KEVIN TURNER: Wasn’t that an awesome demo? (Cheers and applause.) I love that demo, love that demo. I’ve seen that demo probably 15 times, and I love it every time. You know what, this is sort of a different ending than we’ve had in the past. And before I jump into it, I want to  I really want to thank you for your attendance, our sponsors, the expo hall exhibitors, all the presenters, and I really want to thank Allison and the Worldwide Partner Team, as well as the Events Team, and all of the Communications Managers for all the logistics, and work that went into this event. Can we give them a round of applause, please? (Cheers and applause.) These things don’t just happen, and those folks worked tireless hours to make it successful and I’m really proud of the job that they did.

You know, we only get better with your feedback. And we talked about that, and I’m going to jump into some of the feedback things that I’ve heard, and some of the things that we’ve heard on the road, some of the things that you put in the verbatims. We’ll talk about that, and some of the things I’ve heard this week, because there’s been a lot of sharing, and there’s a lot of business done here. But I’m also going to close today, close the conference, with one of the most inspirational people and stories that I’ve ever met or come across. So look forward to that in a few minutes.

But as we jump into it, I thought it would be important to really recap, what does this mean we’re listening? The fact that we’ve shown you all the products and innovation, and the innovation waves, and where we go, and we’ve thrown a lot at you this week? You know, as I talked to you in the opening, we’ve been around the world six times in the last 22 months listening and getting feedback about ideas, and things we need to do to improve.

And one of the things that I think is  if we take a look at the survey that we ask you all to participate in, there’s one question in it that I really love. The one question that I actually had them print out, and I read, and went through, and this is from our partners answering this question: What is the one specific improvement that would have the greatest impact on your satisfaction? And so I want to thank all those partners that participated, and I brought these here today so that you can see, we are committed to making sure, myself and all of the team at Microsoft, are committed to making sure that we hear your feedback. And, more importantly, that we do something about it.

Now for all the comments in the binder, a lot of them are positive about things that you enjoy, or things that we’ve changed or improved upon. Thank you for those. What I’m going to spend time with you a little bit today on are not the positives, but the opportunities, because I believe that’s how we get better, and problems don’t age well. So we’re going to talk about some of those.

As we jump into it, I wanted to give you a sample of some of the things that we’ve heard, simplify licensing, make it easier to navigate through Microsoft, improve our joint selling efforts with the Microsoft account teams, we need more leads, we need more synergistic relationship with MCS. I was so proud to see Maria up here today. Be responsive when we need help, more support for solutions partners, better technical support, more transparency on our performance, security is still important don’t forget about it, and improve the Microsoft Partner Portal because it’s relevant to my business.

I just wanted to share with you some of those, and then I want to go a little deeper with you on these specifically about what are we doing about it, because what I’m going to ask Allison and the partner team to do is to recap, and summarize and send out to all the partners what are the key themes that we’ve deducted from your verbatims, and from the feedback in this conference, and from our travels over the last year, and we’re going to present that to you in terms of what are we doing about it, so that you can have that expectation of us, and we’ll deliver that back. But I wanted to talk about the main themes that I took out of the verbatims and the conversations that I had this week with partners. What is Microsoft doing to simplify license? I’m going to get into that. How do I align better with the local Microsoft sales team? What is Microsoft doing about the technical resource gap that we all have in the industry? Is Microsoft going to take partners with them as they go into software plus services? And what does Microsoft think about the Google partner ecosystem? And how can partners help Microsoft with public policy?

So let’s take simplification of licensing. You know, I was one of Microsoft’s largest customers for a lot of years. And I remember being two years ago when I came to the company, I thought, boy, I can’t wait until I get my hands on this licensing opportunity there. In fact, Steve and I had had a few conversations as a customer about licensing over the years, imagine that. And so as I got into it, we’ve got a worldwide licensing and pricing team run by Joe Matz, and we’ve also got  our legal folks are very involved in our licensing programs to make sure that we’re in compliance. And so, as I got into it, we learned some things. We learned that we had 107 different licensing programs in the company. And I’ve got news for you today, that starting July 1st, this July 1st, we now have 26. We reduced it by two-thirds just over this last year. (Applause.)

The next thing that I learned, I went to Reno, our processing center, where they actually key these agreements, and I sat down and actually went through the process that all of the people, where the agreements come together, and how they enter them into the system. And on the average, we required a customer to sign them 13 different places. Starting July 1st, we’re going to require one signature on those licensing agreements. (Applause.)

Our volume licensing agreements, we reduced them between 25 and 50 percent in pages, just the sheer volume. And no we didn’t shrink the font to do it, or make it on legal paper to do it. We did it the right way. And we reduced the number of amendments that we’re going to have this next year by 50 percent.

These are all things that we’ve worked on over the last year, the LCA department, our Worldwide Licensing and Pricing department, myself, my team, all of my directs, on what can we do to simplify our licensing. And we implemented those.

And we get a lot of requests for Microsoft Financing. We doubled the number of originations this past year, and we’ll double it again this next year, and we’re going to continue to work on that. If you look over to FY ’08, you say better customer and partner experience, we’re going to deactivate an additional 9 to 15, I’m going to go ahead and give Joe a stretch goal here, another 9 to 15 percent of the programs. So we’re going to shrink it even more.

But I’ve got to be honest with you, ladies and gentlemen, as I went around the world to try to find a person that could explain all 107 licensing programs, I couldn’t find a person that could do it. I’ve got a better shot with 26. I’ve got a better shot when we get it to 20. And so we’re going to keep pushing on that.

It will never be simple. Hear me on this. Our licensing program will never be simple, because we’re one of the few companies in the world that sells to end users and consumers and largest governments and companies in the world, and everything in-between, and the breadth of the portfolio that you saw says that it’s difficult to make it simple. But we have to make it simpler, and we have to work on it every day, every week, every month, every year. And you’ve got my commitment, and the team’s commitment that we’re going to continue to do that.

We’re going to simplify our select licensing, and increase our SA attach, and we’re going to focus on strategic and growth markets, and make it simpler in our emerging markets to do the deals that we need to do there. And we’re working on sharing the best practices. But, hey, those are all great. What does it mean in terms of satisfaction? Well, guess what, the past two years, our licensing satisfaction, believe it or not, is up 19 percent. That’s the first time in the history of Microsoft that licensing is showing positive gain on customer and partner satisfaction. I only tell you that to say, we’re just getting started. We’re not done. It’s the number one issue I hear about. And we’re committed to working on it. But I also wanted you to know that we’ve made a lot of changes, and those changes don’t show up immediately, they show up as deals come in, and as their anniversary and they’re trued up and/or new origination. So be looking for those. Give us your feedback, and keep pushing us on simplification.

I also want you to know, we had them create this idea of a self-service quote tool that can allow you, and the customer, to figure out how do they recommend product licensing solutions for your own set of services. How would you tailor and customize it, so that you can access it. This tool right here, license-wise, is available in 10 languages in 85 countries. It’s an awesome thing. It’s built on the back of something called the Microsoft Product Licensing Advisor Tool, and you can build quick quotas, find program comparisons, and broad product information right there in that portal. And it will also calculate your financing and do a lot of different things.

Now, it’s not perfect today. But we’ve launched it, and with your feedback we’re going to keep working on it to allow you to do scenarios, and to come up with the best available licensing option. So I encourage you to go out to partner.microsoft.com and look up Microsoft License-wise. It’s a great tool, and it’s a step to allowing us to continue to simplify licensing.

Next question, how do I align better with the local Microsoft sales team? Well, you know what, we talked earlier about the PAM role, the Partner Account Manager role, and we’ve got a bunch of them here in the audience, and we’re committed to all the subsidiaries having the PAM role, and we’re committed to that PAM role being responsible for three things, partner sales, which includes your satisfaction; business development, new opportunity, and account planning with you; and relationship management. The role of the PAM is to help you do account planning, bring best practices to you, and to makes sure that they represent one Microsoft and shield you, the partner, from all the complexity at Microsoft. And so I want you to expect that from those PAMs, and I want you to give us feedback on how that’s going. And I know we have some great PAMs out there who are excited about the fact that we’re charging, and really raising the level of this position in the subsidiary. And I’ve got all our sellers together next week, and I’m going to talk to them about the importance of the PAM role. And when that PAM, that Partner Account Manager comes knocking, those sellers are going to be responsible for the interface and facilitation of business development. And so we’re going to keep investing in the PAM role, and that’s the biggest thing that we’re going to do is allow that one Microsoft for it to come together to shield you from the complexity.

The other thing I wanted to share with you today is, I looked at the field over the last couple of years, one of the things I realized is the way we were aligned actually inhibited our field from some local empowerment. Well, starting July 1st, we’ve changed that, and we’re putting in a new P&L system. I’ll talk to you about it, because most of us that went to business school were taught that quite frankly you should think global, and act local. Well, ladies and gentlemen, that no longer works, and I actually don’t believe it’s the right business model anymore. What should happen is that you should act global, and think local to maximize your local opportunity.

So what we’re doing starting this past July 1st, is we’re now allowing subsidiaries to move resources to where the opportunities are across segments, allow them to maximize the local opportunity with partners and with customers. This is a big change in the field, and we’re kicking it off next week with all the sellers to make sure that they understand that this opportunity that we want them to think local, so that we can truly leverage the fact that we sell products out of 191 countries around the world, and that we’re really about the local market. That what’s important is what is going on in the local market, and that’s the most important thing. And I wanted to share that change with you, because that will also enable better alignment.

Probably the second most popular question I get is, Microsoft, what are you going to do about this resource problem? Well, ladies and gentlemen, the biggest thing I would tell you right now, on this particular problem, is the cavalry is not coming. That we’re all in this together. That this is a major problem. That the real question, the better question is, what are we going to do about it, because now, more than ever, great people are hard to find. We can’t hire enough people ourselves, coupled with the fact that the number people entering technical fields from the dot-com era to today has shrunk by two-thirds. There’s only a third of the graduates entering technical fields today as there were in the late ’90s. It’s a tragic scenario, and it’s one that we’re very, very concerned about, and we’ve lobbied in Washington, and we all speak at universities around the world, and we’re out there trying to thump up and get people excited about the opportunities that we have, but it’s a major concern.

But I did want to share some things with you that we’re going to do together. We’re making some changes and we’re going to make sure that on prepare, practice, and achieve that we’ll continue strong marketplace support to increase technical development skills for partners. We’re going to provide relevant e-learning courses at reduced rates.

You heard about Chris Cap for IW, he made the prepare part of that free this week. That’s a big deal. And we’ve reduced rates in the other areas.

On the practice side, we’re delivering free practice tests to accelerate the exam preparation. And on the achieve side, we’ve now went to unlimited vouchers for partners, so you can get the discount, unlimited vouchers for partners. It’s a big change and a good change. (Applause.)

And as we think about this resource opportunity, it’s one of the things that we all have to continue to put our heads together to work on, because it’s a major opportunity for us to continue to improve. Now there are some go dos for you in this particular area. We need you to get current. We need you to hold up to date Microsoft certifications. We need you to obtain a higher level of certification, and use our Partner Skills Plus program, and our offers, because it reduces cost, while spending more time with customers.

The other thing I’d tell you is we’re going to figure out how to make sure that we’ve got the highest integrity in the Microsoft exams, because I’ve heard from partners, including this week, that especially in emerging markets that there’s the potential for people to fraudulently take these tests, and that’s not right. And I’m not going to stop working on it until we figure out how to have the highest credibility and integrity in our testing to make sure there’s no question about people who are actually certified. And we will continue to work on that.

But, the one thing that I think is important for you is making sure for each new team member certified that your performance will go up, not just because IDC said so, because you know so, and I know so. And that’s an important part of that. But, as I said, this is a huge problem. And to be successful and fix it, it’s going to take all of us, because we see it, we have a major shortage, we cannot hire the number of engineers and technical skilled people that we need internally to continue with our demand. And we know you have the same problems around the world, and we’ve all got to keep working on it.

Extending the People Ready Business, is Microsoft going to take partners with them as they go into software plus services? I get this question a lot, hopefully after this conference I’ll get it a lot less, but let me remind you there’s three ways we’re going to monetize. We’re going to do on-premise, we’re going to do hosted by partners, and we’re going to do hosted by Microsoft. And don’t forget the announcement we made about marketplace, where you can write applets, and we’ll host it for you.

There’s three ways, embrace software plus services, get on board with it. We’re on board with it. Change is hard, change is difficult, but we’re all making the change to offer that customer the choice, when they want it, being able to offer the choice is the competitive advantage. So I hope there’s no doubt in your mind that there is a place in this business model for our partners. We will take you with us, and we will figure it out together.

But, let me clear up one myth, a year ago we launched and started talking about software plus services, and we didn’t give a lot of details to you. And I got people that wondered if we just held our cards close to the vest, and didn’t share it. I’m standing up here today to tell you, the reason we didn’t share that much with you is we didn’t have it figured out. And we’re still figuring it out. And next year we’ll be smarter about it than we are this year. And today we’re smarter than we were last year. But, we aren’t completely, completely at the end of the job on our vision for where we’re going with software plus services. You heard about a lot of the activities, and we’re committed to those, but those aren’t all. We’re continuing to reevaluate, re-look at, continue to examine the opportunities, and figure out software plus services.

So the call to action this week was hopefully you’ll join us in figuring it out. But, we don’t have it completely figured out yet. We’re well on the way, and we’re transforming some huge product lines, but we still have a lot that will continue to evolve over the next few years. That’s why it’s so important for you to be a part of this transformation as we continue to work through it, but we will have that opportunity for you in software plus services.

Now, perhaps some of you in the audience were waiting for this slide. What does Microsoft think about the Google partner ecosystem? I get that question a lot. The fact of the matter is, I don’t know what to think about the Google partner ecosystem. That’s something you should explore, and you should look at. What I can tell you is about what we’re doing. I can’t really tell you much past an advertising model what Google is doing. What I can tell you is that we’re going to take a long-term approach to innovation, and we’ve shown you that, and we’re going to invest US$7 billion a year. We’ve talked about that.

We’ve got a partner ecosystem like no other company in the world. Of our technology peers, one of the most sacred assets in all of the company, one of the most revered things in all of the company, is the partner ecosystem that we have and what you all do to bring value to the marketplace.

We’re going to bring software plus services to the marketplace, we’ve got a multi-cored approach, where you can pick which ones you want to get involved in, and you’ve met a lot of our people, and we think we have great people. And we think we’ve got great people that are going to continue to drive innovation and value into the marketplace. So that’s what I think about how we’re going to compete. The question I would have for all of you is, you should look at the ecosystem that Google has for partners. And if there’s not a monetization model there for you, then you should deduct, perhaps they could be a competitor, and join the fight.

So if you take a look at it, and you make the decision yourself, you know what, there’s not a monetization model for me, I’d better continue to grow the monetization model that I have, or exploit the one that I have in new ways. That’s a challenge I would have for you. Ask the hard questions. And when you don’t get the right answers, make the right decision, make the right decision for your business, and do it in the right way.

And I talked to you again about what do we bring to the table, it’s this wave of innovation. This is last year, this is the year we’ve got to accelerate the monetization of that. And when you look at next year, wow, boom, it comes right back at you, and accelerating and continuing to figure out how we monetize that innovation. I’m so proud that for every single dollar of revenue that we generate at Microsoft between $14 and $22 goes to the partner ecosystem, between $14 and $22 worldwide goes to you all. I’m proud of that ecosystem. And as I said, we’re going to continue to find ways to grow it.

Interestingly enough, a very common question that I get around the world is, hey, what can we do to help you with public policy? You live in Redmond, what’s going on here is different in this geography, or this market, or this subsidiary, what can we do to help? And so what we’ve done is we’ve created Voices for Innovation. And we encourage you to use your voice to grow your business. Voices for Innovation is an open and transparent network of individual companies who support a balanced, pro-innovation policy environment. Voices for Innovation is about growth, jobs, customer benefits, small business productivity, technology choice, and entrepreneurship. Check it out. Check out that Web site, www.voicesforinnovation.org. I encourage you to, I encourage you to sign up, I encourage you to encourage people to sign up. This is how you can help the ecosystem.

And I want to talk to you about a hot topic. You know, it’s funny, because in the past, 10 years ago people accused Microsoft of being closed and proprietary. Guess what, over the last two years we’ve pushed and struck IP deals with Novell, and other Linux and open source companies. We’ve also said, you know what, let’s have an open XML standard, and let’s make sure that it’s backwards compatible to 2003 Office, so that all the millions of systems out there can participate in open standards.

So our competition that used to say, no, Microsoft you’re closed and proprietary, they don’t say that anymore, because guess what, we struck IP agreements with various people, SAP for one, with Duet. We struck IP agreements with Novell. We talked to Red Hat. They weren’t interested. We’re going to continue to talk to people about how do we bring that to the marketplace, and how can we work with you, and take an offensive position. But, around the first of August there’s going to be a vote, because we’ve proposed an open XML standard, and an ISO standard, that we want adopted worldwide, and now our competitors say, hey, look, we don’t want that standard, we only want one standard.

The world’s got multiple standards, and has always had multiple standards. So we need your help. We need to win this vote for an open standard. And we believe that our partners should be an important part of helping us do that. So please go to www.openxmlcommunity.org to sign a petition and support us. We need your help on that. It’s an important thing for us, because we believe for it to become a ratified open format standard, it’s going to help all of our customers and in turn help all of our partners. So we ask for your support. But, we’re creating this so that we can get your input, we can leverage your knowledge, and you can help us shape public policy at the local level.

Now, I covered with you three things. One was execution, sell, sell, sell, that FY ’07 and FY ’08 innovation, we’re in it to win it together with partners. This is the year we’ve got to sell. That’s what I’m going to tell the sellers next week, and that’s what I’m challenging the partners with, because this can be an historic year, not a good year, an historic year with the innovation that we’ve got in the marketplace.

Compete to win. I mean, there are some obvious competitors and there are some not so obvious competitors. I talk about SAP, guess what, we want to win against SAP. If the customer chooses SAP we want to partner with them. If the customer hasn’t chosen, we want to compete with them, we want to win against SAP. We want to win against anyone that we can, but we want to win fairly and respectfully, and we want to earn it by driving value into the marketplace.

So that we believe that this compete to win, winning in high performance compute cluster computing, and Web computing, and in the database area, those are very important for us. We talked about it, winning against IBM Lotus Notes, and winning against Linux and open source. We have lots of coopetition, but don’t be confused, we want to compete to win fairly, and respectfully by delivering value to the customer and to the partner. So make no mistake, we’re back, we’re tough minded about competition, and we’re tough minded about winning, and that’s important.

Taking care of our customers is a third thing. I asked for your help. You represent us, we represent you. This is such an important thing. If we don’t take care of our customers, somebody else will. And we’ve just got to make sure we do everything possible to make sure that they have a good experience. So these are the three actions that we need your help on, and where we’re going to go with our sales force, as well.

I covered the Microsoft advantage, but we’re committed to winning with partners. We invest for the long-term, I want you to keep driving us, keep pushing us, keep giving us that feedback, and you’re going to see changes, just like you did from one year to this year, you’ll see changes next year. Keep pushing us. We believe in you, and hopefully you’ll believe in us. But, we only get better if we keep pushing each other.

Now, one of the things that I think is truly amazing about working at a company that every single day over a billion people use our software. You know what, a lot of times we get busy. I travel all the time, and have long nights, long days, early mornings, and we get caught up in the day-to-day. And sometimes we might get so busy that we forget what our job is. Our job is to help people change the world. And I’ll tell you, occasionally we run into people where our technology in some small way has touched somebody. Then in turn, we look at the person and we become inspired, and we get uplifted.

My mother used to tell me, Kevin, every time you help somebody else, you may not realize it, but you’ve just helped yourself, and you’ll get better as a result of it, sometimes it’s immediate, sometimes it’s not, but you always get better. And I believe in this ecosystem of Microsoft partners. I want you to meet one of the most inspirational people I have ever met in my life. And at this time I’d like them to roll this video so that you can see this special person that we found, with technology and enablement, and then just somebody that has a sheer positive will about them. It’s an unbelievable story. Please roll that tape.

(Video segment.)

KEVIN TURNER: One thing I wanted you all to know. She’s launched a magazine, she’s got two issues out.

LOGAN OLSON: Two

KEVIN TURNER: Two, that’s right. And one of the things she has on the cover of every magazine is  

LOGAN OLSON: Is me?

KEVIN TURNER: Is you, that’s right. There’s another thing here, because life is always beautiful. You know, you mete people in the world that just have this spirit, and this aura about them that says, look, life is so positive, and anything that happens to me, I’m going to turn it into a positive. And I want to read you the mission statement of this magazine, because it touched me. It says, the mission of Logan’s Magazine is to inspire, encourage, and inform young women with disabilities about how to lead a lifestyle that is productive, purposeful, and pleasurable. Go ahead, you do it. Our goal is to motivate young women to live, work, play, dream big, and look great, experiencing all that life has to offer. I mean, it’s an awesome thing.

So thank you so much for being here. Do you have anything to share with these folks?

MS. OLSON: Hi, guys. You know, when Logan went to a DigiGirlz Camp at Microsoft, she was invited to go visit the accessibility Web there, and it had all kinds of technology, and software, where we were introduced to the Windows Vista speech recognition. We didn’t think Logan’s voice was going to be able to be picked up by that program, and so now that they calibrate it to your voice, she’s  it’s picking up  we had about  there were about 15 DigiGirlz around her when we were testing it to see if it would pick up Logan’s voice, and we were all so excited.

LOGAN OLSON: And it did.

MS. OLSON: Then Maureen in the video with Text Help, another product that is helping Logan do research for this magazine. It has just been fabulous.

LOGAN OLSON: Fabulous.

MS. OLSON: We want to thank Microsoft and all the partners.

LOGAN OLSON: Thank you, guys.

MS. OLSON: For having technology available, because Logan was injured five-and-a-half years ago, and her life was going to be really different, but it sure wasn’t over. So we want to thank everybody that already had products in place that we could turn to, to help Logan do this job.

LOGAN OLSON: Yes.

MS. OLSON: So thank you, Kevin.

KEVIN TURNER: No, thank you. These people  (applause.) Absolutely. I want to challenge all the partners that you need to subscribe to this magazine.

LOGAN OLSON: Yes, you do.

KEVIN TURNER: I told you I’d do that. That’s Loganmagazine.com, one word, Loganmagazine.com. Share that.

And you’re just such an inspiration, and I’m so proud that you came to share that story. It means a lot. You know, we get so busy in our lives working that sometimes we don’t realize the impact and influence that we have.

LOGAN OLSON: No you don’t.

MS. OLSON: It’s huge, because when we were researching the Internet for the now what are we going to do questions for Logan, we saw a lot of grim details for young people with disabilities, about being ignored, and poverty. So when we saw accessibility, and the whole accessibility Web site, and all your partners that we could  I mean, it took us forever. We still have a lot to learn on what we could use to help us do our job.

KEVIN TURNER: That’s so special.

MS. OLSON: So thank you.

KEVIN TURNER: Can we give them one more round of applause, please. (Applause.)

Thank you so much for being here.

MS. OLSON: Thank you, Kevin.

KEVIN TURNER: She rocks, that’s right. That is absolutely right.

So when I tell you, ladies and gentlemen, that we’re going to win together, we’re going to win together. I like those stories, because it’s keeping it real, again, that makes what we do special, that makes it different. And that partner ecosystem that I talked about in day one is special, and it’s different, and you’re special and you’re different. My e-mail, and my phone number is up here. I got plenty of notes after session one. I’m sure I’ll get a few after session two, and I just wanted to give you a flavor of some of the issues, share with you some of the inspiration that we’ve captured, and to let you all know how much we appreciate what you do, because it changes people’s lives.

And I want to say thank you for your attendance, and your attention, and all the feedback, and all the questions. And we appreciate it, and hopefully you’ll attend all the regional keynotes to learn how we’re going to execute in the geographies. Thank you very much. (Applause.)

ALLISON WATSON: If you can hear me, I’m sorry that we’re going to come to a close on the general session. It was an amazing three days, and I appreciate you being here. I wanted to put up one last slide, with the set of things that are going on this afternoon. Regional keynotes are going to start a little bit later than planned. I think they’ll put up maybe a 30-minute break. WE have the afternoon sessions. I want to remind you that the expo hall is a great place to visit, not only for our exhibitors, but also to take the Summit to Success challenge. The EB Fraley CD signing at noon, in the conference room store, and a celebration tonight at Coors Field. We also have the e-mail address for the Surface Pack, if you’re interested in that.

Thank you again. I look forward to seeing you. We are not going to announce where we’re going to be next year, because we’re still trying to decide, and we’ve got some interesting cities for you. But as soon as we know, we’ll have it up on the Web, so you’ll know where to join us next year on our Worldwide Partner Conference Tour.

Thank you again for being here. Thank you so much for your business, and have a wonderful week. (Applause.)