Steve Ballmer: Office 365 Launch

Remarks by Steve Ballmer, Chief Executive Officer, and Kirk Koenigsbauer, Corporate Vice President, Microsoft Office Division Product Management Group
New York, NY
June 28, 2011

Editor’s Note – June 28, 2011 –
This presentation contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially because of factors in this presentation or discussed in today’s presentation, in the management’s discussion and analysis section of the company’s most recent Form 10-K, Forms 10-Q or in other reports and filings with the Securities and Exchange Commission. We undertake no duty to update or revise any forward-looking statements, whether as a results of new information, future events, or otherwise.

ANNOUNCER: Ladies and gentlemen, please welcome Senior Director of Communications for the Microsoft Office Division Janice Kapner. (Applause.)

JANICE KAPNER: Good morning. I’d like to welcome you all to today’s press conference. In a moment, I’m going to welcome Microsoft CEO Steve Ballmer to the stage to share today’s news. But first I want to thank you all for joining us whether you’re here in New York or you’re on the Webcast or you’re at more than 20 events that are happening around the world today.

I’d particularly like to thank the Microsoft customers and the partners that have joined us today as well. As a reminder, please refrain from flash photography during Steve’s remarks today. Now, please welcome Steve Ballmer. (Applause.)

STEVE BALLMER: Well, thanks, and welcome to everybody. It’s a pleasure to be here with you, those of you who are here in person, and those of you joining us on the Webcast, I’m honored to have this opportunity today.

We’re here to introduce Microsoft Office 365, where Microsoft Office meets the cloud. Microsoft delivers technology, and we have been delivering technology our whole lives that connects people to what they love and care about — friends and family, communications and colleagues, business, and information.

Productivity in Microsoft Office specifically forms an important foundation that makes it possible for people to be more creative, for people to make better decisions, for people to accomplish more. And the best tool of all for those purposes is Microsoft Office. It helps people bring their ideas to life, and it’s used by more than a billion people around the world.

As a result of that tool, businesses today operate with levels of speed and efficiency and scale that are really unprecedented, and yet businesses continue to look for technologies to make an even bigger impact — technology that makes it easier for people to work in close collaboration and combine their experiences and expertise and knowledge to reach even greater success.

What happens when Microsoft Office meets the cloud? Collaboration happens in addition to productivity, anywhere for any business of any size.

With Office 365, people can stay connected using instant messaging. With Office 365, they can conduct real-time virtual meetings with co-workers and customers and partners, whether they’re around the corner, in the same room or around the globe.

With Office 365, people can work together on files and documents simultaneously. To make scheduling easy, they can share their calendars with team members on all of the electronic devices that people use. And with Office 365, even the smallest, smallest businesses can design and maintain compelling websites and edit them as easily as a Word document using the SharePoint technology in Office 365.

We believe that effective collaboration is a lot more than good group dynamics; it’s a matter of instant access to relevant information, of ideas flowing freely and of the right people taking the right action at the right time. And it’s absolutely critical — collaboration is — to business growth. That’s why we believe that the best collaboration technology has to be available to all businesses, from massive global enterprises with thousands of workers to feisty startups with just a couple of employees.

I’ll focus on the small and mid-sized group of business here today. That segment is responsible for nearly two-thirds of global job growth and employs about 1.5 billion people around the world. But to compete, small and medium-sized businesses do need an edge, an edge that doesn’t require huge upfront capital investment or complex IT systems to manage and maintain.

Starting today, Office 365 will deliver on those promises and is available in over 40 different geographies around the globe, with more to come.

I think the best way to really understand why we’re so excited about Office 365, or Office meets the cloud, is actually take a look at the service. To show you a little bit of our Office 365 service, I’d like to invite Kirk Koenigsbauer on stage to do a brief demonstrate. Kirk.

KIRK KOENIGSBAUER: Great, thanks, Steve. (Applause.) Hey, everybody.

Well, I’m excited to give you a look at Office 365. We’re going to focus on a couple of collaboration scenarios that are really targeted with an eye towards small businesses. And where I’m going to start is on the Office 365 home page.

Now, on the home page, the first thing that you’ll see at the very top where it says “start here” are some tools to help people get started, things like links to support, tutorials, to the admin page where you can set up new users and do things like reset passwords and so forth.

If you look below, you’ll see things like links to access to your emails, your calendars, your contacts, your tasks, all powered by Outlook. You’ll see access to things like instant messaging, video conferencing powered by the Lync service, and then access to your team site where you can share things like documents, share with other people, all powered by Microsoft SharePoint itself.

In fact, that’s where I’d actually like to start the demo. I’m going to drop into this shared documents directory here. This is a place where you can collaborate with people on different documents. I could click Word, Excel, PowerPoint here if I wanted to start and create a new document from scratch, or I could edit an existing document that I already have saved up here into the SharePoint team site.

Now, I’m going to open up this first document here called Contoso Nouveau Proposal. This is just a Word document. And you’ll see as I click on it, it pops open Microsoft Word. We have close integration with the Word client in the Office 365 service itself.

Now, as I’ve opened up this document, and because this document is stored up in Office 365 in the cloud, other people can actually edit this document at the same time that I am through what we call co-authoring. As you saw there at the bottom, it said John Betz, my demo buddy here, has joined us and is editing information in that side. If you look at his screen over there, you’ll see mine over here, and you’ll watch as he’s editing that document, it’ll refresh right in my screen. So, collaboration in real time here, using the Office 365 service.

Now, in addition to having close integration with the Office client, I’m going to close that for a moment, we’re also shipping inside of the Office 365 service our Office Web Applications. These are browser-based versions of Word, Excel, PowerPoint, Microsoft OneNote that are available inside of a browser — whether it’s IE, Safari, Firefox, Chrome, all the popular browsers are supported.

I’m going to open up that same Word document in the browser itself, give you a look at one of our Web apps here; this is the Word Web app. And I think the important thing to point out here, you can see it’s running in IE. The important thing you see here is that it looks exactly like the document that’s on John’s side of the screen, and that’s really important. When people put their hearts and minds into these documents, they want it to look great; it’s got to look great whether you’re using the Web app or the rich client itself.

As I scroll through here, you can see there are charts, all the formatting is right, the watermark in the background, the table, even things like pagination.

OK, now, I’ve been showing you a little bit about how you can connect with Office 365 using the PC, I want to shift gears a little bit and talk to you about how you can access Office 365 using mobile devices. And so if we can switch the screen for a moment — great, this is a Windows Phone 7, and I want to show you how it can connect to Office 365.

First I’m going to swipe up, and there you’ll see the screen. And of course, you know, you have access to Outlook, your contacts, your tasks and so forth, your calendar. Of course this is provided on other devices as well, iPhone, Android, so forth can all connect into Office 365. Back to the home page here. But on the Windows Phone in particular, we have the Office hub. The Office hub is a way for me to get to my documents up in the cloud itself.

For example, I can scroll over, and I can go to that same SharePoint team site that I showed you just a few moments ago. We’ll click into documents here, and you can see those three documents that I had before. I can open them up here using what we refer to as the Office Mobile Application. And I’ll show you a couple of those here.

You can see we’ve got Office Mobile Applications for Excel, for PowerPoint, for Word, and for a product that we have called Microsoft OneNote. OneNote’s a digital note-taking tool. We’ll take a look at it here. I’ll open up OneNote on the mobile device here, and on John’s screen, you’ll see he’s going to open up the OneNote tool using the OneNote application here on his PC. Of course we have a browser-based version of that as well. And as you can see, my experience on the right side, or my right side, it’s optimized for the small screen. I get things like the chart, of course, I can keep track of Internet-based content, there are things like check boxes and so forth. You get the idea.

And just like in that Word example that I showed you a few moments ago, you can collaborate in real time using OneNote as well. So, for example, if I wanted to, I could go ahead and check off some of this to-do list here, enter in some text. I’m going to do something a little different.

I’m going to take a picture here and show you how we can integrate graphics into it. In fact, I’ll go ahead and take a picture of all of you. Everybody smile. Oh, come on, now, smile. All right, great.

OK. Then I’ll go ahead and accept that, and then I’ll just show you how we can sync that right up with Office 365 here in the cloud. I’ll scroll this down, and again, on my side of the screen, on the right here, you’ll see the picture that I’ve taken of all of you, and in a few moments, you’ll see that just pop up on John’s side of the screen here as well. There you go.

So, great collaboration in real time across the PC, the phone, and, in this case, the browser as well with the OneNote application. All right, very cool. (Applause.) Thank you.

So, I’ve been talking a little bit about how you can collaborate on documents on the PC, the phone and the browser. I want to talk a little bit about how you can communicate with Office 365. And where I’m going to start here is in Microsoft Outlook. Of course Outlook connects to Office 365 whether it’s the PC version or our browser-based version; our Mac Office 2011 product also connects to the service as well, and with Outlook mail in Office 365, you get things like spam filtering, 25 gigabytes of email access, and of course all the richness that Outlook provides, things like conversation mode, you can see we have integrated presence here right inside; this is provided by our Lync service, so you can do a quick IM or chat here from this discussion if you like — you get the idea.

Now, here in this particular mail message that I’ve got, there are some folks asking to schedule a call or schedule a meeting. We can do that in one quick step here with Outlook. I’ll just go right up to the meeting icon here and click on it. That will add everybody that was on that particular email message to this schedule invite that I’ve got.

I could schedule them here. Office 365 provides access to everybody’s calendar so I can see who’s available and when. But let’s say there are a couple folks that are actually traveling, and we want to turn this into a virtual meeting or a Web conference. I will just, in one click, click online meeting here, this is powered by the Lync service, that provides in the meeting request itself a quick link here if I want to go join the conference, or if I’m on a mobile device, I’ve got the telephone numbers here, the participant code, you get the idea.

I’m going to cancel out of this one because we actually have one that’s in progress right now. In fact, I could go to the calendar mode itself, or I’ll show you we also integrate the conferencing directly into these reminders. So, I can just click join online meeting here. And we’ll see our Web conference will appear. And I’ve got John here in the conference, and I’ve got Rory in the back as well.

RORY: Hey, Kirk, how’s it going out there?

KIRK KOENIGSBAUER: Things are good, Rory, thanks for joining us. How are you doing back there? Are you looking good?

RORY: Doing great, thanks.

KIRK KOENIGSBAUER: Excellent. So, we’ve got a Web conference with three people, just a couple of quick clicks to get that going, and you can see how simple it is with Office 365.

Now, in the Web conference, too, you can see we’re able to collaborate here as well. So, we’ve got a PowerPoint presentation that you see on the right side of the screen. And you can see the transitions work and so forth. I can take control of this presentation if I want to. I can go backwards or forward. Let’s say I missed a slide or I joined late, you can see the view turns to a yellow view, which means that I’m the only one looking at that piece of it.

But we also support things — and I could actually take over as presenter if I wanted everybody to go back to the agenda slide. But we also support other kinds of collaboration as well in this Web conference, things like polling, things like white boards. I’ll change to the white board view here, and you can see it’s basically a freeform canvas, effectively. We’ve integrated some content from Visio; we’ve got some charts here or some pictures here that you see, and this, too, is real-time collaboration. You can see John do some editing, Rory’s doing some editing in the back. I can go ahead and bring up a pen here; maybe I want to circle something here. You get the idea. Real-time video conferencing with collaboration all integrated into the Office 365 experience.

All right, Rory, thanks a lot, buddy, we’re going to hang up on you here. Maybe a little too early. All right, you get the idea.

Now, I’ve showed you a little bit about collaborating with people. I’ve shown you a little bit about collaborating on documents and projects. The next thing I want to do is show you how you can collaborate with the world using Office 365 in terms of website design, powered by our SharePoint service.

So, I’m going to go back or go up to my Office 365 site, and this is about a site that’s under construction right now from one of our customers in the beta, ESL Industries from New Zealand. They’re a great customer of ours, and they’re in the process of converting their website to Office 365. You can see it’s under construction here. I’m in the design mode.

Now, we tried to make, as Steve mentioned, editing a website as simple as editing a Word document using the new SharePoint design services that we’ve got here. So, for example, just like you’d expect, if I wanted to change, say, the font or the color of this, I’ll just go right up to the ribbon, just like I would in Word, and I can do that very quickly here. It’s a templatized website. So, for example, if I want to add a logo on all of my pages, I can just double click into the header, click on logo, scroll down, pick the image that I want. Here’s ESL’s logo there, and that’ll go ahead and appear on every single one of my pages. So, for example, if I jump over to the “contact us” page, you’ll see that same logo there.

Now, we also make it easy to insert what we call gadgets to automate sort of common tasks that people have when they’re setting up their website. So, for example, on this “contact us” page, we’ve got a “contact us” gadget that’s here, which will make it easy for anyone to contact me on my website. I can just go ahead and type in my email address here; this is where I want everything to go. Click save, and you’ll see that just drop right in, really simple, right into the experience.

Now, there are a bunch of other gadgets as well; there are gadgets for things like maps and HTML pages. We also have one for multimedia content. So, if I want to make this product page really sing, I’ll go ahead and drop in a video here. And I can take that video from anywhere on the Internet. I’ll go paste in a URL that I’ve got here, and I’ll preview it in design mode. I won’t play it here; I’ll just go ahead and click OK, insert that, and let’s go ahead and take a quick look at that. Go back to the home page; I’ll click on the preview button that I’ll pop up on a new page here. I’ll go to the home page first. You can see the formatting changes. This is out on the Internet, out on Office 365 right now for everybody to see and go to that “contact us” page if I want, we’ll see that contact form. Go back to that product page, there’s my video, I can click play, you get the idea here. Full multimedia built into the design tool itself. Very, very cool stuff.

So, with that, I’m going to hand it back to Steve. Thanks very much. I hope you got a good sense of what Office 365 can do. Really, the essence of collaboration where Office meets the cloud. Steve, back to you. (Applause.)

STEVE BALLMER: Well, thanks, Kirk. To make getting started as easy as possible with Office 365, we developed a wide range of service plans that are designed to meet the needs of a variety of companies of different sizes. With Office 365, businesses can simply pay a monthly subscription at a price they can predict and afford, or they can connect Office software that they own already with the Office 365 service. Their choice.

With Office 365, business leaders can move forward knowing that Microsoft’s not only going to deliver cutting-edge tools and services, but also at the highest levels of reliability, performance and security. Our service level agreement policies in Office 365 are absolutely the best in the industry, and it’s just one reason why businesses can be confident in Microsoft’s deep commitment to stand with them as we stand behind the Office 365 service.

Some of the best-known companies on the planet, including DuPont, Hyatt Hotels, Starbucks and Volvo, already rely on our Office cloud services and are excited about Office 365. And so are small and mid-sized businesses, as I talked about earlier. In fact, during our beta program, more than 70 percent of the beta testers of Office 365 were small and medium-sized businesses.

Yesterday and earlier this morning, I had the privilege of meeting with a number of those business owners and business operators who’ve seen first hand how the same collaboration tools used by those companies can transform their own smaller and mid-sized organizations. Many of those business owners and their IT folks are actually here today.

I’ve got to say, I loved hearing the stories, and I know that there are plenty more to come. I was really impressed with the story of Travelers Haven, which is a relocation and temporary housing company that Elia Wallen, who is here with us, is building in Denver, Colorado. This year, Travelers Haven will work with nearly 5,000 families. Each family move involves nearly a dozen documents and hundreds of communications between Travelers Haven, the family movers, storage, housing providers, real estate agents, to name just a few.

Think about that for a second. The volume. Just in a small business, thousands of clients, tens of thousands of pieces of communication, and only 35 employees in Travelers Haven. Let’s just say that Ely and team have opportunity to take advantage of high-quality collaboration tools.

Ely told me that Office 365 has really changed the way that they work together. They use IM and video conferencing, and they’re planning to make Office 365 their main document hub.

Ely estimates he can save $100,000 a year in IT expenses and cut about 30 hours of work every day across the company. These are material numbers — on a company of 35 people, it’s another two or three employees. It’s big stuff.

Travelers Haven is just one of many early adopters who are really getting some very, very impressive results. Companies like The Wise Group out of Glasgow, Scotland. It’s a job placement firm that expects to cut travel costs and reduce carbon emissions by 30 percent after they retire the 60 servers they think that they will save. Allen, who is the CIO there, told me he plans — I’m not sure he’s being entirely straight with me — but he plans to turn their empty server room into a Jacuzzi, which sounded pretty good to me.

Then there’s ESL Solutions whose website Kirk had a chance to show you, which is a manufacturing business in Wellington, New Zealand. With the workflow system they’ll implement, they expect to improve the quality by sharing information more easily throughout the company. He also expects to get back four hours per week that he can spend growing his business and not managing the IT.

There’s Perkins Eastman, who is based right here in New York. It’s a firm of about 600 architects and design professionals. They’re responsible for a number of impressive structures like the TKTS booth down here in Manhattan and the new Chongqing Library in Chongqing, China. With Office 365, they expect to improve collaboration between their 13 offices around the world and their clientele from Miami to Mumbai.

There’s lots of opportunity out there to reach current and new customers. And to make that happen, we know we need to engage our massive global partner ecosystem of system integrators and resellers. I’m excited to announce today that we’re extending that network through more than 20 leading telecommunications companies and hosters from around the world. These companies already have established, trusted service relationships with millions of small and mid-sized businesses.

With our new partner program, these businesses can take Office 365 and package it with the valued services that they already provide to small and mid-sized customers.

It goes all the way back to 2005 that Microsoft introduced our first cloud service when Energizer, the battery company, became our first business customer using Office Cloud Services. It’s now six years since we started down the journey to Office-based cloud services, and yet, we’re more optimistic about what can be done and the scenarios that can be affected than ever before.

I was talking to one of our customers last night and we were kind of going through and preparing and blah, blah, blah, blah, blah, and you know, he said he kind of had an ah-hah moment. You know, he had talked about Office 365, he had shown it to his people, they were implementing, they were moving forward and then he was actually — Allen from The Wise Group — he was on the train, I think he said, going from Glasgow to London. And all of a sudden, he found himself taking a call on his laptop over Lync, participating in a Web conference, putting it on hold, looking up the notes for the meeting, taking a call from somebody else, all over the 3G card that was built into the laptop. And it was at that moment that he said, “Aha, I get it. I’ve got the stuff that the other guy’s got; I’ve got everything that I need. All of my information, all my files, all of the work and productivity I’d ever want to have available through my computer and what lives out there in the Office 365 services.”

So, as we think about what Office 365 can do — for many businesses, small, medium, and large, from real estate agents, accountants, florists, lawyers, cleaning services, auto dealerships — the list is long. I think it’s exciting to imagine the possibilities, particularly for the companies that have little or no IT support and very little time and financial resources to dedicate the technology, Office 365, where Office meets the cloud, is a big step forward.

These businesses really will be able to let their employees share information in new ways and connect in new ways not only with their own employees, but with their partners and with their customers.

Office 365 gives businesses of all sizes, but particularly small and medium-sized businesses, a clear and strong edge.

Where does Office meet the cloud? It’s Office 365. The absolute best productivity and collaboration service for businesses around the world. It’s a pleasure to have a chance to mark the official introduction of the product today. I know you’ll all get a chance to go up and visit the Office 365 service on the Internet. I encourage you to do that because I think you’ll agree with me, the more time you spend, that we really have a big opportunity to continue to drive productivity and collaboration around the world by bringing the benefits of Microsoft Office to the cloud.

Thanks very much, and again, we welcome your participation today. (Applause.)

JANICE KAPNER: Thank you, Steve, and thanks to all of you for joining us for today’s event. For those of you who are tuning in online, if you have any questions, please feel free to ask them via Twitter, and we’ll answer them directly. For those of you on the Webcast, thank you so much for joining us. For those of you in the room, we have some fabulous customers and partners that are here today, and they will be available along with Microsoft representatives to answer any questions you have from this point forward. Thank you so much. (Applause.)