Steve Ballmer Speech Transcript – Financial Services Summit

Remarks by Steve Ballmer
Financial Services Summit
New York, April 19, 2000

MR. BALLMER: Well, I’ve got to admit; there’s hardly been a day when I’ve been in two more unusual venues for doing customer meetings.If you can imagine what it’s like to actually try to do a product launch in Grand Central, it’s every bit as bad as it sounds.We were trying to make some points, I guess, about how the mobile professional works, and mobile professionals must work in Grand Central. I’m not sure who works in fish markets, and why we are here exactly, but I think it’s a little bit better venue than Grand Central, thanks for that.

It is my great pleasure to have this opportunity to chat with you today.What I would like to do is start with maybe a little bit of a broad perspective on where I think the e-commerce market is going, and then from there, logically, into some of the things we’re doing.And I should have asked where the mouse was, but I’ll bet it’s here.The space bar works fine on this computer, but this computer and this computer are not synchronized.One second, maybe that space bar.Much better space bar.We’ll move over here.

I will start with a little bit of a discussion about e-commerce, and what people in my opinion, just based upon the amount of time I spend out meeting with people in business around the world, I want to talk about a little bit of a view of e-commerce, because I think people have quite a wide range of interests in e- commerce.I think most of the press buzz tends to focus in on some long-term notion of increasing revenues.If you look at the amount of real revenue increase that’s come from e-commerce today, it’s still very modest for most businesses, even companies like Microsoft and Cisco that will tell you, all of our business now is e-commerce business, well, in large measure that’s because we’ve taken some other source of collecting up orders and asked people to please submit them over the Internet.We don’t take orders from distributors through EDI anymore everything goes through the Internet.So, now we have 100 percent e-commerce revenue.

But we’re still in the early days of people really building revenue on the Internet.

(Technical difficulties with the mike.)

MR. BALLMER: There’s a huge expectation of revenue increase, yet really, and I think probably even over the next year or two, the number one reason people invest in electronic commerce does not focus in on this notion of what the short-term revenue is.

The second reason, and not a reason that is as much discussed, that people focus in on electronic commerce is decreased costs.And this opportunity I actually think is, in some senses, a much more important one, short-term.If you look at the amount of processing costs that you can take out of a number of transactions, particularly financial transactions, if you can get your customers to do more and more of the self-service work themselves, you’ll find that you can deliver the customer probably actually a better experience at a lower cost than you can through some other medium.A lot of people think of the Internet potentially as a low service medium.I think of the Internet as a very high service medium.

Sometimes I like to use the example of the Gap.When I walk into a Gap store, people freeze.I’m large; they don’t carry large sizes in the Gap.They don’t like to see people like me walk in.When I reassure them I’m shopping for my wife, that sounds good, I don’t remember my wife’s size.I don’t remember a lot of things, what colors does your wife like, I don’t remember.When I go to, it’s hello, Mr. Ballmer; we’ve got your size in stock.Sir, can we give you some?Did you remember it’s your wife’s birthday; she’s a size

still isn’t she?You can decide whether I don’t remember, or am sworn to confidentiality on that.And I say, why, of course, she is.Still living on Hunts Point Road in Bellevue, Washington.She really does like the mall, doesn’t she?And boom, those things are delivered.

I think it’s important to think about this in the context of improved service and decreased cost as an important part of this electronic commerce opportunity, particularly in financial services.The financial service business is not unique, but it’s in a class with a set of businesses where not only can you order something over the Internet, you can fulfill it over the Internet.Software, media, telecommunications, financial services, all of us who are in the software business are essentially in businesses that are relatively unique on the Internet in the sense that you can not only interact with a customer, you can fulfill your product largely over the Internet.And so the opportunities for decreased cost and improved service go up.

Many people invest in e-commerce because they want to target strategic customers.If you want to have the brokerage accounts of the people who will have assets 20 years from now, you absolutely better be online today, because students coming right out of school are never, ever, ever, in my opinion, going to start trading in any way other than online.And I think you see a number of people who will start investing strategically recognizing that you’ve got sort of a 20-30-year shift in the population, and that the people who will be your customers 20 years from now will insist on this, and they’ll start those trading relationships early on in life, and they’ll stay with the person who they started with, at least in some large measure.

I listed number four, I think that is certainly not 100 percent the truth, but many companies are investing in e-commerce today because it looks good in the marketplace.The stock market tends to value anything that’s got dot-com glitter on it

— now, this was more true 10 days ago than it is today, well, than it was until two days ago, but who knows what happened this morning, everybody in the audience might now that better than I do

— but, nonetheless, the dot-com glitter is still strong.When you see a company like Yahoo who, even as of Friday’s close, was still worth $60 billion, about the same amount of money as Ford Motor Company, it is a compelling thing to take a look at no matter who you are, what business you’re in.We have CEOs of established companies saying, I’ve got to do e-commerce, I’ve got to have a dot-com valuation.And that’s equally true in the financial services market, and we have certainly seen the flood of what I might call more traditional financial services companies making sure that they have online presences for this reason as well as many others.

And last, but not least, I think there’s a general sense that the e-commerce world is a world of strong customer ownership.That theory I will dispute.In fact, I think what we will see is a migration in the Internet, if you look forward over the next five years and ten years, where the Internet today is probably at its zenith in terms of being an environment in which the producer controls the consumer.Today, when you look at the Internet, you really don’t look at what you want to look at, you look at what a set of sites want you to see.When you visit, you see what Microsoft wants you to see.When you visit MSN or Yahoo or Amazon or Merrill Lynch or whomever, you see what they want you to see.That’s not bad, that’s not wrong, but that’s not the future.I think in the future the consumer will be more in control of their view of and interaction with the Internet than they are today.And so I sometimes think that some of the investments that people are making in what I might call a very headlong aggressive fashion to “acquire” customers at all costs may, in fact, not be the investments that people want to make tomorrow.

And the key to this change we see in the Internet, and the key, frankly, to a lot of other opportunities that I think are essential to all in terms of taking advantage of the Internet, will be what we might well call the XML generation, what we think of and we need to make all this clear as the NGWS generation, Microsoft’s next generation platform efforts, or what you could well think of as the generation of the next Internet user experience.There shouldn’t be a soul in this room who thinks that the way we interact with the Internet five years from now will be the way we interact with the Internet today.Browsers, HTML 3.2, Web pages, I mean, if we assume that the world is static, that is a bad assumption for us to make.

And XML has so much possibility in it that with the right software infrastructure around it, the right applications around it, the way you build applications, and Web sites, and application equals a Web site equals an application, the way you build applications and Web sites will change.We will have much richer ability to integrate information across Web sites using standard XML schema.And the way that end users will be able to personalize their experience on the Internet will be quite different than it is today.

I’ll take an example outside of the financial services arena, but then you can project this one into the financial services arena.In the healthcare world, the Holy Grail is the unified patient record.And every healthcare company will say, that’s how we’re going to control our customer; we’ll control all their health data.And nobody ever does it because those pesky old consumers want to deal with multiple healthcare providers, they go to this doctor, that doctor, the records don’t transfer, et cetera.How do I think that problem gets solved over time?I think every person will have a place on the Internet that you might call their health records store, and they will have a way to give permission to people to put scans, lab results, test results, visit minutes, into their health vault, and they will have a way to be able to delegate privilege to people that they trust to look at certain of those results.

Dr. So-and-so, you’re welcome to look at my last X-ray, but you’re not to look at my psychiatric profile.Dr. Foo, I want you to put my blood test in, but Dr. Barr you’re not allowed to put my

— I will be in control of what gets into my unified patient record, and who gets a chance to look at it.And so, instead of having somebody who controls my view of my health, I will control my view and access to my health.

Now project that into financial services.Will the world of the future be one person controlling everything about your financial assets, or will you have a place, you the user, where you can view your financial condition, and you’ll tell your bank, or your brokerage, or whomever to do work for you, to transfer records for you?I tend to think the world is the latter.

Now, why this big hoopla?Because I think it is important to recognize some of the transformation that will occur, to make investments that are consistent with that, and recognize the great power that the world will derive over the next five or ten years from XML.The Web today is not programmable.Web sites don’t really program other Web sites.That is an important, fundamental, powerful concept, not just for the personalization I discussed, but for the way applications get architected.Your Web site cooperating with your partner’s Web site, with your customer if you have an institutional business, the way your Web site talks to the Web site of the institutions with whom you do business.Even internal to your own organization, the way applications interoperate will move even on corporate LANs, corporate intranets, to be much more XML based.You will have the trading systems, the inventory systems, the sort of medium of interchange, I believe, will be XML based.

There’s been a holy grail about that being Java based, there’s been holy grails about that being CORBA based, there’s been holy grails about that being SAA based, there’s been many holy grails.Here’s a new one.But, this one I really believe in, myself, and I think essentially the world has embraced it.And I think if anybody is sitting here thinking about, the title of the conference says, Investing In The Future Of Technology, understanding XML and certainly as a platform vendor we see our great opportunity as building a set of platform services that make it easy and convenient to craft, both from a consumer aspect, as well as a business aspect, these kinds of XML based applications.What does the messaging infrastructure look like, the management infrastructure, the workflow infrastructure, the transaction infrastructure, the programming model that centers itself around XML documents as an important thing.

I’m probably way past where this slide is relevant, but I’ll mention it briefly anyway.The key thing you’ve got to remember is XML is about data, where HTML was about views on data.And because XML represents a fundamental wrapping of the data itself, it is the appropriate kind of medium for data interchange.When we want to pass information from a Web site to a device, we should really want to pass the XML, not the HTML.We were launching the Pocket PC, and the Pocket PC guys, they’re all excited, they can take any Web page and cram it and reformat it and get it to look okay.Well, what you really want to do is pass some XML, you’re passing them the semantics, the data itself, not passing them the look.You pass them the semantics, then they can really do the right job, as opposed to just playing around, remapping a view, they can take the data and present it intelligently.

You want to share calendar information, you want to post an event to a Web site in one of your trading partners, you want to be able to pass a set of XML data with semantics around it.It’s terribly, terribly important.As we think about sort of the future of our company

as we think about the, as we lay out for our technical team the challenge of the future, Windows 2000 is the starting point.We’ve embraced the key infrastructure in many ways.But, the next quantum leap forward for us, which we have to sort of formally unveil, and give some detail on, we refer to it as NGWS.But, it’s a new version of the Windows client, it’s a new version of the Windows server, and it’s probably a new set of services that are consistent with those, that run out in the Internet cloud, that basically provide a programming model, an event model, a messaging model, that really focuses in on e-central possibilities in XML.And that’s why I wanted to really highlight it for you today.

A second aspect of what we think will be important for this e-commerce world is the notion of reliable and easy scalability.How will the world scale up, because there’s nobody in this room who can really predict what kind of electronic commerce volume they’ll have tomorrow.You don’t know how many customers you’ll have, really, you may get reasonable predictions, but you can’t bank it in stone.You probably don’t really know what services you’ll be offering tomorrow, and the next day, and the day after, you’ll want to provide more and more new services, there will be more and more ideas, and you need to have the scalability in the electronic commerce environment, particularly since the customers can turn on the demand now, you can’t control it the way you can, in some senses, on your corporate intranet.

The fundamental model of scaling in the computer industry today revolves around what I might call big boxes.Buy a big box, and make sure it’s big enough, because if it’s not you’re out of luck, you’re out of steam, you’ve got a whole new set of software problems.And probably while you’re at it, buy two big boxes, because one of the big boxes might go down some day, and what a disaster, what a mess that is. But, people love big boxes, our friends at Sun and Oracle, they’re the big box company, and it’s not a bad approach.And why do people fall in love with it?Because in some senses, it’s got a simplicity of management to it.

The more you can load on a single box, it’s a big theme we hear from our customers in financial services, the need to consolidate, the data center, get to fewer boxes.Well, it’s true in a sense today the premium is there, because the alternate approach, which we might call the scale out approach, that is you add small discrete increments of scale as you go, and you manage farms of many smaller boxes, which can be added more continuously, not so lumpy, which provides more redundancy and more availability, those are not as manageable today as the big box architecture.

Our approach as a company is, in fact, to make sure that we have big box options available that run Windows 2000.If you take a look at the Unisys ES-7000, you take a look at the high end of the Compaq line, et cetera, you will see, and Compaq-Unisys, great partnership working together on the high end, you will see very high-end big boxes from our partners.But, we still believe that for many, many applications the right scalability approach is to have a scale up, many, many PC servers, where you’re load balancing between inexpensive hardware, you get rid of the notion of a single point of failure, you can integrate new services much more conveniently, you’re not sitting there on a given box having to go through the specific load on that box.You can add processing capability linearly as you need it, but we need to provide the management software that makes it easy to manage that kind of farm of servers.

We’re investing in that, and others are, because the nature of the Web pushes you here.You can never design a box big enough to run whatever the biggest application on the Web is.Just when you think you’ve done it, the application will get bigger.And so we’re putting a lot of effort as part of the push to do more scalable systems into these types of tools.Later on this year we’ll ship the first version of what we call our application center server, it’s a set of management tools that really target these kinds of farms of servers. We’ve got a team here in New York, led by one of our consultants, Bob Fidesco, focusing on nothing but what the kinds of requirements are for scalability and application management that come specifically out of the financial services world.And this is really a front and center priority for us in terms of e-commerce, XML and this new model of scalability.

I want to invite now to join me on stage Steve Long who is the CIO at CSFD.We’ve been doing a lot of work with Credit Suisse in the area of scalability and big projects, and I want to let Steve have a chance to talk to you about it.

MR. LONG: Hi, Steve. Steve asked me to come and tell you what some of the things that are going on in Credit Suisse First Boston.We are actively deploying Windows 2000 on 17,000 desktops and 2,000 laptops globally.We’re about one-quarter of the way done.Additionally, we have another project called Project Sunset.Project Sunset is our move away from Sun UNIX on application servers and database servers.


MR. LONG: We think it will take 18 months to two years to do that, but we’re well underway in that.

Thirdly, we have been developing and we are actively truly developing business applications on the Microsoft platform.We call these apps digital dashboards, the digital dashboards basically look like Outlook 2000 interfaces, but they’re geared towards a particular business user.So we have these dashboards up and running for emerging markets, investment banking, and even some of the back office functions, human resources is the next one that’s supposed to get a dashboard.

So, we believe all of the above will give us a big technology advantage in the years to come vis-
-vis our competitors.The other thing, Steve talked about these big boxes, the big box approach.I brought one concrete example about what Steve calls scaling out, and how to do scaling out correctly.We, as a firm, used to sell these things called path-dependent option trades.And these trades are basically

— you need to use a Monte Carlo simulation to value them.They’re very compute intensive.So we did the old big box approach and bought a very big Sun box for $400,000.It worked great.Then the business expanded, we had to keep buying these big boxes.We ended up buying five of them.Eventually, we realized it was getting a tad expensive, and we looked at a Compaq NT compute form solution.And basically we chose a 30-CPU compute form with dual Pentium 600 PCs in each machine.And since last October, we’ve been getting performance eight to ten times faster than the Sun solution at one-eighth to one-tenth the price.


MR. LONG: We’re really pleased with that.

The other thing we got was no single point of failure, which we used to have, we used to basically have to buy a big box, and another big box in case the first big box broke.

And I guess, lastly, I don’t know, Steve hasn’t mentioned it here today, but one of the things that we’re very interested in in Windows 2000 is what Steve calls friction free development.Basically, friction free development is rapid development and frequent release into a live environment.And I think you’ll see in Windows 2000 that there’s a lot of great features related to friction free development, and in the next version of Windows 2000.

And, lastly, it’s been great; Compaq and Microsoft have been great partners to work with.

Thank you.


MR. BALLMER: Thanks very much.

Steve sort of set me up very nicely for the formal introduction of the discussion of Windows 2000. Windows 2000, I think, is not only for us but really for our customers and the industry, it is an incredible step forward.I think of it as really three things.I’ll go through all the yickety-yick on the slides, but I think of it as three things.

First of all, it’s just the best version of Windows we’ve ever done, and I can’t imagine somebody in business not wanting to have Windows 2000 on their desktop/laptop.It’s unfathomable to me.As soon as the mission critical applications in the Ballmer household, Reader Rabbit and Who’s In the Kitchen, are moved across, I’ll say the same thing about Windows 2000 in the home.And we’ll have a version of Windows 2000 that targets that environment.But it’s important for me to tell you that, I think, only in the context that we are going to drive this Windows 2000 thing absolutely everywhere.So, it’s the best version of Windows, number one.

Number two, it’s a version of Windows at the server where I don’t feel like we have to be apologetic at all as we talk to all of you as sort of Steve described, in terms of really going after mission critical enterprise applications, server or desktop, in any business.Can the product continue to be improved?Sure, that’s our job, we’ll be improving that product as long as I work at Microsoft.But it’s a product that I think is really first class across the spectrum in terms of supporting mission critical enterprise applications.

And, third, we’ve built the infrastructure into Windows 2000 to really support the next generation of Internet applications.The XML support is in there, the transactions, the queuing, the application server support is in there.And, you know, if you want to break it out another way, it’s very reliable.That’s what makes it right for the enterprise.The design was designed with high availability in mind.The product has been tested and instrumented, and we actually had an inspection tool that we developed especially to sort of run over the code and make sure what we had today is rock solid in a way we’ve never been able to do with any product that we’ve delivered.The way we support clustering improves availability.The manageability so that you get the kind of friction free work that Steve was talking about, centralized management, the director, the installer, the security, the XML support, the scale out approach, the interoperability, in addition, the support for new hardware.This is an important foundation.

And while we are already working on the next generation of our platform, because despite what you might sometimes read in the newspaper, we always have to be working, it’s a very competitive world out there, our lives for the next couple of years is making the folks in this room and others very, very successful, taking advantage of Windows 2000.

Just to give you something of a feel of where we wind up with Windows 2000 from a performance standpoint, and this is running our new SQL Server 2000, which will be available here in the spring or early summer.These are numbers on a Compaq ProLient 8500, comparison is to Sun and Oracle, and you can see here something, which has always been the case.We have a price/performance advantage versus the Sun servers.The thing that is new and that is interesting is if you look at the top two absolute TPCC benchmarks that exist today, they exist on Windows 2000.The absolute performance, not just the price/performance, but, the absolute performance, 227,000 transactions a minute that you can get on Compaq boxes running SQL Server and Windows 2000 is amazing.

I had the misfortune of showing some of these numbers in even more detail to a group of CIOs the other day, and they kind of guffawed.Why are you guffawing?They said these aren’t real benchmarks. These are the most official real benchmarks I the world.I said, what do you mean they’re not real benchmarks, this is real, this is audited, this is this.And they said, well, you know, if you actually multiply out here the transactions per second times the price per transaction, and all that kind of stuff.They said, you’re talking about systems that cost millions of dollars.We don’t even buy that kind of system.The high-end scalability numbers that companies like Microsoft and Sun for that matter, and Oracle, who are posting these days don’t represent the lion’s share of what goes on anywhere.

You know, this box that we’re talking about is 227,000 transactions per minute at about $20 per transaction, that’s a $5 million, $4-1/2 million system.That’s a very expensive big box PC solution.Steve was talking about how he was choking on buying multiple $400,000 Sun boxes, and were moving to cheaper systems.So, it’s important for us to show these absolute high, big box numbers.But I think if you look at the bulk of what you do, it will be much more inexpensive, Windows, SQL Server type systems, that provide the right scalability and absolutely the best price/performance.

We have a lot of customers already working with Windows 2000.You had a chance to hear from Steve.I’ve had a chance to meet a number of times with the folks at the Swiss Stock Exchange who have been working now for over two years to convert their entire infrastructure over to a Windows

— their trading infrastructure over to a Windows 2000-based solution.And the Swiss exchange is now up and in production at about half the cost of their UNIX solutions.

We had a chance to work with Merrill Lynch, particularly on not only their internal systems, but their electronic commerce systems.And the speed with which we were collectively able to roll to market their e-commerce application was incredible by using and building on the fundamental facilities that are in Windows 2000.

Now, Scott McNealy has made a point to the Wall Street Journal very recently that says, essentially, until they, meaning Microsoft, can run either E-Bay or E-Trade, Microsoft can say whatever they want and the but … is that they’re just jokers in e-commerce.That’s kind of Scott’s way of phrasing things, I think I can fairly say.And so we did a little comparison here of an E-Trade site, and E-Trade is, in fact, powered by Sun, and a system that’s being powered by Windows 2000 at Southwest Securities.How many trades are processed every day?Twice as many per day on the Southwest Security system.What’s the transaction growth rate?Reasonably comparable.What’s the transaction success rate?Number one is on Windows 2000 systems from Southwest Securities.You can see the rankings and the success rate.Transaction performance, Windows beat Sun.Systems outages since the first of the year, zero and one.I think there’s only one right number here, and I think it’s the one on the left, actually.So, we may not run E-Trade, we actually do run most of E-Bay, but Scott didn’t mention that in the quote.There’s about 400 Windows server and one Sun server in the E-Bay site.

But, anyway, in the E-Trade case, if you do a comparison I think we can fairly say we can now say whatever we want, at least to Scott.But, certainly the point I think to the folks in this room is there’s absolutely no reason to not move ahead now with new development projects.The range of development tools is still there, the convenience, the integration with the desktop world, the Internet world is there, and the scalability and the reliability are also there.

All of this is translated into quite a strong position for us in electronic commerce.We’ve been part of not only Merrill Lynch, but a number of other traditional brokerages have moved their business online. Five out of six of the real time financial information services run on top of Windows, including of course the work from Reuters.And 7 of 12 of the ETNs are built on top of the Microsoft platform, and here’s just a set, an example of some of the customers with their logos are shown below.E-commerce is the future of the financial services marketplace, and in a variety of ways we’re trying to make sure we have a rich offer. Today we launched our new Pocket PC device, and I think that opens up new opportunities for electronic commerce in the financial services world.And to talk to you about that I want to introduce Frank Petrelli, president and COO of TD Waterhouse.He’s going to show you a fairly intriguing new solution based upon one of our client devices.

Welcome, Frank.

MR. PETRELLI: It’s very rare that you get the opportunity to steal two minutes of Microsoft’s time for shameless self-promotion.I am in pig heaven here.But, we did announce today that we’re a Microsoft Pocket PC launch partner, and we’re delighted to be here.You know, we know beyond the shadow of a doubt that wireless is going to drive the next wave of growth in financial services.We see it coming.I am predicting that in the next 3 to 5 years 50 to 60 percent of our volumes will be done over the wireless devices.And so investors are telling us that they want to do it all, any time, anywhere.It’s our job to deliver to them easy and convenient ways of accessing their investments and helping them manage their finances any way they want.So what we have here is the Pocket PC platform that will allow us to do this.

Using the Pocket PC platform, we are developing wireless applications that are taking our current web broker services, that is currently run out of customers desktops in their offices or at home, and which we’re getting tremendous volume.We are seeing peak days where we’re doing over a quarter of a million trades a day.If you went back three-and-a-half years ago it was zero.And today 82 percent of our business is done this way.So we’re very excited now that we are giving customers the opportunity not to be landlocked, and again, the Pocket PC platform is helping us do that.

So let’s take a look at how a typical customer might use the TD Waterhouse Web Broker Wireless for Pocket PC.What they would do is they would probably start off, log in, and the beauty of this log is that it’s the same user ID and the same password that you have at your desktop, so customers don’t have to think about that.Then a customer might look at the screen and say, is it going to be any different from Web Broker?Well, thanks to the Pocket Internet Explorer browser, the customer will experience the same familiar look, and feel, and functionality of Web Broker, where they’re doing all this business today.And so as far as that goes, security and protection of customer information is critically important, and it’s the Pocket Internet Explorer’s built in SSL encryption that makes us feel very good about this, and will protect our customers.

So let’s take a look at what customers will do.First, they’ll look at what the market is doing, check out the market, and you see that this is as of yesterday; the chart is off the charts.We love it, we love it, we wish we could have a few more days like this, after last week.And then we’d probably look at the movers of the day.We would see the most active, the winners and losers.Let’s click on a stock, namely Microsoft, which was one of the most active yesterday, get a quote.If we wanted to we could have put in a company symbol, that’s fine.

Then we probably want to check out news.And we go to the news button and we’d see headline news. However, this service is also going to provide full coverage news reports, by Dow Jones, PR Newswire, and Bridge News.Passing to the news, which happens to talk about our launch today, we’re going to have a customer with the ability to place an order to buy a stock, and namely it will be Microsoft, 100 shares at the market, we all know we should be putting in limit orders these days, but that’s okay for the demo.And you preview your order, just as you would, again, the point is the same functionality, the same look and feel that a customer has today on their desktop, incredibly exciting.

So we at TD Waterhouse are dedicated to providing the best wireless experience for our customers. We believe a big part of that is going to be all about consistency.So when you pick up the pocket PC, and you use Web Broker, TD Waterhouse Web Broker, it’s, again, the same user ID, same password, same look and feel, same functionality, do it any time, anywhere, that’s what customers really want.So to kick off this launch of the Pocket PC we announced today that we are going to offer free Compaq iPaqs to 5000 of our customers, and we’re also going to market the Pocket PC across our entire customer base of about 3-1/4 million customer accounts.Can’t wait to do it.It’s going to happen in the third quarter, and we’re very excited about that.

So let me end by saying, yes, we’re excited to be a partner of Microsoft in the Pocket PC launch, but we’re more excited because we know we are improving our customer’s experience, and they’re going to love this thing.

Thanks very much.


MR. BALLMER: I think this is the business that will be most affected in the world by e- commerce, from the client devices through the XML interactions, through the server infrastructure.For us to really help the companies and the folks in this room realize that potential takes more than just incredible products, which I think in Pocket PC and Windows 2000 and SQL 2000 we’ve really come a long way.It requires a set of resources, support resources, architecture resources, partners of yours and ours who we can bring to bear.

The point of this event in some senses, as hosted by Microsoft and Compaq, is to show that neither of us stand-alone.We both bring to bear a set of capabilities and together what we can do, and what we can do with other companies that are here in the room, development partners, service partners, is incredible. We are putting a particular focus this year in the financial services area.We’ve pulled together all of our key financial services accounts, from around the country, in a single unit, with a single manager, and are really sort of loading up, particularly on technical support and architecture resources to help the kinds of companies represented in the room today really take advantage of what we think are some of the incredible advances that our product line today and through the next generation will enable, in terms of electronic commerce in the financial services world.

It would be our great pleasure to have a chance to work with you, and partner with you.It’s certainly been my great pleasure.And I’m very thankful that you gave us the time today to sit with us, with Reuters, with Compaq.I want to thank the folks from both of those firms, and before we break I’d be glad to take some questions.

Thanks very much.