we move to this folder, once again, you see the entire conversation, even though the messages span multiple folders.

Now, sometimes those conversations are not necessarily related to your current priority. Here is one such example. And this is an e-mail about the upcoming Contoso Company picnic and where to park. Well, it was accidentally sent to all employees at Contoso, which resulted in a lot of additional e-mail piling up in my inbox that I don’t plan on reading. Well, thanks to Exchange 2010, I can now use the Ignore function. So, by clicking this, the entire conversation, as well as future messages related to the conversation, are gone from my inbox.

STEPHEN ELOP: Cut off. That’s a great feature. (Applause.)

JULIA WHITE: So, those are just a few capabilities around helping manage information overload as a recipient of e-mail.

So now let’s look at mail tips to help you as a sender of e-mail. So, to do this, I’m going to send an e-mail to the Contoso news area. And with Exchange 2010, you see these mail tips to provide me important information about the distribution group. First of all, you can see that there’s people outside of my organization in the distribution group. This has over 600 recipients, and there’s a moderated distribution group. And even there’s a custom mail tip there telling me the corporate policy around using this distribution group.

STEPHEN ELOP: So, this is like giving you X-Ray vision into your e-mail that you’re about to send. There’s a whole bunch of warnings there. I’m kind of guessing this is not the message I want to send out, we probably want to clean this up a little bit. And that’s the whole point of mail systems, to help you out.

JULIA WHITE: Yes, we don’t want to make those embarrassing or damaging, damaging e-mails. So in this case, I didn’t want to send it outside the organization, so I’m going to get rid of that. And instead send to the All Contoso alias. And there you go, mail tips are getting resolved, and now it shows me that this time this is the correct distribution group that I did want.

STEPHEN ELOP: Excellent.

JULIA WHITE: Now, another particularly helpful mail tip is Out of Office. Now, rather than having to wait for that automatic response back, I can instantly know that in this case, Ankor is covering for Ian while he’s out of the office. Now, this is just a few of the mail tips available with Exchange 2010. There’s many more that can eliminate a help desk call for you by letting a user know before they click Send that they’re going to get a non-delivery report back.

Now, Exchange also offers integrated voice mail right into your inbox. So now you can manage your voice mail just like you do your e-mails. Now, in addition to the functionality we introduced with Exchange 2007, Exchange 2010 now offers a new speech-to-text preview, as you can see here. So now I can very quickly triage and take action upon a voice mail without actually having to listen to the audio file.

And let’s say I did want to clarify some aspects of this preview. I can simply click to the part that I want to hear and say, did he say lunch plans of did he say launch plans. I can click and it plays from just that point forward, making it very efficient.

STEPHEN ELOP: Very cool, very cool. (Applause.)

Now, of course, it’s great to see the text of your voice mail in the context of the e-mail environment, but for someone like me who is on the road a great deal, I like the fact that I can get all of this right in the palm of my hand. So, what I have here is a mobile device, and what we’re doing is we’re projecting this up there. So, you should see it on the screen behind me. And this is a Windows phone, and the voice mail that you left me is actually visible here on this. And what I can do is actually scroll through, see the text right there and if I wanted to I could actually listen to this, as well. So, I can do all of this perhaps hidden away in a meeting, without having to listen to the voice mail and see what’s actually going on.

And just to make a further point, clearly we’re focused on delivering a consistent user experience between the PC, the phone, the browser environments, and so forth. And in this particular case if I just close that message down here, I think what you can see there is that I’m actually using the conversation view, or have the conversation view now available in Outlook Mobile. It’s a great feature that you’re going to enjoy on the phone. So, making the phone a rich participant in that same environment, very cool.

JULIA WHITE: With Exchange Access for mobile messaging you’re now able to support literally every smartphone device on the market with Exchange 2010.

STEPHEN ELOP: Yes, that’s really important, Julia, because with the wide range of Exchange Access-capable phones, you can now say yes to all of those users who have been asking for flexibility and choice around their mobile devices. We can connect them up with Exchange Access, a very successful program.

JULIA WHITE: Yes, now Stephen you had mentioned that rich consistent experience across the PC, the phone and the browser. So, I’m now going to log into Outlook Web Apps to show you the browser experience. And here again within Outlook Web App you see that same conversation view, here in fact is that exact conversation we just looked at in Outlook 2010, and delivering on a rich, unified communication experience, Outlook Web Apps now offers integrated instant message and presence right here. So I can change my presence, just like this, and I’m going to change it to Busy, since I’m busy doing this demo.

STEPHEN ELOP: And this is all in the context of the browser application.

JULIA WHITE: Correct, all browser. And over here you see my Office Communicator context integrated in, so I can simply click that right within Outlook Web App. (Applause.)

STEPHEN ELOP: Very cool.

JULIA WHITE: And last, but not least, Exchange 2010 now supports the ability to receive SMS text messages into your inbox as you see here, as well as send new text messages from your inbox all in one place.

STEPHEN ELOP: Very cool, very cool. (Applause.) There’s a really important theme, a really important theme developing here, where Exchange continues to deliver to me essentially a universal inbox, giving me one place for all of my e-mail, voice mail, SMS, text messages, instant messaging, and so much more. It’s all consolidating in that box.

JULIA WHITE: So, just like Outlook on the PC, I now have a full range of communication tools at my disposal anywhere I can log into Outlook Web Apps.

STEPHEN ELOP: Very cool.

JULIA WHITE: So now let’s talk about how Exchange 2010 delivers integrated protection and compliance capabilities that help simplify the process of protecting your communications. To show this I’m first going to demonstrate new Exchange 2010 transport protection rules. Now, based on this e-mail  voice mail, sorry — that Ian sent me, I need to send Stephen a confidential e-mail about the Exchange 2010 rollout and the associated launch plans around it.

Now, I could choose to protect this e-mail with an information rights management policy, within the client. But, in this case I’m not going to. I’m just going to click Send. Well, thanks to the new transport protection rules this message will be automatically detected while in transit, and this is based on a transport rule that I had previously configured to look for the words “launch plans.” Now, if I take a closer look at the transport rule, you can see I have a number of conditions from which I can choose. In this case I’m choosing to just look for the specific words “launch plans.”

If I look at the actions, again, a number to pick from, in this case I’m choosing a new Exchange 2010 action that is to automatically protect the message with the rights management template that I’ve defined as Contoso-confidential. So, Stephen, to see this in action why don’t you log in to your inbox.

STEPHEN ELOP: OK. So, this is the moment of truth. Let’s see if this actually works. What I’m going to do is to log in to the Outlook Web App. You’ll notice just as an aside, if you look in the upper left-hand corner there, I’m actually using Firefox. The Outlook Web Application now supports Firefox and Safari. (Applause.)

We’ve always got to pause on that one. And here, right here is the message that you just sent. I’m going to open that message, and you did not mark it as something that could not be forwarded, but that transport rule kicked in, and what you can see right up here is that the forward option is grayed out. So, within the Web application the rights management permission has, in fact, been enforced. (Applause.)

JULIA WHITE: Now, that highlights another new Exchange 2010 capability, which is now integrated information rights management, natively supported within Outlook Web App. So now users can create and read protected messages without needing an additional plug-in, or taking any extra steps. And that means fewer support desk calls for you.

STEPHEN ELOP: It’s great. It means I can protect my e-mail wherever I am, which is just fantastic. That’s great. Now, according to your e-mail, if I read this correctly, Ankor apparently sent me a slide deck a few weeks ago with the meeting agenda. What I’m going to do is I’m actually going to search for that meeting agenda, by copying those words out of this message. I’m going to paste them into the search capability. I’m hitting the paste, and you’ll notice nothing is appearing, of course. It was rights protected, so I can’t do a cut, copy, paste out of that environment. So, that’s pretty cool.

JULIA WHITE: Good try.

STEPHEN ELOP: Good try, good try to violate the rights management. What I’m going to do instead is type this meeting agenda, and I’m going to do a search on that. And it is finding the rights-protected message, as you would expect, in my inbox. But, the message that you’re referencing from Ankor, I’m guessing I deleted it. I’m guessing it’s gone for good.

JULIA WHITE: Fair enough. Well, not to worry, Stephen. As an executive at Contoso it’s important that the organization retains all of your communications, for policy or regulatory purposes. As such, we’ve already enabled the new Exchange 2010 hold policy on your e-mail. And this means Exchange will retain all deleted or edited items in a special recovered items folder.

Now, this folder is not accessible by a normal user. But, I’m able to use a new multi-mailbox search functionality to find this e-mail. Now, I can do this because Contoso IT has delegated to me the capability to do a multi-mailbox search. And this is just one example of the new Exchange 2010 delegated administration capabilities that help reduce the burden on IT.

STEPHEN ELOP: Very cool. You can pass off the load to other people. Very good.

JULIA WHITE: So from right here within the Web browser I can conduct this search. Now, I have a search already preconfigured to look for this mail, and as I open it you can see the rich set of options I have to look for. In this case I’m looking for just meeting agenda, the keywords, and I’m able to search in documents as well as e-mail. And I’m able to look at  search all mailboxes at Contoso with my delegated  

STEPHEN ELOP: Right across the company.

JULIA WHITE: Exactly, in this case I’m just looking for something in your mailbox, so I’m just choosing you. And I’ve created a name for the search, as well as a folder for it to go to when it’s done. So, I’m going to save that. And I’m going to go ahead and restart and let that search run.

Now, it’s important to note, this search is going to look across the primary mailbox, the new Exchange 2010 integrated archives, as well as the recoverable items folder created based on this hold policy. So, clicking Reset I see that it has, in fact, succeeded, and I found one item. Let’s hope it’s the one we’re looking for. I’ve now clicked through to the Contoso discovery mailbox, and as I click through the results you can find that down in your purged items there, in fact, is the message. I found it for you.

STEPHEN ELOP: Very cool.

JULIA WHITE: So, in just the past few minutes I’ve just given you a sampling of the great new capabilities and features of Exchange 2010 that help you lower your IT costs, improve productivity and better manage risk. And by running this PowerShell command list I can check in on how that mailbox move is going. You can see, I’m 66 percent done, yet I remain connected and productive through the entire demonstration. (Applause.)

STEPHEN ELOP: OK. So, just recognize everything we did there, all of the transmission of messages, the archival search, all of those things happened, that mailbox is in motion, just fantastic. So, we’re going to take a quick check over here. We’re getting fanned, what do you think of Exchange 2010? Hold up the signs here, what do you think? Okay, we’ve got wonderful, is that good? I think that’s good, and more beer. Okay, two out of three. Julia, thank you very much.

JULIA WHITE: Thanks, everyone.

STEPHEN ELOP: Great job. (Applause.)

Now with all of these great capabilities comes promise, and significant reward, and maybe, just maybe, your IT life becomes a bit easier, a bit easier to manage. Technology such as Exchange 2010 will provide you with a little extra time to enjoy your weekend. Maybe, maybe not. Let’s explore this third IT dream a little further about your weekend.

(Video segment.)

I don’t know. A bit of time off, I’d rather be doing Exchange mailboxes than that, quite frankly. So, we hope you enjoyed the demo. We’re looking forward the upcoming weeks and months, some of the world’s largest enterprises are guiding us to the rollout of Exchange 2010. Many of these customers are seeing significant cost savings thanks to new, low-cost storage options.

For example, the U.K. office of NEC Phillips expects to increase their e-mail storage capacity by a factor of eight, and at the same time they expect to cut costs by a full 75 percent by using Exchange 2010. And how about NASDAQ (OMX), Carl Magnus, who was on stage just a few moments ago, as he said, they’re increasing mailboxes by a factor of 40, and at the same time cutting costs in half. Exchange 2010 helps you save money through integrated e-mail archiving as well. Now you can more easily preserve and discover e-mail, and using existing infrastructure and skills, all without changing the experience for your users, and all without the need for additional software.

For example, after deploying Exchange 2010, South Sea, a South African cellular communications provider, reports significant improvements in their ability to simplify administrative tasks associated with archiving and complying. This is leading to big savings for them.

Now, real evidence of all of this is coming from third-party analysts. And this is something that you should all familiarize yourselves with. For example, Forrester Research recently studied this very carefully, and came to the conclusion that you could see a complete return on your investments in Exchange 2010 within six months of deploying it. That’s the type of business case that all of us can move to help move the infrastructure forward.

Now, to augment the benefits provided by Exchange 2010, and Windows 7, we’re also excited to be launching another generation of new products today, and that’s several Forefront products. Forefront Protection 2010 for Exchange Server, which provides the best-in-class anti-malware, and powerful spam prevention. Those products are launching today as well. There’s a lot more coming up in that area in the months ahead, all sorts of new forms of protection, including in the Internet environment with SharePoint, and so forth. Stay tuned, a lot of exciting things still to come in that space.

Now, I want to change our direction just a little bit, and turn our attention to another area, IT infrastructure. Microsoft’s premier platform for running your applications, even open source applications, is Windows Server. In fact, 72 percent of servers worldwide run Windows Server. And with Windows Server 2008 R2, we have delivered an extremely high quality and reliable product. This release provides you with the opportunity to drive down your IT spend while also surprising and delighting the end users in your organization with new capabilities to make their lives easier. No longer will you have to say, no, I can’t give you new services quickly, or within my existing budget. This is your opportunity to say yes.

Already 460,000 customers have downloaded copies of Windows Server 2008 R2, and R2 is available on every major OEM hardware platform. This level of customer and partner interest is another testament to the value that businesses and our industry partners see in this release. We’ve extended virtualization, power management and scalability. We’re providing actual insight and intelligence into how systems are performing, and how they can be improved.

We know that many of you are moving your virtualization investments from the area of server consolidation, and beginning to focus on business continuity. With new capabilities like Live Migration, you can now do this with our built-in hypervisor Hyper-V. And by using that with Microsoft System Center management tools, organizations large and small alike are experiencing real value.

For example, Continental Airlines, they have consolidated more than 125 servers so far, and deployed more than 320 virtual machines. As a result, they are saving one million euros per year in hardware, software, labor and deployment costs. And then there’s Cheshire Fire and Rescue in the United Kingdom, they deployed Windows Server 2008 R2 for the benefit of its 1,200 employees, and the environment. They consolidated 30 physical servers down to 17. They were able to reduce their hardware support costs by 80 percent, and their server electricity costs and impact on the environment by 77 percent. So we’ve seen tremendous results already from a variety of different organizations, large and small.

What I would like to do now is take a deeper look at this infrastructure, exploring in-depth more of the capabilities of Windows Server 2008 R2, Forefront and Microsoft System Center. To help me do that, please join me in welcoming on stage Robert Wahbe, who is Microsoft’s corporate vice president for Server and Tools. Please join me in welcoming him to the stage. (Applause.)

ROBERT WAHBE: Thank you, Stephen. Good afternoon, everyone. How is the session going so far? How is it going? (Cheers and applause.)

So, I’m going to spend about 20 minutes focused on how Windows Server 2008 R2, Windows 7, and System Center work together in a very integrated way to drive down savings around three big areas, around operations, around connectivity and around power. Before I jump in and talk about that, and demo that, I want to talk about some of the big industry trends that helped shape the R2 release that you see today.

Probably the forefront trend that we’re seeing is around virtualization, and Stephen talked about this. This is virtualization of the desktop, virtualization of the data center, virtualization of resources like networking and computing. And that trend of virtualization is also fueling this idea of cloud computing, delivering IT capacity and IT capability as a service, whether it’s infrastructure as a service, or platform as a service, or ultimately as Stephen was talking about, software and applications as a service.

As we automate more and more of our business IT, and as we build out these data centers, it becomes more important for renewed vigor around power management and power efficiencies, and that’s this idea of green IT. These trends are impacting all of the landscape. But you see them no more strongly than in the data center. And they’re driving new architectures in the data center where Windows Server plays such a pivotal role.

The traditional data center where most of the servers are today, and where most of the new servers are going today, you’re seeing virtualization of key workloads driving up utilization, lowering cost. You can then take this to the next level, IT capacity and IT capability as a service, hosted on premises and that’s the private cloud, or hosted by a third party and that will be a public cloud.

Now here’s the key thing: Microsoft’s strategy, Microsoft’s investments are about supporting all of these scenarios. We hear from customers that they want the flexibility to decide which of their workloads, which parts of their business are going to use these, and they have to have the flexibility to mix and match. And so you see us supporting all of these things. Windows Server is the foundation of that across all of those scenarios, powering from the traditional data center all the way to the public cloud, and powering our public cloud offering of Windows Azure. You see System Center managing physical assets, virtual assets from the desktops all the way to the data center, and you see Forefront securing that infrastructure again from the data center to the desktop and all the way to the edge.

Now, Stephen talked about that we’re very excited about the release of Windows Server 2008 R2, and we’ve been talking both informally and formally with customers gauging where they’re starting to save money, and I want to highlight three of those areas: operations, connectivity and power.

Now, in our formal studies of the early adopter customers, we’re seeing 15 percent productivity gains with Windows Server 2008 R2 and System Center. Now, in a case like COMVEL, they’re seeing even more than that at 20 percent. If you think about that 15 percent, that’s six hours a week, six hours a week that you can now dedicate to those key strategic projects.

In the case of connectivity, using technologies like DirectAccess and BranchCache, we’re seeing value both on the business user side, as well as on the IT side. In the case of SpinPro, which has a lot of distributed users and remote users, they’re seeing productivity gains of up to 30 percent, because they’re always connected to their corporate network, they always have access to those various resources.

We’re also seeing great savings on the IT side. We implemented DirectAccess and BranchCache in our Mexico sales office, and we saw our network traffic drop by 90 percent. Now, given that analysts talk about a third of the cost of deploying remote users is around these connectivity costs, that really begins to accrue to the bottom line.

And finally, power. Out of the box, no configuration changes, on the same hardware, 2008 R2, compared to 2003, is 18 percent more efficient. Now, that’s a number that I personally get very excited about, as I think about the global installed base, all upgrading to 2008 R2, that’s the equivalent of taking a million cars, a million cars off the road. It’s a huge savings collectively.

It’s also a case that we’ve gone beyond that. We’ve introduced power controls working with companies like HP that allow you to bring power into the decisions about where to put your workloads. And taking advantage of that a company like Vortel was able to drop their data center costs by over 85 percent. Taking all of these savings together, the overall study is that you can get your return on investment in less than six months with R2. So, it was an incredible relief for us.

So, that’s me talking about R2. Now, what I want to do is I want to show you how we get these savings. And with that, I’d like to bring up Jeff Wettlaufer and he’s going to walk us through some of these products. Jeff. (Applause.)

JEFF WETTLAUFER: Hey, Robert. How are you doing, thanks for having me. It’s great to be here in Berlin.

ROBERT WAHBE: So, what are we looking at here?

JEFF WETTLAUFER: Yes, so this is a typical example of a dashboard. This is the IT service operations view of our physical and virtual resources. There’s a couple of key things here on the dashboard that I’d like to highlight for you that are going to shape our data and what we’re going to walk through. This has been built on Windows Server 2008, System Center, and a service-level dashboard solution accelerator. There’s a couple of key areas I want to highlight for you that are going to shape up what we’re going to show you.

The first, as you can see along the top, are these IT projects. Now, we’ve had great progress on our Windows 7 deployment; that’s pretty much complete now. The one I want to spend some time with Robert and you guys here today is to talk a little bit about that Forefront Endpoint Protection software deployment project. Now, before we do that there’s a couple of alerts you can probably see there that we have to address. The first is an alert firing around DirectAccess. Our organization has utilized the Forefront Unified Access Gateway services to assist us in deploying our DirectAccess frontend services.

Our users love DirectAccess. It is always on, always connected, and they can see a transparent connection into their corporate resources. The IT administrators, us on the backend, we love that service, too, because those remote guys out there, they’re visible to our system. Always on means always managed. So, we’re going to have to take a look at that DirectAccess service, because that Forefront deployment project is depending on that.

We also have an alert happening here around a power efficiency warning. And we want to demonstrate for you how Windows Server 2008 R2 and System Center can help you manage, monitor and optimize your power consumption like never before.

ROBERT WAHBE: That sounds great. So, given that our deployment project depends on DirectAccess, it sounds like we need to find out what if anything is going on with DirectAccess. So, let’s just dive in.

JEFF WETTLAUFER: Let’s do it. OK, so we’re going to browse over here to our System Center console, and what you’re seeing here is the IT administrator’s view of our network’s physical and virtual operations. You can see here in the center that I’ve actually got a summary of my Windows Server 2008 R2 DirectAccess services. And you can see we have an alert firing here. Now, it’s running. It’s still up and running, but we’re going to have to take a little deeper look here.

Now, you guys all know what troubleshooting used to look like. It was log and voice mail. Well, those days are over. With one click I can select my server, browse through my problem path, and R2 and System Center work together and tell me exactly what the problem is.

ROBERT WAHBE: That’s fantastic, and this is a great example of where you’re getting back  (applause.) This is a great example of what I was talking about getting those six hours back, no ad hoc analysis, no ad hoc investigation, a very simple interface, one click and you have the information you need at your fingertips, saving you time. This is great, Jeff.

JEFF WETTLAUFER: Yes, so let’s resolve this issue. So, you guys all know what troubleshooting would normally look like at this point. First of all, it would almost be impossible to really understand what was happening here until the phone started ringing, or you had some voice mail happening, or e-mails, or you started going through some log files. Well, this is where R2 and System Center get really interesting. Through the integration underneath, with PowerShell, System Center and R2 can allow us to do operations remotely that we couldn’t do before. This is going to save us all kinds of time, not having to walk down to the server cabinets, or run those remote desktop services, or try and find the right log files.

Let’s take a simple example of what that looks like, and show you how we can do that here in System Center. I’m back inside my System Center console, and simply right-clicking allows me to actually right off the server initiate a PowerShell connection remotely to that box. This is saving me huge amounts of time.

Now, for the purposes of this demo, I’ve already initiated that PowerShell session. Now, you saw earlier, Robert, that we were conserving some network load, our DirectAccess users, they love that service. And that alert is dropping down to the load-balancing side. There might be a feeling here that we just got a few more users than we expected. So, we’ll just double-check that.

I’m in my PowerShell console now, and I’m about to launch a PowerShell Commandlet that will connect to my Forefront Unified Access Gateway server that’s running DirectAccess, and it’s going to report back to me the number of active users I have right now connected to that service. Let’s go ahead and take a run at that and see what happens.

ROBERT WAHBE: A lot more users than you expected.

JULIA WHITE: That’s a lot more, yes. So, that’s way more than we expected to see there. So this remote access DirectAccess service is really critical to our business, so we’re going to have to add some services to make that a bit more productive.

ROBERT WAHBE: And this kind of automation is key to the increases in productivity. PowerShell is a huge investment and priority for Microsoft. We’re working it across all the Microsoft technologies, across partners, across ISVs, so all of that technology is available in PowerShell. In R2 alone we’ve doubled the number of commandlets to over 600. So, again, a huge priority to make sure that everything is scriptable and automate-able from within PowerShell.

JEFF WETTLAUFER: Great. So, we know what the issue is. We know what we have to do. Let’s go ahead and crank on with this. Now, one of the easiest things we can do is deploy a new DirectAccess server in its virtual format. The fastest way we can get this done is deploying a virtual machine. I’m back inside my System Center console here, and I’m looking at what’s called my template library. Now, templates are a very cool things that saves us huge amounts of time. All it does for us is require a couple of mouse clicks, a couple of small suggestions, and we’re done. Why don’t we take a quick look at how we can use System Center and templates to deploy a virtual machine to resolve that DirectAccess issue?

So, I’m inside my System Center console. I’ve got a couple of base templates I can use. My organization here runs a couple of base server templates. We have a Server 2008 R2 external server configuration. We have an R2 base image. We also have an R2 internal server. I’m going to use that external server for my example here. I’m going to simply right-click, select New Virtual Machine, we’ll call this ZAUAG.temp. I’m going to select the Next button down here, and now this is where it gets really interesting with System Center and R2.

Our organization uses a couple of hardware templates, and a couple of base images to deploy our servers. Now, we can customize just about anything in here, but our organization has a couple of base builds we use as predefined selections. You can see here, the different types of things I could choose are processor allocations, memory, and those kinds of different things. For this case I’m going to select my dropdown, and you can see here in my dropdown I’ve got a couple of predefined hardware profiles, for example, a standard server, a high-performance server, or an edge server.

Now, because that Unified Access Gateway DirectAccess server has a public-facing role, I’m going to pick that edge server hardware configuration. I’ll select Next, you can see my hardware configuration change there in the wizard. This brings me to my operating system profile selection. And again, we could do all kinds of customizations here. But, our organization uses a couple of OS provisioning templates, or predefined OS customizations.

You can see we have a 64-bit baseline server configuration, and then a couple of kind of maybe workload level configurations, like DirectAccess, Domain Services, or even SQL 08. So we already know it’s a DirectAccess service deployment, so we’re going to select that template. And at this point, this is going to ensure that that hardware configuration I have defined is going to rollout and deploy a virtual machine with not just Server 08 R2 involved, but DirectAccess, and our Forefront Unified Access Gateway services configured.

Selecting Next brings me to a really interesting feature called Intelligent Placement. Intelligent Placement is a capability that allows System Center and R2 to work together to make recommendations about the best hardware host that I may want to place this virtual machine on. Now, you heard earlier in our dashboard view, Robert, we had an issue around the network performance. So we have the ability here to customize our rankings, and we can actually take our slide bar here, and make a higher priority around our network utilization.

This will ensure that the virtual machine we’re going to deploy out is going to have the most highest performing network-based server. This is a new feature, great productivity, and encapsulates a bunch of the best practices for where to put that load. And, again, it’s very easy to go do.

ROBERT WAHBE: This is great.

JEFF WETTLAUFER: So, just a couple more mouse clicks and we’re done. So let’s carry on here, I’ll select Next on that, a simple path of where I’m going to place the virtual machine out there on the new host, a couple of more small mouse clicks, and I’m going to select a network connection for that virtual machine. One more quick selection here, I’ll select the default for the restart behavior of that virtual machine, and I’m done. All I’ll do at this point, before I hit create 

ROBERT WAHBE: What was that? Three minutes, four minutes, and we’ve already now made sure that our DirectAccess is rock solid.

JEFF WETTLAUFER: All we do now, re-enable that virtual machine to start when we’ve deployed it, and you mentioned a bit of comment there, Robert, about our investments in PowerShell. Well, check this out, you guys, if I hit this View Script on the bottom corner here, everything we’ve just walked through for you is running in PowerShell underneath the hood. How cool is that? (Applause.)

Simply hitting Create is going to submit that job, it’s going to create that virtual machine out on that host, and bring it into our DirectAccess services.

ROBERT WAHBE: OK. So, now we have DirectAccess rock solid. So I guess the next thing is to do our deployment project with Forefront Endpoint Protection.

JEFF WETTLAUFER: That’s right, exactly.

So you heard Stephen talk earlier about new opportunities to embrace new technologies. Well, we know you guys are dealing with new user styles, and new places of work. And what R2 and System Center can really help you reduce your costs in that effort.

There are two things I have to do to deploy my Forefront Endpoint Protection software. The first is a simple software deployment. So a software distribution scenario, we’re going to push out the Forefront Endpoint Protection software to our users. The second thing I have to do is, I have to add that Forefront Endpoint Protection software to my base Windows 7 image, so now that it’s a standard application for us, any net new Windows 7 build is going to receive that software.

ROBERT WAHBE: Let’s do it.

JEFF WETTLAUFER: I’m going to go into our System Center console. I’m going to select my advertisements, I’m going to go to new advertisement. We’re going to give this a name, we’ll call it the Forefront Endpoint Protection package.

ROBERT WAHBE: Creative.

JEFF WETTLAUFER: Creative. We’re going to select our physical installation of our Forefront software. We’re going to select a browse here, and select a target group, the Windows 7 laptop end users as you can see at the top there. Selecting Next. At this point, it brings up the system basic behavior changes for the actual distribution of the software. It’s a security package. I’m going to raise the priority for that. The basic defaulting agent for the download of the package. And that’s about it. We’re done. So a couple of mouse clicks and we’re finished. And this is now deployed to wherever those users are, hotel rooms, branch offices, all of that is available, and it’s very efficient because it’s using BranchCache out of the box.

ROBERT WAHBE: It is, and DirectAccess.

JEFF WETTLAUFER: So, first of all, there are two things R2 is helping us achieve this with. The first is that we are building on top of the DirectAccess services. We mentioned earlier about how those end users who are using DirectAccess are always on, always connected. Well, to us, always on means always managed. Always managed means always secure. That’s really going to help us in that space.

The second thing that’s really helping us here is the enablement or support in R2 and System Center of BranchCache. BranchCache is a new capability in R2 that allows us to significantly reduce the network traffic by placing shared resources on clients and servers around the network. As an example, in our Microsoft office in Mexico, we actually deployed R2 and BranchCache for System Center and our network traffic dropped 90 percent. So significant results out there.

The last thing I have to do here is, I have to just go and add that Forefront software to my Windows 7 deployment. I’m going to go back into my OS deployment capabilities, select Edit on my Windows 7 task sequencer. And I’m going to drop the application into that physical application section there. So as the OS goes through its deployment, we pushed in applications with that. I just want to make sure that Forefront is a part of that process.

So, we’re going to select out of there, and just a couple of mouse clicks here, we’re going to install some software, give it a really unique name again, simply select that package, and we’re done. Hitting apply at that point will add that software to our Windows 7 deployment package, and make sure that any net new Windows 7 builds will receive that software.

So last year, on this stage, we introduced to you BranchCache and DirectAccess in R2. This year, we’re really pleased to come back and be with you and share the integration we have spent time on in products like System Center and Forefront.

ROBERT WAHBE: We’ve done two of our three things, we’ve made sure DirectAccess is working well, we deployed our end point, and now we have that power work. Now as I talked about earlier, out of the box, no configuration, it’s 18 percent more efficient. So, it can’t be about configuration and power, because that doesn’t have any work at all. So what is that power all about?

JEFF WETTLAUFER: That’s exactly right, Robert.

So Microsoft has been working with some key hardware vendors like HP to deliver power control feature sets for anyone who wants to really optimize and take advantage of advance relationships around power monitoring.

Over in System Center, we’ve actually been doing this for a couple of years on the performance level where we’ve been monitoring things like processors, and utilization for a couple of years. As an example, you’re seeing in front of you here, I’m back in my System Center Console, and I’m looking at three specific servers and their processor performance. This is three different boxes, and showing their processor performance data. These are examples of taking power management mainstream, and we’re running here a couple of new HP G6 Series servers that we’ve brought to Berlin to showcase this technology.

Well, now we’ve extended this through a new relationship between the hardware, the operating system and the management layer. We have the ability now to really understand new relationships, and understand data about what’s happening between those different environment layers.

ROBERT WAHBE: A truly riveting graphic out there.

JEFF WETTLAUFER: Riveting graph, absolutely. What you all are looking at here is actually very cool. What you’re seeing in my System Center console is a new Power Monitoring Management Pack that’s looking at the power consumption data of my R2 servers.

ROBERT WAHBE: That’s actually pretty cool.

JEFF WETTLAUFER: Yes. So why don’t we take advantage of that scenario, and take it one step further, and show a simple example about how we can take that processor data and that power consumption data and help make some really informed decisions about our workload management?

Let me go back to my System Center console, and I want to show you one example here of something called a PRO Tip. Now, new to R2 and System Center is a concept called Performance Resource Optimization, or PRO. And through PRO-enabled management packs, we have the ability to really gather centrally, and collect on that processor and power utilization data, and make really good, informed decisions about what we want to do to really gain some efficiencies.

ROBERT WAHBE: Now, it’s great that it’s taking in both utilization and power, which is wonderful in terms of driving that green IT. But you wouldn’t normally see an Implement button, though, would you? Wouldn’t it be automated?

JEFF WETTLAUFER: You’re absolutely right, Robert. And typically this kind of technology can be completely automated. But we know you guys like to see things happening, so in this case we’ve taken this PRO Tip and made it prompt the administrator, myself, to take action themselves and approve it. So, we can simply hit the Implement button, and that’s going to submit the job for us, and implement the process.

ROBERT WAHBE: When you hit that Implement button, there is going to be no disruption for users, and no disruption for systems. So, talk a little bit about how that’s working behind the scenes to give that seamless experience.

JEFF WETTLAUFER: That’s right, Robert. This demonstration is taking advantage of a new capability you heard Stephen mention called Live Migration. Live Migration is a new feature to R2 that allows virtual machines to be moved from one physical location to a new host. And during that process, the users remain connected, the services remain running, and there’s no interruption. The bottom line is, this creates a level of agility that keeps people productive no matter what we have to do on the back end.

ROBERT WAHBE: That’s great.

So, you’ve seen a quick overview of how Windows Server 2008 R2 and Windows 7 and System Center work together to really lower costs around operations around connectivity, and around power. So, thank you very much.

JEFF WETTLAUFER: Thank you, Robert. Thank you. (Applause.)

ROBERT WAHBE: And thank you very much, that’s a wrap on Windows Server, and we’re going to play one more dream IT, and then Stephen is going to come up and wrap up. So, thank you very much.

(Video segment.)

STEPHEN ELOP: So, today, we have discussed Microsoft’s vision for you. Our desire is for you to take advantage of the new generation of IT solutions, to not just reduce IT costs but to also help your organizations grow, and to help you delight the people around you.

Now, while at times we may have taken a lighthearted approach, make no mistake, we are absolutely committed to improving your organizations and to helping make your lives just a little easier.

You know, before I joined Microsoft just under two years ago, I had a lot of questions on my mind, questions like what’s the future of the operating system, what are the best opportunities for innovation around products like Office and Exchange, what steps should Microsoft follow in order to continue to lead the world as it all looks forward towards cloud computing.

Now, I had the good fortune two years ago to receive from Steve Ballmer and others at Microsoft the necessary confidential information about what the future held, and I was able to see the remarkably positive answers to those questions and a number of others, answers that you are seeing today.

I personally could not be more proud and more excited to be in Berlin with all of you, being able to share with you the work that we’ve been working so hard on about which we are so proud.

Now, when we return to Tech•Ed Europe in 12 months, my IT dream is that nine out of 10 of you will have begun deploying Windows Server 2008 R2, Windows 7 and Exchange 2010 in your organizations.

As a result, all of your organizations will be experiencing demonstrable cost savings and productivity benefits, and each of you individually will have helped to promote the strategic role that IT plays in today’s business world.

Those are our opportunities, all of us, and we are going to pursue them together.

Thank you and please enjoy the rest of Tech•Ed. Thank you. (Applause.)

END

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