Bob Kelly: Microsoft Virtualization Launch

Remarks by Bob Kelly, Corporate Vice President, Servers and Tools Business
September 8, 2008
Bellevue, Wash.

STEVE BALLMER: (via video) Hi, I’m Steve Ballmer. I’d like to welcome you to our virtualization launch event. I’ve heard from many of you that you see virtualization as a critical way to make your IT infrastructure more efficient and agile. Virtualization is a key enabler for making IT more dynamic, and we want to work closely with you and our partners to make virtualization ubiquitous across your entire IT infrastructure. Thank you for joining us and taking a closer look at the incredible opportunity these solutions can represent for your organization. Enjoy the day, and get virtual now.

ANNOUNCER: Ladies and gentlemen. Please welcome Corporate Vice President, Server and Tools Business, Bob Kelly.

BOB KELLY: Good morning. Good morning. Fantastic, thank you for coming here this morning, and welcome to the Get Virtual Now launch. We have a really exciting show and an exciting day for you. We have more than 1,000 people here representing over 56 countries and thousands of people online, so we’re really excited and we’re really very grateful that you’re making the time and investment to come here and listen to Microsoft today.

What an amazing way to get started, a virtual Buddy Guy, the blues legend, and a physical Quinn Sullivan, a nine-year-old kid from Boston who is absolutely ripping it up. I’d like to join Quinn back on stage. Quinn, come on out here, please. This kid deserves another round of applause. Absolutely incredible stuff. Awesome, awesome, great job. Really well done. So, nine years old?


BOB KELLY: How long you been playing?

QUINN SULLIVAN: About four or five years.

BOB KELLY: Four or five years. Believe that? Four or five years. And you’ve actually played with Buddy Guy?


BOB KELLY: Amazing stuff. Again, please, a round of applause for Quinn Sullivan. Thank you very much, Quinn, thanks. (Applause.) That is awesome.

So today we’re here to learn about, you know, why virtualization matters now. Hear from our customers, find out what partners have done, help really make adopting virtualization much, much easier. Later today, you’ll hear from Bob Muglia where he’ll take you deep into the technology and really help you understand what we’re talking about when we talk about Dynamic IT and how virtualization is a key enabler of Dynamic IT. And you’ll hear from Microsoft COO Kevin Turner, who will come out and speak to you about customers in the real world who are using this virtualization technology to really deliver incredible business value in the short term.

Customers have been telling us that virtualization is a top priority, but there really are a stunning number of customers who have not yet adopted virtualization. In fact, less than 12 percent of all physical servers being sold into the market today are acting as hosts for virtualization. While that’s expected to double in the next four years, it still means there’s a long way to go before customers are really starting to leverage the technology in a deep and pervasive way.

Today, we’re going to talk about how Microsoft solutions will make it easier for customers to adopt virtualization across their entire infrastructure. Let’s just get going.

So when we talk about virtualization, we like to talk about it in the context of helping customers become more dynamic with their IT environment. Dynamic IT, as you’ll hear from Bob later, is Microsoft’s strategy for helping customers drive cost out of infrastructure and build new capabilities faster. And virtualization is a critical enabler of this vision. Why do people virtualize? What’s really behind driving the hype?

At the end of the day, it comes down to three things: driving costs down. Really, it’s very important through this consolidation effort that happens with virtualization, you can drive costs down in the power savings, and in the rest of the management of the infrastructure. And you’ll hear from customers and partners a little bit later in the show about how that really comes to life with Hyper-V and System Center.

Increasing efficiency: With virtualization, you actually have fewer resources, physical assets, to manage. And that, therefore, means that there are fewer costs associated with managing that infrastructure. As a result, it’s much easier to move systems around, much easier to be dynamic and agile to respond to the business. Faster application testing, seamless deployment for end-user applications. So really, increasing efficiency.

Finally, enabling business agility: Business agility is really the ability for IT to respond to the business or the user need. And typically today, to deploy a new capability with new servers can take weeks or even months to deploy that solution. Virtualization takes it down to minutes, and that’s a really critical enabler for business agility, and at the end of the day, delivering greater capability to the business. The right virtualization strategy can enable you to do all of these, not just manage your costs, which typically is how customers are looking at virtualization today.

What I’d like to do is actually show you a little video of three customers in particular who are seeing dramatic savings and dramatic business agility as a result of using Microsoft virtualization technology. You’ll hear from the Scooter Store that has had a 50 percent cost reduction by moving to virtualization. You’ll hear from Continental Airlines and their need to be more agile to respond to their business. And you’ll hear from the State of Indiana, who had a $14 million cost reduction as a result of going with virtualization. So go ahead and roll the video, please.

(Video segment.)

BOB KELLY: Great. Fantastic results, real-world results, customers using the technology today to enable much more dynamic IT and to deliver incredible business value to their end users.

Now, when we think about Dynamic IT, Microsoft’s approach to this really is what we call a 360-degree approach. Virtualization is an important technology, but make no mistake about it, it’s not an end in itself. It is an enabler of a better IT environment. And when we think about Dynamic IT, we’ve been thinking about this for a long time. And investing in virtualization for many years to deliver an end-to-end solution from the data center to the desktop.

In the server space, we have, obviously, Hyper-V for driving down costs and managing your server environment. Desktops, we have the Vista desktop centralized deployment solution. Application virtualization with software technology to manage your applications, and presentation virtualization through Microsoft terminal services. The critical piece of the strategy here, however, is that System Center allows you to manage those assets from the data center to the desktop through a single pane of glass.

System Center helps you manage that physical and virtual environment with one solution that is pervasive across the stack. And today we really want to share with you more details about how we’re using this technology, how customers are deriving benefit, and as importantly, where we’re taking this into the future.

So to deliver the right virtualization solution, this broad offering has to be more than just about product, it has to be a core strategy. And this strategy changes IT. IT is now no longer constrained to the physical environment. It’s now a much more logical or dynamic IT environment. And to make it easy for customers to deploy virtualization, we listened and delivered. At the end of the day, our core value proposition is to deliver an easy-to-use, easy-to-deploy solution.

So customers ask for familiar tools that don’t require specialized training. If you know Windows, you know virtualization. The data center to the desktop, all scenarios supporting that broad selection of customer needs. End-to-end, as I said, System Center managing physical and virtual and cross-platform with help from Sun and Novell. We’re also deep into virtualization management, meaning that you see all the way through the virtual machine into the application with System Center Operations Manager. This is a key differentiator that really allows customers to deeply understand what’s going on in their IT environment, not in a superficial way just managing the virtual machine.

Finally, delivering the best ROI for your data center. That’s our mission: to democratize virtualization. As I said, less than 12 percent of the servers going into the market today are acting as hosts for virtualization. We see a massive explosion about to occur on the server side, and then of course across the desktop, the applications, and the presentation layer, all managed with System Center. Later today, you’ll hear tremendous results from customers when Kevin Turner comes up to talk to you about exactly what we’re seeing in our customer base today.

What I’d like to do now is actually have a customer tell you what they’re doing with virtualization and the specific benefits they’re seeing. So if we could roll the video, please, from Talx.

(Video segment.)

BOB KELLY: Okay. So now that you’ve seen this great video of a customer who’s actually using this technology and really has been doing so from an early-adopter standpoint, I’d actually like to invite Bryan Garcia to come on out and to share more about his experiences with Hyper-V and Virtual Machine Manager. Bryan, please come on out here. Good morning.


BOB KELLY: How are you?

BRYAN GARCIA: Very good. Thank you for having us here.

BOB KELLY: Absolutely. Great to have you here. So you were an early adopter of both Hyper-V and Virtual Machine Manager?


BOB KELLY: Tell us a bit about why you chose to deploy both of these technologies.

BRYAN GARCIA: Well, we’re predominately a Microsoft environment and we wanted something that would be easy to learn and something we could integrate into our overall environment rapidly.

BOB KELLY: I see. And so as you were thinking about this, what were the features that you were looking at that you thought were going to be critical for your environment?

BRYAN GARCIA: Some of the key features for us were 64-bit support, symmetric multi-processing support, high availability, and also increased performance in our virtualized environment.

BOB KELLY: So why were these important? What were critical about them?

BRYAN GARCIA: Well, some of the key things for us that were critical are we are a .NET shop for all of our development. We’re moving most of our applications to 64-bit to get better scale because we service millions of customers with what we do, and we also need something that would work right out of the box that we didn’t have to invest a great deal in training our staff on new technology and take away from delivering business value.

BOB KELLY: Got it. What was the experience?

BRYAN GARCIA: It’s been great. It’s been very easy to deploy. We’re using System Center to manage the environment; we’re also using it for the ability to allow users to self-provision. The other thing that has been very valuable to us is the tool, the assessment and planning tool in helping us figure out what work loads are good to virtualize and what those virtualized environments will need in terms of resources.

BOB KELLY: Yeah, that’s a pretty critical piece for us, obviously, is to deliver and help you understand more than just the technology, what are the solutions that you can deploy. So what benefits have you been seeing from your deployment of Virtual Machine Manager?

BRYAN GARCIA: Some of the benefits have been the cost savings. We’ve been able to see about $5,000 per four virtual servers we virtualize. That’s allows us to — we’ve realized that savings from a couple things, one, we’ve realized it from reduced acquisition cost of hardware, maintenance cost of hardware, and also from the environmental and power controls for our environment.

BOB KELLY: Got it. Great story. I’d like to ask you to give Bryan a round of applause and thank him for coming here to visit with us today.

BRYAN GARCIA: Thank you very much. (Applause.)

BOB KELLY: As you can see, we had some great customer testimonials. Obviously, we’re still early in the deployment of Virtual Machine Manager and Hyper-V, but the reality is we would never be where we are today without the help of our partners. Partners help us round out the solutions and extend the platform and build complementary products and services to deliver a solution to you and to the rest of our customers.

Specifically, in the hardware arena, we have lots of partners who have been here both as sponsors of the show and also as participants in the overall global launch. There will be 175 events that will happen around the world beginning today. And our partners on the hardware side from the processor to the rest of the hardware, server hardware, network gear, et cetera, we’ve been working very closely with these partners to ensure that our virtual solutions complement their offerings.

Our work with storage partners in particular helps ensure business continuity and rapid provisioning. And on the software front, many, many of these partners you are already using in your existing environment. These partners have built on top of the platform to enhance the management and leverage virtualized infrastructure to provide a much more advanced management solution, hosted services, appliances, and interoperability across the stack.

Finally, on the services front, we have many partners ready to help you plan this dynamic data center. And these partners offer the skills and the resources to help you implement your virtualization strategy. So we’re really very grateful to our partners for the work that they’ve done to round the solutions out and to help us deliver a better experience to you, to help you’d drive out cost, and to build a better business that is able to respond more quickly to your business needs. So thank you to the partners, and you’ll see many of them out here after the show.

Okay. So that’s me today. I would like to thank you for actually coming today and participating in the kickoff of the show. We had a rocking start to the day. At this point, I’d like to ask Quinn Sullivan to come back out on stage. And what Quinn’s got in his hand (guitar) — playing in his hand is that Gibson, Flying V guitar. So, Quinn. Awesome. This guitar is available to one of you through a raffle later today. This guitar has been signed by Buddy Guy and by Quinn and is available by raffle. If you look in the back of your attendee guide, you’ll see the instructions for how to go ahead and win that today. Visit the partner pavilion to find out more about this.

At the end of the day, we’ll raffle this off and then we’ll have a live band that will end the celebration of the day. We have a great, great day ahead of us. Attend the breakout sessions, attend the partner pavilion to learn more about the solutions. Come back here later for Bob Muglia and Kevin Turner.