TOBY RICHARDS: All right. Get back, because we have still people coming in the door. I know what you’re thinking. Can you get this guy off the stage and bring out Steve. It was great having Ray here. The good news is, he told me he had a great time. And thank you for the conversation and the questions for him. And it sounds like we’ve got somebody new on our virtual team for the newsgroups and forums conversation. So that was good.

All right. With that, I’m making sure people are getting in their seats pretty quickly, and it looks like they are. So I won’t take any more of your time and of Steve’s time. So please welcome Chief Executive Officer of Microsoft Corporation Steve Ballmer. (Applause.)

STEVE BALLMER: I love this group. Somebody tell those Canadian guys to stand up. You would think this was a press conference with all these darned cameras. It is my honor and privilege to have the chance to be here with you today. I was sitting backstage thinking, gee, wasn’t I just here a year ago? And somebody said to me, no, Steve. I think that would have been Toby. You haven’t been here for a few years. And I thought, heavens forbid, that isn’t true. This is my favorite speech every year. Toby said, is that really true, Steve? And I said, “MVP, baby, MVPs, how can it not be my favorite.?” So it is truly an honor and privilege to have a chance to be here with you today. I expect kind of a little bit more wild and wooly, rocking and a reeling kind of a discussion than I do with my average customer group. Everybody sits quietly. I don’t think we’re going to quite see that out of this audience, and I’m sure you’re going to push, push, push, push, and we count on you for that. Ray talked about it. Toby, I’m sure, half the Western World. But the work that you guys do, not only helping our customers, but really helping give us the right kind of a kick in the backside when we need it to really be on the leading edge of how people are using these products, talking to us about it, telling us what we can do to make those better experiences is absolutely, absolutely invaluable. So I say thank you. I say I’m looking forward to it, and I’ll say I’d better get to getting or I won’t have enough time for Q&A. So with that, let me just give you one final thanks. We really appreciate everything you do for us. (Cheers and applause.)

How many of you have been, just a small show of hands, somebody who controls lights, let me have a little light. There’s an expression in the Bible, God says light and he gets light. I say light, and I get two little dim bulbs turned on. How about a little light? I want to ask you a question, how many people have been to more than three MVP Summits, raise your hand? (Show of hands.) How many MVP Summit rookies do we have here today? (Show of hands.) All right. All right. We’ll try to continue to keep it lively for all of you.

What I thought I would do is take  now let’s see if I have better luck, you can turn the lights back down. The guy above, he’s a powerful guy. Okay, I want to have a chance to talk a little bit about Microsoft in aggregate, the whole of the company, what we’re doing, what we’re trying to do. I’m going to be at the 50,000-foot level. I know a lot of you are going to want to dive in and talk about specific things. I’ll hold that really for the Q&A, because I think it’s probably useful for all of you as you give us feedback, and as you’re helping and assisting, and working with people in the community, it probably helps for you to have a broader context of how we think about ourselves, and what we’re trying to do.

I want to start with our strategy. We talk about our mission a lot, enabling people and businesses throughout the world to realize their full potential. Some people come back and say, that sounds like blah, blah, blah, blah. You don’t mention software, or hardware, technology, and people  even outside, they come back inside, they yearn for the good old days when we just talked about a computer on every desk, and a computer in every home. That was kind of brilliant. Bill actually invented it when I was thinking of quitting Microsoft in 1980 to go back to school, and it really kind of grabbed me, and we’ve used it ever since. But it turns out it, it was beautiful because people knew what we were trying to do, our strategy for getting it done, and there was even kind of a way to measure how we were doing.

We sit here 28 years later, there’s still not a computer on every desk, there’s still not a computer in every home, and yet really our strategy and our mission have expanded. The heart and soul of what a computer brings is empowerment, it is enablement. And that’s why we talk about the mission of the company is enabling people to realize their full potential. That’s what technology lets us do. It’s an extension, it’s a tool that lets us communicate more, get better insight, learn more. It’s an enabler of productivity, imagination and fun.

The strategy for Microsoft actually is about the same as our strategy was the day Bill Gates and Paul Allen started the company. They didn’t really start with this computer on every desk and in every home thing. I was there. I remember. Bill was always talking to me about it. Paul Allen had come to Bill in 1971 with the first microprocessor, hey, Bill, let’s build this hardware company, let’s build a computer with this Intel 4004. Bill said, no, Paul, we’re not hardware guys. Two years later, he jumped him again, this time with the Intel 8008 microprocessor, and said, Bill, let’s build a computer. I don’t know how you know what you are when you’re 17 or 18, but Bill again very sagely said, no, Paul, we’re not hardware guys. 1974, our sophomore year in college, Popular Electronics Magazine, MITS, it’s the 8080 microprocessor on the cover. MITS builds the personal computer with the 8080. And Paul runs to Bill and says, okay, we’re not hardware guys, we’re software guys. And Bill and Paul look at each other and said, yes, let’s build all the software anybody is going to ever need for one of these. We’re on the same strategy, basically, 30 years later. (Applause.)

Of course, that’s a little liberal, it’s not entirely correctly. We’re not trying to do all the software, but we do have an expansive vision of the ability for a company to focus in on broad, horizontal scenarios that are driven by core capability and expertise in software. That’s the strategy that we continue to pursue.

A couple of things that made us different than a lot of other companies: Number one, we have not been afraid to dive in and build various different business capabilities to help take our software to market. We grew up as what we call a desktop company. I still don’t know what it means to be a desktop company, but since we always got labeled on, I wear that label proudly, but we learned about developers and OEMs, and retail, and selling stuff, and blah, blah, blah, blah, blah.

And then about probably almost 20 years ago now, we hired Dave Cutler, who came in to do NT. Dave said to me, Steve, I’m not coming to Microsoft to do any toy operating system. I said, Dave, we’re in good shape. We already have a toy operating system. So why don’t you go do the real operating system, Dave. He says, okay, we made a deal. And we got started in what you might think of as our server and enterprise business. And it turned out we had to learn a whole lot of new things, but our core capability in software development served us well. And we kept after it, and we learned about new areas of technology, we learned about new support models, and sales models, and service models. And here we sit 20 years later, and our software capability has driven us to have a very successful desktop business, and an enterprise business, server business.

Ten years ago it was clear to us that the capability of horizontal software was going to be bigger still. It was really going to be important to be in device classes that didn’t look and smell, and feel like a PC, the television set, the handheld device. It was clear that the world of the Internet was going to emerge, and we would have software that didn’t just run in data centers, or enterprise data centers, and didn’t just run on desktops. So we started MSN, and we started Windows CE. We bought Web TV, and Hotmail, and we are now in the process still of building new capabilities in the online area, and in the entertainment and devices area.

We have a lot to do in all four of these things, and I’m going to talk about some of the product innovations and things that we need to do, but the thing that drives us is a broad competence, and capability of our ability to do software. We don’t always do it perfectly. People in this room understand that. I’m sure I’m going to hear a little bit about it. And I’m sure I’m going to even talk a little bit about it. But, our ability to do horizontal software, to get software that works better and better together, I was pleasantly surprised and impressed at one of the questions Ray got where somebody said, the software is working together better than ever. I never thought I would hear that from an MVP ever in my life, but I want to thank my brother-in-law for that question. Just teasing, just teasing, just teasing, just teasing.

In any event, it took us a while, sometimes it takes a while, because you get your core capabilities in certain areas, and you’ve got to keep them moving. So we now are building core capabilities in devices and in online. We’ve had some success, certainly with Xbox and Xbox Live, where we are today with our IPTV stuff, very strong. We’re selling a lot of mobile devices, but more to do.

In the online area we’ve got a lot of users, we’ve got some big competitors, we’ve got some big whatevers, competitors or acquisition targets, whatever you want to call it. We’ve got a little bit of everything out there. And yet we’re very committed to the strategy of using software innovation through a broad set of ways to go to market, to change the world, and there’s so much more to do.

I was down in LA yesterday, we were talking about the future of magazines, and newspapers, and video, and entertainment, and advertising. We, as an industry, we’ve probably changed 10 percent of what we will ultimately change, in terms of the way people read and consume information, the way in which we weave socialization into various information consumption activities. There’s so, so, so much to do. And I think it will be exciting, and the competition will be exciting.

In the area of devices, as large as the cell phone market is, the market for intelligent small form factor devices is still relatively small, a few hundred million. People throw new cell phones out, at least in developed countries like the United States, quickly, because the pace and rate of innovation is tremendous. So across the board, there’s opportunity, there’s excitement, there’s interest, and Microsoft uniquely, I’ll say, amongst all companies in our industry, will invest on the consumer side, and on the business side, and will invest broadly in all of the important business models that are required to take great software innovation to market.

I want to just briefly make a comment or two about each business, so we get to the Q&A session. The desktop business, as everybody knows, is where we grew up. Things are kind of in a state of flux in some ways, the development platform, Win 32, n.NET, Windows Presentation Foundation, some of the things that Scott Guthrie had a chance to show and talk about with Silverlight, and WPF, it’s fantastic, but it’s a stage of transition.

Office, Office 2007, a lot of exciting innovation on the user interface front, that I think has really changed not so much probably from MVP perspective under the covers, but the front end to that product really quite a dramatic change.

Windows Vista, a work in progress. (Applause.) Seriously, a very important piece of work, and I think we did a lot of things right, and I think we have a lot of things we need to learn from. Certainly, you never want to let five years go between releases. And we just sort of kiss that stone and move on, because it turns out many things become problematic when you have those long release cycles. The design point, what you should be targeting, we can never let that happen again. We had some things that we can’t just set the dial back that I think people wish we could.

Vista is bigger than XP, it’s going to stay bigger than XP. We have to make sure it doesn’t get bigger still, and that the performance, and the battery and the compatibility we’re driving on the things that we need to drive hard to improve. And yet we did take some important big steps forward with Vista.

So I know I can get a lot of feedback from this crowd. The number one point of feedback always for MVPs is on Windows, I know I get a lot of feedback. I bet if I look I can get a little bit of feedback, I’m sure I can get a lot of constructive feedback, and believe me, top of mind for me, for Ray and the senior team here is making sure that we continue to drive forward, and take the good work that we did in Vista, take the chance for improvement and progress, and drive forward.

In the meantime, we have some customers, a lot of customers using Vista, a lot of customers, and we have a lot of customers that are choosing to stay with Windows XP, and as long as those are both important options, we will be sensitive, and we will listen, and we will hear that. I got a piece of mail from a customer the other day that talked about not being able to get XP anymore, and we responded, XP is still available. And I know we’re going to continue to get feedback from people on how long XP should be available. We’ve got some opinions on that. We’ve expressed our views, but certainly with this crowd, [email protected]. I’m always interested in hearing from you on these and other issues.

So the desktop business, it’s our heart, it’s our soul, we continue to drive forward from this foundation. The enterprise business is probably the area where we’ve seen the biggest explosion, explosion of new innovation, explosion of revenue, of opportunity, and the fact that we are willing, and able, and excited to move into new technology areas I think has been good for you, good for us, and good for our customers, the whole server area, various server workloads, line of business applications, collaboration, file servers, Web serving, high performance computing.

We just recently established one of the leading benchmarks for high performance scientific computing applications, in terms of the number of FLOPS that we can process versus Linux and other machines. It’s because we dedicated a team, and we’re focused in on scientific computing now as an application.

People were talking about SharePoint, the work we’re trying to do there in collaboration, development platforms, portals, and business intelligence, and we’re going to continue to expand the footprint. I’m in Norway this next week as we complete our acquisition of FAST. A very important part of the SharePoint product line as we move into higher and higher levels of enterprise search. Somebody talked about business applications in the Q&A with Ray, and the need for us to continue to listen hard on the feedback on Dynamics ERP and CRM. Unified Communications I think has just started scratching the surface of what we can do in voice and video with products like Office Communication Server, and our Roundtable effort.

Virtualization, bring it on. It’s virtualization time for Microsoft, whether it’s the work we do with HyperV and server virtualization, client virtualization, application and presentation virtualization, we’re going to make sure that we democratize virtualization. Today less than 10 percent, probably really less than 5 percent of all the servers in the world are virtualized because it’s just too darned expensive, and too hard to manage. We intend with the releases that we’re making this year to really take major strides around addressing both of those.

Cloud platform, Ray had a chance to talk a little bit about that. There will be a whole lot more to discuss with you and show you as the year progresses. Online, online for us is sort of an unusual situation. If you look globally, particularly at mail and instant messaging, we have an incredible footprint, smaller actually in the United States than any other part of the world, but an incredible footprint. We’ve been moving forward. We run the e-mail system for more people on the planet than anybody else, and a pretty good business. And yet because the biggest revenue category and frankly one of the most important applications category has emerged as search, where we are the clear number three in the market, god knows what I’d say to you if we were the clear number four, but we’re the clear number three in the search market in terms of share, and yet it’s an area where I think there’s going to be so much innovation that we’re going to continue to drive forward, take share, push the market leader. Obviously, we’re trying to complete our acquisition of Yahoo, we’ll see how all of that goes. But in the search area, I don’t know how many people have checked out the new stuff we did with news search this week, with the new mapping stuff. I’ll tell you, there’s an opportunity really to knock the socks off in terms of innovation in that important apps class, and we’re going to keep coming, and coming, and coming, and coming, and coming, and coming, and coming.

I need to get my annual feedback. How many of you use Live Search as your default? (Show of hands.) How many of you use Yahoo Search as your default? (Show of hands.) Let’s try that one again. How many of you use Yahoo Search as your default? (Show of hands.) Wow, we offered 31 bucks a share. How many of you use Google as your default? (Show of hands.) I’m going to make you a deal. I’m going to make you a deal, I’m going to make you a deal, I’m going to make you a deal. Here’s the deal, we’re going to do some stuff this year which I’m sure will be important to this crowd around blog search. After we do the stuff around blog search, I’m going to ask you for one thing, and I’m asking for it personally, just me, we’ll send you a little reminder tickler mail, I’m sure I can get Toby to do that, but I’m going to pick a week later this year after we get our new blog stuff in place, which I think is probably pretty important for this crowd, and I’m going to ask you, it’s all voluntary, but I’m going to ask you one week switch your default, one week. At the end of the week, I want you to send me mail, I’m going to make it SteveBfoo instead of my normal SteveB account, but I’ll want feedback, how was your week, what happened, what did you like, what didn’t you like with all of the tenacity, and intensity, and passion, and insights that this group can bring. Can I get people, particularly the people who raised their hand on my last question, to promise me one week later this year? Can I make that deal with you? (Cheers and applause.) That’s the deal. I’ll make sure every one of you gets a response, and I’ll bet at the same time you’ll send me a few questions on other products, and that’s fine, too. So that’s the challenge that we both agree we’ll take later in the year. There’s a lot of things coming in this area. We’re very serious about being a leading edge innovator, and I certainly encourage you to just check out today even the new news search stuff that we have up there, and the new mapping stuff, it really is phenomenal.

Last, but not least, is the area of devices and entertainment. Certainly we have many Xbox users in this audience. We continue to push forward. We’ve got to broaden out its footprint. Windows Mobile, ironically, we will outsell both Apple and Blackberry quite dramatically this year. It’s ironic, and most people don’t know that. And yet I think both in a business model sense, and in a product sense, there’s good work being done by many players in the industry, not just Microsoft. And I think that certainly this should be a good year for us for sales, but the work we’re doing on Windows Mobile 7, which is the next major release of Windows Mobile, not just in the Windows Mobile team, but across Windows Mobile, in Silverlight, the development platform, the e-mail, the backend, I think you’ll continue to see that as an area of major excitement and innovation for the company as we move forward.

We’re in the middle of what we call our fiscal year ’08. This is most of the key products that we will ship during Fiscal Year ’08. We had a list just like this for our last year, Fiscal Year ’07. We have a list that’s even bigger than this for our Fiscal Year ’09 coming up. The opportunities in this industry, and certainly the focus and dedication at our company to continue to do new software, new innovation, new products, is super high. I feel like a broken record. I come to this MVP Summit every year, and I believe in the same thing. The opportunities in information technology are better today than they’ve ever been. There’s that theme from the movie The Graduate, we have some people who might be old enough to have actually seen the movie The Graduate. Kid is graduating from college, his father-in-law-to-be comes over to him and says, son, I’ve got just one word for you, plastic. It’s 1968 at the time, and that was the growth business to be in. For the last 30 years, the only business in this world worth being in if you really want to make a difference is information technology. You guys have all made that wise choice, and we’re glad you’ve chosen to spend your time in the business with our products and our company.

Thank you all very much, and I’ll look forward to some questions. (Applause.)

TOBY RICHARDS: Great. Thanks, Steve. All right. So, like with Ray, I have prepared a few questions, but I don’t think I will. We’re ready to go, so I’ll help take some notes. Actually, I’m going to start with Mike Number 4.

STEVE BALLMER: Yes, start in the south and work your way north to Canada later. (Laughter.)

QUESTION: More and more often we’re being encouraged to engage with the local offices, but I’ve identified four things internal at Microsoft that makes this very difficult to do. The first one is, and before I get to  I’ve talked to other people around the country, and they seem to have similar issues. The first is, we have not had MSDN events in Salt Lake for two years. We’re told there’s not enough numbers of attendees there. We sold out our Visual Studio 2008 launch faster than most other cities within a thousand mile radius that are having events. That tells me the numbers exist.

Second of all, I was told by one of our local developer evangelists, his budget is 25 percent of what it was two years ago. This makes it very difficult for him to engage with us.

Third is that it seems that the evangelists turnover about every two years, and this one is going to be more of a thing for Toby. I found out this week, they do not have access to our MVP profiles, even if we check Microsoft visible, and I understand that it’s a security thing, put another checkbox on there that it’s visible for local offices.

And, finally, when we do find out who these evangelists are, oftentimes it’s like going to an e-mail black hole, we hear nothing back from them. (Applause.)

STEVE BALLMER: Okay, a couple of reactions. If you’d like, I’ve made notes. Mostly I think that wasn’t a question. That was very good input. I do want to pushback a little bit just so you understand where we’re coming from, and then I’ll tell you what I’m going to do. We did make a conscious choice a couple three years ago, maybe three or four years ago, to move more of our evangelism, and more of our MSDN event style activity online, to do more things through kind of online events, and presentations, and the like. We’ve gotten a lot more people to attend net, but it doesn’t surprise me that we have  I don’t know, a 25 percent budget, no MSDN events in Salt Lake, that strikes me as odd, too. But we did make the conscious choice. Bad choice in your opinion to move more online?

QUESTION: No, I think it’s good to move more online, but let’s keep an eye on what’s happening locally still. That’s vitally important.

STEVE BALLMER: Okay. So what I will do, one other comment, if you send e-mail to somebody who works at Microsoft, and they don’t return it, I’m angry. Feel free any time you’re not getting an e-mail response from one of our people, just forward it to me. (Cheers and applause.) It will help, believe me. You will help me improve Microsoft, and I bet we can improve the response rates awfully quickly. I give out my e-mail address often, SteveB, SteveB, SteveB, okay. I do it all the time. And the truth is, I don’t get that much e-mail from customers. The customers don’t waste your time. MVPs don’t waste my time. People send legitimate questions, concerns, ideas. Computers send spam, not human beings, by and large. And if you’re not getting a response, seriously, send me one or two, I guarantee you things will clear up pretty darned quick.

On your other comment, what I will do is, I’ll step back and kind of take an all up look with our folks on what we’ve done in terms of physical evangelism versus virtual evangelism, and I’ll take your input, I’ll hear what we’re doing, and if I agree with you I’ll give them a little bit of a push, and hopefully we’ll get it into a little bit better place.

QUESTION: Thank you.

STEVE BALLMER: Thank you. (Applause.)

TOBY RICHARDS: I would just add, in terms of the engagement with our sales crew, that’s a huge responsibility of my team, our profiling system has outgrown its capability, and I told the team, hey, we have a product called MSCRM, maybe we could start using that. Anyway, we’ll take actions. By the way, my e-mail is [email protected].

STEVE BALLMER: Say it loudly, Toby. [email protected].

TOBY RICHARDS: All right. So let’s go to Mike Number 3.

STEVE BALLMER: No, no, the Canadians now moved south.

QUESTION: Hi, I’m a 10-year Exchange MVP, and also run the unified communications business at Quest Software, so I talk to a lot of your customers about Exchange and SharePoint. Two of the questions that come up quite often are, one, around SharePoint going online. What’s the offline experience? Is it going to be Groove, is that going to be a seamless offline experience? Then secondly, how real  give us some idea of what you see your hosting business, your online business being like in three years, how many seats, how big is going to be, that kind of thing?

STEVE BALLMER: Well, we’re certainly trying to get a relatively  first of all, let me air a little dirty linen. There’s a legitimate debate. I’m still a big believer that offline is very important. (Applause.) But, reasonable people can disagree about that. I mean, I think they can, with the amount of connectivity that the world has, other than your time on an airplane, most people, in developed countries anyway, who want connectivity at any point in time can get connectivity at any point in time.

In fact, I just came back with my family from a trip down in the Amazon jungle, over a holiday, and frankly, I could get connectivity to the Internet via my little wireless card most places in the Amazon jungle, much to my surprise. So reasonable people can argue about how important it is to have a complete offline experience. The issue, we are trying with both Groove, and some of the things that we’re doing with extensions to the Windows shell, we’re trying to make sure we have a good offline experience for SharePoint.

The real question is, do we do a complete and symmetric online-offline platform, what we really today have is a server platform with no equivalent offline platform, and I don’t think you should expect us to just fully jump on a symmetrical  despite the fact that that makes a lot of technical sense, it’s a lot of work, and in a world in which increasingly people will be connected, what we may do are a set of half steps, and two-third steps, as opposed to one big whole step. And reasonable people can disagree. I’ll say it. I happen to be a guy who thinks offline is going to have more importance for a longer period of time, and that’s why we’ll take some important steps.

In terms of our own software plus services business, we do think it’s important to, for a variety of reasons, that we have a strong presence in addition to the presence of our partners, for a number of reasons. Number one, it turns out most of our products probably have some level of rearchitecture that needs to be done, or should be done, if you really want to get them to run optimally in the cloud. You wouldn’t necessarily just want to take the server product and dump it over the wall, you want to think scale-out in a very different form, you want to think about rate conditions in a very different form. So I think it’s very important for us to not only build servers, but also to build and offer service ourselves.

We will be aggressive with that, but the number one thing, say with Exchange, for us is that people get on Exchange. If people want to host it themselves, I say great. If people want to host it with one of our partners, I say great. If people insist, and want a direct experience with Microsoft, I say great. We’re going to make sure that we can be excited and enthusiastic economically, whichever choice our customers make, and we want to be able to work with our partners on that basis.

QUESTION: What’s your prediction as far as how many seats you’ll have in three years?

STEVE BALLMER: Exchange?

QUESTION: Yes?

STEVE BALLMER: The range is quite  we have press in the audience, so I’m going to be a little careful anyway. But, even the range internally is quite broad. I think what we’ll see is a hockey stick. Over the next year or two  (applause)  that was not the shameless  I didn’t mean it to be the shameless pandering that it was to the Canadian guys. But, what you’ll see is the early adopters are moving, moving, and someplace probably I’d say two to three years from now we’ll get some inflection point like that, depending on when we hit the inflection point it’s greater than a million, and it’s less than 100 million. I don’t mean to be goofy, it’s probably millions, and it depends on when we hit that point in the hockey stick, that’s for total hosted seats, not just Microsoft on its own.

QUESTION: Thanks.

TOBY RICHARDS: Number two.

QUESTION: Hello, Steve. You are a passionated (sic) person. Here in this room we are all passionated persons. And I represent one group, the MVP group of the Groove guys. And the Groove guys are working regularly with the SharePoint guys, because SharePoint has a terrific market curve, acceleration curve. And in the vision of Microsoft, it’s server centric. The Groove passionated guys say, hey, if you add a distributed, intelligent environment with the SharePoint environment, and if you have these two visions complementary going on the market, you have here a fantastic opportunity to have a solution, a competitive solution against Google, and a collaboration space, and a set of other spaces.

So I would like to ask you, or request your commitment, to have the Groove development and SharePoint development team up, working together, allowing new ranges of applications to arise, to come on the market, which can be partly distributed, and take the strength of SharePoint, and the SharePoint guys, having this offline experience of Groove, which is a terrific, robust, highly secure environment. So here, as an MVP representing all the passionated guys, I would like for you to give a response on that, a commitment.

STEVE BALLMER: Let me  don’t move. If you are a Groove or SharePoint MVP, please put your hand up now. Okay. Put them up and leave them up, if you agree with the gentleman who asked the question, leave your hand up. Okay. So that’s pretty unanimous. Now all you  put your hands down. If you are not a Groove or SharePoint MVP, and you have passion around the suggestion that the gentleman brought up, please raise your hand. Fascinating. Fascinating. Okay. Let me ask one other question now of you.

It’s interesting, this is the third time SharePoint and Groove, and their relationship, or offline SharePoint, with the last gentleman, Groove and SharePoint is an affiliated question. Ray got one of those questions. Should Groove be called  this is not actually a branding meeting, it’s not a marketing meeting, it’s kind of a technology. Would you like SharePoint to  Groove to be rebranded SharePoint, or SharePoint offline?

QUESTION: It’s about passion, my response is about passion.

STEVE BALLMER: I’m asking about  I’m actually asking a product design question, more than anything else. Is that the right design point, from your perspective, to take Groove?

QUESTION: I’m sorry, can you repeat the question?

STEVE BALLMER: SharePoint offline, I’ll just make a name up. That shows I’m not going to get any marketing awards, but would you like the design center for Groove to evolve to be much more SharePoint offline, or would you be happy to continue to see the two proceed with related, but independent, design points?

QUESTION: You asked me a question, and I want to respond.

STEVE BALLMER: I’m unfair, but that’s okay. I’m sorry.

QUESTION: I will respond with the knowledge I have, based on the vision of the product team, and the passionated guys of the MVP group, and SharePoint feedback, I listen, as well.

STEVE BALLMER: All I want is that feedback.

QUESTION: So my response is, Groove has this rich set of features, and to some extent needs to be leveraged to the SharePoint infrastructure. And to some extent the SharePoint infrastructure doesn’t know enough that they have a fantastic SharePoint infrastructure. So I respond to you that it’s an intelligent mix between the two, and I think I could understand that in version 14 of Groove there was an intelligent mix of both of them, maybe missing some little thing, which is the development environment, and be sure that in the Groove SharePoint stack developers, or people who innovate with highly valued applications, will have this ability to  not to tweak, but to use this dynamic think framework  dynamic think framework is surely one of the biggest challenges. So here is clearly my response to you.

STEVE BALLMER: I’m sorry to drag  I value the feedback, it’s very useful. I’ve got my action item. Thank you.

TOBY RICHARDS: All right. Mike number one.

QUESTION: Hi, I’m from Canada. I don’t live in an igloo, and it’s a Chesterfield, not a couch, one comment, and a quick question. The comment is, Canadian content in Xbox Live’s Marketplace, and Virtual Earth is always slow in coming. It’s gotten better recently, so I appreciate that. But, I hope we don’t have that problem again. The question I have is, in the spirit of developer love, could we get some Canadian MVP love, if I give you my jersey, Steve?

STEVE BALLMER: Bring it on. (Applause.) Here’s the deal, here’s the deal though. For all of you who are  you have a nice haircut. For all of you who are thinking these Canadians are getting too much shtick, next year I’d like to see a few other guys show up with some national pride, so we don’t have to pay for this stuff. (Applause.)

TOBY RICHARDS: Number four.

QUESTION: (Off mike)  they brought you a signed poster from the event, and a cape. And we’d like to deliver those to you.

STEVE BALLMER: Bring them on, baby. This is like an IQ test, every new piece of clothing I’ve got to keep moving this microphone.

TOBY RICHARDS: How about 625 MVPs from around the world posted one of our server and dev tools launch events, thank you very much for that. Great job. (Applause.)

All right. Let’s see what mike number three has in store for you.

QUESTION: I’m an MVP with FrontPage, so dead man walking.

STEVE BALLMER: Baby, you hurt me. We just changed your name, we didn’t kill you.

QUESTION: So it’s a little bit of a bittersweet thing to take the mike at this point, where so many of these people have actually become my friends, people from disparate countries. It’s just been a great experience. Since this may well be my last visit, I took the time, which was a sickeningly long amount of time, to make these pen drives for the video presentation I don’t want you to play for these guys, it’s just for you. So I guess here’s my question, I’ve spent four years, and in those four years probably 6000 hours directly focused on FrontPage, FrontPage related stuff, not that I didn’t make money off of it, but it was 6,000 hours, how about I get from you 10 minutes to watch this tape, and 2 minutes to give another one to your predecessor, same topic, they’re not different content. And then since the Canadians had that, and those guys had that, I’ll give you something sickeningly American, a Simpson’s necktie. (Applause.)

TOBY RICHARDS: The ten minutes will be later. The good news is for you, the FoxPro guys are still coming. All right, number two. Number two.

QUESTION: First, thanks for this. At your presentation in Bombay last year in November, I followed up your keynote with a presentation of Groove. I think, as anyone observed, the people who were most excited were actually Microsoft people themselves. So I have both a suggestion, as well as a question. The suggestion is, please don’t dilute Groove as a platform in its own right. It has a value not necessarily dependent on SharePoint or anything else.

Very often Groove is a much easier entry point into an organization. It’s also a phenomenal platform on which to build real-world applications, and I’m talking of distributed ERP, point of sales systems, and a lot of things that benefit from the security, reliability, and the ease of use of Groove, which brings me to my question. What can we as MVPs do to vitalize Groove within Microsoft?

STEVE BALLMER: Well, Groove is an important product now. If you take a look at it I’d say probably the acquisition we did of Groove was one of the top five largest acquisitions the company has ever done. And, yet, I hear what you’re saying. If everybody at Microsoft used Groove every day, maybe in every application  I use Groove, but I’m not a daily user, I’m more of a weekly-type user than a daily-type user. I’ll talk to Ray and we’ll give it some thought, which probably would involve doing things for the bootstrap. People have their ways of working, to take one of our important internal applications, and improve it through the use of Groove, so I’ll take that as a good suggestion and take it up.

QUESTION: Thank you. (Applause.)

TOBY RICHARDS: All right. Number one.

QUESTION: Mr. Ballmer  

STEVE BALLMER: Steve, Steve works better.

QUESTION: Okay. I’m an MVP from Toronto, Canada. Go Canada, Go, Hans, Go. A year ago we addressed Bill Gates in the twilight of his tenure at Microsoft, knowing he was on his way out and asked him about his past, and the accomplishments. You and Ray are taking the reins from a giant, a visionary who did put a desktop on nearly every desk in nearly every house. Now I have my server, I have my desktop, and I have my laptop. I check my e-mail on my mobile 6.1 device  wait, no, Mobile 6, because 6.1 doesn’t really exist for the users. I watch TV on my Media Center PC. So I want to know what is your vision of what’s coming next, where is Microsoft, and where is the industry going to go, and where are we going to be 10 years from today? (Applause.)

TOBY RICHARDS: Good question.

STEVE BALLMER: Let me  and probably too long an answer. So let me just take vignettes of things that will change, because the level of change isn’t going to slow down. Let’s just start with TV. You mentioned watching TV on your Media Center PC, and I say, great, you watch TV on your Media Center PC a lot like the way you used to watch TV, plus a little bit. It’s not the kind of social, involved, community experience even that Xbox Live is today. I mean, it’s ironic, if I tell people, you can watch TV and talk to your friends, and alert them, and notify them, people go wow, if I say that to my kid he says, dad, I think that’s what we do on Xbox Live all the time, what’s the big deal, dad.

So you talk about the ways in which any one of these experiences, the future of the way we think about social entertainment and video will change a lot. Today you watch TV, or you watch the Internet, you don’t really have the full corpus of video content in the world that you can dial up and easily access. It’s easier, but the way you will search on your Media Center PC for a video on the Internet is not as convenient as the way you’re searching for, I don’t know, CTV, or whatever. There are just different ways to search, to find, to browse, it all changes.

Natural user interface, just think about the way we interact with PCs, it’s kind of dopey. I’m getting ready for a trip next week, I’m going to a few countries, I’m going to see some customers, and you know what I’ll do? I go to my assistant and say, why don’t you get all of the trip reports, all of the customer information for all of the stuff I’m going to do on my trip, can you bring that all together for me. It turns out what’s she going to do? She’s going to go look at my schedule, which is recorded electronically, she’s going to go to our CRM system, and a bunch of Web sites, why doesn’t my darned computer do all that for me? Why don’t we have enough intelligence that the computer can understand my intent and go do it?

The next 10 years will bring that, the change in the way media is consumed, the change in the way we navigate and control the computer, whether it’s natural language, or voice recognition, or touch, the way  the amount of information that’s available that we can find and search, and get access to, think about it in the business context. Most business people I talk to still think it’s just kooky that we have all of these computers, and they can still never find the answer to any piece of information they’re looking for.

Seriously, how many of you  you get  I had this happen to me a few years ago on an airplane. The guy sitting next to me says, I’m reading a bunch of computerish looking things, he says, so you work in the computer business do you? I said, yes, I do. I’m always a little nervous at that stage, because I feel like I’ve got a tech support question coming on, and that’s not where I want to start the flight.

He says, well, we’ve got a lot of computers in my company. I said, well, that’s great. He says, I’ve got a question for you, my job is to set the price of car insurance in the State of Colorado, and I think we should charge more to people who buy insurance the week between Christmas and New Year. And I say to him, why is that? He says, who would buy auto insurance between Christmas and New Year, except somebody who was thinking about getting drunk on New Year. Interesting question, I had to say. I said, so what’s the computer problem? He says, I know our computers know what really happens with those people, but I have no clue how I can ever get that information out of the system.

So the future of search, of business intelligence, of analysis, there’s so much more we can do to create higher level models of information, and business process, there’s so much more that we can do on input techniques, and computer control, there’s so much more we can do to digitize the world’s information. The way in which we program is downright primitive. We program almost the same way today that we did 15 years ago. How do we ever bring software development up to semantic levels, so we’re not banging away, banging away, instruction by instruction, by instruction. How do you express intent?

The world today is still basically in enterprise data centers, and on desktops and in PCs, how do we change the models so more happens out in the cloud, and software management costs come way down? But, there are specific kind of ideas, and R&D investments, and vision for all of those problems and so much more.

So while it’s been a great 30-odd years for Bill, and 28 years for me, I think the next 10 years there will be more innovation, more change, more excitement than ever before. And I guarantee you, we’ll even get it all the way up to people who talk about Chesterfield’s instead of couches.

QUESTION: Thanks, Steve. Next time you’re in Toronto I’ll buy you a Steam Whistle.

TOBY RICHARDS: All right. Number four.

QUESTION: Hello, please excuse my bad English. I’m from Germany. I do speak German, and I do speak FoxPro, as you were afraid of. To be honest, I was recently told Microsoft killed FoxPro again. To be honest, we got used to it. So being dead the third time is not a topic. We still have increasing membership, so by the way, we love SharePoint, and the FoxPro guys in Germany do the SharePoint 2008 launch conference, Ask the Expert, because you run out in some countries of older guys who know what they are talking about.

We just got stuck with SharePoint 2001, because you have a lot of new products, but these 1.0 versions, you tend to leave the people alone when the real product shows up. So those people that try SharePoint 2001, or Silverlight 1.0, there was a big step to the 2.0 version. We have 1,000 members, we charge $200,000 a year for membership fee and conferences, still we cannot afford to upgrade to SharePoint 2008 Server. We have the 2001 Internet unlimited license. So just in case you have a leftover license, it would be nice.

Okay, but here’s my real question. As you might know, we FoxPro people do a lot of desktop applications, and they’re running pretty fast. Over the years, the speed of accessing files on the server degraded more and more from Windows XP to Vista it’s getting even worse if you want to open a file on the server and share it by multiple users. We originally thought, great, then they can install backend servers better, because they behave better, but as things slow, all the other products get affected by this effect. So you concentrated a little bit too much on the backend, and maybe you forgot about that the fast access to files on the server by multiple desktop users would still be a nice feature.

What we are really fighting with is getting our applications available on the Internet. We’re old guys, okay, the average age is 45 and higher, so we need some time to adopt to your new technologies, and to your new Internet technology. We thought we found a great product called Terminal Server, so what we do is we use this great product, Windows 2008, on our four quadruple, multi-core machine with 64 gigabyte, and we can host simultaneously up to 1,000 sessions on this one machine. It’s really running great having a hardware VPN in front of it. The only point there is, Windows 2008 is nice, but you charge $90 per client license. So we obviously use 2008 64K version to host half a dozen virtual PCs to launch Windows 2000, because there the terms of our client license is free.

You’ve got the idea, because if I now want to upgrade from Windows 2000 Server to 2008, you charge for a 1,000 users $90, it’s an upgrade of $90,000 for one machine.

STEVE BALLMER: Do me a favor, if you don’t mind just sending me a short e-mail with a complete description of the scenario, let me look into it. There’s the specific case, and the general case, and we have to make sure we take care of both, and I appreciate the input, and I promise you I’ll take a look at it.

QUESTION: Just one last sentence.

STEVE BALLMER: Yes, sorry.

QUESTION: It’s just that it would be great to have a way to launch the server applications on the Terminal Server and just get a license for it. I want to run that application on the Terminal Server to have my desktop applications running, and get the old stuff still working so that I get the time to work on the new stuff, and then make it integrated later. But we have so many old applications, and Terminal Server is great to host this. It would be a good way to get all this old stuff still running, instead of now being attacked by Java and Oracle to get my applications got converted right away to the Internet, so this would really help a lot of desktop developers to make a living. Thank you.

STEVE BALLMER: Great. Thank you very much. (Applause.)

TOBY RICHARDS: All right. As the bearer of bad news, we have time for one more question, so we’re going to go to Number Three again. My e-mail, TobyR, T-o-b-y-R, and you send me those questions and we’ll get Steve and his team to answer. So the last question will be here at Microphone Number 3.

QUESTION: Good morning, Steve. I’m from India, and I’m pretty lucky to have the last question here. My question is non-technical, and I really want an honest answer from you. You may give a yes or no, or refuse to give a descriptive one. I’ve been watching Microsoft and working with Microsoft products over the years, and this is my first MVP Summit, and it’s really my privilege to be here, and to hear you live, and see you live. You are the CEO of Microsoft Corporation, billions of dollars in revenue, more than 80,000 team members working in more than 200 countries worldwide. Do you get sound sleep? (Laughter.)

STEVE BALLMER: Yes. Excellent sleep. Seriously, I sleep extremely well, and long. I need seven to eight hours a night. I get seven to eight hours a night. And if the question is, are there things that worry me, the answer is sure. I worry about many things. I worry about our company, and keeping agile, and our desire to have all of the best and brightest people working for us, and partnering with us. I worry, and think, and wonder about how we’re going to come from behind where we’re behind, and stay ahead where we’re ahead. I worry and wonder about financials. But the day you don’t sleep well, I think it’s probably a day that you shouldn’t keep doing the kind of job I’m doing. You have to be realistic when you’re awake about where you are, and confident enough that you can go to sleep when it’s time to go to sleep.

I’m not trying to be facetious. It’s one of the things that I think leaders have to sort of get their mind around is this notion of balance. In most things, people like things to be black or white. We’re in good shape, or we’re in bad shape. And a leader has to be able to realistically say what needs to improve, and confidently say what’s good. People want to know, are we betting short-term or long-term. And a leader has to say, we’re going to perform well short-term, and invest in the long-term. And I don’t just mean this in kind of a fluffy, silly way. But you’ve got to balance what I would call the yin and yang of life very well. I think we all have to do it, but certainly anybody who leads an organization has to do it of any size. And sleeping is part of that. It says you’re confident enough, and yet what people really want to hear is, do you have trouble sleeping at night because there’s so much on your plate, and I think you have to have enough confidence that you’re going to be able to do a good job 16 hours a day that you can frankly sleep well the other eight hours a night.

I have to say probably my only hard time sleeping comes on the many occasions when I fly to your home country, the 12-1/2 hour time difference is really kind of a drag when it comes to sleeping. So I’m glad to see you so bright and energetic here today. (Applause.)

QUESTION: Just like you, I had a hard time, too, when I came all over from India here. So it was really my pleasure to be here.

STEVE BALLMER: Well, it’s great to have you here. It’s great to have you all here. Enjoy the rest of the summit. (Applause.)

TOBY RICHARDS: All right. Thank you. Those were great questions for both Ray and Steve, and I’m going to just wrap up the general session component of our Summit, and I know many of you are sticking around for other meetings with your peers, and so I’m glad that we were able to facilitate that.

I want to end kind of the same way I started, which is talking about your contribution. And rather it come from me, you heard from me, I’m going to read a blog post that happened yesterday by one of our Corporate Vice Presidents, his name is Alex Gounares, he is the Corporate Vice President of our AdCenter product. And so the blog is titled, Lines at the Company Store. (Laughter.) Here’s how it goes, and I’m going to try to read it like I do to my five-year-old son. Earlier this afternoon I stopped by the company store on the way back from visiting the ad teams in Seattle, another big acquisition we had last year. I thought I would stop by quickly to get a new keyboard. Wow, it was packed. The line to get in stretched all the way outside, and folks were standing in the rain just to get in. I’m not fond of queuing, so normally a line like that would have scared me away. However, since it was the company store, I thought I would see what was up. The event was the Microsoft MVP Summit, and I had stopped by during one of the breaks where the MVP attendees had a chance to visit the company store. If you aren’t familiar with the MVP program, it’s for our Most Valuable Professionals, these are technical leaders from around the world who have gone above and beyond in helping our customers with Microsoft technology. It’s a fun and educational event, so if you get a chance to participate, I would definitely encourage it. Inside the store, it was packed, the checkout line snaked around two walls. The energy was incredible. I wandered around, and on pretty every section I overheard, this is cool, this is great, look at this. People were really excited about the technologies. Even though I had to wait in two really long lines, I found the experience reinvigorating. It’s easy to get caught up in our day jobs, wrestling with bugs, getting consensus on a spec, trying to figure out FY ’09 budgets, but at the end of the day the whole point is to create products that delight our customers. At the company store today, there were a lot of people excited by the products we’ve built in this company. Of course, you don’t need to go to the company store to see the impact. Next time you are out of town, have a look around, how many cash registers are running Windows? The menu in the restaurant was likely created with Word, or Publisher, and I think a few of the Word or Publisher people appreciate this one. He says, extra credit for those of you who know enough about typography to figure out the difference. How many folks playing Xbox Live. The person next to you on the airplane is likely doing e-mail with Outlook in cache mode, et cetera, et cetera, et cetera. Some days at work are fun, and some days there are challenges, but take some time to see our stuff in action, and that’s a helpful and very positive reminder of what it’s all about. (Applause.)

It is so great to see this type of blog from one of our company leaders, obviously one recognizing the contributions of MVPs from around the world, but also a demonstration of an 80,000 person company working very hard to be a better listening company. I have committed six years of my life, and I’ve been at Microsoft 13 years, I always thought I was a good listener, I’ve committed the last six specifically to the topic of making Microsoft a better listening company. And I’m fairly confident that you saw a demonstration of that over the last few days. (Applause.)

What I need to commit to you is that our way of listening, I need to commit that as a 365-day a year process, not necessarily a process that only takes place in three-and-a-half days. Tomorrow, I will talk to my team, they are all here from around the world, and that is going to be one of the things we talk about. We’ve been running this program now for 14 years, and we have a tremendous amount of opportunity to bring the voice of community back to our teams, and you may think we’re doing it well now, I can tell you, we have a lot more work to do, and so I’m committing to you that my team is going to double down, as we say sometimes in Microsoft, on that particular priority.

So with that, just a few other things to say. I had a few people, you get feedback at these summits on a lot of things, and somebody came to me and said, you know, hey, I didn’t really like the welcome gift, I didn’t like the water bottle, or something like that. It thought the water bottle was pretty cool. My response was, okay, I’ll take the feedback. What I am super proud of in terms of what we gave you this week, we gave you the attention of at least 1,000 Microsoft employees, 1,000 Microsoft employees wanting to hear directly from you. (Applause.) And I guarantee you blogs such as the one that Alex sent, and the takeaways that the Mike Nashs of the world, and the Scott Guthries of the world, your voice is going to be heard for a long period of time after this summit with Microsoft employees. There is a group of people that I want to thank, and so I want to raise the lights, and I want all of the people on the community support team, as well as our people from the field, and our DPE teams to stand up, raise their hand, and I want the MVPs to thank this group for such a great event. (Applause.) All right. Thank you, good job.

You know, I’ve just been managing this team for just about two months now, and I have had a  one of the commitments I made to the team, all 80 of them, is that I would make a personal connection with each and every one of them by today, essentially, and half of them I’ve just met at the Summit for the first time, and I tell you, man, this is a very passionate group of people doing great things on your behalf. So I’m very thankful to inherit such a fantastic group of people.

With that, I’m going to let you go. I will give you one announcement, and that is next year’s MVP Summit has been confirmed on March 1st through 4th, 2009. So you’ve got a lot of work to do to earn your trip back. So, again, I want to thank you for all the contributions you’ve made to technical communities around the world, and look forward to hearing from you again, 365 days a year, not all of you, that would be a lot of e-mail, I’m not sure I could process that, but anyway, thank you very much, and have safe travels back to your homes.

END