EDITORS’ UPDATE, Dec. 3, 2004
— Microsoft is evolving the Office Solution Accelerators program with the Solution Showcase for the Microsoft Office System. For additional information, see
Microsoft Showcases More Solutions Developed On the Microsoft Office System
or the
Microsoft Office System Solutions Web site
.

JEFF RAIKES: Well, good morning. I really appreciate the opportunity to spend some time with you today, in particular focusing in on the opportunities for information worker productivity, especially based on the new Microsoft Office System.

But as I begin, the first thing I want to do is to say thank you, thank you for your commitment, thank you for being here as a part of us building this next wave of momentum with all of our partners around the world. I want to say a special thanks to the partners of Microsoft Business Solutions. I get an opportunity work with Doug Burgum on the Business Solutions business, and we really appreciate the years of commitment and the fact that now you’re a part of this broader Microsoft family.

And in the context of the Office System, I want to say thanks very much for the ideas, the influence that have led to this exciting leap forward in information worker productivity, because it’s been your ideas, it’s been the way in which you work with customers, that’s really seeded the possibilities of the Office System. And so today I get a chance to really share that with you.

Now, to set a historical context, I want to look back at the last couple decades, and build on that to think about the future of productivity. There have been at least two major waves of growth, significant growth, in information worker productivity. During the 1980s, with the establishment of the PC and categories like word processing, spreadsheet, presentation graphics, there was a leap forward in terms of personal productivity.

During the 1990s, as those devices got connected together, the growth in networking, the Internet, the use of electronic mail, another major step forward in terms of information worker productivity.

But in the minds of many people, in the minds of many of your customers, our customers, there’s a question: What is next? Is there still opportunity ahead? In fact, some of our competitors — the Open Source community, Linux, Star Office Open Office — they would suggest that really everything out there in terms of information worker productivity is just good enough. They’re not interested in really taking a step forward built on integrated innovation. They would say that just cloning where we were with Office 97 is enough.

But, in fact, as I think you’ll see today, there is incredible opportunity ahead. I challenge that notion that good enough is, in fact, really good enough. If you believe their view, you’d say there really won’t be that much more innovation in hardware and software. You would think that Moore’s Law is now Moore’s history. You’d think that the lives of information workers really couldn’t be any better than what they were with Office 97.

And so at Microsoft, we have a very different viewpoint and we think all of you do as well. And in particular this new viewpoint provides incredible opportunity for you as our partners to build exciting, new information worker productivity solutions.

We believe that there’s a new tipping point. You may be familiar with the book by Malcolm Gladwell that talks about social epidemics and how in society we see things just kind of chugging along, and then there’s an explosion, an explosion of the use of the Internet or the explosion of the use of the personal computer.

Well, I believe that we’re at a tipping point for information worker productivity. I think you’re seeing a transition from what people used to think of as Office, document-centric productivity, to Office becoming a workspace for personal, team and organizational productivity; so that we get this integrated innovation in ways that will make a huge difference in terms of the productivity opportunity.

And in order to respond to that, we are making a major transition. We’re working with you to set up this great opportunity. If you look back, you can think of Microsoft Office and the Office box and the client applications and the focus on personal productivity. But as we look forward with Office 2003 and setting the overall brand concept of Office System, we’re pulling together the set of client applications, the server capability, the services in order to enhance the full aspect of information worker productivity, personal, team and organizational productivity.

So in order to really set this context, we’ve been challenging ourselves internally, we’ve been working with partners around the world, in order to show the new potential of information worker productivity and where we’re going.

And part of this is a brand transition. It’s a transition where we change people’s thinking from thinking of Office as just the combination of Word, Excel, PowerPoint, maybe Outlook, to this new Office System where the products, the services, come together to dramatically enhance what people can do in information work.

What I’d like to do is actually show you the video that we’ve used internally and now somewhat externally to set this brand context. It gives you a sense of this important transition. So let’s go ahead and take a look.

(Video segment.)

(Applause.)

JEFF RAIKES: Thank you. So the video helps to underscore not only that we’ve raised the level of what is possible in information work, but also it helps to emphasize that emotional connection between the tools that we use for our productivity and the importance that that is in our success in business, and that’s the kind of important brand statement that we want to make and that we’re going to invest in and that we think will really help you and Microsoft working together on behalf of our customers.

So this new Office System brings together the programs, the servers, the services and the solutions. What I’m trying to do, what we’re trying to accomplish with this brand transition, is to raise the level up to this concept of the overall Office System, the integrated system to transform information into impact.

And if you look at what we are doing this year, we are releasing more new products around information worker productivity than we have ever released in a single year. We have new product categories like OneNote, focused on digital note-taking; InfoPath, focused on electronic forms centered on XML; the step forward with SharePoint Portal Server; the establishment of Windows SharePoint Services, building on our first wave with SharePoint Team Services; what we’re doing now in terms of new service capability, like the Microsoft Office Live Meeting service, which will help people use the capability of Web conferencing in order to connect people around the world. Those are just examples of the great elements of the Office System that come forward to really make a difference.

I want to take a moment and really emphasize Windows SharePoint Services. What we saw with SharePoint Team Services was a very important step in terms of how people can collaborate. We learned a lot during the 1990s about knowledge management. I think everybody in the industry learned that when you try and force knowledge management from a top-down perspective, it’s very difficult. What you really want to do to encourage the sharing of knowledge throughout the organization is to take a grassroots approach. You want to make it really easy for people to collaborate, so that they are not dependent on the information technology group in their company in order to be able to have that kind of collaboration.

So that was the step with SharePoint Team Services. We found it to be so important we have now made it a part of the Windows Server family. So with Windows Server 2003, you’re getting SharePoint 2.0, you’re getting Windows SharePoint Services, which provides that mechanism for grassroots collaboration, collaboration on documents, sharing of information, managing virtual teams. And it’s built on a solid foundation that shows the integration of presence, the support of versioning and checkout, shared calendars, discussion and, of course, very importantly as part of the Office System concept the integration with Office 2003.

So as you can see, we are taking the approach of the Office System and our collaboration with Windows SharePoint Services to integrate the capabilities to transform information into impact.

And this is a huge business opportunity for all of you. We just pulled together a few of the numbers from Gartner and Data Quest that show the partner opportunities surrounding the productivity of information work.

In the area of collaboration, better teaming — US$45 billion associated with that spectrum. Or take, for example, business process automation — $55 billion, or business intelligence, sharing broadly business information in organizations — $17 billion opportunity. So as you can see, there’s incredible opportunities for solutions focused on information worker productivity.

We are taking advantage of this right inside Microsoft. You can see that we have deployed, I think we now are up to more than 40,000 people using Office System 2003, approaching 50,000. I myself have been using Office 2003 for more than a year, as have many of our key people across the organization.

And we see incredible benefits: improved confidentiality. You know, everybody’s interested in securing the flow of information. With the new Information Rights Management capability where you can set permissions on the documents, people are now more in control of the security of their information.

Using Windows SharePoint Services and SharePoint Portal Server, we have been able to dramatically improve our own internal collaboration. We have about somewhere over 50,000 employees. We have more than 25,000 SharePoint workspaces, people collaborating together on document review, on setting up meetings, on projects like fiscal year planning, things that they need to do in order to get their job done.

We’ve taken SharePoint Portal Server and made that the foundation of the Microsoft intranet. Microsoft Web went up on SharePoint Portal Server 2.0 in July. And so we are able now to show our customers and to show you as our partners how we are using these technologies to emphasize the sharing of information across our organization.

Using Microsoft Outlook, we’re saving several million dollars a year in terms of lower bandwidth costs because of the new approach of Outlook in Office 2003 where we’re caching the information, and we have much fewer servers as a part of our Exchange system. We were able to consolidate.

We’re using InfoPath, the XML forms capability, for time and absence and dozens of other applications that will improve the sharing and flow of information and save us costs for those kinds of business processes.

We’re extensively using Office Live Meeting, the PlaceWare service. If we were able to just save one trip in five, that would contribute over $40 million to the bottom line of Microsoft through savings in T & E.

So, these are just examples of how we are applying the Microsoft Office System inside our own company to make a big difference in information worker productivity.

Now, in order to give you a sense of this, I thought what I would do is a little demo this morning. I’m going to go through several products that are a part of the Office System, and I’m going to pull them together into what we consider to be a very exciting example of the kind of solutions that can be built on Office System for information worker productivity.

Now, first I want to start with Microsoft Outlook. And part of the reason I wanted to start there is because, as we all know, e-mail is exploding dramatically. People are using e-mail around the globe to communicate, and many, many people are feeling the overload of e-mail.

We did a lot of research to understand how it is that people read. We learned that basically by redesigning the screen of Outlook, we can dramatically improve people’s ability to be able to consume information.

So, for example, here you can see how the preview pane is on the right, the most important folders are here on the left. I can quickly review my inbox; great examples of what we can do to improve the consumption of e-mail.

And independent studies that are in process right now would indicate that people can consume their e-mail up to 15 percent faster with this new design of the screen.

People are able to do the management of tasks right within the inbox through the flagging system. You can have search folders. These are all capabilities to improve the ability to find the information you need, to send the e-mail, to manage the e-mail.

Now, for this particular scenario, what I want to do is to go through a solution called a “pitch book.” Pitch books are very commonly used within, say, the financial services industry. A good example is investment banking. A typical investment bank might be doing more than a thousand pitch books a year. And this particular solution is one that we’ve been working with some customers on, and the early indication is that we’ll save more than 25 percent of the time necessary to create a pitch book, and that’s a dramatic improvement, because the pitch book is fundamental to how these banks operate. They are selling their services to the firms in the M & A, or merger and acquisitions, space.

And so, by being able to respond more quickly with the pitch book and being able to also save costs in developing the pitch book, that is the competitive advantage for them.

So here, I see I have a piece of e-mail from Neal regarding needing a pitch book, and what I’m going to do is I’m going to take a look at this e-mail, and I notice that he has a document that he’s attached. And this shows you the new Microsoft Office OneNote, our application focused in on digital note-taking on the desktop, on the laptop, on Tablet computers, whether you’re using keyboards or whether you’re using pen and electronic ink.

Here you can see just how rich the note-taking capability is. I can use ink, I can have Web links, I can take content from other applications, and I can organize this just like the notebooks that I would typically use on paper except now all of the information is with me everywhere I go.

Outlook is the application that I have traditionally used the most, but now I use Microsoft Office OneNote more than any other application, probably twice as much as I use Outlook because most of my days involve meetings where I’m taking action, taking down notes I have actions, I have reference information, and I want to be able to search across all of that, I want to be able to quickly find the action items and I can do that with the Microsoft Office OneNote capabilities.

Now, here you see in the notes it says if I need help, I can talk to Brad Sutton. This gives me an opportunity to show another great capability of the Office System. I’m going to go ahead and do a lookup, and what the lookup does is it calls upon our research pane. The research capability or research pane is an XML Web service capability that has been built into the Office System. I can search external sites on the Internet like Factiva, MSN. For business information, I can search internal sites.

And in this particular case you can see that it found a person — Brad Sutton, the person that was referenced here — and when I click on this link this takes me to a new capability that is also very exciting. We are now in SharePoint Portal Server. And in SharePoint Portal Server, what we have is a “My Site” capability — personalized, customized Web sites for individuals throughout the organization.

And you’ll notice that the search is in context, so that if this wasn’t what I was looking for I could continue with the research pane to look at other alternatives, but since this is what I need, this site for Brad Sutton, I have the ability to take a look at his information. I can see whether he’s online: presence is integrated. He can have private documents, he can share documents. I get the profile information with contact information. I can see where he fits into the organization.

Now, it turns out that Brad is absolutely the guy that I’m looking for to help us on the pitch book, so let’s go ahead and move to the next step and work on the pitch book.

So now what I’ve done is I’ve brought up the pitch book. And this is a very, very important step forward. This isn’t Microsoft Word as you would have known it in the previous releases. What we have done here is we have integrated arbitrary XML schemas. And, in fact, you’ll notice over here in this task pane it’s a document action pane. And this is an extremely important concept for all of you. It is the concept of a smart document. It uses the arbitrary XML schema as a way to program in an Office-based solution, in this case the pitch book solution where I can have various pitch books like a bond offering, and everything in here then is actions and reference information that is sensitive to the context of the document.

I’ll show you the XML schema. You’ll notice I’ve turned on the tags, the XML tags and you can see those throughout the document.

Let’s go ahead and scroll down here a little bit.

Here you see the relevant charts for a bond offering and watch as I click in this location of the pitch book and you’ll notice that the document action pane brings up the relevant solutions or the relevant components that I would need for completing this pitch book. In fact, because of this type of pitch book, I need to include top performing indicators, so I simply click on that chart and it’s automatically included.

But there was some serious magic there. That’s an XML fragment that came right from SharePoint Portal Server, and it’s a live piece of information. Now, typically in these pitch book examples, as you go through time, things get out of date, the typical pitch book has stale or old, dead data. This is live data. So as the top performing indicators change, the charts within the pitch book can be kept up to date, so a great example of using the XML Web service capability within the document as a way to have a live document.

Another thing I want to do is I want to show you a great example of how we’re facilitating the protection of information. What I’m going to go do here is to protect the document, and then in the new Word of Office System 2003, what I can do is I can actually protect individual sections of the document, even to the point where I can give specific users the authority or authentication to be able to go in and edit their sections of the document. In this particular case, I’m going to go ahead and I’m going to protect this section, the current themes in the capital market.

And what I go ahead and do is start enforcing the protection, and you’ll notice I can do a password, the traditional mechanism, but sometimes that doesn’t work. Sometimes you don’t want to be e-mailing passwords around. I could also use the new Information Rights Management capability of Office System as a way to set specific individual privileges and not have to circulate those kinds of passwords. So let me go ahead and protect this document.

Now, the next thing I want to do is I want to send it around for review. And this is another important step with the Office System. I’m going to go ahead and send it to Brad, but you’ll notice over here that I have attachment options. That came up automatically.

Now, a typical review scenario is you send out a dozen copies to people to review and you get a dozen copies back with a dozen different sets of annotations or comments; very, very difficult, very time consuming in the review process.

What we’ve done in Office System is we’ve leveraged the capability of Windows SharePoint Services. So I’m going to send a shared attachment. What this will become is a live document, a live document on Windows SharePoint Services, what we would call a document workspace.

And so when I go ahead and send this off you’ll notice that when I go to the Web site, the SharePoint site, I have all of the relevant information. I’ve got the shared documents, I’ve got the people who we’re working with, I have the task lists and all of this was provisioned just by creating a document workspace.

So I could go ahead and open up this pitch book as somebody who’s working on it. And here you see another major advance in Office System in the new Word. In the new Word, we’re using our technologies like ClearType to provide an online reading view. It makes it much easier for people to review information online. Plus in addition, you’ll notice that I have the shared workspace pane so that I can see the various members of the group that are reviewing the document, whether they’re online. I can take a look at the task list. I can take a look at the other documents. So I have all of those capabilities of the SharePoint site that are in context of me working with the document.

Now, the last thing I need to do is to go ahead and print this off. And this gives me the opportunity to show the new InfoPath. This is an InfoPath form. Again, InfoPath is based on XML and so that means these are smart forms. If I go ahead and select Seattle as the customer location, you’ll notice that the form updates with the relevant information. I can include controls like a date control. I can go ahead and fill out the form.

And when I go ahead and submit this, it give a great emphasis to what you can do with InfoPath. InfoPath connects this kind of form-based information to SharePoint Portal Server, to Web services and also to other people, so that you can create XML-based forms in order to dramatically improve the efficiency of paper-based processes.

I’ll go ahead and do a submit and this is a great example of where we can use an XML Web service, in fact, as a part of what we’re doing with Office System at our launch in about ten days in New York City, we’re going to be explaining how we’ve worked with Kinko’s to do an XML Web service that allows them to tie their capabilities as an organization into the Microsoft Office System in order to improve the ability for people to connect to those services.

So in a very short period of time, I was able to show you about eight to ten of the products of the Microsoft Office System and I was able to show you how in a very short period of time a development group — in fact, we estimate that this could be completed as a solution in only about 8 to 12 weeks. So you could have for a large organization, a large bank, you could create an information worker productivity solution that’s core to their business in a couple of man months and make a huge difference, more than a million dollars a year for most banks in terms of their efficiency or productivity with the use of Microsoft Office System for a pitch book solution; so a great example of what we’re doing.

The next thing I want to do is to emphasize how we’re trying to take a broad view of using the Office System for solutions and to provide capabilities to you that will accelerate your opportunity to deliver solutions to customers.

We’ve created this concept, Solution Accelerators, where we’re taking the Microsoft products as a foundation and helped pull them together for specific solutions in the finance area, operations area, human resources, sales, what we sometimes call FOSH — the acronym of F-O-S-H, Finance, Operations, Sales and Human Resources. In fact, just this week at a major human resources show in Philadelphia we announced the new Recruiting Accelerator that people in the human resource field can use in order to be able to improve their facilitation of the recruiting and interviewing process.

And recently, we had introduced the Six Sigma solution. We’re working on Sarbanes-Oxley. We have an XBRL Solution Accelerator.

These are not complete solutions in and of themselves. They are a set of capabilities that you can use to accelerate your ability to deliver a solution to your customers.

And just like what you saw with our demo of the pitch book capability — in fact, one thing I should mention is that we’re going to give you a DVD with the smart document capability and most of that demo that you saw is right there on that DVD so that you’ll have the ability to look at how we’re building these solutions in Solution Accelerators.

Now, of course, the thing that really makes it work for customers is the way in which we work with you, our partners. I’ve had the opportunity to work with Quilogy for many years. Since 1992, Quilogy has grown to 300 employees, 14 offices and more than $40 million in revenue. They are a Gold Certified partner. They work with us across the desktop and server solutions, Microsoft Business Solutions, and they’re also a CTEC.

And Randy Schilling, the president and CEO of Quilogy, is a great partner for us to learn about how Office System can really make a difference in information worker solutions. So what I’d like you to do is to join me in welcoming Randy Schilling. Randy? (Applause.) Good morning. How are you?

RANDY SCHILLING: Good morning. Thanks, Jeff. Great to be here. Thanks for having me.

JEFF RAIKES: Great to have you here.

You know, Randy, one of the reasons why I asked if you’d be available to join us today is that I know that you’ve had some excitement about Office System and that actually one of the things that’s always impressed me about working with you is you’ve done a great job of identifying things that you thought would really have an impact for your customers in investing early. You’ve done this with Office System and I’d like to understand your excitement about Office System and have you share that with the audience.

RANDY SCHILLING: Yeah, absolutely, Jeff.

I’m very excited about Office System. I mean, I believe strongly this product and this new platform. I mean, it’s fundamentally changed our business in the way that we approach the marketplace. I mean, we’re that example of that classic partner. I started the business in ’92, doing app dev and infrastructure and that’s my background.

But with this new release of this product and this platform, we’ve finally changed the way we go to market. We’re no longer just selling to IT; we’re now selling to FOSH: the people in Finance, the people in Operations, Sales and HR; in fact, it opened up a lot of new opportunity for us in the way that we approach the market and bigger opportunity to get more sales and grow our business, and so we’re very excited about it.

JEFF RAIKES: Yeah, one of the things that I think would be very helpful to the audience is to share some of your early experiences with customers. I know that you actually took an early step in understanding the Office System and applying it to some customers needs and so maybe you could share a little bit about the customer examples.

RANDY SCHILLING: Yeah, I think what our clients have been telling me is that, ‘Randy, you guys have helped us tremendously in terms of building our line of business applications, implementing our solutions that we need to run our back office.’ But now what they’re saying is that, ‘I’ve got a lot of applications out there, it’s kind of complicated to do my work, I need to simplify that.’

And so that’s where the Office System stuff has come into play, and that’s what they’re getting so excited about. The SharePoint V.2 stuff is a huge hit right now, the InfoPath stuff, and so I guess the proof in that is really what we’ve done with Office System. Since earlier this year, we’ve already completed more than eight pilots with this stuff, and that’s very exciting to us. I mean, that’s a tremendous amount of momentum that we’ve had there.

Now we’re doing more than dozen engagements today where we’re implementing solutions on top of the Office System platform and a great example of that is what you see here, some of the examples of the pilots we have going on.

One is Children’s Hospital in Seattle. Yeah, it’s a great example. And so this is a situation where the physicians and the nurses have a lot of applications that they need to run do their job, to run the hospital. They have over 50, 60 applications and it was too complex for them, so they want to simplify that.

And so the way that they’re going to simplify that, or the way that we’ve simplified that, was to leverage our skill set of that classical solution provider to build Web parts. We had that app dev experience. And so, we built Web parts that we then placed inside SharePoint and then we’ve also leveraged some of the common tools in Word and Excel and then leveraged some of the new things in there to help automate the workflow, sprinkle a little bit of InfoPath and all of a sudden we’ve taken those 60 applications down to 10 and it’s really made their lives a lot easier and they’re thrilled about it.

JEFF RAIKES: That’s fantastic. It’s very important to me, as I think you know, since we have worked together a long time, that we think of these in the context of the partner opportunity as well as the customer opportunity. So I want to make sure that you share with the audience how you see this as fitting in with your business and your business goals and what the opportunity is for the partners here.

RANDY SCHILLING: As I said, Jeff, I mean, it’s fundamental we’ve changed who we’re selling to. I mean, we still are selling to IT. We still have that app dev infrastructure stuff, but now we sell into the FOSH. And I think if you would have asked me this a couple years ago, and I know we’ve had conversations about it in the past, and you said, ‘Randy, you’ve got to do more Office — Office, Office.’ I said, ‘Jeff, that’s nice, but we don’t do Office’ and that was under the Office 2000.

But then, when you came out with Office XP you had this SharePoint thing in there and that allows us to start dipping our toe into that and start leveraging some of our skill sets as our developers and infrastructure folks and so all of a sudden we started seeing a little bit of success there.

But again, now with Office System, this is a whole new ballgame. I mean, we have fundamentally, as I said, changed our business and we’re focused more on business decision-makers and those are the people with the budgets and that’s where the money is, follow the money.

JEFF RAIKES: That’s right, especially these days you’ve got to help them.

RANDY SCHILLING: And so that’s the thing that’s most exciting about that and that’s the real opportunity; it’s the selling into business decision-makers, selling that information worker and going after what you were showing a little bit earlier is that I think it adds up to about $117 billion services opportunity going after that business around the information worker.

JEFF RAIKES: So you are using Office System to really help transform your business so that you can be focused in on those business decision-makers and their specific needs in finance, operations, sales and human resource?

RANDY SCHILLING: Absolutely, and we’re getting meetings, we’re going higher in the organization versus just going through IT and that’s been the big change.

JEFF RAIKES: Now, one of the things that’s very important about this conference and how we’re trying to build momentum for the future is learning from you and all of our other partners around the world on our partner program, and yesterday you got a chance to hear from Allison. What’s your perspective on the new partner program and how that fits in with Quilogy?

RANDY SCHILLING: Well, I’m still learning a little bit about it, but my understanding of it is that we’re no longer just a generic classic partner. We’re able to communicate a lot better and Microsoft is better able to identify who we are and what we’re focusing on. So, like the information worker, and so by focusing on information worker and communicating that to Microsoft and Microsoft knowing that, we can engage a lot better as we go to market to try to win new business.

JEFF RAIKES: Great, super.

The last thing, you’ve got a lot of your peers here from around the world. What’s the most important thing you’d say to them about Microsoft Office System?

RANDY SCHILLING: I think one of the biggest things is just understanding the potential here. I mean, it’s a tremendous opportunity. And internally in our own organizations, I’ve had trouble getting our developers and infrastructure consultants excited about this because they’re not seeing that potential. And that’s what I would say is that I can tell you over the last eight, nine months, as we’ve done this eight pilots and these dozens of other projects that we’re currently engaged in, this is a real opportunity. It’s one of the biggest things that’s come along in a long time. And if you’re not doing anything with this, you’re missing out on one of the biggest opportunities.

And when I go to bed at night and I wake up in the morning, I’m thinking about how can I leverage that $6.8 billion R & D budget that you all are spending, which is enabling us to grow our business, and that’s what I get so excited about and I want to thank you, Jeff, and thank Microsoft for giving us all the opportunity to go to market and to grow our business again, and that’s what so exciting.

JEFF RAIKES: Great.

RANDY SCHILLING: I want to thank you very much for giving me the opportunity.

JEFF RAIKES: Great, thanks, Randy.

RANDY SCHILLING: Thanks a lot.

JEFF RAIKES: Really appreciate it.

RANDY SCHILLING: Yeah, thank you. (Applause.)

JEFF RAIKES: Well, I wanted to have Randy up here with me, because I think he really underscores how many of you can transform your businesses for the opportunities ahead. And one of the best ways to work with Microsoft on this is our go-to-market campaign. What we try and do is we try to pull together our resources from the sales and marketing standpoint, put that together in a go-to-market approach that really makes it easier for us to work with you, to be focused and to have the opportunity to go after more business, whether it be communications and collaboration solutions or work management solutions or portal solutions or how we get customers connected.

One of the things that I really want to emphasize that is very important and a big go-to-market for us this year is realizing value via deployment. This we think is a huge, huge opportunity and I want to underscore it in the case of Microsoft Office. Desktop upgrade has really become a priority for CIOs. The surveys from 2002 emphasized that they were really beginning to look at how they were going to take their older machines and make a significant step forward. In fact, we found that 32 percent of customers planned to upgrade within the next year or the next 12 months.

So our campaign to support this is backed by more than $70 million of sales and marketing resources because together we have the opportunity to target more than $300 million users of Office that are still on older versions, even versions before Office XP. So we believe that this is a $2 billion opportunity for you.

And the other thing that I want to emphasize is not only is it an opportunity in terms of just the services revenue that you will have for getting those desktops up to date, but in particular the big opportunity for you is to put in place this Office System foundation, this Office System platform, so that you can have a business approach like Quilogy and Randy Schilling and open up new opportunities to enhance the value for your customers for information worker productivity solutions.

Well, as I close, I want to say we’re very excited about the partner momentum that we’re seeing across the Microsoft product line and in particular with Office System. As I indicated up front, many of you have made a big difference in terms of our thinking about the Office System and helped to put in place this foundation for the future.

And we are very committed to help you realize that. In this year, we are going to put in about $500 million around the world to establish the Office System and reach out to those customers who you can connect with to build solutions, productivity solutions for information work.

Here you see some of the examples of our advertising that we’re putting in place. As part of our launch in about ten days, we’re going to kick off television advertising in the U.S. where we establish this brand concept that I alluded to earlier with the video but in particular where we show the deep connection that people have between using Office and success in their jobs. It truly leads to great moments at work. And we want to get that concept across very broadly and allow you to use that as a way to work with your customers to move them forward.

So as I summarize, our commitment is to work with you in the new partner program to use integrated software innovation as you saw with the Office System pitch book example. We’re going to continue our investments, we’re going to continue to raise that platform capability. We want to work with you very closely in these go-to-markets so that we can build a great ecosystem to deliver the most value together for our customers.

So with that, I’d say thank you very much for your support of Microsoft and in particular the opportunity to work with you on the Office System.

Thank you.

(Applause.)