Allison Watson, Bill Veghte, Stephen Elop: Worldwide Partner Conference 2009, Day 1 Keynote Speeches

Remarks by Allison Watson, corporate vice president, Worldwide Partner Group, Bill Veghte, senior vice president, Windows Business and Stephen Elop, president, Microsoft Business Division
Worldwide Partner Conference 2009, New Orleans, July 13, 2009

Editor’s note – July 14, 2009 –
Bill Veghte’s remarks have been updated to correct Windows 7 release to manufacturing timing information due to a transcription error.

ANNOUNCER: Ladies and gentlemen, please welcome Microsoft corporate vice president, Worldwide Partners, Allison Watson. (Cheers, applause.)

ALLISON WATSON: All right, let’s give it up! Great job out there. All right. Welcome, everybody, to WPC! (Cheers, applause.)

All right, well, let’s give it up for Playing for Change! (Cheers, applause.)

This organization is so powerful, they represent what we represent in this room. There’s over 100 musicians across five continents, and the proceeds from the work that they do in delivering concerts goes back into building music schools in emerging countries. It’s a fantastic example of how the power of partnership and the power of collaboration comes together, and I’m so pleased that they’re here with us this week.

Now, in this room today we have over 9,000 of you who are participating with us from 125 countries. We also are welcoming our online audience on Digital WPC. It’s the power of partnership that will bring up through the changing market reality.

Now, I’d ask you to pause for a moment and think where you were last September, last October. I was in Brussels and Munich and Colombia and Mexico City and Florida talking with partners, at the time in the middle of what we weren’t sure what was going on. And at that time, we raced back to Redmond, we sat down and we did some research, and we said, what happens when an economic reset happens in the world?

And in research of 200 years we found that companies who win in a time like we’re in have three important characteristics. No. 1, they had a vision that they stuck to it. They knew where they were, and they knew where they were going.

No. 2, they believed in themselves, and they instituted marketing approaches that would work for the current reality.

And No. 3, an intense focus on salesmanship. We’re all in the room salesmen at the end of the day, and it was important to get out in front of our customers.

Sitting here with you today at the dawn of this conference, I’m incredibly upbeat, based on the work and the environment and the enthusiasm from all of you around the world. Ulysses from Mexico and I talked, and he frames up that recession means crisis, but crisis means new opportunity. We have to be creative and imaginative about what we take forward.

You heard from Carrie yesterday as we were talking at the dawn of the conference, and Carrie said, if I didn’t have a great P2P strategy, I wouldn’t have necessarily made it through the way I have in the last three months.

And Craig from the U.S. and Software One team said, we have to help our customers leverage every tool in their toolbox.

So, ultimately it’s about our customers that will make the difference for all of us, and will get us through and make us successful coming through the other side of this.

Let’s hear from one of our customers at Baker Tilly.

(Video segment.)

ALLISON WATSON: It’s great to hear from customers as they help represent our case for change.

So, let’s look at the three case for change items that we’re dealing with this year, the market forces. You heard Baker Tilly talk about how technology and business has fundamentally changed for all of us, but you also heard him say that technology will still be invested in, but it must show dramatic ROI, and that’s our job in this changing world.

Secondly, customer need. In addition to needing to have technology prove out for our customers, customers even more are looking for expertise from our partners. They’re demanding that you’re going to be better in front of them, they’re demanding that you help take them to the limits where technology can deliver for them, and they’re looking for partners who have strong relationships with Microsoft and strong relationships with other partners so that they can deliver across the range of needs.

And third, what are the needs that you’re bringing to us in this changing world? You’ve asked us for more differentiation in the marketplace. You’ve asked us for access to new customers. And you’ve asked us for real time connections via P2P so that you can accelerate your business further.

I think we can all agree that we’re in a different world with different opportunities. Using input from customers and partners and you, I’m honored and pleased to announce the introduction of the new Microsoft Partner Network. The new Microsoft Partner Network is an evolution evolving from the Microsoft Partner Program to the Network, and it is intended to change the game and adjust to the shifting landscape.

But at the core our vision for partnering at Microsoft hasn’t changed. We still have a vision that any partner of any type can have a profitable business opportunity and deliver great innovation for our customers.

So, there’s three core pillars of the new Microsoft Partner Network. The first is capability. The Microsoft Partner Network has the opportunity to strengthen your capabilities, and we will both require and recognize those of you who invest in capabilities that are deeper and better for our customers.

The second pillar is our customers. We will both require and recognize marketing and sales excellence, and a generation of net new customer demand across our geographies.

And the third pillar is all about connection. It’s about the real time connections that you’ll see going on here at the conference today, and throughout the year as we deliver more and more value for our customers and for each other.

So, let’s have a little fun and take a look at these pillars, what I call to a story style.

So, first on the subject of capabilities, I believe partners who invest early and have deep skill sets should be recognized.

We’re focusing the Microsoft Partner Network around 30 competencies that are aligned the way customers are asking for business, and are aligned to the way Microsoft is going to business.

There will be more precision in each competency in terms of the benefits required, and in terms of the requirements required and the benefits offered.

And for each of these competencies we will be introducing an advanced level. For those of you that are willing to go deeper, invest earlier, and commit annually to performance requirements, the advanced level will be for you.

I think excellence in customer satisfaction should be rewarded. Starting at this year’s renewal for Gold Partners, a customer satisfaction participation in our survey will be required.

I love it when partners are recognized in the marketplace. You’ve given me feedback personally that “Microsoft and Allison, you need to do a better job bringing partners into the Microsoft brand advertising.” We’ve come a long way, but we’re going to go take it even further with the Microsoft Partner Network, bringing it in to all of the assets and the marketing that Microsoft brings to bear into the market.

What about the pillar of customers? I believe every partner can grow their customer base. We’re investing in digital marketing, and you’ll see later the search engine optimization toolset where our most committed partners are seeing a 28 percent increase in the customer outreach that they’re driving in the marketplace.

I love it when we save customers money, and drive customer innovation. As they say, necessity is the mother of invention, and we’ve gotten very crisp with our conversations and with conversations for you around how Microsoft assets save customers money and drive innovation.

Our most committed partners took this seriously this year, and invested with us on this messaging. A Finnish partner, used OCS 2007 and the Saving Customers Money campaign to save a customer 33 percent on their travel budget, and to take $50 million a year out of their costs. That’s saving money. So, Ulysses, we’re going to help you get innovative with those customers.

I hate it when a deal gets stuck. With Microsoft financing we’re increasing our subsidiaries from 15 subsidiaries to 25 where Microsoft financing will be available. And for those partners who have used Microsoft financing, you’ve told us and we’ve seen deal sizes increase between 40 and 80 percent with the use of the assets in the Microsoft Partner Network.

The third pillar is connection. Now, I wish and I know you wish that social media would work for business. Today, we’ve re-skinned the entire Microsoft Partner Program environment to the Microsoft Partner Network. We’re embracing the best of the Web with the best of social media.

We think social media can be fun, and we’re having a lot of fun with it here this week, but it will also impact business. Our research into this area tells us that we can use the technology to increase customer satisfaction, to change brand attitudes, to increase visitation on our Web site, and ultimately reduce in revenue increases. So, we’re making a big bet on social media working for business.

I think every partner can grow their average deal size by 16 percent. IDC just recently completed research with partners in our community who engage in partner-to-partnering as a strategy, and what you’ll see is those partners who use this as an explicative strategy increase their deal size by 16 percent, and actually increase the number of deals they do by 33 percent. That’s powerful, and that’s the power of the network.

And finally, I love it when a customer finds a partner. I love it when a customer finds a partner. I love it when a customer finds a partner! Today, last year at WPC, I told you that we sent 250,000 leads to partners from the Web site, and all of the assets and marketplaces we use with Microsoft Solution Finder.

This year, we upped the game. We sent 350,000 leads to partners — 350,000 leads to partners, resulting in a 33 percent increase. We consider this an important objective, and you’ll see us continuing to drive harder and drive up the number of business that we’re sending you, because you will be excellent for our customers as part of the Microsoft Partner Network.

So, what does the journey from the Microsoft Partner Program to the Microsoft Partner Network look like, and how will it unfold? It’s going to unfold over the next 18 months so that you can be prepared and ready to make the journey with us.

Thanks to Randy and the team at Quilogy in St. Louis for being my guinea pig on the transition.

So, today, Quilogy is a Microsoft Gold Certified Partner with the following competencies. When we’re coming up for renewal in the next few months, the team will go through renewal and they will migrate their existing competency framework to the new competency framework that we’re introducing this week.

And also if it had not been participating in our customer satisfaction survey process, that will be required by the beginning of October.

And finally, Randy and the team can sit down now at this conference and from here on out, and plan where they want to be when the Microsoft Partner Network fully comes online in the next year’s renewal period. And as you can see here, the branding around competencies and advanced competencies, and the increase requirements that partners will have to earn those competencies.

So, you’ll have a full 18 months to understand where you want to go to make the plans so that you can get there.

The journey starts here, and we have quite a few assets on site, both in the Microsoft Partner Network booth, and in sessions that are designed to help you understand the new requirements and understand the journey that we’re all on together.

So, next I want to enjoy and experience the new innovation now that’s coming out with the Microsoft Partner Network at this conference. I would like and encourage you from the stage to send me stories every year to tell me how things are going. Well, I’ve invited four partners onstage to talk about their stories and how Microsoft Partner Network is helping them win in the marketplace. Please help me welcome some partners. (Applause.)

So, Shaquille, Spring Wireless, how’s it going?

SHAQUILLE: Pretty well, Allison. Thank you very much for having us here. It’s great to be here at the WPC ’09.

ALLISON WATSON: You had a big year, not only in the mobility space but also as an award winner here at WPC ’09. So, share with the audience a little bit about that award-winning year.

SHAQUILLE: OK, let me tell you about Spring Wireless, folks. Since we were founded in 2001 in Sao Paolo, Brazil, and began our partnership with Microsoft, we’ve grown our customer base to over 450 enterprises in over 30 countries worldwide.

We’re a mobile solutions as a service company, serving a variety of different industries, especially the consumer packaged-goods industry. Together with Microsoft CRM, as well as Dynamics AX, we bring a complete solution to mobile ERP.

We bought in early to the Microsoft vision around mobility and bet our business on the Windows Mobile platform. The integration of Microsoft technologies and platform across devices – PC, server, and Web – are key to our continued success and growth.

It’s a key competitive advantage for a company to allow its sales force access to company information, as well as KPIs while they’re out in the field using their Windows Mobile devices.

A great example of this is L’Oreal, the largest skincare and cosmetics company in the world. They wanted to increase their sales and marketing performance for their luxury products division, and using our mobile sales force applications across 1,200 Windows Mobile users and 300 of their distributors across Europe and Latin America, L’Oreal expects to increase sales over $160 million over the next two years.

Microsoft partner assets are absolutely critical to helping us meet our goals.

ALLISON WATSON: Excellent. Well, we have a tremendous amount of innovation. I’m thrilled you all are focused on mobility and the transformation of software plus services in your business. Come on over. I want to show you some new assets in the Microsoft Partner Program that will help you and some of the other partners here in this room.

First is the new Microsoft Partner Network look and feel that launched over the weekend, and this is our social media site where all of our partners are going to be engaging, as I said, in a little bit of fun and a little bit of networking this week, but it will be a place that we work online to establish the conversations that we need to have, to build the communities, whether it’s consumer packaged goods or education or business, that we need to talk about to take our conversation forward and deliver value in the marketplace.

Next you’ll see our profitability modeling toolset. Now, you mentioned that Spring Wireless had to make a decision to invest in the Microsoft platform at the time when mobility, it’s a great year for mobility. So, we’ve got the Microsoft profitability toolset here, and what you’ll see is the ability to take whether it’s our mobility platform, our software plus services platform, or any of the competencies that are in the Microsoft Partner Network, and make a three-year business model with both revenues and costs so that you can project various levels of profitability based on the investment that you’re willing to make.

As we make transformations into this new world, it will be important to make sure that we’re doing it, and we’ll get out the other side with great profitability.

And finally, I wanted to talk to you about an application testing environment for ISVs, given that Spring Wireless is an ISV. And what you see here is what we call Project Green Light that allows all of our ISVs to get early access to testing their applications that run on this new wave of innovation that Microsoft is launching this year.

As you’ll see here, one of our partners has gone through testing, they tested on Windows Server 2008 R2, and they’ve got a green light. We’ve got marketing resources available so that they can take advantage of the partner network. And they’ve got a red light on Windows 7. So, in this case we’ve got technical resources that are self-service and friction free to allow partners to figure out how to get their application up and running and into our database of Windows 7 compatible applications. It’s a great asset, and I think ISVs like yours and others in the room will take advantage of it.

SHAQUILLE: That’s fantastic.

ALLISON WATSON: All right, thanks, Shaquille.

SHAQUILLE: Thank you. (Applause.)


GORDON: Hi, Allison.

ALLISON WATSON: How are you doing?

GORDON: Good to see you.

ALLISON WATSON: All right, Gordon, so you’ve got a big business going on in the UK, and I think these partners are going to be excited to hear about what’s going on there.

GORDON: OK, thank you.

Well, I’m not only a Microsoft Gold Partner, Allison, but I’m also a Microsoft services ready partner based out of the UK, and I have a complete focus on the Microsoft System Center suite of products.

So, I’ve been a Gold Partner for about two years now, and I have to say that even though we’ve got an economic crisis on at the moment, I’ve seen a 150 percent growth in my consulting team over the last 12 months, which is a great place to be.

ALLISON WATSON: Fantastic. Great.

GORDON: So, I think we have quite a unique partner model as well. We kind of work 60 percent directly with customers but 40 percent alongside other partners, quite often under their banner, becoming their System Center expertise, allowing them to give their customers that end-to-end solution experience.

We also work directly with partners to enable their people around System Center. So, for example, this year we’ve developed and delivered a systems management suite enterprise boot camp with Microsoft, which we recently delivered to three different locations across three cities to over 80 target partners, and all over Live Meeting.

Have a look at how I powered my business this year as well. We’ve been able to utilize services ready quite heavily.

So, through our partnership with Microsoft services and the use of service line offerings we’ve been able to create multiple, repeatable customer engagements, which has really allowed us to work with larger enterprise customers such as British Telecom in the UK, for example.

And, in fact, this week I caught up with Peter Scott who’s CTO of end user technology at British Telecom just to ask him what this engagement has meant to him.

ALLISON WATSON: Great. Let’s hear what he has to say.

(Video segment.)

ALLISON WATSON: It’s fantastic to see that great result, and that’s not one small customer.

I think we have great things to talk about you and all the other partners in the room. Come on over to the Microsoft Partner Network demo.

All right, so first I’m pleased to announce today as well the brand new Partner Learning Center. As you know, we launched the Partner Learning Center several years ago. We’ve taken great feedback from partners because we know having your teams ready, whether it’s sales and marketing content or technical content, and having easy online access in multiple languages around the world is critical.

So, you see here the new Learner View for the Partner Learning Center where employees can manage their own training requirements, and all of our training courses are available and searchable. And what you see also is a Manager View so that managers can set a training platform for their entire partnering organization, and track how that training environment is going, so you know that you’ll be ready and have the right capabilities for our customers.

Next we’re launching the online Practice Builder tool as part of Microsoft’s partners sales resources. This is a tool that will allow you in a self-service way to use the best of our IP, combined with our technology, to help build these core practices that you’re building so that you can have faster repeatable solutions out into your customer marketplace.

And finally, you mentioned being a Services Ready partner. We’re pleased to announce today some significant innovation in Services Ready. First, we are the first and only company in the industry at this point who takes services as a strategy to increase the capability of our partner asset, and we continue to invest in that.

We will announce today that we’re publishing a roadmap and a retirement plan. When we launched last year, we had 17 service line offerings, we had over 171 partners around the world participate in our Services Ready, and do a co-engagement with our consulting services business.

This year we’ll be launching 40 new service line offerings, and we’ll be announcing for the first time retiring of our first seven service line offerings.

Now, I had a conversation yesterday with a partner who told me, I don’t sell VMware into the enterprise, because I get the consulting service business in there competing with me. Well, I’ll tell you we’re going to retire our virtualization service line offering this year, because we believe the market is ready, and partners have the right skills.

Three, we have our services leaders compensated. Their checkbook or their wallet is going to be based on delivering great partner value-add through Services Ready, and the satisfaction that our partners have with those co-engagements.

And finally, for Services Ready for partners who invested early we’ll be introducing branding in both the old program, as well as the future of the Microsoft Partner Network. So, some great innovation in Services Ready, and I think partners are quite excited.

Thanks very much, Gordon.

GORDON: Thank you. (Applause.)

ALLISON WATSON: Carlos, welcome, how are you?

CARLOS: Fine. How are you?

ALLISON WATSON: Thanks for making the trip north.

CARLOS: My pleasure to be here.

ALLISON WATSON: Good. So, what’s going on at TiM this year? You all are really interesting in this Web environment that so many people are getting into now, and making money in. So, tell us what you did this year.

CARLOS: Yeah, TiM is a 45-person company founded in 2001 as an IT services and a software solution company.

As a Microsoft partner, our mission is stated at having to contribute with our customers with their business goals through innovative Web and mobile solutions using Silverlight, SharePoint, Dynamics CRM, and Windows Mobile.

In the next slide there is an example of an application built on Silverlight that we call an e-to-see portal, which means easy to find, use and share information, where easy is the key to a new paradigm of use experience.

You know, Silverlight is a very exciting technology. At TiM we use it as a platform to drive innovation and creativity for new kinds of applications.

Changing the way people do things on the Web has become our specialization, and our offering always includes smaller components to extend business processes beyond the office.

In order to keep our business growing, we are maturing our sales and marketing practices. We consistently use the Partner Marketing Center content and templates to conduct our own demand generation campaign.

In addition, our solutions are registered at the Microsoft Solution Finder where we have reached new customers.

And finally, we complement our competencies through generating partnerships with P2P networking activities, sponsored by the IMCP, another channel builder activity, and actually 30 percent of our revenue comes from P2P business, so I think the business is growing good.

ALLISON WATSON: So, you believe in the results?


ALLISON WATSON: That’s great, but we’ve got great innovation on the marketing assets in the Microsoft Partner Network as well.

First, I’m pleased to introduce today the new Microsoft Demo Showcase Suite that’s available and live today on Windows Azure. And what you see here is one of the applications from TiM that is up and running for the education space, and one of the applications that’s available.

Partners now have the ability to build and customize either taking our demo environment or the demo environment that you built for your customers, and host them in the cloud, and you have real time access with yourself and customers to an Azure-based application environment and an application that helps you deliver value out.

Our most committed and best partners find that when they can show the customer in a personalized way how solutions can solve their unique business needs, we close deals faster at lower cost.

You mentioned the Microsoft Partner Marketing Center. We continue to put all of our campaign assets, and allow our partners to invest in better marketing, more high quality marketing that gets customized with our messages and yours.

Today, we’re also launching the Grow Green campaign, where we did a pilot over the course of the year about how we really show customers how to save customers money, not so much in the IT side, but because of investment in IT they can save money on electricity, power, and other third party costs.

So, what you see listed here is just one of the templates in the Growing Green campaign. It allows a partner to market out to customers. It has embedded calculators so that partners can show their customers actual cost savings based on their real customer environment.

Additionally, we’ve launched search engine and digital marketing assets for our partners as part of the new Microsoft Partner Network. This is just an example of a dashboard for our partners to engage with us in digital marketing assets, and it really improves how they market themselves to their customers on the Web. We’re tracking and helping partners figure out how to increase traffic, find terms that resonate in search engines, and drive marketing ROI.

And finally, you mentioned Microsoft Pinpoint. We’re pleased that Microsoft Pinpoint is available today in three countries in a release format, and we will start an international rollout over the course, and it will be in 13 of the world’s largest countries in the course of the next 12 months.

And here as an example, on track timesheets came up on a particular search, and you’ll note that we have the ability here again right from our marketplace homepage to allow partners to provide demonstration toolkits, try it or buy it, directly from our Web site, so that we can automatically increase the throughput that our partners have with their customers.

So, Carlos, do you think that will help?

CARLOS: Yeah, so much.

ALLISON WATSON: All right, great, thanks so much.

CARLOS: Thank you, Allison. (Applause.)

ALLISON WATSON: Hey, Rand, how are you?

RAND: I’m doing great. How are you?

ALLISON WATSON: Welcome back. I think you were at the Imagine Cup in Egypt last week.

RAND: Oh yeah, I was in Cairo just a week ago, an exciting competition. I’m glad that Microsoft sponsors it.

ALLISON WATSON: Yeah, it’s fantastic, and we’ll hear a little bit more about that tomorrow I think.

RAND: Yes, yes.

ALLISON WATSON: Good. So, what’s going on at Convergent Computing this year?

RAND: So, as you know, we’re based in the San Francisco Bay area, and our focus has been in the areas of system integration, as well as we do online services through Microsoft BPOS.

The success that we’ve had over the last year, and really what keeps us going on an ongoing basis is the close relationship that we have with the Partner Account Manager. Our PAM is able to work with us, we work with our partner solution profiles to identify our core competencies, and then to be able to really match that out and work closely with the field to be able to really work in lockstep to go out and be able to work with customers on an ongoing basis.

We use the Partner Sales Management tool to be able to make sure we log information inside the system, so that way we can know what’s going on, our Partner Account Manager can work with us, as well as the field knows what our customers are doing.

The tools that we’ve been able to use from Microsoft have been great, a number of the different things that we’ve been able to use, example like the IO Assessment Tool. This is a tool that’s given us the opportunity to go through and do an assessment on the customer and do that gap analysis. And key to it is figure out those things that the customer has, what they need to be able to do, and then to be able to identify those things that Microsoft can provide them that type of solution and working through it. And those have led to different types of different offerings, like planning services, and we’ve been able to leverage the packaged services, which is part of the customer’s SA benefit. So, that way when we can go into these customers, we can identify things, we can do planning around SharePoint, around Exchange, around desktops, and those things help us move the dial.


RAND: And one of the key areas, another area is in the area of finance. I think in this economy sometimes it’s difficult where customers have a cash flow issue or something that’s holding up the project, and as you mentioned in your keynote a few moments ago is that really the Microsoft finance has helped us move the dial, be able to get it to the point where the customer has an opportunity to be able to look at different areas and be able to finance things and make things work. So, it’s worked out real well.

ALLISON WATSON: That’s great, and you had a big win recently with Sedgewick.

RAND: We have, yes, Sedgwick, Detert, Moran & Arnold, a 750-person law firm in San Francisco, was just one such customer where we leveraged these packaged services to be able to actually go out and start a System Center Configuration Manager deployment, and actually as of right now we’re doing a Windows 7 rollout with them starting this morning. So, it’s an exciting time.

ALLISON WATSON: And so you left people at home to get that Windows 7 rolled out. That’s fantastic.

RAND: Somebody has to work to make sure we pay the bills.

ALLISON WATSON: I understand.

All right, come on over. We have great innovation in our selling assets as well in the Microsoft Partner Network.

The first you mentioned using the IO Assessment Tools that we’ve launched and had success with our partners.

Well, in addition to the Assessment Tools we have companion tools for driving deployment and planning services that are available to our customer who are on our SA benefits options and are Enterprise Agreement customers. And as you see listed here, whether it’s desktop deployment, SharePoint, Exchange or business value, we have the tools that allow you to provide engagements, co-branded with Microsoft, and most importantly get paid by Microsoft as part of our incentive strategy in the Microsoft Partner Network.

You also mentioned using Microsoft Partner Sales Management toolsets for managing the core opportunities between both your team and our team, so that you have access to the right information, and that we together are clear on both the ambition that we have for the year with strong growth goals, the customers we’re going after, and we’re tracking it and attacking every day in this new economy to get the sales that we’re trying to get.

And finally, I want to talk a little bit more, you mentioned early on the software plus services transformation that you’re engaging in. Give me a little bit more about what’s gone on in the last 12 months since we introduced BPOS.

RAND: Absolutely. So, as a system integrator we’ve have traditionally been an on-premise organization, helping organizations deploy Windows, Exchange, SharePoint, and SQL.

When BPOS came out, it was like, do we really want our customers to go to online because will that actually affect our traditional business.

But what we found is that really customers need choices, they want choices, and they were going to ask for it anyway. And rather than taking these customers and sending them away to somebody else, we included BPOS into our services, and now when our customers ask us, we have an online service offering, as well as a traditional on-premise offering, and we never have to send that customer away elsewhere, we’re able to go through and continue to work with that customer on a strategic basis.

ALLISON WATSON: That’s a great example. Rand and I were talking about the impact and how fast he’s driving forward with Exchange 2010 and the impact that BPOS offers him in selling the true software plus services story.

Now, we have some amazing announcements today for our Business Productivity Online partners. The first is for all our Business Productivity Online partners in the Microsoft Partner Network we’ll be offering 250 seats of the service based free at no charge for partners to use for their internal use so that they can become their own best expert. (Cheers, applause.)

Secondly, one of the core pieces of feedback we got from partners is we needed to do a better job with order on behalf. Starting this week, partners like Foresight and CCO and others can now embed technology inside their own Web site and inside quotes. So, you’ll see here on Foresight’s Web site everyplace you see “try or buy,” we’ve got code embedded behind those buttons that if a customer clicks on it and clicks into our order management portal, the partner of record will automatically be established and it will go towards your credit as a Microsoft Online influencer and reseller. (Applause.)

And finally, we have a dashboard that allows you to track what’s going on with your online assets. So, what you can see here is just a small glimpse of the total view of the information you can get from the Microsoft Partner Network homepage dashboard where you can drill in to understand all of your customer activity, their trial activity, their purchase activity, and of course most importantly for me is the amount of money that partners will make as a result of participating in the incentive program with Microsoft BPOS online.

RAND: We like to know what we’re going to make.

ALLISON WATSON: Yes, I know. It’s always good to be able to track that revenue, isn’t it?

RAND: That’s great.

ALLISON WATSON: All right, thanks so much, Rand.

RAND: Thanks so much. (Applause.)

ALLISON WATSON: So, I want to welcome all of you to the new Microsoft Partner Network.

But this is only the first thing we’re announcing at the conference this week, and I want to take you back a little bit for those of you who joined me three years ago in Boston when I told you at the time it was the biggest launch wave in Microsoft’s history.

And now three years later, at just the right moment, there’s an even bigger wave coming. This wave is going to take a level of talent, a level of commitment, a level of investment in quality and capability to get it right.

But this one is going to provide even bigger opportunities. This one is going to be so big that we’re going to need to get towed onto the wave.

So, Fred, could you please bring me my surfboard?

FRED: Here we go!

ALLISON WATSON: Very nice, Fred. You got changed.

FRED: Yeah, well, you know, I wanted to look the part, Allison.

ALLISON WATSON: I see. All right, so have you ever heard of tow-in surfing?

FRED: I have heard of tow-in surfing, Allison. In fact, I took this board, and I went out and I shot some video with it yesterday. Flew to a really exotic location, and I don’t know if we’ve got the video.

ALLISON WATSON: Well, let’s watch the excitement of riding the world’s biggest wave.

(Video segment.)

Imagine what we can do together if we’re all that good. Thanks. Let’s have a great year, and let’s go for it. (Applause .) Thank you.

(Video segment.)

ANNOUNCER: Ladies and gentlemen, please welcome Microsoft Senior Vice President, Windows Business, Bill Veghte.

BILL VEGHTE: Good morning. How is everyone doing out there? (Applause.) All right. You watch that video, it’s such an exciting time. It is such an exciting time. This month we will release Windows 7 to manufacturing, and we write that next chapter, we go after that opportunity. And when you think about the story of Windows, and you think about that story, and you all have written that history. You think about Windows, and over the world you’ve got over a billion people, over a billion people, depending on what you do. More people speak the language of Windows than speak the English language. And that opportunity, and that value, that incredible simplicity, that broad a set of choices, that’s what you’ve done.

I want to start by saying thank you. Thank you for the incredible history that we’ve written together, and the incredible partnerships. Today, today is a brand new day, and today we get to write that next chapter together.

To do that, though, we’re operating in tough economic conditions, and yet we’ve got an absolutely fantastic product, and platform in Windows 7. We’ve got an incredible set of partnerships around this room. And so what we need to do over the next couple of days is, we need to get very, very concrete about the product, the platform, we need to make sure we have a good line of sight together on the opportunities that we see economically for you, and how you grow your business and deliver great value for your customers.

We need to make sure you’re clear on the actions that we’re taking, how we’re betting and investing in what is an incredible opportunity with Windows 7, so that you can take those investments and amplify them.

We’ll do that. I’ll introduce it and queue it over the next 40 minutes, but whether it be the sessions that happen later on today, whether it be in Kevin Turner’s session, where he will talk about the competitive opportunities we’ve got with Windows 7, or in the nearly 20 breakouts, make sure that you’re leaving the sessions, make sure that you’re leaving Worldwide Partner Conference having good line of sight on the product, the opportunities, and the actions that you can take.

So, let’s talk about the product. The first thing I want to talk about when I talk about the product is the fact that we did some significant revamping. Learning from the experiences we had around Windows Vista and revamping, revamping our engineering process so that we’re clicking milestone by milestone by milestone, all the way through the development process, high-quality milestones, hitting dates, and delivering a Windows release within three years to general availability of Windows 7 from Windows Vista.

The next thing that was absolutely essential is how we are listening to customers. Listening to customers so that the fit and finish, the simplicity, the performance, the overall experience is very, very clean. Making sure that our development process is about that listening and learning.

And then the final piece around it was making sure that we’ve got the right ecosystem outreach for the people who are building compatible and exploitive solutions and capabilities across Windows 7.

So how are we doing? How are we doing? Is anyone in the house running Windows 7? (Audience response.) All right. We’ve got such a good opportunity, and the feedback, I mean, the feedback has been – it’s just been exciting, and frankly a little humbling. But, you look at these quotes. These are the quotes that I pulled from the beta, the beta not the release candidate, not the final product. I look at it in the context of enterprise customers. I’ve been around the Windows business for almost two decades now, and I’ve never had a Windows release, Windows 3.0, Windows 95, Windows 2000, Windows XP, where we were over-subscribed in early adopter programs.

We run these early adopter programs through the beta and the release candidate to get customers in scale deployment, and we help and support them, but also so we can learn and make sure we are completely triangulated on the opportunities and the value props. This is the first release of Windows where I had to call customers and say, I’m sorry, we just don’t have the capacity for you. And you look at these customers across the globe, from BMW to Del Monte, from T-Mobile to Pella Windows, an incredible breadth and range. You listened to Rand Morimoto just a moment ago, he’s up on stage and he smiled, he’s like, yes, my business 700 desktops in a law firm down in San Francisco. The feedback from enterprise customers has been very, very good.

Now, as you think about this, it’s not only what enterprise customers are doing. When I look at the opportunity, businesses deploying, and thousands of desktops around the globe, but also how are we doing with IT pros. So how are we doing with the technical professionals? They’re excited about the security and manageability, but how are they thinking about it as end users, as well? We have over 90 percent favorability on Windows 7 today, with the release candidate, over 90 percent favorability, and that’s a statement. When you get that high level of favorability it means they’re excited about it not only in what it does for them professionally, but also what it does for them personally.

On the SMB side, you look at the feedback here from partners and from customers, and obviously I’m starting to take the marketing volume, the noise level on Windows 7 up for the people who are familiar with it, but again the feedback has been very, very good.

Do you guys want to see the product, though? All right, let’s take a look at the product. I need to bring the house lights up just a little bit. How many people are running Windows 7? Can I just see a show of hands? (Show of hands.) OK, thank you all so much for participating in this journey with us to make sure we’ve got the very best product possible.

One of the things I find as I have conversations with you is you say I want to do a demo, because I get – part of it is I’m excited about what it does on the security side, or the manageability side, but I want to make sure that we can excite end users. So the first part of this demo is a demo that all of you can do, regardless of whether you have network connectivity or not, it’s a simple way of getting people excited about Windows 7 as end users.

Now the first thing I do when I start the demo is you look and you say, this kind of looks like Windows, and it is. It’s consistent and familiar, so there’s not a huge learning curve associated with it. You’ve got the start button here, you’ve got the task bar, but one of the beautiful things that people are telling us about Windows 7 is that as they’re interacting with it they’re doing their normal tasks, and all of a sudden all these cool things start happening.

The preview Window, you guys probably have dozens and dozens of Windows open. Well, the average user has five or more Windows open 40 percent of the time. Quickly and easily I’m navigating and I’ve got the previews. Now, these previews are really rich. If I go up here and I hover over here I’m getting a full-screen view. And when I close that, I go to my favorite search engine, I want to go ahead and close that, I simply click the close, natural, intuitive, approachable.

The next thing I’d like to talk about is I’d like to talk about this taskbar. Now, this is your space, it’s not only active applications and services, but it’s ones that you want online. So, for example, if I want to go ahead down here and pin, lock Excel to the taskbar, I can do that as simple as that. If I want to move it over here I just move it over here. Naturally, intuitively taking those everyday tasks.

One of the pieces of feedback we’ve gotten that people are very positive about is the concept of jump lists. So as I go over here and hover over the Excel icon I can right mouse click and I can bring up my most recently used sales data spreadsheet very, very quickly, and very easily. Now, you’ll see as we go through the journey on Windows 7 you’ll see that these jump lists are very extensible. So, for example, if I go in here on Messenger, the Windows Live Messenger team has done some of the common tasks, changing my status, common tasks. You’ll see, for example, in Windows Media Player, if I go over here, my pinned play lists, some of the most recently accessed media content. I go over here to Outlook and the Outlook team, even in the tech preview, is starting to take advantage of jump lists to do new tasks, or jump to a specific thing.

I’ll give you one of my favorites, though, while I’ve got Outlook up. So I’ve got Outlook up, let’s say something I’m doing all the time, I want to – I’m attaching a presentation to an e-mail. I haven’t opened it, I simply drag it and drop it over Outlook, boom, just like that. That is Windows 7.

OK, let’s go ahead and close out of that. The next thing I want to do is all of you have laptops, many of you have laptops, and of course many people do, as well, and they have all these Windows open. And they’re like, all right, I want to do that side-by-side comparison between the spreadsheet and this word processing doc, or two Internet tabs. OK, now the deal, dragging it over, no, not in Windows 7. Drag it over to the right snap it, drag it over to the left snap it, just like that. Now you say, but I want more. All right. All right.

So I want to see how hot it is going to be in New Orleans. You go down here to this peek button in the lower left-hand corner, I can hover, transparency, see, I can click to minimize all, I can click again to bring them back. Let’s say, for example, I just want meetings, I shake, get rid of that, shake to bring it back. That’s the beauty ad simplicity of Windows 7, taking those every day tasks and the users natural interaction, having fun with it. That’s Windows 7.

All right. The next thing I want to do is go ahead and minimize all these Windows using the seek button. Let’s go over here. I want to show you Direct Access, because as I go out and I demo Windows 7 to enterprises, and IT pro folks without exception, if they’re in and they’ve got a mobile, let’s say sales force, whoever, they get incredibly excited about it. And if you look at this demo, it represents a great services opportunity for you, and we’ll come back to this.

You know this scenario, I’m cranking through my e-mail, and I’m on a public network, and boom, I need to get access to corp net. I need access to corporate network expense report. In this case, I want to make sure you’ve both the latest and greatest Windows 7 content. And just so you know there’s no smoke and mirrors here, let’s go ahead in here and open the network and sharing. You see right here, I’m on that public network. I VPNed in, it’s just the standard old public connection. But I can go ahead in here, and I can click and just like that I’m on the Microsoft corporate network. Do you think any mobile professionals will be excited about that?

OK, so the next thing I want to talk about is, I want to talk about BitLocker-to-go. And the feedback that you all have had was, hey, BitLocker is great for all those hundreds of thousands of desktops that are lost out there every year, but these things, these USB keys, there’s like 150-200 million of them in circulation, and there’s a lot of data, critical corporate data on there. With Windows 7, we’ve provided a capability called BitLocker-to-go, so very quickly and easily you can set a policy so that no data can be written to a USB key without being password protected.

So, I’ll go ahead and I’ll plug that in. I’ll go ahead and plug that in here. It will pop up a dialogue box in a second. There it is. I’ll go ahead and I can type in my password and unlock that and open it up. All encrypted, all are group policies that you can set, and now I’ll go ahead and close this. I’ll pop this out. Anyone in the front row paying attention? You ready for this thing? I don’t need it anymore. I might lose it. The United Kingdom, you know, they had a person that lost one of these for 12 million citizen records ending up in a pub parking lot because it fell out of a person’s parking lot. You don’t have to have that problem. Here you go. It’s all yours. Nice catch, by the way. OK, BitLocker-to-go.

The next thing that I want to show, this one I think it is one of my favorite features in terms of what I think it can do both in terms of your economic cost model, and in customer satisfaction, particularly if you’re doing help desk type tasks. This is called the Problem Step Recorder. So, I’ll go down here and I’ll type in, record steps. And you’ll notice as I’m using Windows 7, I’m always working from the start box, it’s that natural language query in here. I’ll type in record, boom, record steps, and I’ll bring this thing out.

Now, the scenario, imagine the scenario, one of my favorite advancements in terms of my personal usage with Windows 7 is Home Group and Location Aware Printing. I’ve got a laptop that I’m constantly going between work and home with, and I want to make sure that I’ve got the right printers configured at home, so that when I get home and I want to print something, I’m not going through 15 steps to do that. And with Home Group and Location Aware Printing, it’s so easy to do.

Now, I want to show all of you how to do this, but I don’t want to have a conversation 100,000 times. The way I do it is, I’m going to go up here, I’ve got my Problem Step Recorder. I’m going to start recording, and go down here, I’ll type in printer. And there is view printers and devices, bring that up, we’ll select this guy. Go ahead and manage default printers, go ahead and select network as my home network. Let’s go ahead and select the printer, we’ll select that, which is OK. And then we’ll hit stop record.

Now, I’m going to go ahead and I’m going to save this file. It’s just a simple HTML file. We’ll bring that file up. And now, I can teach anyone how to do exactly that. If you scroll down through here, and maximize this window, you’ll see, OK, here’s the first thing I did, I clicked on that start button, I typed in printer, I chose view devices and printers, selected it. So a very, very simple and easy way for you to troubleshoot remote problems, or to teach users.

The last one I want to talk to you about is compatibility and virtualization. We’ve done a lot of work through both Windows 7, and then the Microsoft Desktop Optimization Pack to enable a seamless migration, an easy migration for those incompatible apps. Every Windows 7 Professional Edition customer is licensed for a copy, a virtual machine copy of Windows XP and the feature I’m about to show you, which is called Seamless XP Mode.

And I go up here, and I’ve got this application, in this case Quick Books Enterprise Solutions Retail Edition 5.0, does not work on Windows Vista, does not work on Windows 7. I can go ahead and interact with it. For example, I can go ahead and I can pin it to the taskbar down there. Remember, this is an application run natively on Windows 2000, and I can simply launch it and bring it right up, just like that. Making sure that the investments that your customers have in those Windows XP, Windows 2000 applications carry forward, and you can take advantage of them in Windows 7.

What do you think? Good? (Applause.)

All right. So, let’s switch back over. So, that gives you a sense of the product. And, of course, I could go on and on and on because there are so many things that we’ve done to make those everyday tasks easier, make the PC work the way you want it, and enable a new set of opportunities. Take advantage of the booth, go to the Windows 7 booth, play with the product, push the Microsoft personnel so that you leave Worldwide Partner Conference with a great understanding of what the product can do, and the service opportunities that it affords you.

But I want to talk about one specific area that, as I do roundtables with you, is a key piece of feedback and a key piece of learning for us. And it’s around making sure that Windows 7 is compatible. As we went through the journey on Windows Vista, we made a huge set of architectural improvements. Architectural improvements in graphics, and file system, and the networking stack, in security and manageability. And you and I know that we needed to do those advancements to make a more secure and more manageable platform to deliver the next generation of graphic experience. But it came at a cost in terms of compatibility.

Now, the good news as we think about compatibility in the Windows 7 context, you’ve got hundreds of millions of active Windows Vista licenses in the marketplace, and all of those customers, and the solutions and the compatibility investments we’ve made on Windows Vista help us and enable us for Windows 7. But we’re certainly not stopping there. We’ve worked very, very hard around each one of these dimensions to make sure that the migration to Windows 7 is here. It starts with making sure that Windows Vista to Windows 7, very, very smooth. And then it’s about making sure that we continue to smooth out the migration particularly from Windows XP to Windows 7.

When people ask me, how’s the launch? You know, how do you think about the launch of Windows 7, I say that the Windows 7 launch started last fall when we did the Professional Developers Conference, and the Windows Hardware Engineering Conference. It was there that we delivered a very, very high quality platform complete developer release. Why? So, that they can start developing, they can make sure that they’ve got the right solutions.

At the release candidate, we started certifying and logoing on Windows 7. We wanted to make darned certain that at the release candidate we could logo and certify, and move that ecosystem further along. Right now, right now, this is before RTM, before general availability of the product, we’ve got over 16,000 partners, hardware and software partners, developing on Windows 7. When you compare and contrast the past releases, you don’t see those kind of numbers until you get into the general availability timeframe. We have within 72 hours, 72 business hours, of the release candidate of Windows 7, we have two certified logoed graphics drivers. It’s about that ecosystem outreach, and making sure it’s right.

Now, it’s not only what we do globally, but it’s what we do locally in each one of the geographies. On the ISV engagement side, we’ve invested in ISV labs in 24 countries around the world to make sure that that ISV engagement is happening. For ISVs and developers in the room, push us to make sure that you’ve got the right engagement, because we’re investing to support and enable you.

Those of you that have not take advantage of Application Compatibility Toolkit for your customers, it’s a tool that we continue to invest in. It’s a great tool for you to profile and help your customers understand whether they have compatibility issues, and how to address them.

Virtualization, we talked about XP mode. XP mode is great for unmanaged environments. The MEDV investments that we have as part of the Microsoft Desktop Optimization Pack, the MEDV work is for managed environments, and then of course we have the application virtualization work as well, or App-V. The application compatibility factory, one of the feedbacks that I’ve had from enterprise customers in particular is they want an incredibly cost effective way of outsourcing the compatibility testing and remediation for their applications and services. We’ve got good factories, we’ve got over 500 certified engineers around the world, but that number needs to continue to grow, and that’s an opportunity.

The final piece is making sure that you’re taking advantage of the guidance and best practices. We’ve got millions and millions of Windows Vista deployments. We’ve got thousands and thousands of Windows 7 deployments with the early adopter program. Translating all of that knowledge back into best practices create case studies to help you make sure that you provide the best guidance possible for your customers from the learning that’s happening across the globe. So, heavily investing to make sure we support you and your customers so that they can take advantage of all of those great advancements in Windows 7.

Okay. So that’s the product. I want to shift gears now and I want to talk about the opportunity. To do that, I want to actually start by playing a quick video, and have some of you talking about the product and the opportunities that we can see, that they see. Let’s roll the video.

(Video segment.)

It’s a great opportunity. When you look at that one of the things that I think we’re all gauging in is in this economic time how quickly will the migration be, and what’s the opportunity. IDC did a survey, actually they released it last night, which is sort of gauging as they look at the data from enterprises, from small and medium sized businesses what’s the opportunity, $320 billion over the next year will be spent on that opportunity. You and I know this well, for every dollar they spend with us they spend, in the IDC study that was released this morning, $18.52 with you. But, as we drill in on this opportunity many of you have been through this journey before with us in a major platform transition. I want to talk about how I see the opportunity similarly, and a little bit different this time around.

The first thing is when I think about it I think about it both in the context of the run rate of new PCs, and then the install base of existing PCs. OK. The run rate of new PCs, business PCs are an productivity tool, they’re going to keep buying them. And they’ll buy them in the order of 177-180 million business PCs with Windows 7. So immediately, immediately you’ve got a service offering, hardware offering, a software offering opportunity with those sockets.

The other thing that is a little bit different this time around, though, is that Windows 7, the feedback that we’re getting from customers and from you is that it runs very, very well on the existing class of hardware. That is to say, traditionally what happens when you deliver a release is it really – it pushes the envelope on that latest hardware. In the Windows 7 case some people are telling us, hey, we think it runs better than Windows Vista on comparably equipped pieces of hardware. So you’ve got a very large installed base opportunity with Windows 7. We would estimate that that opportunity is about 246 million PCs around the globe on the business side alone.

Now, with that then you think about it in the context – let me talk about small and medium sized businesses, and then let me talk about enterprises. The way I think the deployment cycle will happen in small and medium size businesses is along the following lines. They need a new PC, they’ve needed a new PC, they’ve heard good things about Windows 7, they’ve come to you and they’ve said, you as their trusted advisor, what are you hearing, what are you saying, moment of truth. They’ll put a single, one or two Windows 7 PCs in there, and you’re getting that ground swell around Windows 7, and then they start saying, okay, what additional machines within my small and medium-sized business could run Windows 7. Maybe the end user goes out and does the upgrade, or buys it themselves, but you get sort of that mix. You’re going to have a set of Windows 7 machines as new, and you’ll have some that will go into the installed base.

When I think about the specific service opportunities that I see in the marketplace in small and medium sized businesses today, as different from past solutions, I think you understand Help Desk, you saw the Problem Set Recorder, each one of them, make sure you go through the product and say, okay, how am I going to reduce my cost of implementation, because of the new capability in Windows 7, whether it be the image management tools, whether it be Problem Set Recorder. But, the other thing I want to hit on is, I think there’s a new set of opportunities that are available with Windows 7 that we haven’t really been able to service SMBs well with around mobility.

You have very, very mobile work forces in small and medium sized businesses, and yet the quality of the experience that they get versus a well-managed enterprise IT shop is very different. And so the work that we do, whether it be in the wireless capability, whether it be in location-aware printing, et cetera, et cetera, opens up a whole new set of scenarios and solutions around mobility that those small and medium sized businesses didn’t have access to before.

As we think about the SKU, the primary SKU for small and medium sized businesses it will be Windows 7 Professional Edition, that’s where we’ll put our focus, our energy and our resources, because of the additional security and manageability, and because of the XP mode that we talked about earlier.

On the enterprise side, whether you look at the Goldman Sachs, or UBS research, IDC or Forrester, or Gartner, what everyone is saying in all of their surveys is that enterprises, some of them have stayed on XP, but you’re going to see a relatively rapid movement to Windows 7. Now, as you and I  as you scope this opportunity, as you think about it, this is the IDC number, think about the enterprise customers that you service and support, if 59 percent of those desktops move do you have the right business capacity to service and support them? What my insight and data shows globally is that the people in this room, and broadly in the marketplace, we do not have the services capacity to support that move on the current velocity, and that represents very good opportunity.

When I think about where the best margins are, is it in planning and app compat, and deployment migration, and help desk and support. What I see right now is the very best margin is on the planning side. But, once you’ve done the upfront planning, you’ve lowered your sales cost so that you can run all the way through the stack and provide that support for customers. And if you don’t provide it, then build the partnerships with the folks in this room, or the folks in your geography so that you’ve got, in essence, a turnkey solution across a set of partners.

Another thing that’s important when you think about this opportunity in Windows 7, is we’ve had very, very good success selling the value proposition of Windows 7 into the marketplace around additional security and manageability, and we’ve had actually phenomenal success with the Microsoft Desktop Optimization Pack. If you’re not familiar with it make sure that you do not leave Worldwide Partner Conference without understanding how it fits in our strategy. We have sold over 18 million licenses of MDOP. And that is the fastest selling on a license base, the fastest selling product that we’ve ever had. So how that fits in is a great opportunity. But, the other secret is when you think about this is that means that we’ve sold  in the enterprise there are 51 million enterprises, enterprise desktops that are already licensed for Windows 7, and that’s all a services opportunity for you.

Let me go down into the optimized desktop for a second, because I talked about mobility on the small business, SMB side, where I see particular opportunities. The virtualization side I see lots of opportunities on the client side, as well, lots of conversation on the server, but this is very true on the client side, as well. And we’ll provide that capability through MED VNs in the MDOP package, we’ll provide that through App-V, but make sure as you go through Worldwide Partner Conference, if you’re an enterprise partner with us, particularly on the infrastructure side, make sure that you’re understanding our solutions, and how you can employ them  deploy them and apply them for your customers, because it’s a conversation, at least in the customer conversations we’re having, lots of dialogue, lots of interest on the customer side, and a great business opportunity for us collectively.

Okay. Let’s take it now to action. We’ve talked about the product, we’ve talked about the opportunities. What are we doing, and how does that set up for you? This is a key, key slide, it sort of lays out how I think about our go to market actions for Windows 7. Feedback that you shared with me, and I completely agree with is that as we go to market a foundation to that is what we do in the consumer space, what we do with the broad end users, and carrying that conversation around, the unique value of Windows through the simplicity, value, and choice that it offers. You’re seeing me do a relatively high volume, high volume in terms of noise campaign in a set of geographies around the world, around Windows. We’re going to make sure that we continue to invest hundreds of hundreds of millions of dollars in that consumer conversation around the unique value of Windows.

We’ll do that through broad air cover. We’ll do that through offers. We already announced one of the offers late last month around this concept of the early bird special for Windows 7, $49.99 for your upgrade from Home Premium to Windows 7, $99 for Professional. Why, because I want to get that bootstrapped and keep pushing that consumer momentum.

I think that carries over into the SMB side, particularly at the low end. But, on the SMB side we’ll take that same consumer message, but we’ll tweak it a little bit, and we’ll focus on the anywhere access and mobility scenarios that we talked about. We’ll lead with the Professional Edition SKU, and talk about the security and manageability of that product. And we’re going to do some fun things around volume licensing to make sure that the install base has the opportunity to take advantage of Windows 7 in a very economical way.

On the enterprise side, key thing here is you know the conversation around optimized desktop, optimized infrastructure, all of those attributes, security, manageability, all of those attributes and that customer conversation we have, the way we’ll go to market is use Windows 7 as an inflection point to say, hey, it gets better, it gets stronger. So we’re not changing, we’re strengthening our story.

We’ll land that with Windows 7 at RTM, at the release to manufacturing we’ll talk about the customer successes we’re seeing, some of those early adopter case studies. We’ll continue that drumbeat into the fall, and then it gets stronger yet again as we launch and deliver Exchange 2010, and Windows Server 2008 R2 into the marketplace, where the combination of those with Windows 7 provides an incredible advancement in optimized infrastructure. Again, we’ll do that and we’ll do some things on the volume license side.

So, given those actions, let’s talk about some of the things and some of the announcements that we’re doing here at Worldwide Partner Conference in support of you. We’ve done, as we are out listening to you, one of the feedbacks that we got from our key infrastructure partners is they said, look, we love the desktop as a specialization, but that’s not enough. We want a top-level competency. We want you to invest at that level. We want you to brand it. And I’m pleased to announce here at Worldwide Partner Conference that that’s what we’re going to do. By October you’ll have a partner competency at the top level, and you can use that brand and that logo to carry forward and deliver solutions for your customers.

The other thing that you’ve shared with me is you’ve said, gosh, there is a big opportunity, there’s a big opportunity in volume licensing, we want to know when it’s available, and we’d sure like you to be more aggressive on the economic side. I’m pleased to announce that September 1 the Windows 7 volume licensing will be available, and I’m pleased to announce here today that we will do a limited time promotion on Windows 7 for volume licensing, depending on the volume, and geo, of between 15 and 35 percent discount for your customers. What do you think? (Audience response.)

But, you want more. The other thing that we’ve heard from you is you said, look, a bunch of your raised your hands and the feedback that you shared on Windows 7 is great. But, you said, if you broaden your internal use rights that would help us go further and faster on Windows 7, to be better advocates for the product. So should we broaden the internal use rights? Yes? (Audience response.) I can’t hear you, do you really want me to do it? (Audience response.) All right. All right. So today we are doubling internal use rights on Windows 7 so that we can bootstrap this opportunity in the marketplace.

So what do we need to do? As you go through Worldwide Partner Conference take advantage of the booths, the keynotes, and the breakouts, so that as you leave here you’re clear on the actions we’re taking, and the opportunities for you, you understand the product and the value proposition. But, as you leave Worldwide Partner Conference, use the product, use it at work, use it at home, take advantage of those internal use rights, become a trusted advisor for you customers, your partners on Windows 7. We will be very aggressive in making sure that we build awareness. Today in the U.S. we’ve got over 40 percent awareness and we haven’t done a whit of marketing on this thing yet, over 40 percent awareness on Windows 7.

As we take that volume up in our partnerships, I look to you to help have that conversation and be a trusted advisor on the opportunities of Windows 7. As you listen to the dialogue here at Worldwide Partner Conference, as you talk to your peer group, think about are you applying your resources, whether they be on the sales side, or the services side, or the support side, optimally to take advantage of that opportunity. Then finally, we’re investing very heavily around the Windows 7 opportunity. I want to make sure that every dollar I spend is a dollar that helps you, whether it be in the marketing, whether it be in the best practices, whether it be in the application compatibility toolset. Leverage our investment, take advantage of the resources up on Windows 7, and as in any dialogue, in any partnership if there are things that you see as opportunities that we’re not nailing and missing, give that feedback to us.

Today is an absolutely tremendous day, because together we will write the next chapter of Windows history, and we’ve got a great opportunity in front of us. Thank you very much. (Applause.)

ALLISON WATSON: It’s awesome down here in our audience. In fact, I’m enjoying it. It’s a lot cooler here in the audience than it is up there on stage. So, Windows 7 has got to be the most amazing opportunity for partners in this room, and in my travels partners have been more excited all over the world than in any time in my 15-year history.

So, we’ve been monitoring the tweets that have been going on. Partners are pretty excited about the $18 of opportunity for every dollar of Microsoft software. The large install base opportunity with 59 percent of the enterprise PCs being upgradeable, and the new features including rich tasks, and the Problem Step Recordings. And partners are very excited about the opportunity for Windows 7 on netbooks as well.

I have a couple of partners here with me, and I’d like to see your reaction. Harry, tell us what’s going on, and tell us what your customers are telling you.

HARRY: Wow, what a terrific product, and what an amazing opportunity. You know, Allison, over the past three years, we’ve upgraded all of our customers with new desktops and notebooks, and guess what, we have to download them to XP. What a shame that was. But we now have three years of customers that we can go back, starting today, and upgrade them immediately to Windows 7. What a huge opportunity for us. We just can’t wait to get started.

ALLISON WATSON: That’s fantastic. How about everyone else in the room? (Applause.)

All right. Alex, in the small business space, this XP Mode thing is a really big deal, we think. It takes away the last of the objections. Tell us about your experience with that?

ALEX: Well, it’s absolutely amazing. You know, when you go to a small business, they hate nonsense work. So the first thing they ask us is, make sure that this product is compatible. And, trust me, it is like never before. The second thing they say is, make sure the product is fast. And, trust me, if it’s not fast, it will blow out your computer. And, number three, make sure that it works, and this is the truth. (Applause.)

ALLISON WATSON: All right. Anyway, there’s more to come. Keep tweeting, keep getting excitement going about what’s going on with Windows 7. We’re going to head back to the show floor now with Stephen Elop and the Office team. We have more coming.

ANNOUNCER: Ladies and gentlemen, please welcome President, Microsoft Business Division, Stephen Elop.

STEPHEN ELOP: Good morning. Good morning. It’s great to be back here with you today. This is an opportunity for me that is truly inspirational, with you here again, second year in a row, with 6,000 partners. So, I’m very excited to be here.

You know, when I met with you last year, we reviewed some of the disruptive forces that are defining our industry, including new business models, like software plus services, new expectations for solutions, new competitors, new architectures, all of those things, and of course the economic upheaval has just added to this sense of disruption.

History tells us that through periods of disruption like this, there will unquestionably be winners and losers, some who will gain share, and some who will lose share, some who will prosper, and some who will fail. My core message to you today is exactly the same as it was 12 months ago. Microsoft will stand as a company who aggressively facilitated the transition for our customers, our partners, and for Microsoft through this period of disruption so that we can all benefit. Every one of us must embrace the fact that a lot is changing, and it will continue to change. Our business is changing. My business is changing. Your business must change as well.

At the same time, every one of us has to build on the well-established foundations that already exist, allowing our customers to realize their potential through the magic of software while building on the deliberately dependent relationships between us that has worked so well for so long. All of us in this room will succeed if we are thoughtful, deliberate, and focused about the areas where we are going to invest.

Just like many of you, over the last year, Microsoft underwent a comprehensive review of its areas of focus. For example, within the Business Division, we assessed every significant initiative underway within the team, evaluating those initiatives against market opportunities, the competitive context, their alignment with our core strengths, the alignment with our partners, with our sales motion, all of those things, including our ability to positively impact or change an existing market segment for the benefit of our customers.

This effort was made in the context of a single mantra, fewer, bigger, best, which emphasizes those opportunities where we have the greatest potential to positively impact our customers, our partners, as well as our own likelihood of success. Now, our first big bet is to compete to win share in those areas where we are best positioned for long-term success. And to do this, we will invest even more aggressively and double down on those solutions that are most critical to our customers, helping them surmount the problems that they face today.

What does this mean? It means helping our customers save money, helping them drive great productivity. Sometimes, it’s as simple as helping them take advantage of what they already own. The good news is that this translates into opportunity for every one of you. Let’s take unified communications as an example. There is tremendous momentum around this space stemming from Exchange 2007 and extending to OCS 2007 R2, which was launched earlier this year. Exchange has continued to win share from competitors, and now Gartner is predicting that Exchange will reach 70 percent of enterprise market share next year. And there is still tremendous opportunity with customers using Exchange to get more value from their existing investments.

Let me give you an example. The majority of enterprise voice mail accounts, that’s voice mail, are up for renewal in the next three years. That’s just the way the cycle works. And with Exchange’s built-in voice mail solution, these customers can consolidate infrastructure and reduce maintenance fees. Another example is wireless e-mail, where customers can reduce costs by combining the built-in capabilities of Exchange with their mobile phone. Your opportunity is to embrace Exchange to help your customers reduce cost, and consolidate their investments.

And then there’s Office Communications Server. This business is experiencing the same double-digit growth, even during these tough economic times. This momentum exists in part because of the cost savings, and productivity improvement that customers derive from things like OCS Unified Audio Conferencing, the conferencing capabilities of that. Customers are saving a lot of money by canceling their traditional audio conference bridge contract in favor of OCS. For example, Linebridge, a professional services company, is saving $1.3 million per year by using OCS for the conferencing. Let me show you what these customers are excited about. I’m going to do a bit of a demo here.

Okay. The beauty of OCS is the great interoperability with other Microsoft products. For example, here I’m looking at OCS. You might notice  I’m sorry, at Outlook. You might notice it’s a bit different, and we’ll talk more about that in a few minutes. But what you should see in the lower right-hand corner, I have my various contacts here showing up with some indication of presence, pictures, and so forth. What I’m going to do is actually take a look for one of my contacts, a gentleman by the name of Albert, actually there he is right there, Albert Kumar (ph). I’m going to select him, and what you see here is the contact part for Albert Kumar. So, starting from within Outlook, moving into an environment where I can decide how do I want to communicate with Albert. I can choose e-mail, instant messaging, phone, and so forth.

I’m going to start off with instant messaging. Hopefully Albert is standing by to receive this message. Let’s see if he’s backstage somewhere, I suspect he is. There he is. Okay, so we’re on instant messaging. How easy is it to take the conversation further? Well, let me just click on the phone connection here, and establish voice connectivity with him, single click.

ALBERT KUMAR: Hi, Stephen.

STEPHEN ELOP: Albert, can you hear me okay?

ALBERT KUMAR: Absolutely, of course.

STEPHEN ELOP: Okay. So we’ve promoted the instant messaging session which started in Outlook up to voice. Oh, boy, don’t you love that. Okay, but it’s restarting, let’s see what it does. Actually, here’s what I’m going to do. Boy, it’s not looking good. We’re going to try one more time. Don’t you love when that happens to a demonstrator onstage, absolutely. No, it’s not going with me.

Okay, so what we’re going to do is move on to a second part of the Outlook demo. I love that. Actually, I’m going to try one other thing. Let me see if I can go here, nope, can’t do it.

Okay, what we’re going to do within Outlook is also talk about one of the capabilities that’s powerful, and that is the ability to actually schedule audio conference calls from within the context of Outlook. So, what I’m going to do is switch to my calendar view, right over here, and I’m going to select a time, let’s say on Wednesday, and I’m going to create a conference call. What you can see here is with just some simple entries, I’m able to actually create a conference call which includes all of the numbers and things that people might require if they’re dialing in from somewhere else.

So, I’m going to say this is a test session, here is the info, whatever the case may be, and I’m going to send that off. And as easy as that, what I was able to do is to create an audio conference call in the context of calendaring, but what I’m also able to do, however, is, if I were to join a conference call, you’ll see how easy it is all of a sudden, and because we saw OCS sort of tip over there, this may have a problem, but we’ll give it a shot. There we go, joining conference call, and I’m into the conference call. At this point, I have voice going with multiple parties at multiple times sharing in an audio conference call. No more dialing the 1-800 number, no more putting in the PIN code, no more doing the authentication of the administrator. I’m able to do all of that very easily. So, give me a round of applause for getting through the second half of the demo. Okay. (Applause.)

Okay, so you get the idea. What you can do with OCS is actually bring together all of these different forms of communication in a very powerful way. Let’s think about the customers. Your opportunity is to introduce your customers to the full spectrum of unified communications, from the basic productivity gains and customer satisfaction associated with e-mail, calendaring, instant messaging, and presence, through to unified audio conferencing, voice messaging, and increasingly into full voice over IP deployment that will ultimately be able to replace traditional voice infrastructure.

Now in terms of opportunities out there today, let’s also talk for a moment about Dynamics. While the ERP market is hard right now, there is still a great opportunity to take advantage of Dynamics ERP solutions to grow share against our competitors. The industry agrees, for example, Dynamics AX is the only product featured in the leader quadrant of Gartner’s recent magic quadrant around mid-market ERP vendors. We have a great solution there that customers are looking for, and that is taking share. Yes, there are some Dynamics ERP partners here for sure. (Applause.)

Let’s talk about Dynamics CRM for a moment. Even in this environment you are continuing to drive sustained double digit growth, because of your efforts there are now more than, now listen to this number, more than 1 million Dynamics CRM seats that you’ve sold and implemented out there. Congratulations, and thank you for Dynamics CRM. (Applause.)

Of course, where are those coming from? Some of them are coming from new installations, but we are absolutely winning deals against and Oracle’s Siebel. Customers are switching, because they are saving money and getting more flexibility. A great example of this is provided by the partner Ascentium. They are the Microsoft Dynamics CRM partner of the year. Ascentium is a marketing and technology agency that’s focused on helping sales and marketing executives. Utilizing Dynamics CRM as a line of business application platform for their customers, Ascentium has been able to drive a four-fold, year-over-year revenue growth around Dynamics CRM.

So again, tough economic times, huge growth at the same time. It’s a great story and something worth looking at. Now we’re seeing many of our partners follow this same path, building out additional functionality beyond classic customer relationship management. We refer to this as XRL.

So I’m going to try again and go over to the demo station, see if I can show you Dynamics CRM. Okay. As we all know social networks today are an Internet phenomenon. In our personal lives these networks are allowing us to connect, connect with friends and family, but additionally sites like Twitter, and LinkedIn, and Facebook, they’re enabling organizations to develop higher quality relationships with their customers, which is really exciting. Now, in the days leading up to WPC, we posted various messages on our WPC Twitter account directly from Dynamics CRM, so using Dynamics CRM as the marketing portal into Twitter. We want to use Dynamics CRM to tap into this network and the discussions underway. Think of this as a quick demonstration of how you can use tools like Twitter to help your business marketing efforts.

Okay. So here in front of us we have the Dynamics CRM interface, and I’m looking at the various statuses as they’re called in Twitter, that were put out there from within Dynamics CRM. What I’m also able to do is take a look at the responses to that. So I’m actually going to select today’s statuses. These are statuses that have been coming in against the WPC ’09 Twitter account, Stephen Elop speaking live, demonstration failed, okay, we’ve got Twitter working just the way we would expect it to in real time. Thank you for that, I love that.

Now, of course, I love real time feedback. Now what I’m going to do here is actually post a new Twitter message, I’m going to ask for audience participation in response to this message. If you’ve got phones that have Twitter access and so forth please get those ready. What I’m actually going to do is say that from the WPC ’09 Twitter account I’m going to ask a question of the audience. And the question is, do you like Creole food? Simple question, because you’re going to see a lot of it, that being the Creole food. So what I’m actually going to do is post this message. It’s now been put up to Twitter. It’s up there right now, and anyone out there in the audience who cares to participate, you’re going to be able to actually respond to that message in Twitter.

Speaking live, and somewhere in here we’re going to see that Twitter message posted. As we start to cycle what I’m going to do myself is I’m going to go back to the original message, and I’m actually, on behalf of my own account I’m able to reply, and participate in this. And in this case I’m going to use my own Twitter account, and I’m going to indicate that, yes, I like Creole food at WPC ’09. And I’ll put the WPC ’09 tag against that so people know what that’s about. I’m going to post that one, as well. And that’s going on.

Now what’s happening in the background here is we have a number of workflows, which are processing through and actually gathering up various tweets and so forth. What you can do from within here, within this Dynamics CRM environment, is actually take a look at the various tweets that people have put out there against it. What you can also do, as well though, is start to learn something about your customers. So I’m actually going to double click on this Dr. Res, and you can see the information from his Twitter profile has been brought into the Dynamics CRM environment for marketing purposes. I can even go so far as to click on an influence tab and start to get some sense of how he is feeling, or she, about various things related to our WPC ’09 environment.

So how many times have they said something generally positive, or neutral, or negative. And, of course, the reason for this is as you launch various marketing messages you’re interested in understanding, okay, so what type of feedback am I getting, how is this working out there. So what I’m going to go, just to give you a sense of how this can go even further, is I’m going to pull up my original tweet that I put out there, do you like Creole food. I can actually go forward and run some reports against that.

So, for example, I can write this report which says that since I posted it various people have begun to tweet against what I said. What’s really interesting here, though, is you see these sudden run-ups, this is an indicators of the number of followers that actually follow the people who have followed me and responded. So what type of impact has my do you like Creole food message had? Well, so far 3,000 people who follow people who follow my tweets are, in fact, looking at that message, or have the potential to look at that message. So when you start to figure out who are the influentials in your market, how do you get a message effectively out there, how is it working, you can use these reports within Dynamics CRM to actually manage it somewhat like a marketing campaign.

Let me show you one other report. Of course, we’ve got to get the answer to your question. Those tweets were coming in, and as we say  62.5 percent of the people who have tweeted to respond to me so far are neutral on the whole question of Creole food. I have bad news for all of you as lunchtime approaches. (Laughter.) You can imagine what’s coming.

I think you’ve got the general idea. What we’ve done is we’ve collected information, we’ve made sense of it from an insights perspective. What we’ve just shown you here is, yes, that’s cool, but there’s a Twitter connection capability that’s been provided, but that’s not the real message of what I’m trying to put in front of you. What I’m trying to say is, this is a platform. Dynamics CRM, or XRM, is something upon which you can build. We happened to build something that interfaces with Twitter, and we did that in preparation for this conference. By the way, that’s available to all of you, source code, the whole thing, is a free download if you’re a CRM user. Take advantage of it, build some solutions for your customers. Of course, your opportunity is to use the Dynamics CRM platform to deliver all kinds of innovative XRM solutions, all sorts of capabilities for your customers. And that’s the opportunity.

So now let’s discuss collaboration. Thanks to you SharePoint now has more than 17,000 customers, and get this number, 100 million licenses sold. That’s how many people out there are licensed to use SharePoint today. It’s a fantastic testament to the effort that all of you have made to drive this forward. So on behalf of Microsoft, thank you for establishing SharePoint. Thank you very much. (Applause.)

There’s another side to that story, and that is that we all know that the majority of SharePoint customers still have so much more to discover. There are many, many examples of improved collaboration derived from the implementation of SharePoint-based internal portals, that’s right. But, what about advanced forms of collaboration, collaboration through improved content management, enterprise search, business intelligence, or more advanced forms of social networking. SharePoint covers so much ground, yet many of our customers only see it through a relatively narrow lens. Perhaps the lens they applied when you first demonstrated its potential. It’s time to go back and have that second demonstration.

Interestingly enough, a couple of months ago, I was invited to be interviewed onstage by Tim O’Reilly at the Web 2.0 conference in San Francisco. It turns out it’s a conference that’s not frequented by Microsoft executives, because this is a group, the Web 2.0 group in San Francisco, who is unified in their general lack of enthusiasm for Microsoft.

Now, I’ll tell you, in my entire professional career it is the only time I was heckled when I went onstage, like just walking up onstage, open derision.

But you know what, I delivered to that crowd a very important message: social computing is an area where we are all rapidly innovating. SharePoint is the platform that brings social computing to the enterprise, and legitimizes these new constructs in a corporate setting.

And for those hecklers in the Web 2.0 audience my message for them was this: SharePoint comes with a business model. And you know what, it’s a way for them, just like all of you, to make some money.

Your opportunity is to unveil the full breadth and potential for productivity improvements that SharePoint represents for the enterprise, including social computing.

Now, let’s spend a minute on business intelligence. For the fourth year in a row, CIOs are telling Gartner that business intelligence is their number one spending priority. In this climate, self-service insight, driven through familiar tools like Excel, SQL Server, and increasingly SharePoint, is critical.

As part of our planning process, we made the decision that we would focus on driving the democratization of business intelligence, putting more useful tools into the hands of more people. This compares favorably with those companies who are charging as much as four times as what Microsoft charges for business intelligence solutions, and, of course, this traditionally excessive BI software licensing costs, those erode the dollars available for you from a services side.

So, your opportunity is to help bring BI to the masses, building the applications that allow your customers to benefit from BI through the use of their existing investments, and teaching them about the money that can be saved in the process.

We’re going to show you some of this in a few minutes. Also you’re going to learn a lot more about self-service business intelligence tomorrow during Bob Muglia’s session where he’s going to show you some really exciting and new capabilities that we’re bringing to market.

Now, as everyone is well aware, Microsoft as a whole and certainly the business division will be delivering a great deal of innovation in the year ahead. And so our second big bet is to ensure that you have everything you need to successfully launch the next wave of productivity software Office 2010.

Exchange 2010 is already in public beta, testing today in the broadest public beta that we’ve ever done, with millions of people using Exchange in a services environment.

And today, we are announcing that Office 2010 has reached the technology preview engineering milestone.

Now, this technology preview, the first release — yes, actually I heard one person applauding. Are you kidding me? Office 2010 is coming. (Applause.)

Now, the news is that the technology preview is a by invitation only experience. The good news is that every single person in this audience here today is invited to participate. So, watch your e-mail, you’re all getting into it, full Office 2010 technical preview. (Applause.)

Now, Office 2010 was designed to deliver the best productivity experience across the PC, mobile phone, and browser. We leverage what each of these devices does uniquely well, the power of our PCs, the mobility of our phones, and the ubiquity of the browser, all to deliver a complete productivity experience.

To enable this, we focused on three key areas. First, enabling people to use Office anywhere. We know that two-thirds of the world’s population are online at least once per month, and here in the U.S., 89 percent of the top companies already offer telecommuting to their employees.

So, providing work style flexibility has become a must have requirement for today’s organizations. Office 2010 helps. Your documents will look the same all the way down to the formatting as you move across PCs, phones, and browsers.

Second, we focused on enabling people to work better together. We know the flow of information is strong and continuing to grow. For example, according to Basics Research, on average workers receive 93 e-mails per day. With Office 2010 not only will it be easier to manage all of that e-mail, but you’ll also be able to work better through real time collaboration on the same documents, and we’re going to show you some of that.

And third, we focused on enabling people to better bring their ideas to life, by easily expressing their creativity through the use of video and images.

We know 20 hours of video are uploaded to YouTube every minute. We know that these videos and other forms of media are how you like to tell your stories. New innovations in Office 2010 will greatly improve your ability to creatively incorporate this media into your productivity experiences. And I know as you’ve been watching the slides, you’ve been seeing a few examples of those flying by.

Now, while Office 2007 continues to be a terrific success, we know people always expect and want more. Office 2010 was built to improve on the essentials people rely on today, and to anticipate what they need tomorrow.

But don’t just take my word for it. Let’s listen to some early adopter customers who are already experiencing some of these benefits.

(Video segment.)

STEPHEN ELOP: Very good.

So, to see what these customers are talking about, please join me in welcoming Takeshi Numoto on stage, corporate vice president of Office. We’re going to do a little bit of a demo here for you. Takeshi, come on out. (Applause.)

TAKESHI NUMOTO: Good morning, everyone.

It’s my honor to represent the Office team today to demonstrate how Office 2010 will deliver the best productivity experience across the PC, phone, and the browser. We’re improving on the essential features that over half a billion customers use every day, and we’re also delivering the next generation of productivity experiences for tomorrow.

Let me start with the application that’s so core to so many of us, Outlook. The first thing you notice in Office 2010 is that it comes with the Ribbon.

We introduced the Ribbon in Office 2007, and saw that it really helped customers discover and use more of the power in each of our applications.

So, we’re extending the Ribbon to all of the Office applications, as well as SharePoint, Project, and Visio.

STEPHEN ELOP: So, we’re expecting a great consistent user experience across Office 2010, the whole business productivity platform, the whole thing.


STEPHEN ELOP: Excellent.

TAKESHI NUMOTO: I bet you can’t go through the old toolbar menus anymore.

STEPHEN ELOP: No, it’s going to be hard.

TAKESHI NUMOTO: Okay. So, in this first mail you will see that I have a voicemail in my inbox, and it even comes with a voicemail preview so that I can read the voicemail without playing the audio.

STEPHEN ELOP: So, this is a speech to text that we heard about on the video.

TAKESHI NUMOTO: That’s right.

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

TAKESHI NUMOTO: Well, I love this feature become sometimes I get to use this when I get to sit through a staff meeting sometimes, and when it’s a little bit long, and it’s very, very helpful. (Laughter.)

STEPHEN ELOP: Yeah, thanks for that. (Laughter.)

TAKESHI NUMOTO: I can even click on the preview, and Outlook will play just the corresponding portion.

VOICE: Make the year-end review your top priority. Thanks for your help. I’ll talk to you tomorrow morning.

TAKESHI NUMOTO: And so that I can make sure that I’m getting the message.

Outlook has even pulled Holly’s mail out of the voicemail to create this contact card, so that I can quickly send her a mail or IM or call her if I want to.

Well, okay, Holly obviously wants me to get going on the year-end review presentation, but before I can do that, I need to get a handle on my Inbox.

With the conversation view in Outlook 2010 you can see that my cluttered Inbox was actually comprised of a very few number of conversations. Focusing on conversations rather than the individual messages helps me work in a much more efficient way. The conversation view brings together all the messages around a conversation, even if they’re in separate folders.

And when I go to trips or come from a bunch of meetings, and I see e-mails pile up, I can clean up my Inbox, and Outlook will remove all the redundant messages so that I can focus on just the ones I want to, I need to.

STEPHEN ELOP: There’s a half hour a day, that’s great. (Applause.)

TAKESHI NUMOTO: And how many times have you been on one of these threads, Stephen?

STEPHEN ELOP: Oh yeah, okay. So, we’ve got everyone stop replying, stop replying to all, enough already, please take this offline, stop replying all, I think this thing has a life of its own. We’ve all gotten a lot of this. Okay, I’ve got it.

TAKESHI NUMOTO: Office 2010 has a solution to this problem with this “ignore” button. With one click this whole conversation disappears.

STEPHEN ELOP: It’s gone. (Applause.)

TAKESHI NUMOTO: But even better —

STEPHEN ELOP: Even better!

TAKESHI NUMOTO: — all future replies to this conversation will automatically be deleted.

STEPHEN ELOP: So, even if people keep piling on, it’s gone: the mute button for Outlook.

TAKESHI NUMOTO: Exactly. I love this. (Applause.)

So, this next slide is the one from Holly that she was calling about to get ready for the year-end review presentation.

Since I actually need the help from people on this e-mail to prepare for the presentation, I’m actually going to use Quick Steps to organize a meeting.

Quick Steps is a customizable one-click action for most common e-mail tasks like you can forward e-mail to your manager or move it to an archive.

Here I’m going to use Outlook, Quick Steps to create a meeting invite to everybody on the e-mail, with the e-mail content built right in, so people have the context, and it’s going to help me find a time that works for everyone very quickly.

And this brings me to my favorite feature in Outlook 2010, Mail Tips. Basically it’s giving me a heads up that Scott is out of the office even before I send out the mail. If I add people from outside the company, it also gives me a warning.

STEPHEN ELOP: No more embarrassing confidential information flowing out.

TAKESHI NUMOTO: That’s right.

STEPHEN ELOP: Okay, good.

TAKESHI NUMOTO: Or even better, if I add a big distribution, Mail Tips warns me that I’m about to send this out to 286 people, and I of course don’t want to do that.

So, Mail Tips is going to really save me from making a bunch of embarrassing moments.

STEPHEN ELOP: Okay, definitely Outlook looking out for us, that’s great.


So, in order to prepare for this presentation, I actually need to get some sales results. So, let me go to the SharePoint site to get this. And you will see, of course, the Ribbon in SharePoint 2010, and it’s going to help me discover and use the features of SharePoint.

If I click on this spreadsheet here, I can easily see the things I can do, like edit the document, check in and checkout, manage the document, or set workflow against this document. Here I’m just going to open this in Excel 2010 and see what Excel 2010 is about.

The first thing I want to do is to analyze the pricing trends for our products, but with so many it’s kind of hard to do. You know, Stephen, if I gave you a pricing analysis like this, what would you do to me?

STEPHEN ELOP: Yeah, we’ve all seen these graphs. It’s not going to work. You need a different way to show that information.

TAKESHI NUMOTO: So, I’m going to use a great feature called Sparkline Excel 2010, which is basically a mini chart that can fit in a single cell. I’ll show you what I mean.

I can set a high point, a low point, maybe use the live preview to get it looking just right, and it gives you a very good sense of the pricing trends, but it becomes very powerful if I apply it across many cells, like here.

STEPHEN ELOP: Very cool. (Applause.)

TAKESHI NUMOTO: Another great data analysis tool in Excel 2010 is the part that you see here. This lets me drill down on a pivot table to get the views I want very easily.

Let me add a couple of slices to show you what I mean. Let me add views by product category or countries, and let’s say I click on one of the newer products like helmets, and you can see that the data streams down to show that we’ve only been selling it in the last two years, and only in a subset of countries. If I add our mainline product like mountain bikes here, the data fills up to show sales in all countries across all four years. And Slices is a great BI tool for everyone, not just power users.

STEPHEN ELOP: Now, in terms of business intelligence though, what you’ve got here is an example of individuals being able to do business intelligence, so the whole idea of BI for the masses, this is a great example of it.


STEPHEN ELOP: Very cool.

TAKESHI NUMOTO: So, let me just save this, and get back to — and close Excel out.

Now let’s imagine I’m on the road. You know, even when I am out of the office, Office 2010 helps me use Office anywhere and stay productive. Just from any PC with a browser I can get to the same spreadsheet we were just using and get an extremely high fidelity view.

STEPHEN ELOP: Okay, so Excel in browser.

TAKESHI NUMOTO: That’s right.

STEPHEN ELOP: There you go. Same spreadsheet we were looking at just a moment ago.

TAKESHI NUMOTO: That’s right.

STEPHEN ELOP: There it is. That’s what everyone has been waiting to see. (Applause.)

TAKESHI NUMOTO: Well, I can even drill down on the data just with the browser if I use the slices that I just created.

Or it shows you can also see the Sparkline that I just added, I can even make some lightweight edits, and you will see the browser with the Ribbon UI implemented here as well, and I can add a column, and maybe add an average price point for the last couple months using all the familiar features that I’m used to in Excel, and you’ll see this populate down in a second.

STEPHEN ELOP: Beautiful, beautiful.

TAKESHI NUMOTO: On the other screen you’ll see that Jim has actually opened the same spreadsheet in his browser, and he’s making an update to some of the data fields.

STEPHEN ELOP: So, we’ve got two people, same spreadsheet, browsers.



TAKESHI NUMOTO: And his changes are formed in red to make it easy to see, and you can see it populate on my view as well. Very cool.

STEPHEN ELOP: What browser is he using?

TAKESHI NUMOTO: Well, as you see the logo, you can see that Jim is actually using Firefox. Office Web Apps will support Internet Explorer, Firefox, and Safari.

And also Office Web Apps will be available to people in three ways. First, consumers can use the Office Web Apps through Windows Live at no cost. This means that over 400 million consumers who use Windows Live services will be able to use the Office Web Apps.

Second, for businesses that would obviously want more management and control can subscribe to Microsoft Online Services where Microsoft hosts the Web application for them.

Finally, we’re announcing today that all Office 2010 volume licensing customers will be able to run Office Web Apps on their premises. This means that over 90 percent of Office annuity customers will be entitled to run the Office Web Apps on-premise when we launch.

STEPHEN ELOP: So, enabling online premise, or on-premises solutions for our customers, great differentiator and a great example of the power of choice that we’re offering for our IT customers.

Also if I’m doing the math right, on day one when the Office Web Apps land, 400 million Windows Live users, 90 million annuity customers, close to a half billion people will have immediate access to the Office Web Applications.

TAKESHI NUMOTO: That’s right.

STEPHEN ELOP: That’s very cool.

TAKESHI NUMOTO: Very exciting.

STEPHEN ELOP: Landing with a big step, that’s fantastic. (Applause.)

TAKESHI NUMOTO: Now that we’re done with the data analysis, I want to go to PowerPoint and finalize our presentation.

PowerPoint 2010 utilizes the power of the PC to deliver some fantastic transitions in cinematic effects. So, let’s take a look.

STEPHEN ELOP: This is the ooh and ah session.

TAKESHI NUMOTO: This just drops, gallery, shred, pick award, cue, honeycomb, switch, and vortex.

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

TAKESHI NUMOTO: Obviously this slide is not done, so let me work and finish this up.

PowerPoint 2010 makes video a first class citizen, and I’ll show you what I mean. I can insert footage here, and it’s a nice bit of video footage of a bicycle race. But it’s a bit long, so let me trim this down maybe by a couple seconds.

STEPHEN ELOP: So, you’re editing that video right inline right within PowerPoint.

TAKESHI NUMOTO: That’s correct.

STEPHEN ELOP: Very cool.

TAKESHI NUMOTO: And I can set it to run automatically.

But this color feels a little off. So, let me recolor it so that it looks more professional, and maybe apply some nice formatting using live preview effects here, and even apply a reflection just as I can do today with photos but now I can do this with video.

So, let’s take a look at this. So, this is the footage running with the reflection intact.

STEPHEN ELOP: Beautiful, beautiful. (Applause.)

TAKESHI NUMOTO: Now that I’m done with video, I actually want to make this easy to share. So, let me go to the backstage view.

Backstage view is the place in Office 2010 that organizes all the features and commands that apply to the entire file, so that people can discover and use those features easily just as the Ribbon organizes the features that people can help use and discover within the document.

Here I can see that the video is too large, 11 megabytes, so it’s not very easy to share. So, let me compress this and make it much smaller. So now I’ve saved 8.7 megabytes, and the file is now down to 2.2. So, now I can easily share it around with the people I need to work with.

Backstage view is also the place where a lot of the deep integration with line of business applications or SharePoint or Office Communications Server can surface, as you can see in the presence icons here.

STEPHEN ELOP: And we’re going to have a lot more to share with you as it relates to integration with SharePoint and the rest of Office at the SharePoint Conference in October. So, SharePoint and integration here, definitely be at the SharePoint conference.

TAKESHI NUMOTO: Yep, it will be very exciting.

Now let me go back to the presentation and continue work on this one.

Well, this slide obviously needs a bit more sprucing up, but PowerPoint 2010 supports coauthoring, which is multiple people can open the same document at the same time and work on them.

I see that Jim is working on this slide deck, so let me IM him and ask for his help.

STEPHEN ELOP: Be careful. This crashes sometimes. (Laughter.)

TAKESHI NUMOTO: No pressure.

So, I’ve asked Jim for help, and I can of course continue working on this presentation as Jim works in the background.

And with the power of coauthoring in PowerPoint, I can work with others simultaneously, but use all the rich capabilities of Office. And this is what I would call collaboration without compromise.

STEPHEN ELOP: So, full collaboration, rich client to rich client, and that’s great. Now, Chris Capossela is going to be giving a series of sessions over the next three days. He is going to be showing this I think in Microsoft Word as well to get a lot more exposure to this collaboration concept.

TAKESHI NUMOTO: That’s right.

And I will make some changes on my end here as well.

Now, on the other screen you can see that Jim has turned a couple of these bullet points into much more visually compelling Smart Art using Smart Art that we introduced in 2007. We’ll be delivering many more Smart Art in PowerPoint 2010 as well.

Now that I’m done with my changes, let me just go ahead and synchronize the changes. Ooh, moment of truth.

So, the changes show up, Jim’s changes show up on my screen, and I love the way PowerPoint delivers the ability for me to collaborate but also maintain control of my documents. This really lets me work together with others on my terms.

Now that we’re mostly done with the presentation preparation, I actually want to go and do a dry run with the team.

PowerPoint lets me broadcast my slideshow. What I mean by that is anybody at anyplace, even at a PC without PowerPoint installed, can participate in this slideshow remotely. So, let me send this link out to the team and start the broadcast.

So, my team will get the invite in an e-mail, and you saw on the other screen that Jim has clicked on the link and is participating in the broadcast session.

You can participate in the session from mobile phones as well, and you see that there is another team member participating from a Windows Mobile phone.

As I advance the slides — (applause) —

STEPHEN ELOP: Watch this, watch this! Hold that applause.

TAKESHI NUMOTO: — you can see that people are moving along the same page.

STEPHEN ELOP: Both Windows Mobile phones, as well as — very good! (Applause.)

Okay, so clearly the mobile experience, the best experiences are going to be delivered on Windows Mobile. We’re quite certain about that.

But what about I think there’s one or two people in the audience who have iPhones. Okay?

TAKESHI NUMOTO: You want to give it a try.

STEPHEN ELOP: Let’s give it a try. We happened to have borrowed from one of you an iPhone. I receive the same e-mail message that you sent out. And what I’m going to do here is click on a link within the iPhone. Let me turn it this way. It sort of goes sideways sometimes. Let me go left.

Oh, you know what’s happening? Ah, everyone is using wireless out there. No, we’re going to be stuck. We’re stuck because what is actually happening in the room is the wireless is like really grunged up, and we’re having problems getting those connections.

What we can demonstrate to you, however, is that same experience of advancing the slides on an iPhone or any other browser-based environment is supported, and something we’re looking forward to sharing with you, so it will be a great experience.


What we wanted to show here was everybody being on the same page — (applause) — regardless of location or the device that you’re using. This is what we mean when we talk about the best productivity experience across the PC, phone, and the browser. We’re very excited about the technical preview milestone today so that we can start sharing our progress and start receiving your feedback. Thank you very much.

STEPHEN ELOP: Thank you, Takeshi. (Applause.)

As Takeshi said, across everything we’ve discussed today, an underlying theme has been that we are delivering the best productivity experiences across PCs, phones, and browsers, collectively a notion that is supported by cloud computing.

So, it’s not surprising that our third big bet is our ongoing commitment to fully embrace software plus services.

Microsoft took a big step in this direction exactly one year ago at WPC in Houston when we announced the Microsoft Online Services Partner Program and pricing model.

You responded, and you have driven a boom in customer interest. Since launching the program in the U.S. 12 months ago, we have expanded to 18 additional countries. Each week, more than 100 of you sign up and join the Microsoft Online Services Partner Program. And so to date we’ve enrolled over 5,000 partners, who most importantly have helped thousands of customers, including enterprise customers, adopt this technology, customers like GlaxoSmithKline, Philips, AP Moller Maersk, Aviva, Duson InfraCorp (ph), Ingersoll Rand, and a number of others; but also smaller companies from around the world, including locally, Environmental Services Incorporated, Esperanz Pharmaceuticals, and Image Tech, who happen to be three customers of Baton Rouge, Louisiana based partner SparkHound, who’s delivered those customers to us. So, thank you for that. The momentum is fantastic.

And our message is resonating with customers. Customers value the power of choice, the power of choice to deploy their software on-premises, hosted by partners, or in the cloud, the power of choice to use a blend of rich client applications, applications on mobile devices, and browser-based applications.

And partners are beginning to make money, not just by signing up customers, but more importantly by developing and delivering custom solutions.

As part of the Microsoft Online Services Solutions Showcase, there are over 100 custom solutions, built by partners, exclusively for Microsoft Online Services, and we continue to see that.

We’re also continuing to invest in online. As Allison just discussed with you, we’re delivering four new partner features and new business partner opportunities, which is great, and we will deliver to you continuous improvements addressing the feedback that you provide to us.

For example, we’re moving to a quarterly update cycle with our service improvements. That way we can better respond to your requests.

We’ve already started with some of that response. We’ve increased the SharePoint upload size, the Exchange mailbox size limits, support for Firefox and Safari, more IT control. We’re providing you with the opportunity to include your business information on invoices, and so forth. The list of improvements continues. So, we’re listening to you, and we’re always looking to improve these services so that you can deliver a more comprehensive solution to your customers.

Now, you’ve seen some of the innovation that’s coming from Microsoft. Undoubtedly, these products and services will drive tremendous opportunities for all of you.

As I said, Chris Capossela is going to spend an hour with all of you giving the same session three different times over three days to drill down into the details of the various partner opportunities that exist around Office 2010.

To help set the stage for Chris’s discussion, I’d like to share with you what my aspirations are for all of us in the next year.

When we return to WPC in 12 months, partner-powered Microsoft solutions will stand apart from all alternatives, clearly recognized by our customers as the best choice for their business.

Nine out of 10 of your customers will be engaged with you to pursue the broader value associated with solutions like unified communications, CRM, SharePoint, and business intelligence.

Nine out of 10 of your customers will be working with you to transition a portion of their IT to the cloud.

Nine out of 10 of your customers will be working with you on their roadmap to deploy Office 2010, Exchange 2010, and SharePoint 2010.

Those are your opportunities, and most of all, because of the ongoing and deliberate dependence we have on each other, we will pursue these goals together.

Thank you, and have a great WPC. (Applause.)

ALLISON WATSON: Well, that was exciting. Again great to be in the audience, but it turns out the online community has exploded. We have just surpassed the top 10 conversations in the world in the digital community, and we just exceeded the conversations going on about Michael Jackson. So, I would say give it up to the Microsoft community around this globe, and WPC 2009.

All right, so that was pretty exciting. All of us in the audience had so much to see, I think it was like this. We’re like all the audience watching what was going on, and that’s the impression that was going on when Office 2010 — we didn’t even have time to stop and clap.

Now, I have a couple partners with me. I know you guys were — everyone is making quiet noises in their seats so they can pay attention to the next conversation that was happening. But what are you thinking about after watching that are the business opportunities that you can do in Mexico, Mario, with your customers?

MARIO: Yeah, it was like, wow, it just keeps getting easier and better. So, you just talked about the world changing, but you can also mention the businesses are changing. So, I strongly believe what we have just seen here that we’re going to change the way our customers collaborate.

ALLISON WATSON: That sounds great.

Now, Jay, what are customers telling you about Office, and what are you going to tell them in response?

JAY: Well, our customer base, the oil and gas, nuclear industry, has pretty much standardized on SharePoint as the collaboration platform. We made a big bet into the BI vision, and what I just saw there is just unbelievable. It’s going to add that much more value to our bets.

My only thing is how soon can our guys get it? I’ve got to get my developers on this tomorrow.

ALLISON WATSON: Well, with digital distribution that we have in the Microsoft Partner Network we can get you fast access to all this technology, and we’ll have it up to you as soon as the guys get it loaded up on my site for you to download.

All right, so great things ahead. I want to talk a little bit about the value keynotes that are coming up, but I wanted to first say great Tweeting going on about the BI, and we had a “Stephen Elop is my hero” conversation going on.

So, this is the agenda going on for the rest of today. Obviously we covered so much information just in those two sessions. We have Bob Muglia covering the entire Server & Tools platform tomorrow, the developer platform, the announcements around Windows Azure.

So, if you see, we have two sessions today called value keynotes, and one more tomorrow. Our Office and Windows offerings will be repeated. But it will be important for you all to check your schedules and pick out exactly which are the most important business opportunities, because in each of these hours we’ll drill into further information and we’ll also drill into the specific partner business opportunity by partner type.

So, incredible opportunity, I want everyone to make and take advantage of the time at the conference here before we get into some fun this afternoon.

I welcome everybody again to WPC ’09. Thanks and have a fantastic day. (Applause.)