ANNOUNCER: Ladies and gentlemen, please welcome Senior Vice President for the Microsoft Corporation, Chris Capossela. (Applause, music.)

CHRIS CAPOSSELA: Well, good morning, everybody, and thank you so much for joining us here today at the Microsoft Lync launch. My name is Chris Capossela, and I’m a senior vice president with the Office Division, and in a few minutes I’ll be joined by Gurdeep Singh Pall, who is a corporate vice president, who leads the Lync engineering team. We couldn’t be more pleased to have this opportunity to thank all of our customers and our partners who have worked hard with us to bring Lync to the marketplace and to be here in New York City to launch the product. So, a big thank you to all of you for joining, and to all of our customers and partners for making it possible.

Now, this is a very big day for Microsoft. It’s a long journey that we have been on. We’ve been working on unified communications now for a good five or six years and it was that time where we really saw an opportunity to transform the way communications are done. We found opportunities to integrate communications directly into Office and make them very, very simple to do.

Lync is a major part of our broad Office strategy. We feel like with Lync the future of productivity is really here today. Lync 2010 completes the latest wave of Office 2010, SharePoint 2010, Exchange 2010. It completes that family of Office products that is ushering in a new era of communications, a new era of collaboration.

So when we think about how Lync fits into the broad Office strategy, it’s actually incredibly clear: Lync is the lynchpin to our communications strategy. And with Office and Lync and SharePoint and Exchange, our mission is to deliver the best productivity experience across the PC, the phone, and the browser. And we’re doing that, the PC, the phone, and the browser, Lync and Word and Excel and PowerPoint and Outlook, all of those applications are available on your PC and your Macintosh, on browsers, on phones, and we’ll get into more details on that today.

A major part of our mission is also to deliver this technology to customers on their terms, to deliver the cloud on customers’ terms. If customers want to run all of this technology themselves in their own datacenter, virtualized servers, et cetera, we want that to be possible and they can do that with Exchange Server, SharePoint Server, Lync Server. If they want Microsoft to run all of that technology on their behalf and take care of running those servers and patching those servers, then we want them to be able to do that as well, and we’re doing that with our cloud productivity service called Office 365. So, the second major pillar of how we deliver the world’s best productivity is to deliver the cloud on the customer’s terms.

The last element of it is by taking a very broad perspective of what productivity actually means. It’s not about word processing and spreadsheets and presentation tools alone. We actually think today’s productivity is about unified communications. It’s about enterprise search, it’s about collaboration and content management and business intelligence. And our mission is to deliver these core products in a way that customers can use them far more deeply than they’ve typically used the point solutions in all of these spaces.

Today, Lync delivers on a major element of our unified communications strategy. As I mentioned, it’s something that we’ve worked on for five or six years to really make Office and unified communications come together.

I thought it would be great to get a little bit of a broader perspective. So, to start off the session, I thought we could start with a quick video call actually using Lync, and I’d like to introduce a special guest speaker here with us today. Bill. (Applause.)

CHRIS CAPOSSELA: Hey, Bill. Bill, it’s so great to have you joining us. Thank you so much for being here. Where are you joining us from?

BILL GATES: I’m in my office in Seattle, and enjoying using Lync here.

CHRIS CAPOSSELA: Great. So, you can see I’m actually using Lync to do this video call. When I maximize this, we’re going to switch over to high-definition video, and in a couple of seconds, you’ll see a great high-definition video interaction with Bill himself. So, Bill, you know, thank you so much for being here. We’re using off-the-shelf PCs, off-the-shelf webcams, just an Internet connection. But with Lync, we get the high-definition video.

Bill, why don’t you start off by just giving us a sense for — five or six years ago, you really pushed the company to get into this software-powered unified communications space. Tell us about why, what was the opportunity you saw?

BILL GATES: Well, Microsoft is about the magic of software and making things work together, allowing everything to be a platform for applications. And when you looked at the PBX, it really sat there by itself. It had its own directory, its own infrastructure, it wasn’t connected up to the groups you defined. It didn’t have access to your schedule. It couldn’t connect up to the PC screen in the right way.

So that isolation meant that it wasn’t available to platforms, and actually the end user — navigating back and forth. And as the mobile phone came in, that almost was a third thing. So, software wasn’t helping the user in the way we thought it could.

CHRIS CAPOSSELA: Great. Over the past five years, we’ve obviously made some good progress. Any thoughts on how you think the industry has kind of evolved over the five or six years?

BILL GATES: The importance of unified communications is far stronger today than it was when we started down this path. If you look at the high-definition screens, the cameras, the pervasiveness of the mobile phones, the desire of the employee to use that mobile phone and then be able to transfer calls and data back and forth to their PC, the desire to have a workforce that’s mobile, bring people in, collaborate with them in new ways. The need to put everything into a consistent platform is very clear now. So, it really is very timely that we made the big bet in this area.

CHRIS CAPOSSELA: Absolutely. Now, when you think about this shift from sort of the traditional PBX to more of a software-powered unified communications, how big is that shift? How do you relate it to other shifts in the industry in terms of importance or size?

BILL GATES: Well, I think this is probably the most important thing to happen for the office worker since the PC came alone. You know, there’s all this attention to great things that are going on in the home and consumer-type stuff, but it’s important to remember that productivity in the office is a central thing, and I’m so excited that this one is coming together.

When you look at somebody’s desktop right now, you see that that phone is a separate thing and the PC, and you are working with one, learning one, it’s got funny buttons, funny ways that you do things. You know, people still feel a little inept. That screen can put up full sets of information, it can have your calendar up there, the whole thing will be quite different.

So when you see somebody’s desk in a movie and you see that separate phone, you’ll think, wow, that was before this happened. That was before software came in and a great platform emerged that would let people do flexible work.

CHRIS CAPOSSELA: Super. So, we’ve made some great progress. We’re excited about the Lync launch itself. Any sense for what you think comes next?

BILL GATES: Well, software has not stopped doing its magic. You know, we’re seeing that with the camera now we can do visual recognition. We’re seeing white boards, I think it will become standard in the office that your white board will let you draw people in for video conferencing, it will let you navigate to information. So, that kind of type of interface, the video recognition, the voice recognition, those advances in software will drive it to a new level.

Another key point here is that we’re opening this up to application developers. And so a lot of the surprise we’ll see will be coming from those application developers. Whenever in the past we’ve given people a rich platform and let them go at it, let them understand what does a hospital need, what does a law firm need, what does a call center need, they’ve been able to really do some amazing things. So, this is the start of unleashing that whole software applications community.

CHRIS CAPOSSELA: Well, Bill, thank you so much for joining us. It’s really great that we can use the technology itself to bring you in, but I really appreciate you taking the time and thanks so much for all your effort today.

BILL GATES: Thank you. (Applause.)

CHRIS CAPOSSELA: Thanks, Bill.

So you can see that with Lync, every single face-to-face communication can be better, whether you’re connecting across the hall or across the world. You know, Bill is 3,000 miles away in his office in Seattle, and yet just with off-the-shelf PCs, off-the-shelf $50 webcam we’ve got going there and our Internet connectivity, we’re able to have a very, very high-quality, face-to-face meeting. As the Internet connection waxes and wanes, Lync will automatically bring the high def down so that we’re not sucking up tons of bandwidth and bring it back up when we have the bandwidth. It automatically makes those adjustments so we stay connected and have a great experience.

So that really, obviously, brings us to the big news for today. We’re just incredibly thrilled to announce Microsoft Lync 2010. For customers who are familiar with Office Communications Server, this is the major next generation of Office Communications Server, and we’ve chosen this release to rename it to Microsoft Lync to better articulate what this product is all about.

We think that we’re very uniquely positioned with this product because we are essentially bringing together three major different tools into one integrated tool. We’re bringing instant messaging and presence together with audio conferencing, video conferencing, Web conferencing, which you can just do with your PC or with a browser. Together with enterprise voice and the ability to literally either enhance your existing PBX or replace your entire PBX and literally go with off-the-shelf software and low-cost hardware to make that possible.

So it’s an incredibly exciting moment for us, the website is live, people can go to Lync.com and download the trial. It’ll be available for purchase on December 1st when it will be available in over 38 languages in 150 countries around the world. So, we’re extremely excited to have this product available and, again, it’s about instant messaging and presence, audio, video, and Web conferencing and enterprise voice all brought together in a single experience.

So really, Lync at its core is about connecting people in new ways. And what we’re finding through our early adopter customers is that end users are actually delighted to use this product. The end user experience is very easy. It fits with Office, it fits like a glove with Office and SharePoint and Exchange. So, if people are familiar with those tools, they will be incredibly familiar with Lync.

The benefit that businesses are seeing, outside of the end users actually enjoying using the software, are really articulated on this slide. First of all, we see customers telling us that they’re able to dramatically reduce their cost through this notion of converged communications. The idea that Sprint will be getting rid of 200 different PBX pieces of hardware in the coming year, and they’re going to be saving $10-11 million this year because of the integration work that they’ve done using Lync, converging these different communication tools into one integrated tool.

We find that businesses are seeing benefits on how quickly people are able to adopt it. Very low training costs because it’s an extremely easy tool to use, and people are delighted to use the tool itself. So, it leads to a very fast adoption cycle.

And then we’ve done a lot of work to make it far easier to deploy Lync than any other product in this space. And we’ve done that by doing a lot of work on interoperability, so Lync works with legacy PBXs that companies already have on-premises, but we’ve also done a lot of work to make sure that the product is incredibly extensible. So, customers can implement the product, but then integrate it into their own line-of-business systems and have presence show up inside their own business work flows so that integration makes it very easy to deploy and very useful extremely quickly.

We’ll hear from some customers later on, but I wanted to share the kind of big things that we’re hearing back on what value that businesses are seeing from Lync itself.

With that, I’d love to introduce Gurdeep Singh Pall, who is going to join me on stage. Gurdeep, welcome. Gurdeep is a CVP for Lync. (Applause.) Welcome.

GURDEEP SINGH PALL: Thanks, Chris.

CHRIS CAPOSSELA: And we’re going to spend the next 15 minutes or so taking you through some various scenarios to give you a sense of the product itself. So, Gurdeep, please take it away.

GURDEEP SINGH PALL: Thanks, Chris. I’m still recovering from Bill being on video to join us today. But I’m very, very excited to talk to you on behalf of the Lync product team about this great solution that we have.

So what I’m going to show you today is actually the experience. This is the new Office Lync 2010 application. Of course behind this application is an entire infrastructure that we’ve built out here.

Now, the Lync application is designed to be a gorgeous and social experience that your end users will love and of course the Lync application, like any other Office application, is designed to be deployed inside an enterprise and managed and trusted the way you trust other Office applications, of course.

Now, another important thing about the Lync application, of course it does instant messaging and presence, conferencing, and is a soft phone. You know, it’s really designed, as Chris said, to fit like a glove with Office, with Exchange, and SharePoint. So, if you use Office, Exchange, and SharePoint, this is just a natural for you. It will be a natural for your end users.

So let me take you through the application itself. So, one thing you will see is that it’s got a very good treatment of pictures. You know, we think that’s a fundamental element of social, where you want to see the face of the person you’re communicating with. Now, you don’t have to go create any special databases or pictures, these pictures are automatically picked up from your SharePoint MySite and populated here.

Of course if, like me, you don’t like your picture, which is in your MySite, you can always point to a publicly accessible site, and you can put your picture there.

You will also see that you can easily put a note here that people who are watching you, watching your presence, will have access to to know what you’re really doing. Of course we’ve got a legacy of presence, there’s rich presence integrated here right next to the picture. Green shows that here Chris is available, which is his present state, but frankly, I never touch my presence state. I never update my presence because my presence is automatically updated by the system. It’s updated by Exchange calendar. When I’m in a meeting, it shows that I’m in a meeting. If it’s not a meeting, by default it will go to available. If I pick up my phone, it shows that I’m on a call. If I get into a conference call, it shows that I’m in a conference call, et cetera. So, it’s automatically driven.

The reason that is very, very important is that people forget to update presence. And when they forget to update the presence, the confidence of the people who are watching them goes down that, wow, I can’t trust this guy’s presence state. So, we made it completely automatic.

Also, you will see that there’s a treatment of location here. Now, this is a location that you can either enter manually, or this is a location that can be automatically detected through wireless access points, through your switches if you enable that and so on.

This is an extremely important feature. We think it has a lot of social value, but that’s not the reason why we originally built it. We built this location-based system to support E-911 capabilities, because one of the things Lync does, it replaces your enterprise PBX. In fact, the era of the PBX, folks, is over.

Now, let’s go down and look at some of the other elements. This is, of course, the contact view that we’ve all used in things like Communicator before. You can look up people inside your enterprise through the Active Directory. You can look up your contacts in Outlook. If you have your federated contacts, the way Microsoft has 2,000 companies that we federate with today, you can look up federated contacts here. And then you can, of course, start communicating with them.

Now, I look at — let’s say I go down to Carrie here. The moment you hover over Carrie’s picture, you will see a contact card which shows up. Now, this is exactly the same contact card which will show up anywhere in Office where you see Carrie’s name. That means in Outlook, if it’s in Word, if it’s in Excel, you see — or if it’s in SharePoint — when we see Carrie’s name, you can hover on a name anywhere in Office and the same contact card will show up.

You can see that she’s got three days left to go until Hawaii. With one click you can send her an e-mail, with one click you can instant message her, you can make a phone call to her, and you can also look up more information about Carrie which is derived from the Active Directory and also the organization for Carrie, which is derived through your Active Directory, which can be very useful when you’re trying to find relevant contacts. Of course, you know, I can go up here and it’s fully recursive because I can go and hover over Dan’s name and I can see Dan and I can traverse the whole contact from there. So, this is a great treatment of contacts. With one click I can make a phone call, one click I can start a video call, start an instant message, et cetera.

Another really important aspect is this idea of activity feeds. Now, this is a very important social capability. Now, we’ve talked about Lync. Lync connects people in new ways. It turns out, this ambient activity about people is very, very important as well. We’ve seen it in applications like Facebook, but how do you sort of render it in an enterprise-friendly way? So here, as you change your note to people who have you on their contact list, you will see their note just show up here, and it basically keeps track of all the notes that are there, and it keeps up to a certain limit. And you will also see some other activities here. For example, if somebody changes office location or changes a title, that automatically shows up there.

If you go into Exchange and you type in your out-of-office message, that automatically shows up there. So, there’s like an activity feed built right into Lync.

The other very important thing is — now we’re all familiar with the redial button on the phone. And, you know, it’s something we’ve trusted for a long time. This is the mother of all redials. (Laughter.) This is basically the conversation — all the conversations you’ve had, whether they be instant messages, video calls, phone calls, Web conferences, audio conferences, they’re all here. And with one click, I can rehydrate that old session. And as the other person gets the invite for that particular session, they go back to the same history that they were in.

So if you were having an instant messaging conversation yesterday and I came back and I click on it, I will see — the other person will also see the same history of the IM we had and what I had as well. Another very important and useful feature.

And then last but not least is that Lync is a completely soft phone as well. Now, in the past, you know, we sort of shied away from doing the three-by-four dial pad, we thought it was sort of a throwback to a legacy we were trying to leave behind. But based on customer feedback, we reintroduced that. If nothing else, so that people feel comfortable that they can actually use this application for making phone calls.

Now, you will see here that there are two voicemail messages left for me. I can listen to my voicemail messages right here without leaving Lync. Of course these voicemail messages are stored in Exchange and Unified Messaging. With one click, I can go into Outlook and look at the transcription of that voicemail message as well, and of course I can just click here to play this voicemail without leaving the application.

You know, what is really nice is that, again, the same contact card is here. So, if I wanted to respond to Carrie, I don’t have to go look up Carrie, I can just click right here and get back to it.

So here are some features of Lync. Now, Lync is a very deep application so I’m not sure I’ll be able to show you everything here in this demo, but a couple of other things before we move on is that one of the pieces of feedback we received was that when you use different applications, you go into a meeting room, you plug in your CX 5000, it’s very hard for end users to obtain the devices. We’ve made it very easy for you to select the device that you want to use and switch to it.

In fact, if you’re in the middle of a call and you decided you wanted to use your speakerphone, right in the middle of a call, you can go select a different device and the audio will automatically switch over to the new device.

Of course we’ve got lots of rich telephony capability also built in here. You can forward your calls to your mobile device automatically, you can simultaneously ring your mobile device if anybody calls your phone number. You can have your boss/admin capability here, you can have calls which get automatically forwarded to your team after a few rings. So, all those things are actually built in here, but again, there’s not enough time for me to show it to you.

CHRIS CAPOSSELA: It’s a great sort of walk-through of this core user experience in the Lync client itself. And you get a sense for why the feedback, I think, has been so strong.

I noticed, though, in the back that I’ve got an Outlook reminder just popped up. It looks like I’m supposed to attend a meeting on redesigning a physical workspace, called the Office redesign meeting. And we’re going to basically simulate what a conference call might be like if I attend a meeting remotely.

Gurdeep’s going to go over to that side of the house and join the conference session. You’ll notice one of my actual favorite capabilities of Lync is the fact that this reminder is coming up from Outlook, and you see that right here, but Outlook knows that this is an online meeting. So, it gives me the ability with one click right here to literally join the online meeting. I don’t have to know any PIN codes, I don’t have to know any leader codes, I literally click “join online” and sure enough, it’s going to pop up — there we go, ask me later on that. (Laughter.) It’s going to pop up our face redesign PowerPoint that is inside of the Lync UI. Notice the Lync UI changed from just being about sort of that IM experience and the core client there, it changed to essentially a conference room space.

Now right here, I can see a couple of things. I’ll turn my microphone on. I can see a couple of things that are happening. At the bottom of the screen, you see a 360-degree panorama of the meeting room itself. That’s because we’re using a Polycom device to create that 360-degree view in the room, and anybody who’s joining remotely can see everybody inside the room itself. I can get rid of that if I don’t want to look at it, per se. I also see that I’ve got a little video here that’s going to show me whoever is speaking. And notice I can start my own video. I’m in control of when we do that. So, if I want to make sure that I’ve got the appropriate attire on before I start my video, I can do that. I’m essentially in complete control.

Now, I’m essentially ready to join the meeting. You can see over there that they’re seeing me up in that little window because I’m the active speaker. Hey guys, go ahead and take it away.

GURDEEP SINGH PALL: So here we are. We’re in a conference room and we have the CX 5000 sitting here, which is a 360-degree video that Chris talked about. What we have here is a Lync meetings experience. Now, we don’t have to go to a different application like Live Meeting, all this is built straight into the Lync experience. You see video. We feel that video is very important for meetings. It is necessary, but it’s not sufficient because the other things you need to do, you know, I joked that after I’ve seen somebody’s video for the first ten minutes, I’m really look — I get antsy. I’m like, OK, where is the PowerPoint deck? Where is the white board? Where are those things?

We made it very, very easy for you to tailor this meetings experience to the kind of meeting that you want to have. Now, if you were in a presentation type of a session, you know, we’ve uploaded a PowerPoint presentation. This is fully uploaded, this isn’t some screen-scraping type of stuff we’re doing here. This is a rich PowerPoint application that Chris is also able to see on that site, and you can pop out the video and you can make it really big. You’ve got other capabilities.

Now, this is designed to be a presentation, but I have a feeling that Chris doesn’t want to be presented to.

CHRIS CAPOSSELA: Yeah, he can present those PowerPoint slides to me, which is great, but we can also make this far more interactive and make it more of a white-boarding session. Why don’t we do that now.

GURDEEP SINGH PALL: Yeah. And while I’m doing that and tailoring the experience to the kind of meeting that we want to have, I want to point out these devices that are here. You know, this is the kind of meeting room I would like to have. This is our partners’ smart technologies who have these two smart boards. These are very high-resolution displays. In addition to being very high-resolution displays, they’re also touch enabled.

Now, one of the things we’ve done with the Lync meetings experience is that we support multiple monitors, and we allow you to remove elements — undock the elements like video and white board and presentation out of that main frame, and then you can now make use of multiple monitors that might be there — you might use for the meeting.

For example, what Ashamel (ph.) has done, she has on the second monitor moved the virtual white board so that the virtual white board and the physical white board are coincident now. Now what this means is that when I’m in a meeting and if I want to get into brainstorming and working on the white board with remote participants, I can actually start interacting with this in a physical way.

So let me start doing a layout of a room that we’re trying to design here. So, Chris, what do you think?

CHRIS CAPOSSELA: So as he’s working on that white board, obviously, he’s actually touching the screen, thanks to Smart, but I can of course just use my mouse and now I’m dragging things around. And we’re literally working on this together in a classic white board session. We can kind of do what we want.

I think we’re actually missing some additional equipment. We might want to bring somebody else into this conference, maybe an expert who can help us with additional products, additional furniture, et cetera. So, I can actually bring up the Lync client again and now what I can do is actually maybe do a search. I don’t know the name of the person I need, so I’m going to search on furniture. And what we’re doing is tapping into SharePoint’s skill search capabilities.

So when I click on the skill button, now we’re doing a SharePoint search and bringing back everybody in the company who has furniture on their MySite or anywhere in their skillset, and I can see Aaron Painter (ph.) is one of these people. It looks like he’s actually available, you can see the green bar, whereas Cathy Hicks is not available. I can take Aaron and I can just pick him up, drag Aaron over, and now wherever Aaron is, he’ll be invited to join the meeting.

For today’s demo, Aaron’s actually in the back of the room, simulating sort of a café. You can see we’ve got a camera shooting over his shoulder. Aaron, you can probably join us. So, Aaron, tell us what we’ve got going on here. Do you have any additional products that you want to share?

AARON PAINTER: Yeah, I’ve actually got three chairs I want to drop into the conference. I need to get the white board up here.

CHRIS CAPOSSELA: The nice thing about this white board, Aaron can modify things, I can come in here and modify things if you look at my screen, I’m actually able to draw something here like this and say, hey, this is the one I really like. When Aaron gets connected, if he isn’t already connected, he can paste things in from the clipboard and move them around. Ashamel and Gurdeep in this other room, they can be doing the same types of things. So, collectively, we can work together. And you see how easy it is for me to bring anybody into the actual white board session itself.

GURDEEP SINGH PALL: You know, the thing which I really like about this particular physical metaphor is that never before, you’ve been able to paste pictures onto white boards so easily and manipulate them, even though they were pasted on the other side. Similarly, I can start writing stuff here on this white board and now the other person can see it they can change it. And the other feature which is my favorite in meetings like this is that with one click, I can record this entire session because I know that Chris is really fickle. He will decide on some design layout here today, and then he’ll go back and change that and then say, “I never said that.” And now I have proof because I will record this meeting and I will upload it to SharePoint and I’ll be able to show it to him that we actually decided on something that is there.

CHRIS CAPOSSELA: So being able to literally just record the meeting at the beginning and then have that as a file that you put on your SharePoint site so people who weren’t in the meeting can get to a section of the meeting and watch just the portion that they need, it’s just a core scenario that Gurdeep and the team have made possible.

So we’ve moved from sort of an individual person, we saw the Bill video call that was face to face with just two people. We’ve shown you sort of a conference session here across different organizations, bringing in some partner technology, both the Polycom device that gave us the 360 view, but then also the smart technologies that allowed Gurdeep to literally physically touch the screen and work with it.

What I thought we’d do now is have Gurdeep and I move over to more of a consumer-oriented scenario because Gurdeep’s team has done a lot of work actually integrating Lync technology into our consumer products as well. So, I’m going to move over to the living room scenario, and Gurdeep’s going to be sort of the corporate worker, if you will.

GURDEEP SINGH PALL: Now, as we look at Lync here, Chris’s status shows he’s away because he was away. And as soon as he moved to the couch and he’s now in his living room, you know, I wanted to be in the living room, but he pulled rank. And we see that he’s available. So, now, you know, with the work we’ve done in Lync, with one click I can start a video call with Chris, even though Chris is sitting at home on his laptop.

CHRIS CAPOSSELA: So I see that video call coming in. I’m going to accept that. I’m using Windows Live Messenger in just a minute here. Hey, Gurdeep.

GURDEEP SINGH PALL: Hey, how are you doing, Chris?

CHRIS CAPOSSELA: Still good.

GURDEEP SINGH PALL: You’re still looking really comfortable. I’m sure you’re good. Now, you will see here Chris is using Windows Live Messenger — we didn’t switch the screen? Yeah, there you go. And Chris is using Windows Live Messenger. One of the things we did is actually connect with audio and video Windows Live Messenger with Lync. That means that enterprises which are using Lync or enterprises who are on Lync Online can automatically connect into 350 million users who use Windows Live Messenger with audio and video.

And the capabilities that we have here are the same high-definition video capabilities that you see in Lync available through Windows Live Messenger as well.

CHRIS CAPOSSELA: So this is available today with Windows Live Messenger 4.0 and with Lync. And I love this sort of PC-to-PC communication. As I’m traveling around the world, I can use this to keep in touch with my friends and family who are using Windows Live Messenger. But Gurdeep and the team are also doing some work that isn’t yet available that we’d like to try to give you a little bit of a preview of. So, I’m just going to kind of close this laptop down here and I’m going to stand up. What we have over here, hopefully if we can switch the screen, give it a second.

What we have over here is an Xbox set up with Kinect. And we couldn’t be more excited about Xbox. I’m going to sort of wave here and see if I can get the attention of the Kinect device. It’s telling me to wait. It’s not seeing me right now. There we go. OK, I’m going to ahead and launch that — see if I can log in as that demo person. Maybe not. There we go. So, basically what’s happened here is Gurdeep and the team are working on a piece of software called Video Kinect which will be delivered to all Kinect as a seamless update. What it allows you to do is see your contact list online. In this case, we’re seeing Gurdeep. And so we just go ahead and signal to that, and now at home just using my Kinect, I can see Gurdeep using either Windows Live Messenger or Lync. Gurdeep, can you see me over there?

GURDEEP SINGH PALL: I can see you really well.

CHRIS CAPOSSELA: OK.

GURDEEP SINGH PALL: And of course folks can see you on the big screen here as well. Now, this is some capability which is going to be coming out shortly, but what we’ve done is really connected the game or the family room, living room scenario with the work scenario which is what I call the “dads two kids” scenario. And we think that’s a very important capability. The fact that there are a million Kinects sold within the first few days, there’s clearly a lot of excitement around that. We’re very happy to bridge the Kinect network, the Windows Live network, the Lync enterprises, Lync Online together to form a really rich, federated network for rich communications.

The other important thing here is that we started open federation work in 2005 and this is an open stance we have. So, the more networks that connect in, the value of the network goes up, and so we’re very, very excited about that.

CHRIS CAPOSSELA: So you can actually see the Kinect devices following me as I stand up or move around the room. So, again, making this available to gamers around the world is obviously why we’ve sold a million of these devices and Kinect Adventures and Dance Central. They’re great. Gurdeep’s team is saying, hey, why not actually make this a great communications device too and integrate the family room into the board room and make it incredibly easy to communicate across these different dimensions?

So that sort of wraps up the demo, let me turn things back over to Gurdeep. Thank you.

GURDEEP SINGH PALL: Thanks, Chris. Great. So, what you saw was a brief glimpse into what Lync is. What you didn’t see is that Lync is really ready to replace all legacy PBXs that you have. The era of the PBX is over, folks.

Now, we worked on this of course for a while, but let me take you through some of the other important things that are really important from a communications perspective. Now, if you’re going to invest in a communications system, you want to make sure that you can reach all at the end points on that communication system. So, therefore, you know, our customers have asked us to make sure that the great Lync experience is available on other platforms that they use today. Of course on the PC, we have a great Lync client that you saw. We have a Mac client, a rich Mac client which works against Lync today, and there’s going to be an update coming on that also.

Lync works inside the browser with Firefox, with Safari, and of course IE, that works today. And today I’m announcing that we will have Lync available on the iPhone and Windows Phone in the coming year as well. We listened to our customers and to the extent that the other platforms become relevant and customers ask us for those, we are committed to providing Lync on those end points as well. Of course Lync is available inside desk phones from our partners today, and they’re being launched, and I’ll talk more about that later.

You know, an extremely important part of Lync and probably the most important differentiator that should matter to you is that Lync itself is a software platform. You know, I often say that software is like Velcro, you can throw things of software together and they stick together to create a lot of interesting new scenarios.

You know, what we’ve really done is we’ve taken communications and we’ve made it into a software thing so that it can stick together and you can put it into all kinds of applications. We built Lync from day one using SIP as the basis. We’re using things like XMPP to connect into those networks which support those different protocols, and of course we have standards like VoiceXML. Right at the core, we started building on SIP. We’re not talking about SIP as a cool new feature that I sort of put as a checkbox on the machine.

The other really important aspect of this, of course, is the APIs and the extensibility. Now, APIs are really important. You know, you give a developer an API and all kinds of innovations happen the way Bill was talking about. And we’ve seen an amazing amount of innovation just happen in the communication space. And, frankly, the best is yet to come.

Now, we’ve seen presence being embedded into all kinds of applications, exactly in the same way they’re embedded in SharePoint and Office applications today. In fact, that same contact card that you saw inside of Lync that I showed you can be embedded very, very easily into all kinds of applications. Workflow and line-of-business applications, we see lots of applications are written on SharePoint. You can now integrate communications straight into those applications.

We’ve seen contact center applications by partners like Aspect, for example, built on top of the Lync platform. In fact, the same APIs that are used for building the Lync experience that you saw in its entirety is available to you as a developer or to your developers inside your enterprise.

And then of course you can build all kinds of custom applications as well. This extensibility is the most important differentiator for the Microsoft Lync platform. You know, there are only a few platform companies in the world because you need an ecosystem, you need tools, you need lots of developers to come around, you need developers who understand these platforms and now communication just becomes another color on the palette of APIs that you can pull from to create a great experience.

An extremely important part of our vision as we built Lync which was really a very software-centric view is that there are very important partnerships necessary to complete the solution. For example, you need partnerships in the devices space, best-of-breed partners who can build devices, what they’re good at. You need partnerships on PST and gateways, on SIP trunks, you need partnerships to build out E-911 solutions because eventually these solutions need to connect up into the cloud. You need partnerships for survivable branch appliances if you’re going to deliver enterprise telephony solutions. So, we’ve actually worked with a whole lot of partners that you see here to really complete out the solution that we have.

Another very important thing, as you know, is that when you deploy technologies like this, you want to have trained global and regional SIs that you can reach out to, many of these you’re using today, and these folks, we worked with them closely to train people who can deploy Lync at scale. You know, partners like VT, partners like HP, partners like Dimension Data, these folks have been partnering for us for a while, and they’re really up to speed, along with a whole lot of other top-class system integrators who are there to help with Lync deployments.

And then of course we’ve had a lot of ISV activity around the Lync platform. You know, if you’re in financial services, you ask who’s going to be doing my compliance and auditing work? There are partners who specialize in that, and we worked with them on how to bring those solutions onto our platform.

You know, we worked with partners like Aspect to get the contact center solution completed, and a whole lot of partners are doing some incredibly innovative work so that you can take these communication capabilities and really deploy them inside your enterprise with the needs of your enterprise.

Now, so the partner system is extremely important for us and I’m really, really happy to see the support that we’ve seen from the industry. Now I’ll walk over and show you some of the things physically that the partners have delivered and have announced today.

Folks, this is the wall of fame. Actually, so we didn’t take a cart and go to Best Buy and shovel in every device that I could find and put it up on a wall for you. What we did was very intentionally over a period of two years, we worked with these partners to make sure that the devices that are necessary to complete the different solutions were available for our customers today when we do the launch.

So let me walk you through some of these devices. Firstly, you know, HP today is announcing nine different PCs and laptops that have audio-video devices that are certified by us. Now, let me tell you what certified means. Certified doesn’t mean you know, they give us a device, send us a few freebies and we go put a stamp on there and say, hey, you’re good to go.

Certified means that you have to adhere to the standards that we set out, and you have to pass every test that we throw at your device whether it be signal-to-noise ratio, whether it be wideband audio performance, the microphone noise level, the performance of your HD video camera. We actually laid out these standards and we worked very, very closely with these partners and then we got these devices certified.

So when you go to buy any of these devices, you will see a logo on the device which says this has been optimized for Lync, and you can be absolutely trusting that when you plug this device into your laptop or your PC, it is going to be secure, it’s going to have the right performance, and your end users don’t have to go around any other application, the software will automatically detect that this is a certified device and start using it instantly without going through any crazy wizards, et cetera.

So nine different PCs from HP, partners like Lenovo and Dell also have devices that have been certified. Here, we see HD webcams from Logitech at a variety of different price points. Some are $40, some are $50 for HD. That’s right. You don’t have to spend $300,000 to get HD video. I know that’s what you’ve been paying. (Laughter.) But we really want to move to the world where you can actually get these capabilities for every end user that you have in the enterprise.

Let’s move over. Here we have a corded headset from Jabra, not one, many of them. And what’s interesting is some of these things start at price points of $20. So, depending on how much you want to spend and what the usage pattern of a particular user is, you have the right device for them.

Here we have wireless headsets from Plantronics, a variety of these headsets. What I really like about these headsets is that there is a capability in Lync that you’re in the middle of a call, you can actually throw that call to your mobile device and walk away with that call without disconnecting.

What’s great about these headsets is that the headsets will automatically switch from your Lync attached to your PC to your mobile device and you can walk away with it. So, really, really practical examples. We’ve got a whole lot of USB-attached devices. Here, we have a common area phone from a partner called Astra, which is designed to work with our stack, some great phones which we’ll come back to. We have a great speakerphone from Clear One, again, one of our very, very important partners.

Now, these devices are — there are so many of them, which is great, because you get choice. One of the great things of an open ecosystem is choice, another one is innovation because these vendors are really innovating to compete for your dollars. Also, you see a lot of efficiency in pricing. You know, the PBX world has been living in the IBM mainframe economics era, where once you buy the mainframe, you will pay through the nose to buy end points which work against that mainframe. And that’s what today companies who are in the PBX space — I don’t care whether they call it PBX or call manager, they’re PBXs. They will sell you very, very expensive — it’s like a shell game. They move the money around. You know, you bought the PBX. Looks kind of cheap when you compared it to Lync, but guess what? They moved the money around to the end devices. What you have here are multiple vendors that you can go choose from and pick and they will compete for your dollars.

Now, an extremely important partner for us is Polycom. Polycom is a leader, according to Greenhouse, is the leader in video conferencing room systems. Seventy-six percent of all audio conferencing end points are Polycom systems today in the enterprise. Polycom is the best-of-breed partner in the industry when it comes to audio and video.

I’m really, really pleased to have Andy Miller, the CEO of Polycom, join me here today to talk about the devices and all the work they’ve been doing. Thank you, Andy, thanks for your participation.

ANDY MILLER: Thank you. Thank you. It’s great to be here, and thanks so much for the introduction. I know you weren’t talking about us when you were talking about $300,000 video.

GURDEEP SINGH PALL: I wasn’t.

ANDY MILLER: Thank you. With that said, first, congratulations for a fantastic launch. It’s so exciting to be able to be delighting our partners between Microsoft and Polycom with these technologies. So, thank you and congratulations for this great event.

GURDEEP SINGH PALL: Thank you very much.

ANDY MILLER: Today, Polycom introduced a line of technology that was built specifically for Microsoft Lync. Our high-definition and high-definition audio technology. Specifically built for the simplicity of Lync, the connectivity to Lync, and to able to adhere to what our customers want, which are open standards and interoperability. So, the line that we have today from Polycom are both our UC devices and our UC video devices, and we’d love to talk about some of them with you.

GURDEEP SINGH PALL: Great. Please show us these devices.

ANDY MILLER: So the first device is the Polycom CX 600 which is really our headline device to connect to Lync. It was built exclusively for Lync. It interoperates natively. It has the high-definition audio that makes Polycom famous. The technology an interoperability in terms of having presence and all the Lync interoperability actually on the handset itself.

GURDEEP SINGH PALL: And if you don’t mind, I’ll actually walk our folks through this device here. This device, internal code name Aries if you’d heard about it. It actually runs pretty much the Lync experience that I showed you on the PC was actually molded and fit into this hardware. Of course it has HD audio from Polycom, but it’s got this great experience here which is very, very similar to the Lync experience. The contacts that you see here, you can look up people, you can dial phone numbers, you can see the presence of Dan, who is logged on here. You can read your voicemails visually, so you can pretty much click and you can see the voicemails here and read them. You can look at your call logs, and then of course search for contacts. The same contacts that you’re seeing here inside Lync, if I click on — folks, never before you saw a picture which came out of SharePoint on your phone, OK?

Now, let’s go back to look at another favorite feature of mine, which is really the calendar. Now, I can see my calendar, the same one I see in Outlook which is coming from Exchange on my phone. And if there was a Lync conference which was scheduled at a particular time, with one touch, I can join that conference securely. No phone numbers, no PINs. And when I’m in that conference, I will see a roster of all the other people in the conference, including who’s talking, et cetera.

So really, really exciting. A lot of innovation delivered at very competitive price points.

ANDY MILLER: Great. I think Gurdeep we both agree that this is not about dial tone or a telephone, this is about a true UC device with all the features and functionality that Gurdeep talked about.

We also have the CX 3000 which is the Polycom speakerphone device, high-definition, quality from a voice perspective, specifically built natively integrated into Lync. The traditional beautiful Polycom look and feel that you’ve all grown to love, but really specifically built and integrated natively into Lync, which we think is just not only a great technology, but also works very well in terms of the entire Lync portfolio.

GURDEEP SINGH PALL: Yeah, another thing I like about this device is if this is sitting in the conference room, you can dial it like any other conference room phone, but you can actually plug into your PC and you pretty much have the audio coming out of this device in its rich way, and you can have the video, you can have your PowerPoint, et cetera, that is available on your PC as well inside the conference room.

ANDY MILLER: This is actually a Polycom HDX 4000. This is one of the HDX series of telepresence technologies that, again, natively integrates directly into Lync. The other beauty of this is that our intelligent core, which is our bridging and management infrastructure, also natively integrates into Lync. The entire Polycom video portfolio ties into Lync, provides that native integration, that look and feel both from the video side and the voice side. So, the whole telepresence offering with Microsoft Lync is just truly not only a great experience, but again, natively tied into Lync, open standard, true interoperability.

GURDEEP SINGH PALL: Great.

ANDY MILLER: First to market. Finally, the Polycom CX 5000 which as you can see provides 360-degree panorama. You saw it up here on the earlier demonstration. 360-degree, high-definition panorama experience, both high-definition video and high-definition audio, and just a tremendous product to augment your meeting room to provide that look and feel.

GURDEEP SINGH PALL: Great.

ANDY MILLER: Finally, as a gift for everyone in New York today, in your bag is actually the Polycom CX 100 which is basically a high-definition audio speakerphone that actually you can plug in with USB into your PC and have that room experience on the go. So, it’s a gift jointly from Polycom and Microsoft, and it’s our pleasure to provide that to you.

GURDEEP SINGH PALL: Thanks, Andy. Thanks for introducing us to these devices.

Now, let’s shift gears a little bit. I know that video is really, really important to our customers. But today with some of the dynamics that are happening in the industry, our customers are really facing a tough choice. They’re being led down a path where they can be locked into proprietary, end-to-end, expensive systems which follow the mainframe era economics that I talked about earlier.

Now, I think it’s very important as we build out Lync that we have a great open ecosystem so that customers have choice and they can really pick and choose what they want instead of being hostage to one particular vendor. Can you tell us more about that?

ANDY MILLER: Sure. Like you do, Gurdeep, I travel around the world almost on a weekly basis and talk to many customers. What we hear day-in and day-out express your enthusiasm, is all about open standards and it’s about interoperability. They want to be agnostic to their enterprise platform. They want to be able to go internally. They want to be externally outside the firewall, and then finally they want to have that business-to-business experience, to go through the service provider without being tied to closed standards. So, the whole facet of interoperability and open standards, being able to transverse internally and externally to go through the firewall and to work with service providers in a ubiquitous manner is something that I think we both bring to the party and actually completely differentiate ourselves against our other competition.

GURDEEP SINGH PALL: And that’s so important to us. You know, we made sure that our codex interfaces are open for anybody to plug in from a video perspective. We’re not using the excuse of standards and saying, well, people have not yet finalized on standards, so let’s stay proprietary until then. We’re saying everything is open today and we’re actively involved in the standards process, including UCIS so that we can get the industry along to align on standards so that the expensive gateways and transcoding is also not required in the future. So, this is an extremely important element of our partnership, and I really, really appreciate everything that Polycom has done, and I thank you very much for being here for our event today.

ANDY MILLER: I would like to speak on behalf of all the partners that are here. Having worked with you for a long time now on Lync, to be able to be here today to launch Lync is not only a great event, but for you to showcase all the technology, it’s fantastic. So, wish you the best of luck, it’s a great partnership, and thank you very much.

GURDEEP SINGH PALL: Thank you very much, Andy. (Applause.) Thank you very much folks, back to you Chris.

CHRIS CAPOSSELA: Great. So, it’s great to see the partner ecosystem really rallying behind Lync, but it’s also been fantastic for us to work really closely with customers during the early adopter cycle. And we’ve seen fantastic companies like Estee Lauder, Boeing, France Telecom, AstraZeneca, Shell, et cetera, really embracing Lync.

And typically the cost savings that every customer we talk to is looking for today comes through a bunch of different areas. It typically comes through reduced travel, it comes through real estate redesign where when somebody’s building a new building or moving to a new facility, they’ll take advantage of Lync in a far deeper way, and not put in a PBX in that particular space.

They’ll look at cost savings from an entire PBX replacement, and then of course they’ll look at lower IT costs through reduced helpdesk. So, we’re seeing real business cost savings like reduced travel, et cetera, and real estate, as well as hardcore IT savings around PBX replacements.

We’ve been very blessed to have a wonderful set of customers working with us and we’re really excited about that. We’ve also worked with Forrester and commissioned a study on what the average savings might be for a 5,000-person organization. They’re publishing that report today, and in that report, they found that there’s about $18.6 million in benefits over a three-year period, and up to about a 340-percent or 337-percent ROI adjusted over three years.

So this is a generic 5,000-person organization. But then as you talk to individual customers, you’ll hear very specific things. So, why don’t we roll a quick video of those customers, then we’re going to have a quick panel discussion that Ted Schadler from Forrester is going to lead us through. So, let’s see the video.

(Break for video presentation.)

TED SCHADLER: Good afternoon, everyone. My name is Ted Schadler, I’m vice president and principal analyst at Forrester Research, and I’m honored to be joined on stage today with three people that have implemented and have experience with Microsoft real-time collaboration and with Lync. They’re here to share their experiences with you to give you some sense of what the impact is. I’d like to start, actually, by asking you to share a fact or two about your organization and really the key business challenge you were facing that Lync helped you solve. Earl, why don’t we start with you.

EARL NEWSOME: Sure, thanks, Ted. Earl Newsome from Estee Lauder. We’re a global leader in luxury beauty products. We have over 25 brands in over 150 countries. As such, as a retailer of global luxury beauty, we’re actually seeing the digital age actually beginning to impact the way our customers interact with us.

In order for us to respond to that digital age, we need to build a modern workplace which actually accelerates the digital evolution for us.

TED SCHADLER: Great. Thank you so much. Juan, why don’t you tell us what you’re doing down in the Dominican Republic.

JUAN PABLO NOBOA PAREDES: Sure. We had the challenge where we had to go from a few hundred users to a thousand users and keeping the budget in place. We have to remember, we’re the Ministry of Education, we’re not a technology company. So, we had to innovate with the implementation, and we have to integrate.

So we chose Lync due to the fact that it allowed us to bring people in at a low cost, reuse what we already have by implementing software on the computer and allowing that computer to become not only a computer but a work station where you have everything that you need from your Office applications to your phone applications. So, that was the challenge that we accomplished using Lync.

TED SCHADLER: So, this Bill Gates vision actually comes true for you. You take an exciting PC and able to turn it into a collaboration communication device.

JUAN PABLO NOBOA PAREDES: That is correct.

TED SCHADLER: Excellent. That’s a great story. Werner, thanks for joining us. You’ve come from Germany. Why don’t you share a little bit about your organization and the key challenge you’re facing here.

WERNER WIND: Sure. I work for Herrenknecht Group as the CIO. At Herrenknecht Group, there are about 3,000 people working there in more than 60 subsidiaries and affiliated companies. Herrenknecht is world market leader in tunneling systems and designing, manufacturing, and selling these globally throughout the world. We have the challenge in the Asia-Pacific market where we have several subsidiaries, it’s a very strong market, and the CFO, Eric Bouchard (ph) of the headquarters in Singapore came up to me and said, “We have to reduce cost and on the second, we want to raise our productivity.” This is where we used OCS and Lync to help them out.

TED SCHADLER: Wow, very, very interesting. So, Chris mentioned the Forrester study, and in it we certainly found savings from things like PBX replacement and whatnot, but you also have achieved other benefits, and I’m hoping you’ll share a few of those with. Perhaps, Juan, you could drill into a few of the benefits you’ve seen in adopting Lync.

JUAN PABLO NOBOA PAREDES: The benefits of adopting Lync as a means of communication, it came when we had to implement — we have about 8,000 principals, school principals. So, we have to provide them some tools so they can work. We provide them with a laptop and a 3G connection and allow them to have Lync on that laptop with a 3G connection, we give them mobility, but we also give them a place where they can actually go to work. So, wherever they go, they can actually communicate with peers.

TED SCHADLER: So they can be productive, they can connect, they can find and collaborate with each other wherever they are.

JUAN PABLO NOBOA PAREDES: That was what we tried to accomplish, and we did using Lync.

TED SCHADLER: Wow, that’s so interesting. Earl, yeah, please.

EARL NEWSOME: Let me jump on that because I think it’s very important because with 150 countries and over 25 brands that you all recognize like Estee Lauder, Clinique, Mac, et cetera, as we think about how we actually have to operate in that new world, what we use Lync to do is to really embody the experiment of the digital marketplace, the digital workplace. We tried to deliver on the principle that work is something that you do and not a place that you go. That principle in and of itself really allows for us to create that collaborative work environment where location is less determinant of the work that you actually do.

So across 150 countries with over 30,000 employees, we’re able to unleash the creative, the creativity, and the innovation of our company.

TED SCHADLER: So it really unlocks and allows people to connect in ways, regardless of where they are, so they become location agnostic. They don’t care where they’re working from. There are some additional benefits, Werner, you were sharing with us about using the Lync product and some of the integration with some of your suppliers and some of your other systems. I hope you can share some of those benefits and impacts with our audience as well.

WERNER WIND: Sure. Since we’re a manufacturing company, we also have different design departments all over the world. So, we do need an infrastructure where we can collaborate. So, what we did is we shifted actually our mobile costs, and the costs that have been created through PBX onto this existing infrastructure, making it possible to get the benefits there, on the one hand. Additionally, we provided video conferencing to the internal use as well as for suppliers and consultants that work on projects together with us. And also we’re able to provide the productivity that was asked for at the end of the day, and the people are really excited about it.

TED SCHADLER: Yeah, so communication forms the foundation for this collaborative enablement that allows the workforce to work productively and connect with each other. And as you know, of course, a small benefit can have a big impact on the bottom line as people drive forward.

EARL NEWSOME: Yeah, let me jump on that too because I think there’s a pretty interesting point there because one of our kind of principles is that we think that we want to imagine the future, then innovate to achieve it, and then integrate to make it happen on a day-to-day basis. Integration of all these various technologies, that I heard Bill and others talk about, and we’re not only integrating Lync to try to connect people, but we’re using Office, we’re using SharePoint, we’re using all the Microsoft suite to actually create this new modern workplace for our employees to operate and innovate in.

TED SCHADLER: So this integration comes up a lot. I’m sure many of you are wrestling with the best-of-breed versus integrated approach. We do have some experience here, please, Juan.

JUAN PABLO NOBOA PAREDES: Yeah, one of the things we’ve done on the integration part is we took Service Manager, one of the tools that you have with Configuration Manager, to manage all the network and all the computers, and we implement the Service Manager integrated with SharePoint and now the user can open the ticket on SharePoint. That ticket goes up to the agent or the technician, and that technician can actually see if the person is online, click on it, call them and actually share the desktop, fix the problem without moving himself and relocating himself or going to the user. He can do it right from the desk where he’s at right now.

TED SCHADLER: So benefit comes directly from integration.

WERNER WIND: OK, so integration is very interesting. I think there are very different ways at looking at integration, and I want a ticket with the presence information because I believe you cannot overestimate the value of presence. If you take this presence information and you’re able to really integrate it into an environment that really fits smoothly together, for instance in how the e-mails, which is more or less the business content, if you have the SharePoint site or the intranet sites that you’re collaborating on, if you have the project plans and you have this presence information everywhere, even on your mobile phone, that’s when it really kicks in that the people say, wow, I’m going to use this because of the business content right there. So, that’s when, from my point of view, this integration benefit is one plus one equals three.

TED SCHADLER: Yeah, that’s very interesting. And I’d like to ask our audience a question here, so out of the blue. So, with apologies: How many of you, by a show of hands, think that presence is going to be a critical piece of infrastructure in your organizations going forward? Almost all of you. Good. Good. Well I certainly believe that. I’ve believed it for a long time. It’s great to hear how it’s making a difference in your organization.

EARL NEWSOME: I want to add on to that because I think that’s an interesting concept here because I’m thinking about the costs of collaboration. You know, if we think about we’re moving from an economy that moved at Internet speed and now we’re moving at digital speed. And moving at digital speed means the cost of collaboration and actually making that connection as fast as you possibly can becomes increasingly more important because we compete on a global market, we need to react on a global market, and we move at this digital speed.

TED SCHADLER: So you’re really — you’re talking about the business impact of the real-time tool set and the Lync product. Yeah, absolutely. Please.

EARL NEWSOME: I mean, absolutely, because I think the rea-time impact is being able to react and to think and communicate in real time, and then be able to respond to those customer demands, wherever they may come from, whether partners, customers, employees, or consumers, we want to react to those things in real time.

TED SCHADLER: Please, Juan, anything you want to share?

JUAN PABLO NOBOA PAREDES: On the same line, we actually have the same thing. We have multiple locations. So, allowing teachers, allowing principals to share the stories with different communities and what worked in their school might work in another school where they’re totally separated physically, Lync has allowed them to share the stories across the country.

TED SCHADLER: So it bridges the physical gap, the location space between them allowing them to work together.

JUAN PABLO NOBOA PAREDES: Yes.

TED SCHADLER: In any global enterprise, this is clearly an issue as well. Any final thoughts on this one, Werner?

WERNER WIND: Well, if you’re talking about looking for benefits for your business, if you’re in charge of technology, I think UC is a hot spot to look at, and the good news actually is if you’re looking at technology, technology is not the problem anymore. Technology works very well. You see wonderful devices there that we also use, and they really work well. And Microsoft Office provided the product that really works well in that concern.

At the end of the day, if you’re trying to implement this project, it’s about the people, actually, that you’re trying to provide this new technology to. So, you have to sit together with these people very carefully and listen exactly what they want and what they don’t want. So, we really paid a lot of attention by choosing the right devices that the end users really want and are willing to use. If you don’t have that, technology by itself won’t help.

TED SCHADLER: Yeah. I think we’ll let that be our closing thought here. Thank you so much for sharing. Thanks for joining us on stage today. (Applause.)

CHRIS CAPOSSELA: Great job. Thanks so much for being here. Well done, thank you so much for your time. Earl, thanks so much, great job.

So, again, always great to hear from real-world customers their excitement for this space and what they’re doing to use software-powered communications to really bring their workforce or their organization forward.

So Lync is available today — or I should say December 1st — for on-premises deployments, the Lync server product. We’re also working very hard to bring Lync to the cloud. We’ll have Lync Online available as a part of Office 365 when Office 365 is available in 2011. Lync Online will allow you to do instant messaging and presence and audio and video and Web conferencing and PC-to-PC voice, which were many of the things that we demonstrated for you today.

So, again, we’re very committed to giving customers the cloud on their terms. If they would like to run their own technology on-premises, absolutely. If they would like Microsoft to run it on their behalf in the cloud, we’re making that possible as well.

So we’re very excited about what we’ve delivered today, but also the roadmap that we have going forward. This is a really, really big moment for us, and we couldn’t be more thrilled with the partner and customer support that we’ve gotten. Wonderful to have Bill here sharing sort of the go-forward vision of what software-powered communications can do.

I want to thank everyone for all of your time. We really appreciate it. I’d encourage you to sort of play with the stations that we have set up here and check out that great device wall. There are going to be a lot of folks milling around from Microsoft who can answer your questions. Thank you very much. (Applause.)

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