Bob Muglia: Worldwide Partner Conference 2010

Remarks by Bob Muglia, President, Server & Tools Business
Washington, D.C.
July 12, 2010

ANNOUNCER: Ladies and gentlemen, please welcome Microsoft’s president, Server & Tools Business, Bob Muglia. (Cheers, applause.)

BOB MUGLIA: Well, good morning.

So, we have all had our own path in understanding what the cloud and cloud computing is all about. For me I got a lot of clarity last fall. It started very, very innocently. I received an e-mail from our chief operating officer, Kevin Turner. Kevin said that he had a CIO event that he needed to present at in November, which is an event done in Palo Alto, California on Pagemill Road at a venture capital firm that brings in some of the top 100 CIOs around the globe. And Kevin said he wasn’t able to make this event, and he asked if I could do it. And I said, sure, my calendar was free, I was really glad to go do it.

So, about a week later, I received a phone call from Kevin, and Kevin started off, he said, Bobby — now, at that moment, I got a little concerned, because when Kevin calls me Bobby, it’s usually because he wants to give me some fatherly advice. (Laughter.) He says, “Bobby, you know, this event can be a little bit rough. Steve did it and I’ve done it, and we kind of had a hard time with these guys. But, you know, I’ve done some decks for global CIOs, and if you just follow those decks, I think you’ll be just fine.”

So, naturally in the ensuing weeks I just sort of prepared myself, I read the decks, but I was a little nervous when I went in there. And what this is, is this is an event where vendors come in, you’re presenting to about 20 of these top CIOs, and they’re asking you questions, and one vendor comes in after another.

And just to sort of get your mindset to think about this, think of yourself as a sheep lost in the field surrounded by a pack of wolves, and you have the kind of idea.

And I’m sharing things with them, and they’re giving me a hard time about a lot of stuff, and it was a good conversation overall, a little tough, as KT said, but it was pretty good.

Then at one point one of the CIOs looked at me and pointed across the table, and he said, “Bob, you don’t get it. We never want another upgrade from Microsoft again.” Wow. That’s our business. So, that’s kind of a tough spot. He said, “No, look, we want the features, we love the function that you give us, but you put all the burden on us. You make us deploy all the infrastructure, you make us do all the work. We want this as a service. We want you to take that on.”

And it was really at that moment that I got it, I got what cloud computing was all about.

Cloud computing is the transformation of the industry where we all work together, Microsoft and all of our partners, to deliver to our customers IT as a service, to enable them to focus on their business, to enable them to build applications like they could never build before, to not focus on running the infrastructure, essentially allowing every customer to have within their shop all of the best practices, all of the learning that exists across the industry. That’s what cloud computing is. It’s about delivering IT as a service that’s optimized for everybody.

What a big deal, what an amazing realization, and what a realization that was for all of us, and what opportunities that brings.

And let’s look at this landscape. Let’s look at it sort of all up. From an industry perspective when people talk about cloud computing, the analysts and many others talk about really three things. They talk about infrastructure as a service, which is really running machines. It’s really about running the underlying infrastructure, virtual machines and all of the infrastructure that it takes to run a datacenter.

They talk about platform as a service, which is providing the underlying platform that makes it easy and streamlined to rapidly write the next generation of business applications.

And finally, the third piece is really software as a service. And software as a service are the finished applications, the applications and solutions that deliver business value to customers and to end users, and empower end users.

Those are the sort of three components that the industry thinks of when it talks about cloud computing.

Now, at Microsoft we’re really building this out, taking this very much to heart, and what we’re doing is we’re pulling together platform as a service and infrastructure as a service into one service offering that we call the Windows Azure platform.

And this platform really provides a foundation upon which these next-generation cloud applications can be built. Some of those applications will come from Microsoft, and we are certainly building on the Windows Azure platform within our own shops and in terms of providing the next-generation solutions to you, and, of course, this is an open platform that allows all of you to write applications, whether you’re ISVs or solution providers, whether you’re providing those to end customers or providing them more broadly, and of course, it’s available to all of our customers, our mutual customers to build upon.

So, this is a very major commitment we’ve made, and it’s something that we think is very foundational in terms of delivering the future.

Now, talking about the Windows Azure platform, what is the Windows Azure platform, what are the capabilities here?

Well, fundamentally the Windows Azure platform is the world’s first general purpose cloud platform, the first platform that was designed to be fully open, to provide an infrastructure and a full platform set of capabilities that allow any kind of application you want to build to be created. It is a platform that has been designed to run on tens of thousands, hundreds of thousands, even millions of computers, distributed across multiple datacenters around the globe. It’s designed to certainly handle things like the underlying infrastructure and virtual machine management, but it’s also designed to operate at much higher levels and to provide a broader set of platform capabilities, a very broad platform API that enables developers, whether at ISVs or solution providers, SIs, customers, VARs, whatever development capabilities people want, this platform has a broad set of underlying services to allow you to build the apps that you want to create, and to take on new characteristics, characteristics like making it simple to do business continuity, characteristics like simple to provide scale-out and always availability, a whole very broad set of capabilities.

The Windows Azure platform clearly consists of Windows Azure that provides this foundation, but it also very much includes SQL Azure, which is the world’s first next-generation cloud database that has also been built to run across thousands of machines.

Today, SQL Azure is running across thousands of computers in six datacenters around the world, making it very simple for people to build out business applications that require relational database capability, and doing that without requiring you to think about that underlying infrastructure.

So, the focus of this is enabling you to focus on building your applications, not on running the underlying infrastructure and focusing on building that.

Now, the reaction we’ve had from partners on this has been fantastic. Windows Azure has only been released for about five months, and in that time we have well over 10,000 customers that are signed up to use this platform. The feedback we’re getting from those customers is, “Wow, this is different, this is different than any of the other infrastructure services we’ve seen. We’ve tried them; this one is different. It makes our job much simpler to build the applications we want to create.”

And we’re getting that feedback from a broad range of different partners. One of the partners that we’re working with, a great partner of ours, is Infor, and they have begun adopting the Microsoft platform and the Windows Azure platform for their next generation of solutions. Let’s see what Infor is saying. Let’s run the video.

(Video segment.)

BOB MUGLIA: It’s great to see a partner like Infor who are betting on Windows Azure, and I think it will be a great bet for them. We’re really excited to partner with them, and with so many others, so many of you in terms of building your next generation of applications.

At Microsoft we’re also using the Windows Azure platform for our own apps. Our IT department is investing heavily in moving our corporate applications to the Windows Azure platform, and our applications that we’re providing to you, like Dynamics, we’re also investing very heavily and moving to Windows Azure. Parts of Dynamics are already hosted on the Windows Azure platform, and the Dynamics team is working very hard on bringing out a set of services that are based on the Windows Azure platform. So, it’s really exciting.

One of the other things that I’m excited about with the Windows Azure platform is the ability to create new solutions that were effectively impossible to create before, because without a service infrastructure it was not cost-effective to deliver these solutions.

So today, one of the things I’m pleased to announce is that we’re making a great deal of progress on the data marketplace that we codenamed Dallas. I’m announcing today that Dallas will be available and for production by the end of this calendar year. We have a new information marketplace which is much easier to use and is very consistent with what we’re doing in Windows Azure all up. And we now have over 30 content partners that are building applications that utilize the data that’s available with Dallas.

What Dallas does is it takes and makes content that was previously unavailable to most developers, information that’s very important for business, readily available.

What I’d like to do now is invite Don Farmer up to do a demo showing you how one of our partners is building a solution based on Dallas. Don, come on up.

DONALD FARMER: Morning, Bob. Thank you very much.

BOB MUGLIA: Morning. (Applause.)

DONALD FARMER: Well, this is the Dallas marketplace, and what we’d like to do here is just find some data to work with. So, let’s browse for some data, and we can have premium data here, we can have public data here, and the data I’m interested in is let’s focus on demographic data. This is the time of year where we have lots of students on summer internships at Microsoft, and I’d like to see where they come from. Fortunately, the United Nations publish a dataset which we can find here, and this dataset is available on Dallas, and it’s about students and how they study abroad.

So, if I just open that dataset, first of all, I can see it’s a geographical dataset, so Dallas knows that it can show us where this data comes from. I can drill into the tables here, and see the OData tables which are included in this dataset. I can see the metadata of the columns that are available, I can see what columns I can query on. And once I’m happy with this dataset —

BOB MUGLIA: So, Don, one of the things I think that’s interesting about Dallas is all of the data on Dallas is published using an industry standard interface called OData, which allows a broad variety of tools to work with that information. By having all of the data published in a consistent way, regardless of its source, it makes it very easy for all of you that are building applications to work with any of the data that’s coming out of Dallas.

DONALD FARMER: Yeah, I think that’s actually pretty important. And the other thing here is that people who make this data available can charge for it and subscribe to it. So, we’re going to subscribe to this. Do you have a credit card with you? No? Well, just as well —

BOB MUGLIA: It’s OK, this one is free, so it doesn’t matter.

DONALD FARMER: This is a free trial offer. There we go. So, let’s sign up for the free trial offer. We agree to the terms of use, I presume we do, and we’ll complete the signup here, and we’ve subscribed to the data.

But now comes the next part of the Dallas marketplace. Partners can not only provision data as a service, but they can also provision applications that help us understand that data.

So, down here let’s use some applications to understand this data. I would love to demo PowerPivot. As we know, we’ve been working on that for a couple of years. But this is the Worldwide Partner Conference, so let’s show a partner application from Tableau.

Now, Tableau is one of our leading business intelligence partners, and when I click on this icon here, it opens the Tableau desktop environment with the dataset from Dallas loaded into it.

Now, the Tableau environment is pretty intelligent. It understands that if I choose country and students as the data that I want to analyze, if I click “show me,” it will default to show me that it’s geographical data.

BOB MUGLIA: Geographical.

DONALD FARMER: So, if I click OK, immediately I have a nice map of where students are coming from my number. I can just increase that button there, and just get a different size.

Let’s drag on region and color code by region, and now I can see that I can see the Americas and Africa and Asia and Europe and so on are nicely color coded.

But not only are we intelligent about geography, we’re also intelligent about time. So, if I drag time period onto the pages, I now can basically play through this and see the data change over time, and I can see the fact actually that students from China are phenomenally growing in importance, that market of students studying overseas, and I can just play through that and play it backwards and forwards in the Tableau environment.

Now, I got this data from the Web. The next thing, of course, I’ll want to do is share my analysis with somebody else. When I do that, I can use the Tableau public service to save it back to the Web, and I just need to enter my password here and log in, and it will encrypt the password, and it’s going to send it up to the Tableau public service.

Now, when it does this, this is a good time to talk about the various things that you can do with this data, because here I’m building a Web application, I’ve got a desktop application, but other people can also build things like mobile applications. In fact, you’re really unlimited in what you can do with the data with Dallas if you’re a partner analyzing this data or using this data for the consumers. So, you can work on mobile applications, desktop applications, Web applications, all sorts of different possibilities for you there.

Now I’ve got the application available on the Web, and I can share it, and I share it in a very easy way. Simply in this case I’m going to copy and paste the HTML, and I have a blog post here, which is basically ready to go. I can go into HTML editing here, update my blog post with that HTML that I’ve posted, and have a look at the Tableau application.

BOB MUGLIA: There it is, now it’s in your blog.

DONALD FARMER: Now it’s in my blog, published, and people can go into the SQL Server Experts blog and read it right now.

BOB MUGLIA: Great. So, this is a great example of one of the many kinds of applications that can be built with data that will now be available because of the Dallas marketplace.

DONALD FARMER: Absolutely.

BOB MUGLIA: That’s great. Thanks a lot, Don, appreciate it.

DONALD FARMER: Thank you very much.

BOB MUGLIA: Thank you very much. (Applause.)

So, cloud computing opens up the potential for all sorts of new applications, many, many different types of applications, but one of the interesting aspects of cloud computing is that while it is, in fact, providing IT as a service, it doesn’t and shouldn’t just come from global providers like Microsoft. That has a place. The public clouds that we’re building are very important, but it’s also very important for our partners, our service provider partners to be able to build their own public and private clouds. And, of course, customers will want to build predominantly private clouds, and they’ll want to have those within their own datacenter.

Now, at Microsoft, as I said, we’ve invested very heavily in building IT as a service with this next generation cloud platform that we call Windows Azure. And we are experiencing great interest from so many people, it has been an unbelievable success in the short time it’s been out there.

But we keep getting one question again and again and again. Today, I’m going to answer that question. The question is, when can I run Windows Azure in my datacenter? If I’m a service provider or I’m a customer, when can I have all of these benefits but in my environment much more under my control?

So, today, I’m very proud to announce the introduction of the Windows Azure appliance. Yeah! (Applause.) The Windows Azure appliance fundamentally takes the Windows Azure service and extends it. It extends it to our service providers, allowing you to run exactly the same capabilities within your datacenters, providing that capability to your customers, and it can be extended to our larger customers that want to provide IT as a service within their own organization.

So, let me go into some details about what exactly the Windows Azure appliance is.

I sort of said already the first and most important attribute about the Windows Azure appliance, and that’s that it’s a service. Now, that’s a new concept, the idea of running a service that’s coming from Microsoft in your own datacenter. Nobody has ever done anything quite like this before, but we think it is very critical.

Windows Server, SQL Server, they’re great products where you run and update the environment completely yourself. Windows Azure and the Windows Azure appliance is quite different. It is a service that we deliver that you then run in hardware that you own or have rented within your own datacenter. It includes Windows Azure and SQL Azure, both of those components are there. In fact, our plan is to make all of the capabilities that are available in the Windows Azure platform available to you to run in these appliances that run within your own datacenter.

Like Windows Azure it’s designed for phenomenal scale and things like multitenancy support and business continuity. In fact, we are working with our hardware partners to ensure that this is so identical that the hardware that you run in your datacenter will also run in ours. So, we’ll pre-validate and test that hardware in our own environment. And, of course, it will be available through a choice of many different hardware partners.

One of the analogies here that we’ve used in thinking this is the analogy of a set-top box with a cable or satellite provider. When you have your television, you are getting a service, you are subscribing to a service from your television provider. And that service is delivered to you. It’s not something that you have to worry about. You just turn the TV on, and it works. That set-top box is fully updated. But you control what channels you want to watch. You control what programs you want to record. If you want to put parental controls in, you can do all of that. You have much more control.

That’s exactly what we’re doing with the Windows Azure appliance. So, the benefits are associated with the control, compliance, as well as things like keeping the data locally, data sovereignty. So, these are important benefits that allow for much broader sets of solutions being built around the cloud environment.

Now, of course, we’re not doing this alone. We’re doing this with many partners across the industry. Today, we’re announcing it’s all of you. We look forward to your participation. But we have some first wave adopters, some first partners. You see, our plan is to take and make the first limited production release of the Windows Azure appliance available later this year, and we’re working with these first wave adopters to help us understand what is needed here, and to help roll this out.

And these are all partners that I think you’ll probably recognize. Our first partner is a company that I know you know of. They’ve been working with Microsoft since the early 1980s. They certainly sell a lot to consumers. They also sell business computers probably to many or most of you. They have built a broad set of enterprise services, and we’ve been proud to work with them on the Windows Azure platform, and we’re really proud to have them as one of our first wave adopters.

Please welcome with me Peter Altabef from Dell. (Applause.)

PETER ALTABEF: Thank you, Bob.

BOB MUGLIA: Good morning. Great to have you here.


BOB MUGLIA: So, Dell provides a broad portfolio of capabilities. Tell us a little bit more about that.

PETER ALTABEF: Well, thank you, Bob. It is a pleasure to be here and with all of you.

Dell’s cloud strategy is very consistent with what Steve and you have been talking about all morning, and those cloud services include architecture, applications, development, operations, support, and, of course, design and hardware.

One of the keys as we move into the cloud, and we’re already supporting and running and hosting private and public clouds, is our work with partners. Many of those partners are in this room, and I want to thank all of you for being our partners.

We are today involved in the cloud in a pretty big way. Twenty of the top 25 websites globally we are providing the primary infrastructure for, and four of the top five search engines.

So, very involved in the cloud, and very involved with Microsoft and all of Microsoft’s efforts.

As Bob knows, Microsoft and Dell have a more than 25 year relationship with one another, and on things like Windows Server with Hyper-V we have a complete solution already built out.

So, it shouldn’t have come as much of a surprise to anyone when right at the beginning of the Azure project Dell was brought in to be a primary infrastructure partner, and we have been doing that now since very early in 2008.

So, we have a lot of experience with the platform, we are thrilled with the platform and thrilled with where the platform is going.


PETER ALTABEF: So, from our perspective, as you talk about strategy, we really have three, and it’s the three you just outlined on your slide. So, we will be running the Azure platform appliance from Dell websites as a service provider and a hoster. We will also be taking our experience and creating a Dell powered Windows Azure platform which we’ll be providing both to partners, as well as to service providers and ultimately to end user customers. And that will be done on a broad range of basis from a full partnership and sharing technologies to a turnkey relationship. So, we’re very excited about this, and thrilled to be here.

BOB MUGLIA: That’s great. So, how do you see the Azure appliance impacting customers?

PETER ALTABEF: Well, you know, the cloud is all about customers. It’s all about massively reducing the cost of computing and increasing the efficiency.

What we are seeing in the marketplace today are a series of cloud initiatives, some of which we consider evolutionary and some of which we consider revolutionary. We think the Azure platform is a revolutionary change in the cloud marketplace.

And as part of that, you have to look, as you just did in your slides, not only at the infrastructure as a service and at the platform as a service, but at the software as a service layer.

So, we think all of the people in this room will be very active in developing software applications. Dell is developing and will be developing more software applications, and working with partners to do that.

We think that with the Azure platform, those applications will not only be horizontal but will be industry vertical, so health care, education, government, manufacturing, financial services, travel and transportation, telecom. We’ll be able to use this to really drive value for specific industries —

BOB MUGLIA: Broad sets.


And to give just to two examples, in health care we’re the largest provider of IT services in the world, and we think that the Azure platform will be extraordinarily useful for really decreasing the cost of health care, such as providing electronic health records.

When you get to manufacturing and you start looking at supply chain where Dell has an enormous background in supply chain, again the Azure platform we think will be able to work on an industry basis to really drive down supply chain costs.

So, we could not be more thrilled.

BOB MUGLIA: Well, that’s great. We really appreciate all of your support and help. Thank you so much, Peter, appreciate it.

PETER ALTABEF: Thank you, Bob. (Applause.)

BOB MUGLIA: So, our next person is actually a customer of ours. It’s a customer that I’m very confident that you’ll recognize. It’s a household name. It, in fact, is the largest online commerce marketplace in the world, doing over $60 billion in transactions every year, and having over 90 million active customers.

Please welcome with me James Barrese from eBay. Thank you, James. Thank you so much for being here. (Applause.)

JAMES BARRESE: Glad to be here.

BOB MUGLIA: So, it’s great to have you working with us on the Windows Azure appliance. Tell us a little bit about your current environment.

JAMES BARRESE: So, when you think about the eBay platform, and the investments that eBay needs to make in technology and scale to handle this global marketplace, 60 billion in transactions, we’ve had to make significant breakthroughs in how to scale out, how you manage an online Web property.

And just to give you some sense of the scope and scale of that, for example, we have over 200 million listings live on the site at any given time. In a day we do up to 75 billion SQL transactions to run this massive platform. And we’ve had to make breakthrough after breakthrough, and really invested in a foundation and a really robust technology platform.

BOB MUGLIA: So, you guys are a really leading in terms of what you’re doing in providing a cloud infrastructure.

Tell us what attracted you to the Azure appliance.

JAMES BARRESE: So, we’re always looking at innovation and where is our platform going, what’s the next round of technology that we need to invest in, how do we go for investing for our sellers and our buyers. And we looked at Azure, and we actually did some public pilots on the Azure public cloud, and it went well. So, we really looked under the covers and looked at the architecture and the foundation, and we looked at our strategy, and it aligned really, really well.

So, what we’re doing is really joint engineering, so taking the best of eBay’s engineering and our learnings on how to scale, with the significant investments that Microsoft is making in Azure to really figure out how do we get the infrastructure out there so that eBay can take advantage of the next generation in cloud technology.

But what’s really compelling is that it’s going to be in our datacenters. So, within our four walls we can control this scale-out environment, and it’s going to allow us then to really innovate for our customers. We’ll be able to do things through automation, through automatic scale out, that’s also efficient, and have a really rapid response.

And an example of this is the garden at If you’re not familiar with it, it’s an area where we’re starting to let new seeds blossom for new experiments. And you can go there and try out new experiences, we can interact with our community, and Azure is a great — the Azure appliance, what we see is an opportunity where we can deploy something out there really, really quickly, and if it gets a lot of traction, it gets a lot of load coming at it, it will automatically scale up. And if it doesn’t, it’s still highly cost efficient, and from an internal engineering standpoint we’re able to move really, really quickly to get those things out there. So, it aligns with where our strategy is going and it aligns with where our technology is.

BOB MUGLIA: Well, that’s great. There’s no question that eBay is one of the leading Web companies in the world. It’s an amazing company and you have a lot of knowledge and a lot of learning and I can’t tell you how much we thank you for working with us. I know that together we’re going to learn a lot and we look forward to working with you on the cloud. Thank you so much, James, appreciate it. (Applause.)

So, our third partner is the largest IT provider in Japan and the third largest in the world. They have 170,000 employees globally and are very broadly used as a service provider. They just celebrated their 75th anniversary last week, so congratulations to them on that, please welcome with me Marc Silvester from Fujitsu. (Applause.)

MARC SILVESTER: Thank you, good morning.

BOB MUGLIA: Thanks so much for being here.


BOB MUGLIA: So how does the Azure appliance fit into your strategy at Fujitsu?

MARC SILVESTER: Yeah. So, at Fujitsu, we see Azure, the Azure appliance being an essential part of our cloud strategy. We are delighted to be working with Microsoft in the design, development, and deployment of the appliance, and we are going to be taking that through our datacenters worldwide starting with Japan and deploying that for our customers, ISVs and our partners’ use.

Over the coming 12 months or so, we’re going to be training up 5,000 or so Azure specialists and we’re going to work with hopefully many people in this audience to bring work loads from the ISV partners, from our customers onto the cloud. So, in broad terms, our strategy is to build new business value, to build new markets, and to go after new and exciting ISV and partner and customer-delivered services on Azure.

BOB MUGLIA: Now, I know Fujitsu sees a lot of opportunity for their customers with the cloud. Can you tell us your perspective on what this announcement today and our partnership means to your customers?

MARC SILVESTER: Our partners have been telling us for some time now that they want a reliable, trustworthy, flexible, on-premises and off-premises cloud service. They need to be able to subscribe to business services and to data services. They want to be able to take data closer to themselves with data sovereignty issues and with security issues. So, for our customers, this is a real leap forward. It gives us the opportunity to federate the public cloud with on-premises cloud with private data inside the customers’ environment, and for us to collectively look at how we can bring a heterogeneous solution and bring new value to that marketplace.

So, our customers and our ISV partners are working with us now to look at how do we get at the data, how do we build new payload and application and activity services, and how do we take that to a global marketplace and add absolutely new value to the bottom line.

BOB MUGLIA: That’s great. Marc, Microsoft and Fujitsu have had a great partnership for many years. And I can’t thank you enough for working with us as we extend that together with Windows Azure and into the cloud. Thank you so much.

MARC SILVESTER: Thank you. Thank you.

BOB MUGLIA: I appreciate it. (Applause.)

So, in addition, I want to talk about one other partner who is a great partner, HP. Today, HP is also announcing that they will be joining Microsoft and working with us to bring the Windows Azure appliance to all of our customers and service providers.

Now, obviously, Microsoft and HP have also worked together for many years. Earlier this year, we announced a strong new commitment with HP around virtualization and management as well as in areas like database and messaging. And today, we’re extending that partnership with HP together to Windows Azure and in particular to the Windows Azure appliance. HP will be manufacturing Windows Azure appliances and making them available to our service providers as well as to end customers, and their enterprise services group will be running the Windows Azure appliance within their own environment.

So, when I look at all of this, we have four great partners that we’re announcing today, and this is really just the beginning of our work together on the Windows Azure appliance. As I’ve said, the Windows Azure appliance will have its first production release together with these four partners later this year, and they’ll be running this production level — meaning that they’ll be able to build and run services on behalf of customers, full production customers later this year. And as we move forward into the future next year and beyond, we expect to have more ways of this service to be available, allowing more and more customers and partners to participate.

So, we’re very excited about this. It’s a great day for everyone here. It’s a great day for the industry, and of course it’s a great day for all of our partners as well. Let’s get together to make the day with a photograph. Quick picture. Got to do the cheesy photo. (Applause.) Thank you guys very much, I appreciate it. Thank so much. Thank you. Thank you very much.

So, we’re real excited about this. This is a big day for us. It’s one that we want to celebrate. And so what I wanted to do was invite all of you here at WPC in Washington to join us this evening at 6:00 in the expo hall, we’ll have a Windows Azure appliance container there for you to see, and we’ll be throwing a little barbecue there. And I’ll be there, and Amitabh who runs the Windows Azure group will be there. We’ll have a broad set of Microsoft people to talk to. So, I look forward to seeing you all this evening at 6:00 p.m. at the Windows Azure barbecue.

OK. So, the appliance. The platform — the set of services that we’re providing with Windows Azure both as part of the public cloud that we build and now extended to our partners and our service providers with the appliance, those are services. We also, of course, build the world’s leading server, and that has happened because of all the partnership we’ve had with you over so many years — Windows Server, SQL Server, System Center — those are the foundation from which runs over 75 percent of all the industry-standard servers in the world today. And that foundation is really the foundation that we’ve built Windows Azure upon.

We’re focusing on making it easy to move applications from Windows Server to Windows Azure and to move forward into the future. And, of course, the Windows Server platform, Windows Server, SQL Server, System Center, enable you to build private and public clouds today, and we have thousands and thousands of customers and service providers around the world that are building clouds with these products today.

Now, we are investing heavily in driving forward our server platform. We obviously released a new version of Windows Server late last year, Windows Server 2008 R2. We have talked about and will be shortly releasing a first service pack of Windows Server 2008 R2 that includes great new features like dynamic memory. We just shipped a wonderful new release of SQL Server, SQL Server 2008 R2, that brings with it a broad new set of capabilities, including some revolutionary BI capabilities and working with Office. And we are investing to drive forward and making it easier and easier for you to build clouds using these products.

Today, I’m pleased to announce that one of the steps we’re taking is a self-service portal that will be part of System Center that makes it easy for you to provision clouds to allow developers and business units within organizations to deploy infrastructure on their own behalf, not requiring IT to get involved. This is just part of our ongoing commitment to make it easy for you to create clouds, whether you’re a service provider or an end customer, and to do so, certainly with the Windows Server environment, but then also as we move forward with the Windows Azure environment.

Now, looking at the distinctions between these two, I’ve talked about Windows Azure and the Windows Azure platform, I talked about Windows Server and SQL Server — an environment you know so well. What are some of the differences to think about with this and some of the considerations to take into account as you look at these two options?

Well, with Windows Azure, the most important thing to recognize is, first and foremost, it is delivered as a service. It is a service today with the public cloud that Microsoft runs, and it will still be a service when it’s available to you in the form of an appliance. What that means is Microsoft will update the infrastructure for you. In the appliance form, you’ll have a little bit more control over that environment when the updates happen, and you’ll certainly have full control of what runs where within the appliance. But fundamentally, we will still be providing that service to you to update and keep that service fully up to date. And, of course, Windows Azure has been designed to run into many thousands of servers, it has massive scale, and with the appliance, we’re working to scale that down to smaller and smaller configurations.

And the Windows Server platform is something you know very well. It’s a product that you purchase and install on the hardware of your choice. It provides the most flexibility, the most set of flexibility for you to integrate and work with that in your data center. And of course you can use Windows Server, SQL Server, and System Center to build clouds today. It provides a very low operations cost across industry-standard hardware and of course it’s fully under your control and you do all of the updating and manage every aspect of that infrastructure.

So, that choice is a very important thing. It’s really part — these options are very much a part of Microsoft’s ongoing commitment to work with our broad partners and customers across the world to provide the best and most complete and comprehensive set of options for you as you move forward into IT as a service and into the world of cloud computing.

So, one of the key things about this infrastructure is how connected it is. I said that Windows Azure is built on the foundation of Windows Server. That’s absolutely true, and it’s usually very straightforward to take applications built on Windows Server and bring them to the Windows Azure platform. But that’s because we’ve built this on a common set of models, a common identity model based around Active Directory, a common application model, a common platform underneath, and a common way of doing systems management based on System Center.

So, the tools, Visual Studio, System Center, all of those things that you know and love today with Windows Server and SQL Server, all of those things apply and work in the Windows Azure platform, all of those things are there for you and the knowledge that you have and the environment you’re familiar today with Windows Server carries forward into this Windows Azure world and we’re connecting these very much together.

I also said that Windows Azure is the first general purpose cloud platform. And when I say general purpose, what that means is that it can be used to build applications of any type, using any language you want. We’re very language agnostic. We’re agnostic to the underlying infrastructure. So, of course .NET is supported, and it’s world-class with Windows Azure, but we’re open to using other languages and other environments — PHP, Java, development tools like Eclipse and Ruby, making the language choice one that you can choose and build your applications regardless of where they’re coming from. Windows Azure is a general purpose platform, thus it’s available and it’s fully open. And this is part of that broad choice that Microsoft is providing.

Now, you’ll get a chance to learn a whole lot more about this if you’d like because today I’m also pleased to announce that this fall we will be doing a PDC 2010, which will be held on the Microsoft campus live, but it will also be the world’s first worldwide PDC that we’ve ever done. So, we’ll be live from the Microsoft campus, but will also be broadcast over the Internet to sites around the world, and we’re going to make the entire PDC, every session, everything, fully available for people to watch on the Internet regardless of where they are. This is, after all, all about the cloud, so you don’t have to come to Redmond to experience the PDC, but we’re sure looking forward to talking to you about the advances we’re taking with Windows Azure and the cloud overall, because we’re moving very fast and the PDC will be a place to learn a lot more about that.

OK, so we’ve covered a lot of ground. Covered a whole lot of ground. Let’s sort of talk about that and review it a little bit. I sort of talked about two dimensions in some senses. One dimension being industry-standard terminology around infrastructure as a service, platform as a service, and software as a service. The other dimension being where — who is providing those services, because IT as a service can be provided by global providers like Microsoft, they can be provided by all of the partners, many of whom are reported in this room, that are service providers and hosters, and then customers can run services themselves, cloud services for their own business units and developers. So, there are two dimensions.

And if we look at the landscape and the industry, we’ll see there are a lot of players that play in this. So, for example, Google and Salesforce are predominately providing software as a service, but they’ve made some investments in platform as a service. Amazon is providing predominately infrastructure as a service, although they also have made some level of investment to bring them — their users some level of platform as a service capability.

But one thing to note about all of these providers is they’re just global providers themselves. They don’t provide the options to you to run their services in your datacenters, and in fact, they don’t have the history of partnership that Microsoft has had for so many years.

So, let’s look at another vendor, VMware. VMware comes from the perspective of virtualization, virtualization, virtualization. So they’re an infrastructure as a service vendor, predominately. And they certainly do provide end customers the ability to run their environment, and they do provide service providers that ability. But they don’t run it themselves.

I’ll be honest, running IT as a service, running cloud computing, I don’t know how you can do it if you don’t run it yourself. I have no idea how you can do it. We learn so much by doing it ourselves. We are learning by running it every day, and that learning translates into building a better platform for you to run, and we are now committed to delivering that platform to you so you can run it in your datacenter. So, all of our best practices, all of that is available to you.

And so if you look at this landscape all up, there’s only one vendor. There’s only one vendor that really covers the full set of dimensions, and that’s Microsoft. And I can assure you that we are fully committed to driving this forward into the future. (Applause.)

So, we’re committed to that, but we’re absolutely also committed to doing it together with you, all of our partners, and we’re pretty excited by this. There’s so much to do. This is all here and now today. You can use Windows Server, SQL Server, and System Center to build clouds today. You can build next-generation cloud applications today on Windows Azure and those applications will run identically in the future on the Azure appliance, if that’s what you’d like to do.

And so when I look at all of this, this transition to the cloud, this transition to IT as a service, it’s a huge change, it’s a huge change. And when I look back to that fall when that CIO grabbed me and said, “Bob, you don’t get it.” I recognize that this was a time that we needed to think differently. We needed to think about what he wanted. What he was asking me for was to deliver to him IT as a service. And it changes so much of what we do. It takes so many of the things that we’re building today and makes us transform them into the future, and that’s kind of scary. And certainly it’s true for many of you. Some of your businesses will also need to transform.

But I’m going to tell you something I firmly believe. I firmly believe that customer demand for solutions far exceeds the industry capacity to deliver on it. And I also believe that the cloud is an opportunity with IT as a service for us all to deliver for our customers. You can be sure that Microsoft is committed to that, and we’re committed, as we have been for the last 30 years, to doing it together with you.

Thank you very much, have a great WPC.