Jeff Raikes: Convergence 2006

Remarks by Jeff Raikes, President, Microsoft Business Division, Microsoft Corporation

Convergence 2006

“Supporting the People-Ready Business”

Dallas, Texas

March 26, 2006

ANNOUNCER: Ladies and gentlemen, please welcome Senior Vice President, Microsoft Business [Solutions], Doug Burgum. (Applause.)

DOUG BURGUM: Wow. Good morning, Convergence! You just saw Mass Ensemble; weren’t they fantastic? (Cheers, applause.) What a great way to officially kick off our 10th Convergence.

Above and beyond the great performance that you just saw from Mass Ensemble, how they do their creative work ties directly in to the theme that we have for this gathering, that theme of where it all comes together.

Music in general is such a great metaphor for teamwork, but Mass Ensemble specifically was setting the tone for what we want to accomplish over the next three days, each member of the group with their specific role, building on each other, being informed by each other; together literally building the beat and producing such a beautiful and unique sound.

But just as Mass Ensemble is greater than the sum of its parts, we have an opportunity together over the next three days to create something more than just another business conference. As you saw in the opening mosaic, the pictures all coming together, those pictures were literally a reflection of you. We put out a call and in less than a week we had over 600 digital images sent in of you, our partners, our customers, our solution providers, and that’s a reflection of this community, of you, your talent, your diversity, all coming together and creating a single and vibrant community.

So when we think about Convergence, it is the manifestation of a community that exists all year round, but this is the physical representation, the time that we get together to be here face-to-face, and this community from around the globe of partners and customers and ISVs and solution providers and our team members has an opportunity to work together to really help transform and create more success for each of you.

I think that we can see this community has meaning and there’s meaning here, because each year many of you return and each year this grows, and as we hit our tenth year we’ve got a record attendance of over 7,000 people registered to participate during the next few days.

And from this outcome over the last ten years, from those small, humble beginnings 10 years ago with less than a hundred customers at our first Convergence, we’ve had 10 years of not only just growth, but we’ve had 10 years of ideas, of business relationships, of solutions, of knowledge, and occasionally even a little inspiration coming from Convergence.

But these great outcomes can’t just happen without one special ingredient, and that special ingredient is you, our customers. You’re at the center of our community, you’re the folks that really drive what we do, we meaning ourselves, Microsoft, and our partners, and I want to at the start of this conference just spend a minute and tell you personally how deeply grateful I am for the trust that you’ve had to entrust your business to our solutions.

I want to also tell you I want to thank you for your investment of time to be here away from your businesses, away from your families, the sacrifices you’ve made, the dollars you’ve spent to come and participate directly as part of the Convergence community.

So again I want to thank you for all of that, and I want to take this moment as we kick off the conference to ask all of the Microsoft team members and all the Microsoft partners to join me in thanking you, our customers, for being the lifeblood of this community. (Applause.)

We have a great conference set up, and many of you have already been benefiting by coming in early for the conference, being here yesterday to learn more about specific industry solutions, and this is a fantastic time for you to gain more knowledge. Convergence has always been about learning, learning has been at the center of what this event has been about. And with that learning, it’s not just static learning, it’s learning to help you make better decisions, to help your businesses grow, to help you expand, to help you improve your competitive advantage.

And you have an opportunity as being part of this community to also give something back. You heard Matt talk about it this morning and in the video; your voice matters as part of this community.

And so I want to also, in addition to opening with a thank you, I want to open with a challenge, I want to open with challenging you while you’re here to press yourselves to go even beyond your comfort zone, to jump in, to interact, to ask questions, maybe even ask tough questions, blog, spend time at the expo interacting with the solution providers that are there.

And sometimes this level of interaction to get outside your comfort zone takes a little courage, and I think that one of the things that we want to do sometimes when we talk about business practices, it’s good to practice a business practice, and so if Convergence is about learning and it’s about learning from each other, it’s about building new relationships, then we want to take a 90-second practice session right now to help all of us get out of our comfort zone and to challenge this morning to open up, everyone is going to meet someone in 90 seconds that they’ve never met before. And I’m sure there’s someone very close to you that you’ve never met. And unlike other tests that you may have had sometimes where there’s sort of no score, we’re part of the old fashioned thing, there will be a test, there will be a test on this quiz. So 90 seconds from now I’m going to ask you if you can remember the name of the person that you met, and then the other thing you need to find out is did they ride the bull. (Laughter.) OK, good luck, you’ve got 90 seconds; meet somebody new. Stand up!


DOUG BURGUM: OK, Convergence, 90 seconds, well done. And now for the quiz. On three, you’re going to shout out the name of the person that you met. OK, ready, everybody together, 3, 2, 1. (Shouts!).

OK, now, next question, yes or no, did they ride the bull? (Shouts!). I met one right up here, Eva rode the bull. Eva, stand up and give them a wave. All right, good job. (Applause.)

You know, I don’t know if any of you follow rodeo, but eight seconds is what you have to beat in bull riding, very few cowboys are able to do that. Eva shared with me she rode the bull for 43 seconds last night; I think we’ve got a winner down here. Should get her a big belt buckle.

Anyway, I’m very excited about having all of you here, I’m excited about the learning opportunities we’re going to have, I’m excited about the new people that I’m going to have a chance to meet, I’m excited about the old friends that I’ve met at Convergences, customers we’ve had for a long time, partners that we’ve worked with for decades; this is a great gathering to have everybody back together and working together, innovating and thinking about where we’re going to go next.

And we’re very fortunate to have such great content throughout the conference, but I’m also really excited about our first speaker this morning. Jeff Raikes, when he joined Microsoft 24 and a half years ago, Microsoft had 100 employees and $12 million revenue. Think about that. I’m sure many of you have businesses of similar size today, and are thinking about how can we grow our business, how can we add the next employee, how can we add the next set of customers. It turns out Jeff’s got a lot of understanding about what you’re going through as you try to grow your small business and to become a midsized business and how to get a midsized business to be a large business.

When Jeff first joined, he was Microsoft’s very first product manager, and later in the latter part of the 1980s under Jeff’s leadership, Jeff drove the innovation, both the product innovation and the business transformation that became what today we know as Office.

Office has been described by many people who follow the industry, and not just the software industry but all industries in general, it’s been described as one of these top business franchises of all times in terms of its breadth, in terms of its success, in terms of its impact on the planet.

It’s estimated that there’s over 450 million users of Office today in the world. And if you get a chance to have a conversation with Jeff, he might share with you that not all 450 million of those have paid for it. (Laughter.)

But Jeff grew up on the Raikes’ family farm near Ashland, Nebraska, a small town in Nebraska. He did something that not a lot of farm boys from Nebraska do, and that is he had an opportunity to attend Stanford as an undergrad where he studied economics and engineering. He joined Apple, and he was with Apple for just under two years before he came to Microsoft.

Today, 24 and a half years later, he’s the president of the Microsoft Business Division. He’s also a very passionate believer in the power of software and how software can enable each of you to create a People-Ready Business.

Ladies and gentlemen, please welcome Jeff Raikes. (Applause.)

JEFF RAIKES: Well, thanks very much. Doug forgot to tell you that I’ve been at Microsoft 24 and a half years, he told you that, but he didn’t tell you I started when I was 13 years old. (Laughter.)

It’s a great pleasure to be here today, and I want to thank all of you, as Doug did, for your commitment, the time, the investment. You’re very, very important to us. And the fact that you’re here on a Sunday morning in Dallas I think shows your depth of commitment. We’re going to go our very best job to make sure we show you our appreciation and use this as an opportunity to extend the community.

I’m certainly very, very pleased to be here today. And I know a lot of you have been to Convergence before, in fact, greater than 50 percent, and I want to have a special welcome to all of you, and for those of you who are new to Convergence I want to have a special welcome to you as well.

You know, Doug mentioned that this is the tenth Convergence, very important milestone for us, 10 great events, 10 great years of really having this kind of dialogue with our customers.

For me, one of the things I reflect upon is this is the fifth Convergence or the fifth year with Great Plains and Doug being a part of the Microsoft team, and that’s a very important milestone in my own mind.

Because I think back to the year 2000 and early 2001 when we made a big decision at Microsoft to team up with Great Plains and Doug to really take information work productivity to the next level, and I’m going to talk a lot about that today, the context of business process systems and business process productivity and how that relates to the broader aspects of productivity like Microsoft Office.

So I’m really pleased to kick off this event, and I think I have a great opportunity with you to use my remarks to set the tone, the vision for what we are trying to do, what Doug mentioned as enabling the People-Ready Business.

Now, this is a vision that had its formal coming out party, its launch last week in New York City, Steve Ballmer and I kicked this off, but, of course, that’s just an event that really represents years of investment, years of commitment of working with you in order to achieve that vision. And while we are now articulating that vision more broadly, I do want to emphasize that that’s an ongoing commitment, an ongoing investment; much more than a sales and marketing campaign or anything like that, it is a vision that drives our investments and what we’re going to do.

Now, my role today will be to share with you the thoughts on People-Ready Business, but also use this as an opportunity to engage in a dialogue with you. We’re going to leave time for Q&A, some questions were submitted in advance. At the end of my remarks, we’re going to bring up the house lights and invite you to the microphone. I know you’re not bashful, I want you to be thinking about the things that you would like Doug and I to address, and we’re going to do our best job.

So as I continue on this discussion of enabling the People-Ready Business, let’s first look at Microsoft today. Now, some of you may be aware that we had a fairly significant move in how we structure our business this last fall, we aligned our businesses into three divisions. And this is really a focus for us in realizing Bill Gates’s vision for our company in this decade. You know, back in 2000, he laid out the vision and he described it as the digital decade where our goal would be to use the magic of software to break down the boundaries that sometimes disconnect people from their information, to eliminate those boundaries or seams.

And I think it’s very important for us all to recognize that technology and in particular the opportunity of software is touching many facets of our lives. And so what we’re doing is we are setting up our structure at Microsoft to be able to help respond to this important theme, this theme of a digital decade.

One of my colleagues, Robbie Bach, leads the aspects of software technology in our personal lives, what we like to call the digital lifestyle. I mean, he’s the president of the Microsoft Entertainment and Devices Division. My responsibility, working with Doug and the other members of the Business Division team, is to take the leadership on the digital work style, how we use these technologies, how we use software in our professional lives. And another of my colleagues, Kevin Johnson, also with Jim Allchin as co-president, lead the [Platforms}and Services Division, and what they are doing is they are taking the leadership on the platform that enables both the digital lifestyle and the digital work style.

And as I’ll share with you later, that combination of focus is very, very important, it’s very powerful, and I think it really uniquely positions Microsoft to be the best company to be able to meet your needs.

Now, the Microsoft Business Division, as I mentioned, we’re very focused on taking the leadership on the digital work style, and that’s a very, very big part of our company. The Business Division, the business solutions that we bring to market, the Office product line, the Dynamics product line represent about a third of Microsoft’s revenue or about $15 billion.

And what I want to do is to set some of the context for our solutions. And when we think of that, I think we really have to step back and say where are we in the world, what’s happening. And the thing that really sticks in my mind, especially if I reflect on my 25 years or so in this industry, is just how much the world has moved to a global information based economy. Now, this gets talked a lot about now in the press, Thomas Friedman and “The World is Flat,” but these trends, these tools have been underway for quite some time, the workplace is changing dramatically.

You know, an interesting statistic was shared with me yesterday: Last year, in 2005, the billionth person came onto the Internet, the billionth person came onto the Internet. And to me it was an interesting statistic because it symbolizes just how much the world of information work is continuously changing. We really don’t work the same way today. One of the anecdotes that I often use with folks steps back to 1987 when I had to persuade Bill Gates that we should buy a company in Silicon Valley called Forethought. And I really thought it was important, and Bill asked me why, you know, what’s so important about this company, and I said, “Bill, they do software for overhead.” And I thought, well, you know, I do a lot of overhead, so I’ll bet a lot of other people do overhead. That was PowerPoint. I haven’t seen an overhead projector very much lately, but that’s because the world of information work is continuously changing.

And these trends can work for people or they can work against people, and part of our role is to work with you and the partners to be able to make sure that you not only survive but you thrive in this context.

Now, let me just share with you a little bit about some of the key trends, one world of business where people are required really to team across organizations, because we very much live in this global information-based economy, we compete in this global information-based economy, we need to be able to draw upon talent in our organization across geographic boundaries, across organization boundaries with partners throughout the country or throughout the world. The one world of business is a very important trend.

Another important trend we like to describe as people being always on and always connected. And this one I find also very interesting, because I remember in the late 1990s, 1996, 1997 there was this big issue about how are people going to get on the Internet, we worried a lot about that, getting people on the Internet. Now, if anything, people feel like they’re always on and always connected, and frankly not always excited about that. There’s a sense of information overload and a great paradox in that while you have this incredible wealth of information around you and that you can access, oftentimes there’s a sense of information underload, being able to get the information that you really need when you need it, and that’s a very important issue, a very important trend that falls out from being always on, always connected.

Another trend that I think is very important we call transparent organizations, and this has multiple meanings to it. It can have the regulatory meaning like Sarbanes-Oxley or Europe Basel II or the European Data Protection Initiative. There’s a lot of pressure on organizations now, a lot of pressure on your companies to have the right transparency of information in that kind of a context.

But it also has another meaning. In a global information-based economy oftentimes your most fundamental asset is the intellectual property, the information, the knowledge of your company. And given the technology that’s available today, that information, that knowledge, that intellectual property can walk right out the door. So in the context of a transparent organization, in that sense what is it that you do to be able to protect the information.

Well, these trends collectively lead to what we describe as the New World of Work, and many people feel the effects of these trends. But I’d say the most important point that we all have to remember is that people are at the center of this success, they are at the center of the economy, and really even more important they’re at the center of your business, your business success.

And when we think about business solutions, we then must really think about you and your people, what they do, developing customer relationships, driving innovation in your business, whether it be in products or services, being able to build the right partner connection, being able to improve operations; people are the key to business success.

And if we can amplify people’s impact, what we can do is we can amplify the success of your business.

Now, as I mentioned earlier, we recently launched this People-Ready Business vision in New York City, and as a part of that, we think it’s very important that we share the role of software, how is it that software provides this leveraged opportunity to amplify the impact of people.

Well, first of all, I think it’s very important to recognize that software must meet changing needs, they must meet the needs of this continuously evolving New World of Work.

Now, some activities day-to-day are going to really remain the same, but probably most important in the context of software is to think about the importance of agility. You know, there are going to be new opportunities, new challenges that pop up, and will your people be able to respond to those opportunities or take advantage of them, drive your success.

So you need software that has those characteristics, software that can support mission critical processes like simplify how people work together in teams, teams to be able to connect with customers, software that can foster compliance through process and content management, software that can facilitate the insights that people need in your business through better information visibility and search.

You know, it was interesting to me in our research we found that the average information worker spends as much as 30 percent of their time just trying to find the information they need to do their job, and that’s where software must step in and be able to help people get the right information at the right time in order to take the right action for your business. That is using software to amplify the impact of your people.

You need to have software that enables the efficiency through process excellence, and you need to have software that can help people work the way they want to work, anywhere, anytime.

But I think when you step back and think about that kind of software, I think it’s also important to recognize that there are certain requirements for these solutions, requirements that really must drive our investments in our innovations in software. First of all, it’s extremely important that the tools that your people use are familiar and easy to use.

You know, Doug mentioned that we have more than 450 million people around the world who are using Microsoft Office tools every day. That’s an incredible opportunity to take advantage of what they know in order to expand how they can use software in their jobs, and you’re going to see today how we’re bringing together Microsoft Office and Microsoft Dynamics in ways that use that familiarity, so it’s easy to use and pick up.

Software must be very well supported. That’s one of the great advantages we bring, a broad ecosystem or community of partners to tailor solutions to your needs, to your industry so that you have the choice of the solution that’s going to optimize the way in which your people can be most effective to the business.

You need to have software, and our goal has to be to make it easy to integrate or connect into your existing systems, and be able to help you build the new systems.

And finally, you need a software partner that you can count on to invest in innovation that will help you take advantage of the continuous evolution of the world of information work.

Now, I think it’s fair to say that Microsoft is very uniquely positioned, and in particular the business division of Microsoft is uniquely positioned to work with you in this regard. Your needs span a broad range, from horizontal or office type productivity to role-based productivity, and maybe I’m a purchasing manager or I’m a manufacturing manager, to business process productivity, what you see in the ERP system. Your needs span the more structured information of business process, and the less structured information that you see in common business collaboration. Your needs span what the individual can do, what teams can do, and what the company needs in terms of productivity.

And when I say the digital work style, that’s what I mean, our goal of being able to span those needs and be able to deliver the kind of software that can help people create, share and consume information, software that will span to these needs. Because it’s both about the breadth and the depth, and seamless access across those domains of productivity.

And that’s one of the reasons why we invest so substantially. We’ve spent several billion dollars on the wave of business products that are coming to market in the next 12 to 18 months. We’ve been investing in unified communications and collaboration, because we know that in one world of business the people in your business need to team together within your organization, across your organization to your partners.

We’ve been investing in content management so that you could have the ability to better manage the loads of content that’s being created, fit it into this transparent world that we live in, and make sure that it’s well protected.

We’ve been investing substantially in business intelligence so that we can do a better job of helping your people pull the insights from the information that already exists in your organization.

We’ve been investing in search so that people can rapidly find that right information.

We’ve been investing in mobility so that people can work in the style that’s most comfortable for them.

We’ve been investing in customer relationship management, supply chain management, and the finance areas in order to continuously improve those business processes.

We’ve been investing in workflow and portal software so that we can connect those business process systems together with those Office tools and automate those common Office processes that oftentimes are very paper intensive and can be very labor intensive.

And, of course, we’ve been investing in the underlying information work infrastructure to be able to support all of these areas.

Now, in order to help illustrate this, I want to take a look at a sales solution that is a combination of Office and Microsoft Dynamics CRM, and it will really help illustrate this combination of how people are able to work together on business process like CRM with their common Office tools like e-mail and collaboration.

So please join me in welcoming Kari Hensien. (Applause.) Good morning, Kari.

KARI HENSIEN: Good morning, Jeff.

Great, so for our demo this morning I’m no longer Kari the product planner, I’m taking on the role of regional sales manager for a company called Adventure Works Cycle. At Adventure Works Cycle we basically manufacture and sell bicycles, and it’s my job to make sure that those bicycles get into stores for our spring and summer sales cycle.

I’m going to start my day here where a lot of salespeople spend a significant portion of their time, and that’s inside of Microsoft Outlook. Outlook is the place I not only send e-mail, it’s the place I manage my workload. You can see here that I’ve received an e-mail from one of the members of my sales team, Nicole. Nicole recently returned from some sales visits. She’s letting me know that we have an issue with our spring sales cycle. Coalition, our major competitor, looks like they’re going into our customers and offering heavy discounts in order to secure volume.

Now, that’s important to me for a couple reasons: I don’t want to lose those sales and not meet my quota, but it also means that’s going to impact my profitability if I have to match their discounts.

So this is important for me to get to work on. The first thing I’m going to go ahead and do immediately is to track this in my CRM system. Now, you’ll notice that I’m inside of Outlook 2007, our next release of Microsoft Outlook, and Microsoft CRM fits right in as a part of the application experience.

Now, the great thing about tracking this mail in CRM is that CRM will now do all the heavy lifting. Any additional correspondence we have about this issue or the customers impacted will be automatically tracked for me.

The next thing I’m going to go ahead and do is flag this for myself to make sure that I spend some time on that. So I’m going to use a new feature in Outlook 2007 to quickly flag this and turn this into an activity or a task. One of the great things about that is that places that right up front and center on my to-do bar. My to-do bar is really the place I turn to, to figure out what I need to do next and what I need to be working on.

The next thing I might want to do is I might want to get my team together to talk about the new competitive threat from Coalition. But to do that, I’m going to jump over to my calendar, and one of the great things in Outlook 2007 is the ability to now overlay calendar capabilities. So you can see here that I have my team calendar up and going, and I can quickly and easily put my task right up on the to-do bar there.

So let’s go back to our In box here. I’m going to switch to the other client here. It looks like we had a little bit of a hang.

The next thing I want to go ahead and do is take a look at in many cases margin is an issue our company talks about all the time, profitability, it’s really important. And so I seem to remember a conversation we’ve been having about margins and where we were at, so I’m going to use a feature in Outlook 2007 that lets me quickly search and find related information right in my inbox.

So we’ll search on margins. And you’ll notice here that I have several items that come back to me. The first here is a mail from our CFO, Willis. Willis frequently communicates with us about our financial status. So you can see here that I have some information from him about our FY ’06 results.

One of the great features in Outlook 2007 is the ability to preview attachments. And you’ll notice that Willis has included in this piece of e-mail a PowerPoint that gives us an overview of our quarterly results.

So I’ll go back to the message in e-mail, and you’ll notice that one of the other pieces of information, since I didn’t get that PowerPoint presentation up, is there’s also a link here to our financial reporting dashboard. So I’ll click on the link to go to the dashboard, and that dashboard is going to give me information from several systems.

JEFF RAIKES: I think it’s important to point out, right, Kari, that the preview capability can be for PowerPoint, for photos, for common documents so that you’re able to preview them right in the context of what people are doing, which is a part of this providing a familiar and easy to use environment that really helps them save time.

KARI HENSIEN: Absolutely. Bringing up that PowerPoint presentation, it would allow me to click right to it and see the information without having to jump over to Microsoft PowerPoint.

JEFF RAIKES: And similarly, being able to try and get to the key financial information that’s a part of how I do my job.

KARI HENSIEN: Great. So here comes our reporting dashboard up, and you can see here that there are several parts on this dashboard. Now, this is a dashboard built on the next version of the SharePoint Server, and it allows me to bring in information from multiple systems.

The first thing you’ll notice here is that I have a KPI list of key KPIs coming from my back-end ERP system. And you notice that our issue is really about profitability and profit margins, and you can see here our company right now isn’t making our goal. If this is the only piece of data I had, I might not want to meet that competitive pressure from Coalition.

You’ll also notice that I have a chart coming from my CRM system showing me how we’re doing with sales. And then thanks to SharePoint, we’ve also included some unstructured content, some documents and even a new list type which allows me to blog.

Now, the blog is what was really interesting to me here is because there is some key information there about what’s going on with margins, and it’s actually telling me that margins aren’t as bad as they seem, we’re actually very close in the volume of bikes that we have, so qualifying for some discounting on purchasing parts to make it, so our cost of goods will potentially go to decrease that. That basically allows me to see all the information I need to make a more informed decision. I think I’m going to meet Coalition’s price.

Let’s go ahead and let’s go back into Microsoft Outlook. And I’m going to take a look now and see I’m curious about how many opportunities in my pipeline is Coalition a part of, what impact are they going to have competitively for me.

So to do that I’m going to dump into my opportunities in the CRM system.

JEFF RAIKES: Of course, the user experience is integrated right into Outlook, so you actually went to Outlook actually to access the CRM system.

KARI HENSIEN: Yeah, absolutely. So you can see here that I have several opportunities in my pipeline. One of the features I’m now going to use is something called Advanced Find. In Microsoft Dynamics CRM 3.0 we now allow to search across entities to create views on the information. And in advanced find I’ve created a query that allows me to find all opportunities with my competitor specified as Coalition.

JEFF RAIKES: And how many different types of — or is there a limit to the number of views that you can have?

KARI HENSIEN: There is no limit to the number of views you can have for entities.

So you can see here I have a view of opportunities by competitor. I’ll just open that up to quickly show you the queries, and you can see how simple it is. I just simply had to select competitors where it equals Coalition.

Now, I don’t have to go to advanced find, because I’ve saved this as a view, and Microsoft CRM exposes these views right on the entity itself. So I’m going to drop down the view menu and select opportunities by competitor, and that’s quickly going to bring up all the opportunities I have right now where Coalition is viewed as a competitive threat.

Now, this is a great list that we could take action on as a team, but what I might want to do is prioritize these opportunities, which ones should we be working on first.

So to do that, I’m going to do some ad hoc analysis in Microsoft Excel, and I’m simply going to open this information into Excel as a dynamic worksheet. Microsoft CRM uses a secure filtered view capability to allow you to bring in live data into Microsoft Excel to do that analysis.

Now, the great thing about that is when I set it up as a dynamic view and share the worksheet with my team, different members of the sales team will only see their opportunities, they’ll only see the information they’re allowed to see.

Now, what I can do that I have this inside of Microsoft Excel 2007, I can quickly and easily apply some conditional formatting. So the first thing I think I want to do is just try to figure out which are my highest revenue deals to indicate volume, and then the next thing I’m going to do is try to identify which of these deals are closing, and so I’ll just quickly and easily find the top 10 percent there.

And now you can see that I actually do have a couple deals or opportunities in my pipeline that are significant in revenue and also are close to closing.

So I think what I’m going to do last here is go ahead and share this with my sales team, and we’ll prioritize those two opportunities as the ones we want to work on and get closed.

So the way I’m going to do that is use another great feature of the Office System, which is the Excel Server, which ships in SharePoint. And this allows me to quickly and easily publish and share this ad hoc report with my sales team.

So what have I attempted to show you today, Jeff? I’ve attempted to show you how Outlook and CRM allow a salesperson to organize and get their team going and work more effectively. I then have taken the competitive pressure and done some analysis on that, how is it going to impact my company’s profitability. I used SharePoint Report Center to identify that it wasn’t as big an issue as I had thought, so I can meet my competitive price. And then I concluded by trying to prioritize the opportunities in my pipeline using Microsoft Excel to see where my teams should be focusing their time. That way my team and I can be more productive than ever.

Thank you, Jeff.

JEFF RAIKES: Kari, thanks very much. (Applause.)

So there was a lot there in what Kari was showing you, the new user experience of Office 2007, which makes it much easier for people to get to the capabilities they need, the way in which it connects with CRM and the SharePoint Portal capability in order to provide better access for information.

The key point that we wanted to show is whether it’s very structured tasks and structured information or the less structured information like that blog piece, those need to come together in order to amplify the impact of people. It’s the broad productivity need that I think is very important to get connected to these business process needs.

And, of course, our investment in the Microsoft Dynamics product line is much broader than CRM. Let me go ahead and just remind you. Last year, at Convergence we laid out our roadmap, our roadmap that guides the billions of dollars of investment that we’re making, and we really broke that out into two waves. We talked about Wave l,, which extends through the year 2007, where the key theme is the user experience and the integration of the product line, where you have role-based experience, portals and collaboration capabilities, SQL and Office based business intelligence, and easy integration via Web Services.

And I’m very pleased to say that as we’re halfway through that wave, we’ve been able to deliver on the commitments and the goals of the wave. We’ve shipped Dynamics CRM 3.0, GP 9 and SL 6.5, and we’re making very good progress on Dynamics AX 4.0 and NAV 5.0. And within the next year as well we’ll have GP 10 and SL 7.

So all of these product commitments that we made as a part of wave one have either been delivered or are well underway as a part of this first wave that extends through 2007.

And similarly, we’re well into the planning process and beginning development of wave two that goes from 2008 and beyond where the key driver will be taking the core business logic and making that model driven. And that will make it possible for the user experience, the user interface to be easily reflected in business process, and ultimately then to continue our progress on role-based productivity.

Now, to give you a sense of these investments, I want to invite the fabulous MattG to the stage for a demo of our Wave 1 progress. Matt? (Applause.)

MATTG: Thanks, Jeff.

Except today I am not the fabulous MattG.

JEFF RAIKES: Oh, sorry.

MATTG: Today, I am the fabulous Tony, production manager at Adventure Works.

JEFF RAIKES: Nice blue hat there.

MATTG: It matched the shirt. (Laughter.)

Now, as Tony the production manager at Adventure Works Cycle, I basically have two jobs. First, it is my job to guarantee that we have enough bicycles manufactured and ready to fulfill all of those orders that we saw Kari taking earlier. My second job is to make sure that I reduce the cost of making all of those cycles to have a positive impact on our bottom line. And the Microsoft Dynamics product family gives me a lot of different tools to do that.

So let’s take a look at how Tony would start his particular day. You can see here on Tony’s homepage again it’s got kind of that Office Outlook look and feel to it. I can certainly spend my day there. If I want to maximize this space, I can also get rid of that nav pane and then look at the homepage that we’ve created for Tony. And, yes, it is, as you mentioned, persona based, role-based, this homepage has been built just for production managers. You can see that the to-dos and reminders up here are things that would impact a production manager like me. The quick links are down here, all the things that I as a production manager would need to go into the system to do, the metrics, things I need at my fingertips to help make decisions as a production manager. And I know we’ve done research enough to know that Tony spends a lot of time in Outlook, so we’ve surfaced that on his homepage as well.

Now, as I mentioned earlier, the Dynamics product family has a lot of different tools at my disposal to help me do my job, so let’s take a look at a just a couple of those. One of the ways that I can help control expenses is to make sure that the components that are coming into my factory are coming in at the costs that I actually expect from those purchase orders. And in this case I’ve got SQL business alerts set up to remind me or to tell me if that’s not the case. So we can pull up this particular reminder that says something is amiss here, I’m receiving items into my factory at a higher cost than what I expected when I originally made the purchase order, and it looks to me like this Kruger Engineering seems to be a repeat offender in this area, so this is definitely going to trigger me to go and make a call to procurement and find out exactly what’s going on over at Kruger Engineering.

Another way that I can help minimize my costs is to do some pro forma analysis of exactly what’s going into the cost of each one of these bikes that we’re producing. So let’s go down here to my reports. You’ll notice that this is a fairly important report for me, so I’ve put it on my reports and it surfaces on the homepage. And with the power of SQL views behind the Dynamics product, I can go in here and with a SQL reporting services report get a breakdown of exactly what goes into each one of these bikes that I’m making. And you can see here that I’ve got the shifter and the wheel assembly, as you’d expect the frame, the brake assembly, this is what’s making up most of the cost of this particular bike, and depending how detailed I want to do, I can drill back into those if I wanted.

I can also use SQL reporting services and SQL views to spot trends. I’ve got a production cost analysis support that’s also important to me, and I can see in this particular case the shifter for one of those mountain bikes we’re making has gone up in price here over the last six months about 40 percent. Now, that’s definitely an alert, something that’s going to trigger in my head that I need to go and take some action on that.

Fortunately, this happens to be a vendor that we’ve been working with, our product engineers, and they’ve developed a new shifter and we’re going to put that into production here, and it’s not only cheaper for us to purchase, it’s easier to install, which should have a dual impact on the cost of the bike because it’s just lower the cost of components, lower the cost of labor.

I’d like to know exactly what that is going to do to my cost of making the entire bike. So let’s pull up this particular bike, go in and do a little bit of what-if analysis on this. You can see here all of the components that make up one of these mountain bikes over here. I’ve already gone in and made an adjustment for the labor, I know that it’s going to drop down the hourly time it takes to build the bike, so we can see that reflected here. And I’ll go in and change the shifter costs as well. I know they’re going to be coming in at $15. And with a single click, I can roll that up all throughout the entire system, so I can see exactly what that’s going to do to the bottom line of not only this bike but any of the bikes that happen to be in my factory that use that same shifter, with the click of one button here I can make all the GL adjusting entries, I can go in and update the inventory for me automatically, because it understands the overhead, it understands the routing through the factory, understands all of the little components that go into making this bike. And I can see the net effect of that for the bike here. It’s very quick and easy to make my life a lot better.

Now, another way that the Dynamics system helps me, Tony, is communication with my vendor. Periodically as part of our operations we’ll go through and do some contract negotiations, and that’s a monthly type of thing that we do, and it comes up again as a reminder that I need to go and do that. I’ll pull up a little list here of all of my mountain bike vendors, time to go and renegotiate their contract. Here they all are, and with a single click of a button, rather than transferring all that data out somehow and getting it in, I can just go in and create a contract renewal meeting notice or any other type of letter that I want to create in the system. And with, what is that, two clicks, three clicks, something like that, I’m going to be putting all of that information directly from the Dynamics system and auto generating that in, in this particular space, we’re going into Word 2007.

So you can see what we’ve seen here today is from the CRM side where Kari was over there tracking the prospects all the way to the customer relationship management, the sales process, here into the factory and helping us get those orders delivered, the Microsoft Dynamics family of products just makes everybody’s life better.

Thanks, Jeff.

JEFF RAIKES: Matt, thank you very much. (Applause.)

Well, as I think you could see with Matt’s demonstration, there’s a lot of interoperability and really puts people in the context of their role so that they can be that much more effective, we can amplify the impact of what they can do in their role. With the combination of CRM 3.0, GP 9.0 and the Office 2007 system, it’s a great opportunity for you to drive role-based productivity in your organization.

And Doug and I were chatting last night, in particular I think the momentum that we’re seeing with Dynamics CRM 3.0 is something that every one of you should be considering in your business. And, of course, there’s more to come with Dynamics GP 10.0 where we’ll do even more to take advantage of the new line of Office 2007 servers. So lots of great investments that are intended to facilitate this goal of role-based productivity, amplifying the impact of your people in what they do.

It’s about the software but it’s also about the community, they’re equally important. And so I want to take that next step and talk a little bit about some of the great examples that represent this theme.

You and your businesses, you need tailored solutions. And fortunately, Microsoft has always had a history of investing in a broader partner ecosystem. And one of the things that’s a very exciting tool for you is Solution Finder, which you can find on in the Dynamics section. Solution Finder is a way for you to look at more than 5,000 solutions that are available in over 130 countries, and there are 675 of these solutions, in fact, more than 15 percent of these solutions are available here at the show so that you can have an opportunity to take a look at them at the expo.

I want to give you a few examples of what I’ve been able to see in terms of the software plus community, that partnership, how that comes together.

Now, I recently — in fact, as a part of the People-Ready Business launch back in New York City, we had Tommy Hilfiger on stage, and they had a very interesting challenge; they had made a mistake in their view, they had bet on open source software, on the idea that somehow that that was going to be cheaper, a common misperception. The net result was they didn’t get what they needed to do for their business.

So Tommy Hilfiger worked with Columbus IP and Cactus to in less than six months implement the online commerce system that they needed and also to implement Dynamics AX throughout their organization, reducing their cost of information management by 30 percent. So not only were they more effective in being able to represent themselves in the online world, they were able to do it at a lower cost, and that’s real value, and that is a great example of how our software together with our partners, the community, enable a People-Ready Business.

Another example that I learned about was with Winona Community Health in Winona, Minnesota, obviously a mission-critical business where it’s very important that they are supporting the health of the community. They were having challenges; they have nearly 900 employees, they have very paper-based, intensive processes in their people systems, and what they needed to do is they had to solve that, they had to be able to free up more of the time of their people to be able to do what was really important for Winona Community Health. So they worked with ePartners and implemented Dynamics GP in Office Professional as a way to be able to reduce those paper-based processes and increase the amount of time that people had to do in their key role as health providers.

Another great example I learned about was Lorentzen & Stemoco in Norway. They are in the shipping business, they are brokers, and their clients are the shipping companies, and they have a mission critical need to have the right information in order to do the best job of representing opportunities for their clients.

And so they worked with a broad product line from Microsoft, working with a partner named ObjectWare, taking advantage of Microsoft Dynamics CRM, SharePoint Portal Server, Office Professional, BizTalk Server, SQL Server, XML and interoperability; putting all that together but something that they didn’t have a focus in, they were able to work with ObjectWare, their partner, and get the solutions that their associates needed in order to do the best job for their clients.

These are great examples of what it takes to have a People-Ready Business, and what we want to do is to make sure that we’re working with you and our partners, the community, to enable you for your People-Ready Business.

But you might be saying what’s in the future, what is Microsoft continuing to invest in. Well, I think it’s very important to remember that the needs of people in this area are continuously evolving, and what we need to do is we need to continuously invest to meet these evolving needs.

So we’re investing in business solutions that are going to help underlie these trends. Take, for example, unified communications; there’s an incredible convergence, to use that term again, underway where the whole voice infrastructure, especially with Voice Over IP, is coming together with the personal computer and the network where audio, video, networking and personal computer based productivity are converging. And Microsoft is a part of leading that convergence, building on our products like Live Communication Server, which today are viewed as providing reliable, enterprise scalable instant messaging for business purposes, and in the future will be the foundation for how you bring that voice system into the personal computer productivity infrastructure.

The whole theme of software-based services is another trend, and we think it’s very important to recognize you have all this horsepower in your desktops and your laptops, and you have all that horsepower that’s available in the Internet cloud, and what we need to do is to invest to optimize the use of that power, software plus software-based services, software plus services for Live Meeting so that you can have virtual meetings, bringing people together more cost effectively from all over the world, reaching out to your customers, reaching out to your partners; Office Live, our investment to be able to help smaller businesses be able to have the kind of IT support they need in order to run their businesses.

And another very important area we call composite applications; really this is taking business applications to the next level by making it possible to more easily build the solutions around the core systems, the ERP system, the business process system and the Office tools in order to facilitate automation of common Office processes.

So with our continuous investment and your continuous input, the input from you, our customers, and our partners, this is how Microsoft is investing to provide the future of the digital work style and enable a People-Ready Business.

As a company, these investments are going to continue much more broadly than just the digital work style. You know, as I mentioned earlier, there’s a convergence, to use the term again, with the lifestyle. You know, we represented as digital work style and digital lifestyle but I think we all know that they’ve really come together. The work day in some sense has extended, but people want to be in control of their work. They may want to access their work from home but they may also want to be able to connect with their families and their friends from work; that’s a very, very important theme that we have to be cognitive of.

And I also think it’s important for us all to recognize that this is the future workforce, this is the way in which they’re going to want to work. I think about kids, I’ll take my 15-year old son; by the time he graduates from college, which I hope will happen and I hope will be near the end of this decade, and then at that time I really hope he gets a job, at that point in time he’ll have had 20 years of experience working with personal computers, and more than 15 years of experience on the Internet. So just think about that for a moment, think about the 15-year old in your life or 14-year old or 16-year old; think about how they’re using technology because that is our future workforce and it has broad implications. How are you and your businesses going to recruit and retain that talent? How are you going to have a technology environment that allows them to do their best work, that allows them to amplify their impact? And that’s another reason why I think we are uniquely positioned to be able to help you. We’re investing in both the digital work style and the digital lifestyle, but in particular we recognize how those are coming together and how we can help provide that seamless environment.

Well, now I want to leave plenty of time for Q&A, but in closing the thing I really wanted you to understand from my comments today is how we are investing in order to help you enable your People-Ready Business where our software tools and our community of partners can help you amplify the impact of your people and thus amplify your business success.

So with that, I’d say thank you very much. (Applause.)

You know, at this time I want to welcome Doug back to the stage, and perhaps we can bring up the house lights and take some questions that were submitted and whatever else you want to do, Doug.

DOUG BURGUM: Great job, Jeff. Really fun to have you here and fun to hear your thoughts about the vision of where we’re going as a company.

I think it’s really special for our audience here today, who don’t often get a chance to talk to somebody who’s had the span of experiences you’ve had from such a small — basically joining a startup to running a $15 billion division today as president and leader of that group. So I think one thing certainly there’s been a lot of change in that timeframe, but it might be interesting for the folks in the audience who are trying to build their businesses for you to share what’s been constant over that time, what are the tenets, the basic values, some business strategies that you’ve used as a guidepost for the last 25 years.

JEFF RAIKES: Well, I certainly think there are some things that are common from the experience that I’ve had and that you’ve had in your career that do carry through. Probably the most important thing I would want to start with is the importance of people, getting the right people into the business.

I was recruited by Steve Ballmer, and he really set the tone for what we were looking for. Steve would have described it as high energy or high horsepower, high energy meaning people are passionate about what they do, who really care, who really want to make a difference.

People who are high horsepower, you know, might be raw IQ, I think that’s probably less important than, say, street smarts, people who learn, because oftentimes we were doing things that had never been done before, so it was very important that we had people who would learn quickly and learn from their mistakes, and certainly I proved that you could make a lot of mistakes and still keep your job, as long as you were learning from them and moving forward.

And then finally people who really like to get things done, and that characterized what we were searching for them and I think still today, and I think for all of you in the audience in leading your businesses, I think you’d probably say one of the most important things you do is to make sure that you’re attracting the right people, the right talent.

DOUG BURGUM: So in 1981 you had Steve Ballmer trying to recruit you, and you were working at Apple I understand, and Steve Jobs, another Steve was trying to retain you. So what did he have to say when he heard that you were going to Microsoft?

JEFF RAIKES: Well, Steve wanted me to work on — interesting question. Steve wanted me to work on the Mac, Steve Jobs wanted me to work on the Macintosh, Steve Ballmer wanted me to work on Microsoft Office. And I got this phone call, when I announced my resignation from Apple, I got this phone call from Steve Jobs, who, let me just say, it was intense. (Laughter.) Steve Jobs can have a certain intensity about him. And I guess probably one of my favorite memories from that phone call is when he informed me that Microsoft would be going out of business, so I do recall that phone conversation, if for no other reason than sort of the fact that I can kind of look back now and, well, smile, and I’ll just leave it at that. (Laughter.)

DOUG BURGUM: That’s great. I want to again encourage anybody in the audience if you want to come up microphones one, two, three or four, and just stand there, I’ll spot you and I’ll call you out. But as you’re stepping up, and it looks like we have our first customer, if you could share your name and your company name.

QUESTION: My question is, Microsoft Dynamics for us is a brand new name. We’re more familiar with the Great Plains and the Navision AX and the other names. What’s the purpose of moving it to a single name? Will they eventually be one platform or are they going to continue their individual identities?

JEFF RAIKES: Do you want me to take that?

DOUG BURGUM: I’ll take the first part.

JEFF RAIKES: And then I’ll amplify.

DOUG BURGUM: Yeah, exactly, very good.

Well, part of the purpose of going to a single name has to do again with one of the things, a great strength that Microsoft has had over the years, which is Microsoft has done a great job of creating awareness about solutions in categories. And I think one of the things that we want to have with the Dynamics brand is globally we wanted to be able to talk about as a company what we were going to be providing and what you as customers are going to be buying and using, and that dialogue that we can create around a single brand is going to enable us to have much more power and impact in having that dialogue.

Today, as it turns out, many customers around the world are not even aware that Microsoft offers business applications, and while it may be brands that are familiar to all of you, to the broader world it hasn’t been. So we’re going to put some of that great Microsoft marketing prowess and capability behind that single brand.

It also does, part of the second part of the question is it does signify again that we have an end point out in the future, as Jeff talked about during his talk about the wave one and specifically the wave two releases where we are going to move to a common point where whatever product line you’re on today, you keep taking those upgrades and advancing with that innovation, and you’ll end up at a place where we have a converged solution years down the road. So it does signal that we’re moving in that direction.

JEFF RAIKES: Yeah, it’s one of the reasons I really love the strategy that’s based on feedback from many of you, our customers and partners. What we’re really doing is we’re recognizing the significant investment that you’ve made with your Microsoft Dynamics product line, whether it be Great Plains or Navision or Axapta or Solomon. And we’re making sure that we move those product lines forward, that you can continue to get enhancements, and we’re using our software technology expertise to bring together underlying technologies so that you’re getting even better technologies on an ongoing basis. And so over a period of time the best benefit is that we can help you with your business via our software.

QUESTION: Hi. I’m from Raymond James Financial, and we’re looking at potentially implementing CRM 3.0, but we’re also looking at other solutions, such as SalesLogix. Our implementation potentially could be to 7,000 users over 2,500 branch offices across the country.

So what I would ask you is why would you — what would you tell Raymond James to say we should adopt CRM as opposed to something else?

JEFF RAIKES: Well, I want to jump in. First of all, I assume there’s a Microsoft person here, along with the partners that got that, so we’ll be following up with you. (Laughter, applause.) Just want to make sure.

DOUG BURGUM: I forgot to mention that Jeff ran global sales for many years at Microsoft, too, he hasn’t lost that.

JEFF RAIKES: The No. l thing I’ll say might surprise you, I want to actually sit down with you and make sure that we’re right for your business. I think we probably are, but I really want to go through what your requirements are. Because the most important thing at the end of the day is that how we work with you and how we work with your partner, that it’s a part of this theme of enabling the People-Ready Business.

And Microsoft Dynamics CRM has some great advantages. It lives within the user experience that your people live in every day. The most common thing that I hear is, “Geez, I really wish my customer relationship management was right in the context of Outlook because it’s Outlook that I’m using day-in and day-out, that’s so important,” but also then how it can plug into the rest of the systems, whether it be Office SharePoint Portal Server or others.

So a lot of it is the user experience, the integration, those are our advantages, but the number one thing is to make sure that we meet your needs, and that requires us sitting down with you, and I’m glad our account executive will be following up with you. (Laughter.)

QUESTION: We have 37 companies on Great Plains, and next week we’ll have 38, and in two weeks after that we’ll have 39. This is what we need, I hope you’re listening. We need a headquarters function that could sit on top and less us consolidate things. We use FRS now, but, for instance, when a vendor calls headquarters, we’ve got to go into every company to find them. So I hope you put that on your planning calendar and think about it in the future to make Great Plains more scalable for multi-company businesses.

DOUG BURGUM: Great. OK, great. Thanks for the input.

JEFF RAIKES: Thank you. (Applause.)

This has kind of turned into the product input session.

DOUG BURGUM: Yeah, that’s great, we like that.

QUESTION: I’d like to say to Raymond James that CRM we did due diligence on several applications and 3.0 is second to none, outpaced any other alternative by a distance factor, a good job on 3.0. (Applause.)

My question is that as a life wealth management firm, we are now focusing more of our efforts not on just the financial and material aspect of clients’ wealth, we’re dealing in areas such as health and fitness, social community, a lot of different areas that bring significance to life. While the Solution Finder is great at finding partners to help us in the traditional financial areas for our needs, I thought it would be a great idea to be able to have maybe a customer finder to help us deliver other aspects, and let me give you an example. Health and fitness is a part of our solutions that we deliver; wouldn’t it be great to be able to search a customer finder to be able to bring personal trainers who are using Microsoft solutions so that we can integrate their data into our clients’ life and wealth plans. That’s one example, we could use a great database so that those who are using technology built on .NET.

JEFF RAIKES: Yeah, it’s really extending the community. No, it’s great feedback. Thanks very much.

DOUG BURGUM: Yeah, I think what he’s suggesting also ties in directly with what you were talking about in terms of composite applications, bringing information from lots of sources together and really doing that.

I’m going to be talking on Tuesday about community, and I think that the customer finder is a really interesting idea, and so we want to make sure we take that.

OK, let me go to number four, and I also want to say again we’re up a little bit against on time, so if you’re at a microphone now we’ll answer your question, and then I’ll have one question to close, but if you’re not at one now, we probably won’t get to you. So let’s go to mike number four.

QUESTION: In your first question, you shared your vision how a few years down the road all the products are going to come together or in the common platform. You are clearly handling the challenges of moving some older technology well forward and adding new technology into it. I’m going to focus on Great Plains; for example, the security based things, now you’re moving into .NET and your new toolkit I think it’s a great thing. In fact, some of your customers come up and are looking for things that are not quite there the way you enable this solution. I would probably turn to that first question and say, oh, you can look into the toolkit and have a Web Service talking to all companies and bring it back together. And that’s the way we work with our customers, providing solutions now that will eventually be there in the platform, but using the toolkit that you provide.

My question revolves around Great Plains. The toolkit is introduced and has a set of business objects that you can now use to get back into the Great Plains database. Is that an interim thing or is that going to continue to expand and really become the future investment? So if you start developing a solution based on that technology today, that will continue to mature and provide a larger solution, you know, still even few years down the road.

DOUG BURGUM: Well, the message we’re delivering to all of the people that are developing around our Dynamics product lines is that there is, in part because of the long term way that we’re going to support these product lines, we’ve committed publicly that we’ll be supporting the individual product lines within Dynamics through 2013. So if you think that’s a timeframe with which you can get a return on investment in developing in the toolkits that we have available today, then I would say go ahead and do that. But certainly we’re going to be evolving the customization framework toward a common element as we move the applications to a common element, so there will be enhancements in moving forward. But the Web Services and the roles that we’re shipping as part of Great Plains, you can be confident that those are going to be supporting in GP 10.0 and beyond for years to come.

QUESTION: My question is there are certainly large customers that have departments that are Mac specific or use other browsers. How are you going to approach accessing CRM via other browser interfaces?

DOUG BURGUM: Well, at this time we don’t have plans today to access CRM by anything other than Internet Explorer, but we’d like to understand more about your specific needs. It’s the first time I’ve personally heard that suggestion, but it would be good for us to understand more about how that might be, and we can get that feedback. And you can either — do you want to come up to the stage afterwards, we’ll have some people here to get your contact information, or you can just e-mail me at dburgum, D-B-U-R-G-U-M,, and I can get you connected with the CRM team.

QUESTION: So there are some pundits that say that Microsoft cannot truly enter the software as a service space because you have an innovators dilemma problem in that if you truly become a software service, which I saw in the vision, that you’d be cutting out partners and wouldn’t really be able to effectively compete toe-to-toe with the likes of Salesforce, NetSuite, these kinds of multi-tenant software as a service companies. Do you have a response to that?

JEFF RAIKES: Yeah, that’s what those guys want you to think. (Laughter.) No, the truth is it’s — well, how do I — it’s bunk. I mean, the opportunity is to use a combination of the horsepower that you have at your fingertips and the horsepower in the cloud. And there won’t be any company better than Microsoft to bring together software plus service, software plus software service as a way to deliver that. Because those guys like to say, yeah, software is dead, it’s all about service or software as a service. And the truth is software as a service is extremely important, but there’s no reason why Microsoft can’t do both and, in fact, we will do both, which means we will give customers the choice, we will give partners the opportunity to be able to build on that combination. And if you choose to run some of your CRM on premise because that’s the way you want to do it, that’s great; if you want to be able to run some of your CRM in the cloud, you will be able to do that. We have lots of partners here today who are already helping people do that with Dynamics CRM.

So again, I think the strategy that is most important for customers that provides the optimal customer choice is the combination of software plus service. And while some of the players out there want you to think otherwise, ultimately I think the power of that vision will be proven. Thanks very much.

DOUG BURGUM: Jeff, roughly how many customers do we have on Hotmail?

JEFF RAIKES: Oh, I don’t know, a few hundred million.

DOUG BURGUM: I just thought I’d throw that out. I mean, for people that think we don’t know how to run software as a service, I think that’s an interesting customer base to think about that we have some skill set there. And while that’s a consumer-oriented offering, Hotmail, there are some fundamental elements there in terms of billing, in terms of infrastructure, in terms of running datacenters that are going to scale far beyond the people that say that we can’t run software as a service.

JEFF RAIKES: That’s right. And people like to gloss over the software plus service component, because they’re not invested in software the way that most people use it today.

DOUG BURGUM: Great. I guess I still see one gentleman here. Do you have a quick question for us, sir?

QUESTION: And my question is have you thought about the possibility of supporting someone in a fashion that we get a clean way of patching, upgrading, and handling that complement of applications without having to feel all the pain of the individual patches and upgrades and incompatibility when we’re a 100-percent Microsoft shop?

JEFF RAIKES: Yeah, absolutely, we consider that to be a high priority. A lot of what we’ve put in place with the combination of Microsoft Update online, which includes Windows and Office, extending that concept, also on-premise putting in place Systems Management Server, we’re definitely on the trend line to make that much easier. And I’d agree with you that that can be one of the key values that we can provide, so I consider that to be great input and a great priority for us. Thanks very much.

DOUG BURGUM: And thank you for being 100-percent on Microsoft.

The last, this really, Jeff, isn’t so much a question but maybe an opportunity for you to offer some closing thoughts, but in the last year one of the top selling books on the New York Times bestseller list has been the Thomas Friedman, “The World is Flat,” which talks about a number of interesting things. But with you growing up in Nebraska really had this concept nailed like 20, 30 years before Friedman. (Laughter.) So again proving once again —

JEFF RAIKES: Nebraska is flat, so therefore the world is flat, is that the idea?

DOUG BURGUM: I’m not sure, but you were a visionary —

JEFF RAIKES: Go to North Dakota, it’s flatter than Nebraska. (Laughter, applause.)

DOUG BURGUM: Well, we’re proud of our flatness. (Laughter.)

But you have some just thoughts on the future and where the world is headed and what the role that Microsoft can play.

JEFF RAIKES: Well, to the extent that I can provide any benefit to this audience, it really is in the context of this theme of a global information-based economy. I was a farm kid; in fact, my family is still farmers, my brother runs our farm, and Doug grew up in similar circumstances, so he kind of understands Midwestern culture. You may not understand Midwestern culture. I have an older brother, so my older brother runs the farm and I had to find another job. (Laughter.) It’s worked out OK, he thinks — (laughter) — but he is a little sad for me. (Laughter.) And my passion then, how I ended up in this business was I bought an Apple II computer to help my brother run our farm, and it was our information tool, that was the mid ’70s.

And so the thing that, you know, the world changes but there are some elements that stay the same, and the thing for me that’s been changing and stayed the same over the last nearly 30 years is just the power of software in being able to really help people do their job. And I think that the most important thing everybody in this audience has to think about is this concept of how they build a People-Ready Business in order to enable their success. And it’s not all about software and it’s not all about our partners; it’s a lot about their leadership, the way in which they see the marketplace, they see the trends, they’re able to reduce the complexity of the marketplace, the competitors, your product or service set down to the essence of what it means for you to succeed in your business.

And we just hope that what we do as a part of the People-Ready Business is to be able to help you use software as a way to enable the success of your people and thus amplify the success of your business.

DOUG BURGUM: Great thoughts. I want to say to everyone, tomorrow morning, right here, don’t miss it, Bill Gates. We’ve got a great set of events for you throughout the day in terms of breakouts, expos, networking, community centers, take advantage of all of that, use your newfound skills for meeting new people to help further your knowledge throughout the day, but again thank you for being here bright and early on a Sunday morning, we appreciate it, and again thank you, Jeff Raikes.

JEFF RAIKES: Great. Thanks to all of you, thank you very much. (Applause.)