JIM ALLCHIN: Making people’s passions come alive is what we’re here to talk about. Today the PC is often still considered just a tool, but together we need to make it a lot more than that. We need to make it a path to experiences.

Now, during the next hour I’m going to talk about these experiences, and how together we can help bring them to life. I firmly believe that the most successful companies in the future will be the ones who understand the customers, whether in business or at home, really want deep, immersive experiences, and the best products will be the ones that bring those to life.

Now, from a design perspective, it all starts there. You have to think very thoughtfully. You start with the person and you say, “Who is this person?” Maybe they’re a pre-teenager. What are they trying to do? Well, maybe they’re listening to music. Where would they do it? Maybe they would do it in their rooms, maybe with some friends at another house. What’s important to them? Buying some cool clothes, being cool with their friends.

And let’s suppose that you were a provider, a technology provider into this. You say, well, suppose you’re a speaker manufacturer and you say, OK, what kind of speaker should I make, remembering who the user is, where they’re going to be using it in their environment. You say, OK, well, they probably need to be pretty small because most girls’ rooms are small at home. They probably can’t be too loud to not drive the parents crazy. They can’t be too expensive, because they don’t have enough money. And they probably shouldn’t be black, because pre-teenage girls probably aren’t interested in that.

What do you think? It may not be your style, but let me tell you, we had to go to three stores because they’d been sold out. It’s very, very popular.

Now, these may look pretty dorky but they represent the exact things that I’m talking about, about thinking about the user and then putting yourself in their place, and you can make a lot more money if you think about that.

Experienced thinking is the way to the next segment of growth for us. History has always shown that innovation has led the way for all economic growth. If you go back a thousand years, for thousands of years we were just an agrarian society. In 1776, 90 percent of the U.S. population worked on farms. Then the internal-combustion engine and electricity came about and it changed us into the Industrial Age, and from there people produced goods out of these raw materials. Everyone made more money and, in fact, the society moved ahead. In 1900, 40 percent of the U.S. population worked in factories.

Then there were innovations in electronics, the phone, TV, computer; they all brought us into the Information Age. Major economic growth moved into the services sector. Today, 80 percent of the population is in services. Only 15 percent in factories, and less than 3 percent on farms. Yes, all of those other areas got more efficient, but it was a huge shift.

There is a shift going on into the experience economy right now. It’s going to drive this next economic move.

Now, I wrote down [some] things here. Vacationing: Think about Las Vegas. It used to be a gambling experience; now it’s a family experience. The Forum Shop at Caesars generates the most money per square foot of any retail shop in the world. It’s truly an experience going there. Being entertained: Have you ever gone to Cirque du Soleil? That’s an experience. It’s very, very cool, has a special sound in terms of music, and they’ve been in business 22 years, incredibly successful.

Pretending: It turns out there’s a store called American Girl, and if you have pre-teenage girls you’ll know about it, because they’ll spend all their time on that Web site begging to go to Chicago to go to this experience. And in this particular location — they also have one in New York — they have the ability for the girls to come in and they can have a grownup-like experience at dining, they can have a photo shoot, there’s a doll hospital, and on and on. They actually sell a whole set of clothes and other things, but it’s the experience that’s being promoted. And it’s the rage, absolutely the rage.

The last one I put on here was exercising. And you may have it in your cities, but right down the street here is a company called REI. And if you’ve never heard of them, you should go there. Inside REI there is a rock wall in which you climb, and in other locations not only do they have rock walls, but they have bike trails for biking, they have kayak areas where you actually can get in the kayak and try it. They even have a cold room where you can go try the sleeping bags. It’s an experience and people keep going back to it.

Now, why did I talk about all this? It’s because innovation through experiences commands a premium.

Now, I’m going to give you another little example outside the high-tech world before I switch to high-tech. Consider the example of drinking coffee. It only takes a few cents to get the beans to make a cup of coffee. You could manufacture the coffee and get a little bit more by grinding it. Well, that was done. You could make a service out of it in terms of a vending machine where you could put a little bit more money in and get a pre-made cup. Or you could do what Starbucks did. They changed it. They made it into an experience for a lot of money. You walk in for these just a few cents of coffee bean, and you pay a tremendous amount for the experience, whether it’s now moving into the high-tech for wireless, but it’s the music, it’s the experience, the ambience of the place. This is a company that is growing incredibly fast, three and a half stores new per day. Why? Because it’s an experience.

We’ve progressed through innovation just like any of these things that I’ve been talking about. We’ve started off with the microcomputer age, and for 25 years we’ve poured functionality into it. We made it do more, we made it perform faster and we made it do it less expensively.

Then came the graphical user interface and after that we came to Internet computing, and in the Internet computing age the PCs became a must-have if you wanted to get or promote information, whether you be at home or work.

After the Internet computing came what I think of as experience computing. And what is that about? That’s not about speeds and feeds, it’s about sights and sounds. It’s about the feel. It’s about emotion. These devices, the ones that are super popular today, are evoking emotion.

If we follow this experience direction as I’m about to talk about, I believe we will make the PC much stronger than it is today, and where it’s already been strong in the workplace and in, say, the office at home, but we can take it into places that today we’re just getting into, the living room, the garage, down to the wristwatch.

Now, we started these fast-forward experiences in Windows XP, and, yes, we called the product experiences because we sort of had the image of what we wanted to do here. And you can get the feel from looking at what we did with the photos but that was just the start.

Now, there are three magic ingredients in a great experience. First, it’s the fundamentals. You have to get the basics right. If you don’t get the basics right, the rest of the stuff doesn’t count. Second, you’ve got to think through the end-to-end scenarios, just like I talked about with the pre-teen girl with the speakers. And you have to make it relevant to people on a personal level to evoke that emotion.

Now let’s talk about the fundamentals for just a minute. We have to get them right. You’ve heard me, in any of the times I’ve come to WinHEC, you’ve heard me talk about the fundamentals. I’ve been on a campaign for many years. And it’s very funny, because if you do all the fundamentals, you don’t give a lot of credit. If you mess up on a fundamental, you get a lot of abuse. And it’s the type of thing where you’ll create an experience, one that they’ll never forget, and it’s not the way to make great customers.

So the good part of this is that we’ve actually made together as an industry a lot of progress, and I want to show you some of the progress that we’ve made. So I want my PC to be like a TV. And we’ve talked about instant-on over and over and over, and we’ve made progressive progress. Let me just turn on my TV here. Well, let me turn it off. Let me turn my TV on. Hmm, that’s a PC.

Let me do it with the remote control; you’ve seen these. Suppose I just came home and the TV had been off. Well, I can just come here and back it up a little bit and then start playing it. I just switched. And, of course, I could just turn it off — all remotely.

Now, from a technical perspective what’s going on here is we’re leaving it an S0 state, and we’re just dropping the power down of all the components. Now, we haven’t finished the work on this, but we drop down the power by about 30 percent. Now, what’s so great is that it can still do other tasks in the background, so it can be sitting there doing a recording of TV shows like that I just showed.

Now, this was done with FIC and NVIDIA, and we’re in the process of continuing our work here in this prototype so that we can drop down additional power. We think we can drop it down by maybe 40 or 50 percent and still keep it in F0.

And when you think about it, you get all the power of what you might have expected in a little device like Tivo, which is also on, recording in the background, but you have the full PC power.

Now, we’ve been going after this for a very long time. To me this is perhaps the most exciting demo of the entire show that we’re going to do, because it is such an instantaneous response.

I can tell you this is going to be in the hardware showcase, and you should go there and hear about the technical details about how we’re doing this. There’s another example here from Wistron, same general deal in terms of how we did this work.

So I’m going to switch gears to the server side, and we’ve made progress there in terms of the fundamentals as well.

Now, right here is a Small Business Server, and it’s extremely cool for a bunch of different reasons. First, it’s very small. It’s three inches by 10 inches by 10 inches. It only takes 40 watts. It’s fan-less. It’s got RAID on the motherboard. It’s got a built-in UPS, and there’s no network cables at all. It’s just got a PC card slot in the back where you push in a wireless, which, when you think about it, is a huge, huge step forward.

Now, there’s many great things I also have in front of me, which you probably can’t see, but I have a ruggetized HP Tablet PC. And let’s suppose that I was a realtor, maybe I’m an assessor and I go out occasionally to the field. Let me open up some of the pictures that I’ve just taken. And one of the cool things is, I can just drag and drop the pictures once I get back in the office and copy them over.

Now, this is totally wireless. This server is wireless. And I think one of the cool things that I should do before I even do this is just make the point about that it’s rated. So one of the cool things about a device like this is if it was a small business you can pop the drive out and just go home at night. So I just pop the drive out and I’ll just put it down here.

Now, let’s suppose that I came back to the office and I wanted to copy those files over. So now it’s in the middle of copying and, oh my goodness, a power failure just happened. Oh, no, I’m going to lose my data. Well, I’m walking around with a Small Business Server, and you notice it’s not shutting down. What we did is, there is special logic so that the system understands — I should have pointed out that on this machine it’s actually a terminal server into this machine so you can see that the server is still up. So once thiscopies, the system is smart enough to sense that it doesn’t have any workload and then will quiesce. And there’s about 10 minutes of UPS support, battery support here.

And so we’re almost done, finished with the copy, and when it finishes, the server will then go ahead and shut down. And as you can see it’s now shutting down.

I think it’s very, very cool. Are you guys awake? (Applause.)

Okay, so I showed you progress on the fundamentals in terms of the client, I showed you fundamentals in terms of the server. I want to switch to a different demo and show you progress in a set of different areas.

One of the biggest problems, I think, as we made progress in the client and server is tying devices together. It’s just way too complicated. It’s especially true if they’re networked. If you take a device that’s on a local connection and plug it in, we’ve made a lot of progress with P & P but, if you actually have a device across the net, that’s like super, super hard. And it’s a different experience to the end user. They have quite a different experience. If you plug in a network cable versus a USB cable, the way the drivers and all that works is quite different. And you actually have to write different code.

And we also have the problem that UP & P 1X today is really not enterprise ready, so this is a problem that we had where it doesn’t have the best security and discoverability, turning on the type of broadcasting that it does. It doesn’t really work the best in the industry.

And on top of that, we’ve had the problem that most people at home don’t have a secure wireless network. Why? Because it’s too complicated. You want to go around and type in 26 hex digits on each individual device in your home if you’re doing wireless? It’s just way too complicated.

So today we’re announcing great progress in this. We are going to announce that this solution that we’ve worked together with a set of partners including Intel, Lexmark and Ricoh, as well as a set of others who are supporting this, we want to create a device profile that we want for Web services that we’re going to provide to the UP & P Forum and we hope that they will adopt it as the next standard for UP & P 2.0.

Now, while we’ve been doing this we’ve been implementing. So what I want to do is give you an idea of the power of what can be done with this technology. And if Scott Manchester can come out, he’s going to give us a demo of this capability. Thanks, Scott.

SCOTT MANCHESTER: Thanks, Jim.

So, as Jim said, setting up a secure wireless network today is a very complex task. There’s no standard mechanism of getting my wireless settings onto the different PCs and peripherals on my home network. As Jim mentioned, with the PC I’ve got a keyboard and I could go type in all those settings if I remembered them, but how do I get those wireless settings on my headless devices like this access point for a wireless printer? Well, we’re going to make this simple in Windows XP using these USB flash drives.

So what I want to show you today is, I’m going to create a wireless network that’s going to include this desktop PC here and a wireless access point from Abicom, and I’m going to add these two wireless clients here, a wireless laptop and an HP wireless printer.

And once I get this secure wireless network established, I also want to show you how we can take that great plug-and-play experience we get with bus-attached devices and extend it to my wireless attached device.

So in the welcome kits you received you’ve got a CD that has a sample DDK for our network-connected devices APIs, so I’m going to demonstrate a plug-and-play-like experience with my network-attached printer here.

So let me begin. So what I’m going to do first here is, I’m going to launch the new wireless network setup wizard that’s shipping in Windows XP Service Pack 2. I’m going to give my wireless network a name, and we’ll call it the Scott wireless network for lack of creativity here. If I had an existing wireless network in my home I could use that name and manually enter that key if I knew it, but since we’re creating a new wireless network here, I’m going to let this wizard actually create a very strong network key on my behalf.

So I’ll click Next. Now it asks me if I have a USB flash drive, which I do, and we all do now, since they were given as well in the welcome kit. I’ll click Next, and I’ll install the flash drive into any USB port on this PC. This one happens to have one right in the front. So it’s found the right drive letter for me. I’m going to click Next. And it will save those wireless settings to the flash drive.

Now the wizard instructs me to take it out and plug it into all the peripherals that I want to configure on my wireless network. So I’ll start off here with the access point. I’ll plug the flash drive in. And after a few seconds I’m going to get a confirmation that it accepted these wireless settings, it flashed its LEDs three times, now this is ready. So now this device is on my wireless network.

So next I’m going to move to the PC here. Again I’m just going to plug the flash drive into an available USB slot. And it’s going to ask me if I want to run the wireless network setup wizard. Yes I do. Now, do I want to join the Scott wireless network? OK. And there we go, it’s that simple.

So now I’ll remove the flash drive, and as you see, before I even get the flash drive out, I’ve actually already associated to the wireless network. This is shipping code. How many of you guys have ever set up a wireless network this fast? OK.

So last but not least, I’m going to add this wireless HP printer to my network. So as I get this device on the wireless network, I want to discover this device on my PC just as if it was physically attached via bus. So I’ll install the flash drive into the unit, and after a few seconds I should get a confirmation that it accepted the wireless settings, and I’ll return back to the original PC that I ran the wizard on.

So I’m going to plug the flash drive back in, and then click Next.

Now, what you see here is a list of all the devices that I configured. So as I went around plugging the flash drive into these devices, they actually wrote back a little bit of information on the flash drive confirming that they were successfully configured using this method. So you see here that I’ve got a computer configured, the Abicom wireless access point and the HP printer.

Now, while I was configuring this, if I ran across any device that didn’t accept these settings or didn’t use this method I could print out these network settings or make a hard copy of this file here and manually type that key into the device or use whatever method the manufacturer provided to enter in that key material.

By default, when I’m done with the wizard I can remove those settings from the flash drive to ensure that I don’t inadvertently give out my wireless settings to others when I only intend to share files, and that’s this checkbox here.

So what actually popped up on the screen here was a notification that my printer has been discovered. So what I want to do is, I’m going to open up the printer and faxes folder here, and I’m going to show you that we get the same great plug-and-play experience with my network attached device here.

So I’m going to say Associate New Device and you’ll see that I’m getting plug-and-play notifications for this network-attached printer, and there we have it. The printer is on the network ready to be used.

So what we’ve done here is taken a very complex task of creating a secure wireless network and simplified it using Windows technologies. Thank you. (Applause.)

JIM ALLCHIN: I don’t know if you can get a close-up of this. This is a Rio device. Can you get a close-up? There it’s sitting with its USB and Ethernet. Now, this is a great device, but it’s different code, so this is a huge step forward in simplifying the world by being able to build what Scott just showed for you. So we’ve improved your experience in terms of the drivers that you actually have to write.

So my to-do list of fundamentals, my request to you is, build in reliability. That means use the driver verifier, it means use Prefast. It will help you find memory leaks, it will help you find deadlocks, it will help you push on low resource consumption, it will let you do fault injection; use it.

My second request is use the Windows Error Reporting site. It’s been updated. We’ve tried to take your feedback; we’re certainly open to more feedback. The OCA data for crashes lets you figure out what happened to your drivers if there’s ever a problem.

Third, use Windows Update. More and more people are going to just come and stick in their device. They’re not necessarily going to stick in the software, the drivers that you may ship on the CD. Even if you put the big label on it, put this in first, just do it. Well, if the drivers are up on Windows Update, it’s just going to flow down seamlessly without any problem. And then, if you’ve got additional software, they can get it off the disk, the CD that you may have shipped. It’s very important.

I don’t know if everyone understands how much we’re investing in Windows Update and what a service it is. We’ve spent about $60 million on Windows Update. Last year we had 2.4 billion downloads per day. Think about that. We have 100 million users, unique, per month to hit that Windows Update site.

Okay, fourth, eliminate noise. Now, this device here dropped the fans off totally. The SBS machine back here, the Janus, the FIC system back here, again fan-less. Even if you put fans in, I think all PCs should be less than 26 DBA. That’s just my personal belief. That’s a whisper level. That will let us take it into other places. You can drop it less than that if you want. You can get down to 10 DBA; that’s basically breathing level. So I think that’s an important goal for us, because the noise is a problem. We cannot get it into certain environments. It has to quickly come on and off, and it has to be very quiet.

Okay, last, simplification. Now, cables are a real mess. I think as an industry we are moving and we need to move faster to get rid of cables. I think it would be great if you can adopt our network-connected devices work that we just saw. I think it will make your job easier, I think it will make it better for customers. It would be great if you adopted our work that we just showed on the USB flash device. All those things will make connectivity a huge step forward in terms of simplification.

So what about the second magic ingredient? It’s about scenarios. And with scenarios again you’ve got to think about it end-to-end. Now, the demos represented some scenarios. I certainly gave you an idea of using a rugged PC in terms of being an assessor, a real estate person, that was out perhaps with this thing getting wet, getting around a house, jostling in the car while it’s on, and the like. And I also showed watching TV. Those are experiences, but I want to be much more specific.

What you need to do is, you’ve got to think through the doing, the thing that somebody’s actually doing with some technology. You’ve got to understand the entire flow of events. There are many gaps in it. That’s the problem that we’ve had with our software and I think with some of the — as we take pieces from the Internet or devices and having them flow seamlessly together, there can’t be gaps.

And together we’re the ecosystem. It’s not like another company who’s manufacturing all the hardware and all the software, and they have time to just lock it in a proprietary way. They can make it very good. That’s not the best thing for the industry, but you can make a very good experience. We have to work together in order to make sure there are no gaps.

I’d like to ask you to put yourself in the user’s shoes or slippers if they’re watching TV. You have to be thinking the way they will think.

And, as I mentioned, software and hardware must work together. If we don’t do it, then it will be such a jagged experience.

Next, once you really understand the step by step, you’ve got to have the software and hardware anticipate what the user is trying to do. Consider the printing example that we just showed. He didn’t have to go back and do anything. We knew that if he just found that printer, that they probably wanted to print. It’s that level of thinking that may seem sort of obvious, but in the past we haven’t really connected all the dots.

I’ll give you another example in terms of the server, if you’re building server hardware. If you have a stack and rack of lots of servers, consider how the software from a management perspective could interface with lights perhaps on the server, so if you vary one of those in a systems off in a scale-out scenario, you’ll be able to find that server when you walk into the data center. Or maybe it has some other indication, maybe an LED set that is connected directly to the management console. Those things have to be connected together.

A long time ago I worked on Interlisp, which you may or may not have ever heard of, but they had a great feature in this programming language called DWIM, Do What I Mean. And I’m a 100-percent believer in that. If you think ahead to what a person would be doing, just go ahead and do it for them.

The next is you have to think about their environment. I mentioned the rugged laptop, has to fit into the environment. If you’re going into the living room, it has to fit into the living room. These, for example, are designed for that. If it’s going to go in an automobile, it’s got to fit into the automobile. A communications PC has got to have the type of things that you would expect in a communications PC.

That’s all I’m going to talk about scenarios.

How about the final ingredient of a great experience? It’s about people and creating that emotion.

We can show a video here of more industry visionaries within their fields.

(Video segment.)

JIM ALLCHIN: A great experience is personal and it’s emotional. If you give a customer a great experience, they’ll be your customer for life. That’s the three ingredients. It’s a huge opportunity for all of us.

One of the things I didn’t mention about Starbucks, you might think, oh, well, they’ve just sucked all the oxygen, no, that’s not true. It turns out independent coffee shops are stronger than ever. In fact, the ecosystem today around Starbucks is incredible with new farms growing coffee, new espresso makers being built, just across the board. So, it’s an opportunity for all us.

In fact, in order for these experiences to come true, because we’re in this together, we have to work together in order to make it come true. So, what are we doing? How are we applying this to Windows? Well, as I said, we started with Windows XP, things like the photo. We then followed it up with Media Center, and I think you can see what we were trying to do there for the home, living room, TV, distance viewing experience. And then we worked on the Tablet. The Tablet is another example of where we tried to take an experience to the next level. We also did it in the server. If you’ve taken a look at Windows 2003 Server, you’ll see that we’ve created roles so that you can designate what role, how is this server going to be used. And then we’ve tried to make it simple in terms of the steps, once you decide, this is a file server; no, this is a DHCP server; no, this is a DNS server, this is an AD server. So, we’ve tried to make it easy to set those up. The server can be multiple roles, no problem, but we’ve tried to think about it the way our customers would.

We’re really just at the beginning. We’re just getting started on this path. So, you’re going to see more and more as we move ahead. Let me lay out some of the work that’s coming. In terms of the client, we have a whole set of releases that we’re still doing this year. The first one I want to talk about is something called Service Pack 2. And the experience that we’re trying to create there is, because it’s a service pack we can’t take it too far, but it’s about safety. And what do I mean by safety? It’s got a brand new browsing experience that’s much safer. You’ll be able to browse around the Internet being able to avoid pop-ups, but even more importantly to avoid what we call the drive-by downloads, where you go to a Web site, all of a sudden they’re trying to download something to you. So, you’ll be able to tell, as I have my mom, that she’ll be able to browse around, and she won’t have to worry about her machine getting impacted unless she specifically asks for something to be downloaded.

We’ve made a huge step forward in terms of intrusion protection. We have a much smarter firewall that’s built in today, works in the enterprise or at home. It’s programmable in a deep way, but it also requires little intelligence to operate it. Safer mail and Instant Messaging. So, if you get an attachment, which is often how diseases are being shipped around today, they solicit someone to click on an attachment. We’ve added things like, as was already in Outlook before, in Outlook Express, we’ve added the blocking of .exes, but more importantly people were passing around .zip files. So, we’ve added support so if you’re passing around a .zip file and you open it up, it’s not going to autorun an .exe that’s in there. In fact, even if you save it off to the desktop and try to run the .exe, it won’t do it. But we didn’t take away the ability for you to ship around .exes in .zips. It’s just a special way that you have to say, yes, I really, really do want to execute this code, so that the accidental exposure will drop.

We added support for what we call safer memory, so, in case an infection does get into your machine, it’s protected. There are new compiler switches that we’ve added that do things to protect the heap as well as the stack, but we’ve also had support from you, from some of you who are in the chip processor business, so that we can have non-executable pages in memory, what we call NX. I think in the software, it’s called data execute protection. And the capability of this is so that we can use the hardware just like we use memory management for process boundaries, so that in case somebody does try to execute in a heap, they’ll just be prevented from it. AMD has this solution today. I know Intel is about to provide that. And it turns out that I just learned earlier this week that Transmeta will have that later this year. So, great progress in terms of that support.

In addition, in Windows XP Service Pack 2, there’s a whole set of other capabilities. There’s wireless security that you just saw, again, making the home safer is in SP 2. And there’s a set of other things like Bluetooth that we added there.

The next huge wave is what I would call the media experience wave, and that’s later this year. It includes a whole set of capabilities in terms of a new Media Player, a new access to music from MSN, the Portable Media Center, which you haven’t seen, you’re going to see in just a minute, capabilities that are coming from a variety of companies for new media players themselves, portable media players, just across the board, making a huge step up in terms of the media experience. And, of course, there’s a new Media Center coming with that as well.

There’s also a new Tablet with incredible improvements in handwriting recognition coming, and then later on in the year is the 64-bit edition of Windows. This is really important because we have basically finally made a client that’s going to have all the capabilities of XP on the 64-bit platform. So, if you want to watch DVDs, no problem; if you want to use it on a mobile laptop, no problem. And the app compatibility is phenomenal. If you want to run a .NET app on the system 32 bits, no problem. So, the beauty of it is, those apps actually run faster, even though they’re 32-bit, on the 64-bit OS, on the 64-bit hardware platform.

So, the app compatibility is good. The OS support is comprehensive. What’s the one thing we need: 64-bit drivers. You guys have got to do the 64-bit drivers. The improvements in performance are pretty phenomenal, so it’s something that we hope that you will consider.

Then comes “Longhorn” Beta 1. I’m not going to talk much about that right now, because I’m going to show you a little bit of that in just a minute. So, in order to give you an idea of this media experience, I want to ask Dennis Flanagan to come out and give you a soup-to-nuts view of an experience.

DENNIS FLANAGAN: Thanks, Jim.

Hello, WinHEC audience. My name is Dennis, and for several years I’ve been working on media technologies with a lot of you in this audience to try to make it more friendly and fun and easy to use. And usually when I talk at WinHEC, I talk about drivers, and protocols, and APIs, and firmware sides, and stuff. But I’m not going to talk about that stuff today. Today, I’m going to tell you about how I’m using digital media at home, and show you how this stuff really ties together for people’s lives.

So, I started a few years ago building a digital media collection, and I went out and got myself a portable player so that I could take all my music with me wherever I went. And it was then I ran into the biggest problem, which was battery life. I mean, most of the devices on the market today, including the most popular ones, run out of battery life after about eight hours of play. And if you listen to a lot of music, that’s just doesn’t cut it. I mean, if you forget to plug it in overnight, or you take it on a long plane trip, you run out of juice.

So, recently, I acquired this Creative Zen Touch Player. This device has 20 gigabytes of storage, so it can contain my entire music library. I can take it anywhere I go. But, amazingly, it has 21 hours of battery life. So, if I forget to plug this thing in overnight, no problem. I can run for days having great music experiences with this device. And when you talk about travel, if I was to travel from Seattle to Australia, a 17-hour flight, I could start playing music on this device from the moment I left my house, including transit to the airport, the plane ride, and going to my hotel, it would still be playing. So, it really is quite an innovation. And the kind of stuff that people are going to need to weave this digital media into their lives.

Now, I built the digital music library that I have on this device by ripping CDs that I’ve bought. But with the download services that are coming on the market, it’s even easier for me to add digital music to my collection. For example, REM has come out with a greatest hits album and I’ve been wanting to buy it. So, I’d like to show you how I’m going to do that with Napster.

So, at home I have this Media Center PC in my den. I like it because it’s a really cool form factor, it looks nice in my den. The thing I really like about having it in my den is it’s fanless. So the old PC I had in there was like a Norge refrigerator, it had all this fan noise. But this one is really quiet, and great for media experiences.

So, the deal is, I can be in my den, lean back in my easy chair watching TV, and then, with my remote control, check it out, I can log onto Napster. So here I can go and find the REM album that I’ve been wanting to buy, and now I can go ahead and I can buy all the tracks, or I can plan individual tracks and pick the ones that I want. And then, when I grab that thing, I can just go ahead and download.

And as I download that song, or the number of tracks that I bought are going to be downloaded onto my Media Center PC and be part of my collection. Then, I can plug in my Zen Touch to this device, and it will automatically synchronize the new music I’ve added to my device, and I can take it on the go.

So, having the media on the go has been a great experience for me. But when I set up a home network, and, by the way, I wish I’d had that flash key when I was doing it, once I got that set up, what I really wanted was to get the media off that device and into different rooms in my house. So, let me show you a couple of solutions I’ve used for that.

So, what I chose for the bedroom was a network-attached DVD player, because in the bedroom at home we like to watch DVD movies in the evening. But what we’ve had to do in the past is use CDs, and juggling around with CDs, finding them out of a big collection and bringing them in here has been a problem. But this DVD player is a network-attached, so it can discover, and in fact it has discovered the media library that I’ve got on my Media Center PC in my den. So, now I can simply select that and see my different media here. Now, if I go browse the music library, I’m going to browse it by artist in this case, and I can show you, here’s that new REM song that I just downloaded from Napster on my Media Center PC. So, I can go ahead and play that now.

So, this experience has made it much more easy to have my entire media library in the bedroom at my fingertips, a very easy solution for what we wanted.

But in the family room, I really wanted something different. In my house, the family room and the kitchen are kind of all one room, and that’s the public area of the house. That’s where people like to hang out. And there’s a big TV there, and it’s always on. And certainly TV is the main event in that room, but what I really wanted was to get my entire Media Center experience in this room, all the stuff. And now I can with this Media Center Extender. This Media Center Extender is connected over the network to my Media Center in the den, and it makes this TV act like a window onto the Media Center, literally everything I can do with the Media Center I can do from this TV now. So, I can watch live and recorded television. I can browse my music library. I can even log onto Napster from this TV and download more music, or Movielink and download movies I can watch from here.

And, you know, another thing that has really been cool about having the Media Center Extender is the ability to deal with pictures. Like, in the past, when we wanted to show people digital pictures, we had to crowd them into the den and show them on the PC. We didn’t do it very much. But now that I can show the digital pictures on the big screen in the house in the public area, we show them a lot more and it’s a lot more fun. And a very interesting thing is that once people could see more of the photographs, because we showed them, they asked us for prints. So, we’ve actually ended up printing more photographs than we have in the past because of this all-in-one experience.

Once you have this all-in-one experience, it’s very attractive, and now that’s what I want to be able to take with me. And, fortunately, I can because I’ve been beta testing this Portable Media Center device. So, this device, when I hook it up to my Media Center PC, it synchronizes all my media. So, recorded TV shows that I want, my pictures, my music. Now, I’m getting ready to take a family vacation. It’s a six-hour car ride. So, one of the things I’ve done is, I’ve recorded some TV programs that my 7-year-old son likes, so when he’s tired of listening to mom and dad, then he can simply watch TV programs that he enjoys, and that’s going to make the trip go a little more quickly for him. There’s Spongebob.

Now, when we get to our destination, we’re going to see some family. We haven’t seen them for a while, so I’ll be able to plug this device into their television and show some of the digital pictures that we’ve added to our digital photo album since the last time we saw them, or some of the new music that I’ve been seeking from Napster I can have on this device, we can plug that into their stereo receiver and we can enjoy that music there.

So, what’s really making all of these experiences hang together is how easily I can collect and manipulate the media in a way that I like that’s personal to me, how easy it is for me to take it with me where I want to go, and to get it in different rooms of the house. It’s very compelling to people, very human.

I’ll tell you, once you get your hands on one of these Portable Media Centers, you’ll find it’s very addictive, it’s a nice device to have. So, I encourage you to go check it out at the pavilion, because this one is mine and it’s going on vacation with me.

Thanks, Jim.

(Applause.)

JIM ALLCHIN: Thank you.

Now, Dennis gave you the end-to-end experience, and you may not know, haven’t I seen some of that stuff before? Is there anything new here? Well, actually, there’s a ton new and I want to just walk through it. The first is, the DRM we announced earlier this week was in all these devices you just saw. It was in the Media Extender, it was in the DVD, it was in the Portable Media Center. You can have that DRM to content flow in the appropriate content-protected way — very, very big improvement.

Another thing you saw, actually didn’t necessarily see it, we moved probably pretty fast, is that there’s a new transport for media that we created which is driverless. When you plug in a device, you won’t have to worry about writing a driver in order to synchronize the media. For example, in the Portable Media Center itself, it had this MTP as part of it. So there’s no driver that needs to be dealt with, and it’s automatically synched. This will be true in the music players as well. Today, the synch experience on a Windows environment is not the best. In this new set of technologies, just plug it in, don’t think about it, it automatically synchs, and that’s true for photos, music, videos, whatever.

Another thing you saw was the capability for this Windows Media Connect technology. And what this is the ability to do is to get access to photos, music, and the like across the net to a server, such as the Media Center, and that could be from devices from Microsoft, or anyone else.

Lastly, you saw the Media Extender, so that you could have the full fidelity experience remoted to another TV in the house. And last you saw the Portable Media Center itself. Now, this device has WMA lossless quality, first device that’s had this. Hundreds of hours of music, photos, and videos on this device. So, we think it’s going to be great for kids, we think it’s going to be great for adults when they’re traveling, and of course for sharing photos around for your family.

So, I want to switch gears into the server and talk a little bit about the roadmap there. The big thing that we’re pushing for is SP 1, Service Pack 1, of Windows Server 2003. Basically, it has the facilities that you heard me talk about in SP 2 for the client moved over, plus some very targeted things that are necessary again for safety and security for the server environment. Then there is the 64-bit version that’s coming out at exactly the same time as SP 1, and what did I say before? Do the drivers. Then we have an update of Windows Server 2003 coming out next year. The main core capability that I want to highlight in this talk about that release is about isolation. You heard what I said that we did for firewall on the client. Think about we’re doing the same general thing for the server. You have a laptop, you connect through VPN to a company, or maybe you bring the laptop into the company physically and you plug it in, the thing is isolated until it goes through a set of tests. We’re working with a set of networking partners to pull this off for the whole experience, so that that PC is isolated until it goes through an approved set of IT tests. Not our tests, whoever the IT manager might decide. What could that be, it might be something like that it has to have a certain level of updates turned on, it might have to have a certain level of antivirus, a certain level of antivirus signatures, whatever. And it has to pass that test before it’s connected to the network. There are some other things in that release, but primarily that is the core focus for it. And then there will be updates to the Small Business Server that has that same general technology as well.

Then, of course, there’s the “Longhorn” server beta. Today, “Longhorn” client, “Longhorn” server are generally connected together. We’re building it in synch. That was a change. Perhaps a year ago that wasn’t our plan, but it is our plan today.

So, talking about the future, what we’ve tried to do in “Longhorn” is integrate all of those three magic ingredients. In fact that is what “Longhorn” is about. In terms of the fundamentals, we’ve tried to think through deployment in a very deep way. It’s hard to deploy the OS today, apps are more difficult than they should be, they also interfere with each other. It’s also complicated for drivers. There’s a brand new set up for drivers. I hope that you start using that set-up now. It works all the way back to Windows 2000.

Reliability, very important to know that in past conferences I’ve been talking about no reboot. I’m still on that campaign, I need your help. Let’s get rid of reboots. You want to have the PCs in these the client or PC server to be used in these non-stop environments — we can’t have reboots, we can’t have memory leaks. We just have to focus, focus, focus in terms of the quality.

We’re also adding more sandboxing in terms of apps as well as the drivers. You’ll be able to uninstall a driver even in weird conditions so that we can back out a driver, even if you don’t necessarily do things right, the OS will be able to remove it.

In terms of performance, because we’re adding a lot of capabilities into “Longhorn,” which I’ll talk about in just a second, beyond the fundamentals, but in order to put in all the things we want, we’ve had to add some smarts in terms of performance. We have something called Super Fetch, it’s a very smart, new virtual memory capability where we know, predictively, what is going to be needed, and we’ve got them in memory. Much more advanced than any of the past techniques that have been done.

We’re also much smarter about managing the GPU. Today, the GPU isn’t really managed. In “Longhorn,” it is. Last, glitch-free scheduling is something that has taken a lot of work. We also need your help in order to pull it off. In order to offer some of the capabilities as we push the PC out into these different environments, we can’t have any glitches while other things are going on.

And last, security, I’m not going to spend a lot of time on that, I know we’ve talked to you about it in the past at this conference. We are making significant improvements in terms of both on the requests that we’ve got from you on hardware, and in terms of software.

Now, what is “Longhorn” really about? We are thinking about it in terms of doing. These are just some of the scenarios that we think about. And what we’re really trying to do is, we’re going to connect some of these together. So that if you’re dealing with photos, we’ll be connecting some of these together, whether it be watching, managing, and the like, together, in terms of the different steps.

Now, we are making a huge step in terms of developer productivity in “Longhorn.” There are several different new pillars that are coming in “Longhorn. First is, there’s a new storage system called Win FS. And that storage system is, think about it as a file system but with the ability for rich properties and rich relationship between the items that are stored in the system.

Second, we have a new communications which is based on Web services, called “Indigo,” which lets you connect out to other systems in a much more unified way.

Third is a new graphics capability which we call “Avalon,” which takes full advantage of the GPU, and manages that.

Now, all those APIs are managed, and we call the collection Win FS. Now, obviously you’re not doing drivers in managed code, but for the app, we think the best app in the future would be a managed app for a variety of reasons. We’ll tie together these scenarios based on the Win FS set of APIs.

Last is about people, the design we’re using is a person-driven design. What do I mean by that? I mean, we have personas of individual people that we’re locked on to. We know about what these people do in their daily lives, we know their personal-professional interaction, we know the environment that they’re in. This is true whether they’re an IT professional dealing with a particular type of servers, or they’re someone who stays at home and they’re a parent dealing with their children. There’s lots more we’re going to talk about “Longhorn” in the future. But, I thought what I should do is switch to some demos and give you an idea.

It’s very early, you have some copies of “Longhorn” that we’re giving you. I should caution you and say, it’s very early, performance is not there. It’s mainly a tool for you to start down the effort for drivers, and the other types of hardware innovations that you’re going to do.

So with that I’m going to turn to show you some demos. One of the first problems that people have when they buy a PC today is migration. They buy a new PC and they want to get it from one machine to another. And today it’s fairly complicated, I don’t know if can we bring up the screen here. On one machine, when they get it up here, I’ll have “Longhorn” and on another machine I’ll have an XP machine. And what I’m going to show you is the work underway for doing migration. So the first thing I’m going to do is I’m going to start this, on my new machine, the “Longhorn” machine, I’m going to start this file migration wizard. We have something like this in Windows XP, but this is taking it to a whole new level. The UI is not final, but it says, basically, we’ll copy everything is what this first screen says. I’m starting a new process here. I’m on the new computer, and it gives me this step by step of what’s going to take place.

So I say, yes, I’m ready to do this. It turns out I’ve already taken the file transfer wizard, and I’ve already put it on the Windows XP machine, so I’m just going to say yes, I’ve already got it. I’m going to say continue, and it asks me to type in this number. Let me just start this wizard on the old machine, and in just a second it will start, and now it asks me, do you want to use this through a USB cable, or a network cable. Now, I’m going to do this on a network cable right now, but I want to talk about the work we’ve been doing in terms of USB. I don’t know if you’ll be able to get a close-up of this or not. Let me hold it up here.

Basically, this is smart USB cable. And it’s smart, although we haven’t completed it yet, the idea is the software is going to be in the key itself on this cable, all you do is plug it in. This wizard that you just saw will just come up on the machine. The user won’t have to think about it. They’ll just plug it in and it will just work. If you’re in a network environment, well, things are a little bit more complicated. You obviously want to make sure that you’re going to migrate the right machine. So it’s asking me for a key to type in, which I’m going to now type in. And this takes a second while the machines connect to each other. We’re also working on a technique to be able to do this with a single monitor.

We’re almost there, we haven’t quite got it working, but the idea would be that you could buy a new machine without the monitor. And what gets migrated can be everything. So I’m going to say, just take everything, apps included, and migrate it. So that’s the demo, it’s pretty easy, the UI will get even simpler before we’re done.

Our goal here is that we can have doing the migration not take a weekend, you just come in, take your other machine, plug it together. It turns out we’re doing a much smarter way of doing this if you’re at scale in the enterprise. Now, I’m not going to demonstrate that in terms of the new imagine technologies that we’re using, but I’m going to give you a demonstration of something that you might want to use in a business sense, in a business setting.

Now, what I’ve got here is I’ve got a USB key, we’re in love with these, as you can tell, and I have a laptop, that’s powered off. What I’m going to do is I’m going to plug in the USB key, and I’m going to turn this on. Now, I take it you guys are going to get this up on it’s going to be 18. All right. So it’s in the middle of booting. I don’t know if you can see the bottom of this, it’s starting what’s called Windows PE, the pre-installation environment, we’re booting off the USB. And I need to get this up so I can see it.

Imagine that you just can come up to any machine, plug in this key, get the machine booted, either for repair, or for manufacturing reasons, to change something, it’s very, very simple for diagnostic reasons. This will remove the need for you hunting around for drivers you might need for DOS and any of that, this is the full capabilities that you would expect in an XP environment.

Now, this booted to a particular directory. I’ve got to make sure I’ve got the right keyboard here. It turns out that not only do I have Windows PE there, I have full “Longhorn” ready to be installed from that key. So with this one key I can walk up to a dead machine, plug this in, boot it in Windows PE, then immediately go to start the “Longhorn” installation process. So it’s very, very simple. This is another way for us to offer to you a way to get rid of floppy disks forever. You can just use the keys as a way to do back ups, as a way to boot your machine, and the like. So that’s the second demonstration dealing with migration, as well as deployment in general.

So now I want to switch gears and talk about an experience that a legal worker might have using “Longhorn.” Now, typically when we do demonstrations of “Longhorn” it’s very glitzy, and you’re going to see lots of glitzy gaming demonstrations, and we typically do things with rotating carousels of photos. I specifically decided, no, we’re going to show it in a business context about how you can use the “Longhorn” technology, how it might be used in that environment.

So what I’ve got on the screen is an application, sitting in the “Longhorn” environment, for a company called a make-believe company called Contosa, and they’re sitting here, and I’m sure you’ve seen the “Longhorn” sidebar here providing some information, and they’ve customized it where there’s information about the upcoming court dates, as well as there is information about tasks to do. Then over here there’s the Web site for Contosa, and it’s saying, hey, there’s a new app that you should install. Well, my work list over here is that there’s a deposition coming up, and so I need to go and look at and put this new case-builder on, because I’ve got to get to work on this case.

So right now it’s verifying the application requirements, and in just a second it will have installed a brand new version, that’s real code on “Longhorn” where it’s just doing the installation in a very simple way. So what you’re seeing here is some nice capability with “Avalon,” I’m going to go in here and solve one of the biggest problems that legal workers have, which is the relationship between all the massive documents that they have, between arguments, evidence, precedents, and just the individual people. And as you see that as I highlight, I’m showing the relationships, all stored in Win FS, and you can see how fast those are coming up as I move around.

So I want to go over here and look, since this is a case between John Dunlap and Jeff Hoke, I’m going to go look at the information, look at their relationships in a different way, as you can see, “Avalon” coming up, the presentation, integrated video that’s running. This guy is really getting hammered there. I go back, and maybe I want to look at the situation with Jeff. And I decide that I don’t have enough information here, so I need to go find some more evidence about this case.

So I go back up to the top, say I want to research this case, say I want to search on Lexus-Nexus. And this particular case I want to look up Hoke, I’m not going to be actually going out to the Internet, but it is all using Web services, where we have a fake Lexus-Nexus feed that we’re pretending, the rest is live. So I do a search, and the information comes back, again through Web services and “Indigo.” I say, yes, this is the document that I needed. I’m going to come down here and put it on Jeff. And I’m going to go back into Jeff, and as you can see, here’s the new evidence that just showed up.

I’m going to go ahead and open this evidence. And if I go down here, you can get something of an idea about the new graphics. Maybe I want to bring up this page, and I want to move it around a little bit. You can get an idea there of the new glass effect. Suppose I want to minimize all this, and get an even better idea of the graphics capability that we’re going to be offering. And I could, for example, bring up an e-mail and write about it.

Now, you can see, we try to immerse ourselves in the mind of what this legal person might be doing. A lot of that is the app writer, but the technology underneath needs to flourish in a way, the most information rich, relationship rich, graphics rich way come up that’s possible. Now, as you can really tell, we are going to push the graphics.

So now what I want to do is show you the importance of the “Longhorn” driver model. And if I can have the machines up, we’ve got an XP system I’m sorry, a “Longhorn” system that’s going to use the standard XP driver model, and a “Longhorn” system that’s going to use the “Longhorn” driver model. So what I’m going to do is bring up a few things here. It’s working pretty good so far. A little bit jerky. Not enough video memory. Let’s check it out on a “Longhorn” system.

So that’s the fourth one. Still looking pretty good. Let me bring up something else. No problem. And while this was all going on, if I can bring it up here, which it doesn’t want to come up — well, even though I can’t seem to bring it up, there is Quake running in the background, which is incredible. (Applause.)

I don’t know why it’s not coming up but Quake is running in the background — ah, it’s finally coming up. This machine is very slow for some reason. But as you can see, the driver model doesn’t have any issue at all and that’s no change in hardware, just change in the actual implementation. So that gives you an idea. Eventually I think that will come up. We’ll maybe have to come back to it.

So I think the last thing that I want to do is just have you listen to those experience creators one more time, and then I’ll say a few words at the end. So if we can play the last video?

(Video segment.)

JIM ALLCHIN: Remember, it’s not just about the technology; technology is the enabler. The goal is the experience.

Thank you. Have a great WinHEC conference. (Applause.)