Steve Ballmer Speech Transcript – Tech-ed ’98

Remarks by Steve Ballmer, Executive Vice President, Sales and Support, Worldwide Business Strategy Group

Tech Ed ’98
June 15, 1998, New Orleans, LA
Note: Extremely Poor Audio

ANNOUNCER: Ladies and gentlemen please welcome Steve Ballmer.

STEVE BALLMER: STEVE BALLMER: Well, thank you all very much.We sure appreciate you coming and spending the time.The room is very full, I would say, today.We’ll have over 9,000 people here for the Tech-Ed show.It is a real delight and pleasure for us to welcome all of you and thanks very much for spending the time with us here at Tech-Ed.

I thought maybe as much for you as me, since I’ve seen the survey results on who signed up, before we got started, we’d do a little audience poll, so you could get a feel for the other people here in the room with you.So, if you don’t mind, maybe get the lights up just a little bit above the audience, and maybe ask you just a few questions.That’s a hardware problem.It’s one thing when you can’t get your computer working; when you can’t get the lights to go up and down, though, that’s really an amazing deal.

Okay,show of hands.How many people here in the room would consider themselves developers?Show of hands?

How many people would consider themselves IT people in some other sense?

About 200 percent of the people in the room?That makes me pleased.

Second question.How many of you are doing work either on the development or the implementation side with COM today, COM objects?CORBA?

I won’t say see me after class, although it does — it does occur to me.

For how many of you has Java become a mainstream development tool?

And of those of you who put your hands up, how many of you are using Microsoft Visual J++?

I’m going to have to talk to somebody about that, I can tell.

How many people in the room here have built an application or deployed an application using Microsoft SQL Server?Exchange?

And how many people don’t — I’m not really talking about using Microsoft Office, but how many people would say they have built an application or deployed a sophisticated application built in Microsoft Office?

Okay.For how many of you is Unix an important environment either for — first for applications development, how many of you are Unix applications development people?

And how many of you either manage Unix systems or need to interoperate with Unix systems?

Great.Okay.That gives you a little bit of a sense, gives me something to talk to our Visual J++ team about, and it was very educational.Thank you very much.

Let me start out with a small apology, a large apology to those of you who were trying to access last weekend to download supplies and materials for this conference.Our right hand and our left hand were reasonably disassociated.We like to use holiday weekends for major systems maintenance.We should not use holiday weekends before Tech-Ed for major systems maintenance, and we apologize wholeheartedly to those of you who were up on the site trying to get ready for this conference.Our apologies for that.

What I’d like to do today is have an opportunity to kind of get a framework that I hope is valuable to you for the rest of the show.We’re trying to organize things for this Tech-Ed a little bit differently, frankly, than we have in the past, and we thought that this keynote would be a good stage to kind of set things.And what we’re trying to do in some sense is to give you a picture, give a picture of what we think are the kinds of applications and the kinds of scenarios that you’re trying to automate in your company.And we tried to organize our technology education instead of along technical areas today or over the course of the week, far more along the lines of the kinds of problems we think you’re going to run into in your businesses.So I want to paint that framework for you, and hopefully that gives you a senseof how we’re thinking about some of the kinds of things that we need to do to evolve our product line, consistent to what we’re hearing from you about the kinds of applications that you’re trying to build.

Before I do that, though, I want to set a bit of a stage on where we are in the marketplace, and what we’re trying to do at the very highest levels.And I want to start with what we call the Windows principles, the things that we are trying to — or the principles that we are trying to use to guide Windows development and Windows innovation.I think it’s a very topical, very timely topic.There seems to be a lot of interest in this in many parts of the world, particularly in Washington, DC, but I want to make sure that our customers and our partners really understand what we hold near and dear in terms of Windows.

Windows is a platform that we view as very importantly an innovative platform, a platform where we literally will continue to pursue new ideas, integrate new capabilities, integrate new functionality.Windows has a long way to go before we’ll consider it, quote,
.I don’t expect to consider it, quote,
in my working lifetime, for example, and I’m planning on being here for another ten, twenty years.There’s much that needs to be done:directory services, security services.We have to teach Windows to speak, to learn, to listen.There are so many things that we need to do to make Windows more functional for application developers and to make it simpler for users and IT professionals trying to deploy it.

And so when people ask, what is your definition of what’s in an operating system, I can’t give a very fixed answer.We feel a need to push, push, push, push and to listen — to listen to what you want, what you’re asking for, what systems services you deem as important and popular.And it is our principle to add those things to Windows in ways that we think will make you and our user community more productive.

And so as we sit and go through separate discussions with these teams, that’s the fundamental principle that is important to us, the right to innovate and to integrate on your behalf.

We think it’s also very important though that Windows be a very open platform, on which you have a huge set of choices for software, for applications, for development tools, for development approaches.Some of those will come from Microsoft.Some of those will compete with our offerings.Most of those will come from third parties, but it is our plan and intent in every way to let applications vendors and system utility vendors build on top of Windows.If you don’t like Windows systems services, you know people can have their own systems services.You don’t like our programming languages, there’ll be languages from other people.If you don’t like our tools, you can use anybody else’s tools.If you want an application in any field, in any walk of life, you can get it.If you want access to any Internet site, you just type into Windows, www.whateveryouwant.whateveritis and you’ll get there, with no charge, with no fee, with no impedance from the Windows system.

Windows needs to be a platform that provides new hardware ports , peripheral systems, chips, printers, everything you want.There’s got to be great choice.

We have in Seattle this week Nicholas Negroponte who runs the architecture machine group and the media lab at MIT.And I was having a fascinating conversation with him.He had to admit a little secretly, he had thought that the architecture machine group would always be — (inaudible) — and Unix Workstation, but now everybody wants Windows NT systems.Of course I was not undelighted to hear this, and I said,
“But why?”

And he actually surprised me.He says,
“I know you think it’s because of some cool thing you did in Windows, but it’s probably not what — (inaudible).All of the modern peripherals that we want to use for our experimentation and research in the architecture machine group, the drivers and support for those peripherals like — (inaudible) — conditioning systems, et cetera, et cetera, they’re only available today in the Windows platform.”
(Inaudible) — in their Unix workstation, and — (inaudible) — in their Macintoshes in order to buy into the innovation stream around Windows.

From the services perspective, literally an industry has grown up around Windows and the PC.We did a survey recently with Nathan and Associates , which is an economic research company that found that there’s 233,000 high-tech, entrepreneurial companies that have grown up in the United States developing or delivering services and developing custom software around the PC, and that literally thesehigh-tech entrepreneurs — and I’m not talking about Dell and Gateway and Microsoft now, I’m talking about smaller companies — account for 1.7 percent of all United States — of the whole United States economy.It’s 2.2 million workers today.There are 300,000 open jobs and all of that has been built, I think, in large measure on the openness of Windows, the openness of the PC, the choices and services and software.

We think these are the right guiding principles for Windows, an openness, but also a desire and need to innovate and integrate.Certainly pursuing those principles has brought a lot of success.There’s a lot of good momentum today around the Microsoft product line.This year alone there will be someplace between 85 and 90 million personal computers sold with Microsoft Windows pre-installed.

Windows NT Server, from no place basically five years ago, will this year deliver 1.6 million Servers.And if that doesn’t mean much to you, I’ll tell you the total Unix Server installed worldwide this year will be about 600,000, so we’re talking about a number that’s over two and half times Unix.

Novell has also fallen off the pace, and the growth rate of NT Serveris now running about 35, 40 percent a year.And we thank everybody in this room.

I think the surge of Windows NT Server relates largely to its efficacy as an applications server platform.People say,
“Aren’t most of the servers you sell just file and print servers?”
While that may have been true a couple, three years ago, as we look today, I can tell you that fully — fully 35 percent of the NT servers are running database servers from Microsoft or Oracle or others.So NT has branched out and is really now a platform for applications at the server level.

The Exchange product has really seen uptake in the last couple of years.Thirteen million now installed.Our run rate is at about 12 million, a little bit more than that units per year, and exceeds Lotus Notes.We saw the number of hands that went up as people have deployed applications that use Exchange.And that’s what I’m — I get most excited about, with all the work customers are doing with — and collaboration and groupware applications, building upon the infrastructure we keep getting richer and richer in Exchange to support that kind of application.

The SQL Server product has seen good uptake.The numbers are there for you to look at.I don’t know when we’ll catch Oracle, but we’re at 70 percent their run rate right now in terms of new database seatsper year, and the SQL Server 7 product, which I’ll talk about later this morning is, I think, the most exciting product — well, certainly the most exciting database release we’ve had in a long, long time.

Let me turn now to this notion of what we think we want to do with the kinds of technologies that we deliver, therefore what the guiding philosophy is as we add new functionality to our product line.We talk about a concept that we call the Digital Nervous System.Many of you, I’m sure, have seen advertisements that we have run, which I’m not sure explain it very well, quite frankly, so I’m going to take a shot at explaining the words, because until further notice, we think it is the best embodiment of what we’re hearing from customers they want out of their IT systems.

You think of a company or an organization, the way we think of the human body.Every organization has some kind of a nervous system, something that helps it communicate, think, plan, analyze, take action, educate itself, retain memory.If you ask most business managers, what does the nervous system in your company look like, they’ll listen for a few minutes and then they’ll say,
“Facsimile, voice mail, ad hoc meetings, gut judgment, because we never have the data that we need to get our jobs done.”

And while information technology has served the productivity needs of individual end users quite well, and while IT has served the backbone operational processing needs of companies quite well, I don’t think IT has done as good a job of serving the nervous system needs, the kinds of issuesthat businesses are attacking today:how do I increase shareholder value; how do I cut product cycle time from time of design to time of first product delivery; how do I change the supply statein my business to reduce costs; how do I share knowledge internally to my company and with my customers and my business partners.These are the kinds of issues which the business managers that we all serve are locked on.

We had a conference last week with 120 CEOs of the largest businesses of the world:Boeing, ALCOA, Johnson and Johnson, CitiBank.And we talked about these kinds of issues.And when you get right down to it, there are always two things these guys were most focused in on.The first was how is this IT thing going to help me get my employees to serve customers better, and how does this whole E-commerce thing allow me to serve my customers better?That was kind of one theme.The other big theme we heard from them was how do I get the information that I need when I need it to make decisions more effectively?It’s all consistent with this concept of a nervous system.A nervous system, after all, also lets you see and hear and take outside input.

In order to really run effectively this kind of a nervous system inside a company doesn’t require very much; in a way most companies already have PCs, they’ve got a network, they’ve got an Internet connection.So the question is how do we together take that basic infrastructure and give you the tools that let you at appropriate costs put in systems that help your company better contact the outside world, better serve customers, know more about what’s going on, communicate more effectively, introduce new products more quickly, run your backbone manufacturing and customer service operations more efficiently.And how do we provide you a computinginfrastructure, you know, those PCs and networks and Internet connections that from an IT perspective you can take care of at lower costs and with greater flexibility every year.That’s what we call the infrastructure.

So this digital nervous system implies we need to have the tools to help the company manage knowledge, to manage its operation on top of an IT infrastructure that is better and better and cheaper for you to take care of every year.

And so I want to spend time talking about the scenarios that address the things you’re trying to build for your user in knowledge management and business operation, but I also then want to take a little bit of time to talk about how we give you the tools to do your job more cheaply and more effectively.

The first such important tool in many ways, from a development perspective and a deployment perspective, is the Windows DNA architecture, which is based upon our component object model.I like the picture that we show here of what we’re trying to do with DNA services.Not just the technology of what we’re trying to do, but functionally what are we trying to do?We’re trying to give you, starting from the left of the slide, great development tools that can work across broad data storage, and today we have many places where you can store information.You can store things in Exchange or the message stores, the databases, the file systems, the web server.We need to unify your view of storage so that no matter where it makes most sense for you in an application to store a piece of information, that gets unified over time.And the work that we’ve been doing around OLE DB and some of these higher level data object — (inaudible) — or data access are very important in this thrust.And you’ll see us push that, not only in NT 5, but really in the release of MTS [Microsoft Transaction Server technology] or NT 5.

At the application services level, we need to provide you with knowledge management services that will prepare things for storage, transaction services, data warehousing services, collaboration services, so that at the user level you can really implement the publishing applications, the trackingapplications, the line of business applications, the commerceapplications that run the business.

In order to deploy these applications economically, we’re making a big investment around COM and DNA in the distributed services to take care of these objects, the management, directory, security, networking services that will really help you manage and maintain a reasonable network.

Windows NT 5 is an important step forward in the DNA architecture, and Windows NT 5 is the critical step forward in terms of providing you the services that we need to provide you to improve scalability, availability and reliability.And sometimes people ask,
“Is Windows NT 5 all about new COM-based services or is Windows NT 5 really primarily about something else?”
When people ask me, the one thing they can think about on NT 5, I saw simply,

It’s the cost of ownership release.It’s the release where the directory is integrated in, in a way that reduces costs, where the management enabling is embedded in a way that allows you to bring in tools to reduce costs.Intellimirror and the Zero Admin Windows technology are embedded in a way to help you reduce costs of deployment and management.Security is built in, in a way that allows you to protect yourself at lower cost.

So NT 5 isn’t as much about boldly going where no man has ever gone before in terms of new COM architecture, it’s about providing the management infrastructure for those COM objects and the applications that you build around it.

Before I continue with some news and information about COM, I want to show you a little video that we produced along with Merrill Lynch.Merrill Lynch has been developing a fairly sophisticated COM-based application on NT 4, and I can tell you that when we talked to them about NT 5 and what it does for cost of ownership and management, they’re very excited.

So why don’t we take a look at the video and see what they’re doing with COM and NT today.

(Begin video presentation.)

VOICE: Merrill Lynch, over 700 offices in 30 countries.Net revenues of $1.9 billion.Total assets:$1.2 trillion.

How does a multinational, integrated financial services corporation take advantage of Microsoft’s component object model, COM, and MTS in developing software solutions?

MAN: The brokerage industry is about — (inaudible) —

MAN: COM allows us to distribute information much faster, with much better time to market, which in this competitive environment can only be thought of as an edge .The demand for this software environment in this day and age is to get it outbut better, faster, cheaper, smarter.And this is all made possible through COM and MTS.

MAN: The business environment is changing very quickly.Business requirements change almost on a daily basis, and we have to do more with less people, and we have to do it in a faster period of time.We have to develop and deploy our applications now on Internet time.

MAN: What was prior a — (inaudible) — application now can be a web application, a — (inaudible) — application, as well as a customer service application — (inaudible) —

MAN: What happens here is if you tried to do these things all separately, you would have four applications and you wouldn’t be saving any time at all.What COM and MTS allows you to do is support you with the same — (inaudible) — this really helps — (inaudible) — money.

MAN: We built internally an application called our private client shell that leverages COM and creates what we call an application bus.That application bus enables us to take those internal applications that are built in the various areas of the firm and just integrate them on the platform and enable them to communicate through what we call our context manager, and that leverages the bus as the vehicle, which is COM.

We are now rolling it out domestically to 25,000 positions, and we’re at the same time rolling it out to our international private banking branches, which covers about 2,500 positions.What we’re intending to do is to have a common look and feel across all of our business areas and enable all of our business areas to developvertical applications, to transparently communicate using COM.This has been a great enablerfor us, and it’s envisioned that we will see this platform on all of our desktops in the future.

MAN: The ability of COM to help us integrate our legacy systems, and the systems that basically run our business into this new environment is allowing us to deliver our functionality faster than ever before.We have applications out there that are running that are integrating our MTS, CICSsystems along with our SQL Server systems and our non-MTS environments.And we’re using COM and MTS and the COM Transaction Integrator to make this all happen.This is the most flexible environment that we’ve seen today.

MAN: We are happy to be using COM and MTS.They are the most significant part of — (inaudible) —

MAN: COM and MTS make it much easier to build, use and re-use components.

MAN: Component model under COM really works.

MAN: In order to deliver more functionality in less time, you obviously have to write less code.You have to test less code and you have to deploy less code.And COM allows us to get reuseof things that we’ve already built.

MAN: The division of people between component users and component builders is never clear.The component users need to know too much of the underlying technology.With COM and MTS, with their well-defined interface standards, we feel that the business technology can do a much better job without having to delve deep into the underlying object — (inaudible) —

MAN: With COM and MTS, we now can start spending more of our time on delivering business functionality and less of it on delivering infrastructure.

MAN: MAN:Because we are COM-based, applications could be developed in pretty much any environment that interfaces with our applications — (inaudible) — and so we’ve leveragedVisual Basic, we’ve leveraged HTML, VBA, , Visual Basic for applications — (inaudible).We’ve also developed applications in Java.We have Web-based applications that are using Active Server Pages.And so all these interact together and because we’re using COM as the interface we can use all these different tools, and they all work together after — (inaudible).

MAN: MAN:MTS makes it much easier to build server side components.The interfaces are well defined.The components need not be multi-threaded, and they need not be — (inaudible).

MAN: MAN:MTS is out there and we’re using it today.MTS gives us what is important to our business — (inaudible).COM and MTS have performed transactions — (inaudible) — and we’ve — (inaudible) — integrating all of our critical environment in a — (inaudible) — transaction.

MAN: MAN:COM has enabled us to build a system that’s production quality, is stable and allows us the capability to change and update it on a daily basis, whenever we need to.

MAN: MAN:When you’re looking at the implementation — (inaudible) — it’s pretty clear that we’ve made the right choice.Two years ago when we went out to develop our strategic desktop environment, we — (inaudible) — COM technology and bet on it.Now we have that same technology available to us to deploy our server-side applications.And looking back at the decisions that we made three years ago, we’re feeling really good about it.

(End video presentation.)

STEVE BALLMER: STEVE BALLMER:That’s a major mission critical application to be deployed to 27,000, 28,000 users around the world, written in the COM architecture, and really targeting a broad set, not only of the transactional needs inside Merrill Lynch, but also the knowledge management needsinside Merrill Lynch, the need for data that every one of their brokers and privatebankers around the world have.

Now, I know that they did a lot of excellent work in building that application, very excited about it, on NT 4, but the possibility as we deploy NT 5 with Merrill Lynch to help them reduce the cost of deployment, of management, of operation of that application is incredible.And so there’s a lot of focus on not only getting this rolled out, but preparing for NT 5.

One of the key things that we hear from you that you need in terms of the core infrastructure that we provide you, and we saw that as your hands went up and indicated how many of you are integrating with Unix systems, and I didn’t even ask about mainframe and AS 400 and other kinds of systems, is the need for strong interoperability.

You know, I don’t think anybody is surprised, we’re passionate about what we do.We tryto encourage you to do everything you do on Windows.But that’s not the way the world works.The world is a world in which there are a lot of other kinds of systems around, and we need to provide the excellent tools to interoperate with the important other platforms that you own.We’ll always admit we have a hidden agenda that someday we’d love to migrate everything to Windows, but in the short term you need great interoperability tools.

It’s my pleasure today to have a chance to announce some new interoperability initiatives around COM and the Windows architecture, specifically as it relates to some of the leading vendors of CORBA and other transactional systems.

First, with IONAwe are announcing at the show integration with the Microsoft Transactional Server so that you can initiate a transaction on Windows NT from a Unix system, or you can initiate transactions from a Windows NT system on an IONA-based Unix system, and that’s a symmetric operation.(Inaudible) — transaction interoperability between Windows and Unix.

With Visual Edge, who’s the leading provider of bridgesoftware between COM and CORBA, we’re announcing a license that they’ve donewith us, of our COM technology, to try to provide even better bridges between the COM and CORBA world.

And with Digital Equipment we’re announcing a program that they’ve embarked upon to provide a digital interoperability between our transaction services and the HVMS,which is a digital transactional server on open VMS — (inaudible) — Unix and actually they also have those on Windows NT.

And I was delighted to see that not many of your hands went up when I asked who was using CORBA.On the other hand, for the people for whom this is an important issue, we wanted to make sure that we continue to provide the services at the COM layer and at the transaction layer to give strong interoperability between Windows systems and the other systems that you have in place or are deploying today.

Particularly, as people build new Unix applications — I hope they do less of ratherthan more of, I have to admit — but as people build new Unix applications, we think they’ll find this interoperability very, very important.

I want to turn now and talk about some of the new products just to set the stage for this discussion that I want to have about the key business scenario, business operations, commerce, et cetera.But I thought I’d give you a peek at a couple of new products, and one older product, besides NT 5.NT 5 is well known.The betas are becoming available.But I wanted to give you a peek at a few other products.

First is the product, whose code name is Office 9.It seems like a bad name somehow, right in front of the year 2000, but we’ll deal with that in the marketing realm later.But Office 9 is the code name for the next release of Office, which will be available towards the end of this year.And it’s got a focus in three areas, and we’re going to leverage each one of these as important in either infrastructure, knowledge management or actual business operations.There’s a focus on cost of ownership, with the new use of the new Windows installer, which is fundamental in making NT 5 deploy applications more quickly and simply; Intellimirror support, which picks up on an important NT 5 theme, we have a world wide executable.There is no difference in the version of Office that will support Arabic, Hebrew, Japanese or English, for those of you who work in multinational companies.

Next area of improvement is in the area of Web integration.We built HTML/XML publishing directly into the application, so you can save — and we’ll see this in part of the demonstration later — you can save things in HTML format or you can rollthings back from a Web page that have been stored in XML format, and if you load a chart or a grid back into a shell, for example, the data is back in native Excelformat, and we use the XML extension in order to do that.

We’ve got new Web components — (inaudible) — Office simply in the browser.We’ve got a new set of data access tools, better collaboration and discussionintegration.We’re building SQL Server right into access on the client.We’ve extended Excel’s — (inaudible) — capabilities, and tied it with the — (inaudible) — server that we’re building into the new release of SQL Server.We’ve extended Outlook for a set of new functions that’s coming in Exchange, et cetera, et cetera, et cetera.

It’s a major new release of Microsoft Office. We’ll be in limited Beta test here over the next several months, but with full production available by the beginning part of next year.

SQL Server 7, as I said earlier, is a very significant and important release for us.It’s the release where I think I can look anybody in the world in the eye and say,
“We are in the database business in every way, shape and form.”
The way we’ve done things to make it easier with SQL Server 7 for database administrators, the system autoconfigures and auto-tunes.We give you the tools to manage site by site.

I said we’re taking a version of SQL Server and building it in with access for laptop use, but through the new clustering technologies in Windows NT 5 we’ll also scale up the very large, very high availability database systems.

We’re not going to ship SQL Server 7 until the biggest ISPs in the world, SAP, Baan, PeopleSoft, all say,
“Yes, this is a product that we can sell to our biggest and most demanding customers.”

We’ve integrated a range of data warehousing support, not only the OLAPServer, but also a set of English language query services, database — data transformation services.We’re putting together data martsand data warehouses.It builds upon the repository technology that we’ve integrated already in Microsoft Visual Studio.

And then there’s a range of new tools for the database developer and the database administrator.

It’s another big quantum step forward for us, from a product perspective, and very important for the scenarios that I’ll talk about in a minute.

Site Server is not a new product. We just shipped our Site Server 3 product.It has not yet to come, Site Server 3 we just released, but it’s a product that I don’t think we talked enough about, and helped you understand enough, because it is a wonderful product.We’re helping you set up rich Web Sites with which you can do business with your customer.Whether you’re selling from your business to the consumer, we’ve got a lot of services.If you’re trying to re-do your corporate purchasing systems or re-engineer your supply chain management with your downstream and upstream business partners, there’s a range of services and protocol standards like our value-chaininitiative that have COM protocols.

If you’re just trying to put up a Web Site that does marketing, provides customer services and builds a sense of community amongst your users — and this is very important.

I can actually argue that for many companies, it will be the community and marketing and customer service they provide on the web that will be far more important even than the direct transactions they book .We’ve got facilities in Site Server for member management, personalization, order tracking, direct mail and many more.

And from an ease of use perspective, we have — (inaudible) — tools that really make it quite convenient to split up very — (inaudible) — electronic commerce sitesvery quickly.

For those of you who haven’t taken a look at Site Server, it’s available now.We encourage you to do it.Office 9, as I said, will be the beginning of next year.And SQL Server 7 will be in the second half of this calendar year.

So, those new tools, plus NT 5, plus our Exchange product, which I think is another important backbone, that’s the core set of building blocks all anchored on COM that we provide you to try to attack some of these Digital Nervous System opportunities:how do you help with collaboration, letting people exchange information and work in a rich way, knowledge management, creating and managing documents, publishing them.

Today, at least at Microsoft, we’re stillnot doing a good job of this internally, it is still way too hard, on our Web Site and internally to help people find information, and that’s why it’s important that we continue to push the knowledge management facilities in products like Site Server, tracking, data analysis to understand your business, operational and line of business applications that really run the business, and then the commerce applications to build customer and partner relations.

So, I want to kind of walk through each of these scenarios and help you understand the products that we think are important, and then maybe show you a little bit of a demonstration.The breakoutsfor Tech-EdEd are very much oriented around these scenarios.Most applications that you build will be a combination.Now, take that Merrill Lynch application.That Merrill Lynch application is the transactional or line of business application; it’s also the knowledge management application, which provides custom delivery of information to Merrill Lynch’s brokers around the world.They’ve built in collaborative services, so that their brokers can work together on common accounts.There are tracking facilities to help the brokers trackand keep account of what the customers are doing, or what their customers might want to do.

So it’s not like any application that you build will be strictly one of these things or the other, but they’re different technologies and different objects and technical approaches that are required to implement these kinds of functionality.

Let me start with messaging and collaboration.Messaging and collaboration is an area where we’ve gotten a lot of experience in the last several years, because the Exchange product has gotten to be quite popular with customers.We’ve — (inaudible) — our customers using these products in a wide variety of ways.At Boeing, which has over 140,000 Microsoft Exchange users, the mission critical application of sales, the way salesmen collaborate on a new airplane order, the way the executive staff get together remotely to conduct its staff meetings is done with a combination of products like Outlook and Exchange and Office and NetMeeting.

We’re continuing to improve the technology to support these scenarios.The recent release of Exchange, our 5.5 service pack release has a variety of new capabilities to enable work flow and routing scenarios.

The new version of Outlook provides for background replication and synchronization.

Office 9 will literally from within any Office document let you initiate a discussion, so you can be right thereand start the discussion of a given piece of information, so we integrate the best of what’s been in Office with the best concepts that have been in products like Notes and Exchange.

We have a lot of customers who have deployed large-scale collaboration systems around our technology:Boeing, General Electric, British Telecom, Sony in Japan; the United States Department of Defense has plans for over two million — (inaudible) — collaboration and groupware and messaging infrastructure; Johnson and Johnson.

To give you a sense of some of these collaborative scenarios, and also to show you some of the new technologies on the horizon, let me invite Charles Elliott, program manager from our collaboration group to come on up and join me and show you a couple things.Charles?



CHARLES ELLIOT: How ya doing?

STEVE BALLMER: STEVE BALLMER:Well, I’m better now that I have the right video up, thank you.

CHARLES ELLIOT: Oh, that’s — I’m so glad to hear that.I don’t like it when you’re in a bad mood.

Hey, look, I thought I’d talk to you today about something that’s in the news, and I don’t mean the front page of the US news, I mean the front page of MSDNNews, where there’s an article on the routing problem and the Microsoft Exchange Server release , and this is exactly what you were talking about before.This is the ability to create routes to send around messages for approval, disapproval.We can consolidate results, et cetera.This is technology that’s built on top of the — (inaudible) — service that we released with Exchange version 5.5, and will be seeing in the upcoming Service Pack 1 version.

So, let me just show you what can happen here.Say you have a company that’s already doing things with the Event Server, in this case someone who’s created a public folder into which you put time cards.And they’ve got a nice little Outlook form, and what they’re doing here is they’re collecting time card information for contractors.

STEVE BALLMER: So we’ve got a collaborative work flow application —


STEVE BALLMER: — (inaudible) — people are trying to — (inaudible) — this stuff together.

CHARLES ELLIOTT: That’s right.So, when this message is posted to the forum– excuse me, I’m going to do that one again, because I misspelled — (inaudible) –and we’ll do it for Wilma Flintstone this time.

STEVE BALLMER: Friendlier than Fred.

CHARLES ELLIOTT: Yes, she is indeed.And I can almost spell her name.Oh, well, there we go.

So, we’re now going to go over to the time card administrator, who’s the person who is charged with collecting all this information, seeing if it’s right, and sending off a summary report.And what’s happened here is that the event service has kicked in, gone through the folder, picked out the time card information and created a little summary message .All of this is a simple — (inaudible) — app, very simple to write based on VB script.The script is kicked off by a new message event occurring in that time card folder, and then put a summary piece in here.

Now, say that this person is then asked,
“Look, you really need to put this stuff through a review — (inaudible).You can’t just — (inaudible) — taking this information as it is.”

Well, with Exchange 5.5 SP 1 — that becomes a fairly easy thing to do.What we do is we use the routing wizard to create a simple route using the routing services that are installed with 5.5 SP 1.So what is this route going to do?Well, first we have to —

STEVE BALLMER: Now, we happen to be showing these routing services working to Outlook, but we could route to anything —


STEVE BALLMER: STEVE BALLMER:– to the browser, to whatever — (inaudible) —

CHARLES ELLIOTT: That’s exactly right.The only reason we have Outlook in this demonstration is to create the messages .


CHARLES ELLIOTT: So I’m going to log on as the time card administrator.I’m going to choose the folder on which to base the route, and I’ll base the route on the summary folder, because I want to capture those summary messages.We then need to select the kind of route we want.We can have a sequential route or a parallel route.In this case we’ll have a sequential route with one person on it.Select that first recipient, who will be Leslie, my VP.We’ll send the item as an attachment.We’ll put the message text in here.

STEVE BALLMER: STEVE BALLMER:What we’re creatinghere is the general infrastructure for — (inaudible) —

CHARLES ELLIOTT: That’s right.We’re creating an envelope that’s going to carry this message around, and it’s going to be used to collect responses.

Once the route is finished, we’re going to send it back to someone, and in this case we’ll send it back to the time card administrator.And we’re done.

So, if I now go back to where I was before, I should be able to drop a new message in here.Again, I’ll put summary in the subject line.Contractor name is going to be Betty Rubble.


CHARLES ELLIOTT: Betty hasn’t worked heretoday.


CHARLES ELLIOTT: Let’s give her a little extra time.


CHARLES ELLIOTT: So, the same things happen.The message has been deposited in the public folder.The event service kicked in, created the summary, but this time the routing wizard kicked in and sent that summary off to Leslie — (inaudible) — to be reviewed.Auto-routed now with our little message, please review.We can click here on the attachment.Here’s the time card summary.Go down to the bottom, there’s Betty with her 41 hours.And you’ll notice that the envelope is Outlook aware.We have approve, reject buttons on the top, the Outlook votingbuttons, so we can choose to approve this right now, and that approval should then cause the message to be sent back to the time card administrator.

So we’ll go to the time card administrator’s inbox, and we get time card summary, final results.We click on that.It identifies the route for us.Here’s the time sheet summary.Information at the bottom shows that Leslie approved this.The entire item overall is accepted.And we’ve also got a tracking — (inaudible) — here showing all the people who engaged in this route and what their responses were.

Simple, up front application.Loads of obvious business apps.

STEVE BALLMER: STEVE BALLMER:So, enabling a new route of work flow and collaborative services.


STEVE BALLMER: STEVE BALLMER:Exchange is the engine in this case.

CHARLES ELLIOTT: Exchange is the engine.The Event Server gives you access to folder based events, VB script on top of this, and then the routing wizard that we ship in the SP 1 box allows you to create some simpleexamples, but you can go further.We show in this article and in other places how to actually manipulate processmaps, build the scripts that have to drive all this stuff.

STEVE BALLMER: STEVE BALLMER:Super.Sounds like a good step forward in messaging and collaboration.

CHARLES ELLIOTT: Yes.We’re proud of it.

STEVE BALLMER: Thanks, Charles.

The key here, there are a lot of different products and technologies actually involved in the demonstration.I think that’s typical of the kind of work you do as you build applications. And so we’re trying in the — (inaudible) — we’re trying to be — (inaudible) — to give you a sense on how products can come together around the kinds of scenarios and things that you’re trying to do inside these applications.

We think a particularly important area will be publishing and knowledge management.That’s why Office 9 has been redesigned to make it a much better authorer of HTML and XML information.That’s why we acquired FrontPage, and it has become the most popular tool for managing content on web sites.If you dig into our Site Server product, and we actually have two versions, one version that we call the Commerce Edition, but we also have a simple version of Site Server, which just has the facilities for managing, personalizing and delivering information, making it easier for you to serve, personalize and deliver information.And I think that will become an important technology as we marry it or as you marry it with the capabilities of Office 9.

We’re not going to show that to you here today, but we think this whole — this whole area is very important.

As I talk to customers around the world, one of the top level concerns on business people’s minds is delivering and training and keeping their people educated.Whether you work at Wal-Mart or McDonalds, whether you work in a technically sophisticated industry like high technology or biotechnology, keeping customers and keeping employees trained and educated is very important.That’s the process of authoring, publishing and delivering knowledge.We think Office 9, FrontPage, Site Server, the work we’re doing with our NetShow product are all very important in this process of publishing, education and knowledge management.

We’ve got customers who have done really very incredible work in this area.One I think I’ll highlight is JD Edwards, who’s also a large independent software ISV, grew up in the AS 400 space , has recently moved to NT.But they do all of the custom delivery of information to their sales force, their support groups, inside JD Edwards, using a confluence of Microsoft tools — (inaudible) — it’s Site Server, to personalize and deliver the right information in real time to the support person, which is different than what the system engineer needs, which is different than what the sales person needs.And they’ve done that in very, I think, clever — clever and impactfulways.

Tracking.One of the things which I think business managers do a lot of is to track things; track employees, how many do we have, what are they doing; track customers, track contacting customers, track, track, track, track, track.And in a way I would say tracking has been a weakness of our portfolio of products — (inaudible) — Office 9 and SQL Server 7 are really grilled in on solving this problem.As we add technology that provides richer and improved facility for letting you do data access in your applications, in the browser, in a variety of different places, as we build the client side version of SQL Server that has riskreplication then between client and server, it can serve as an underlying engine to access — (inaudible) — at the clients; as we provide sophisticated replication facilities so that the mobile worker is one of the people who needs tracking most, can unplug his laptop, do work off-line and then synchronize the database running on the laptop simply with the database running back on the server, we think we’ve made important strides forward.

There’s a number of customers we’ve worked with: Moss Micro,an ISV in Southern California has done an exciting sales force automation application.Forum, which is a division of Baan, has redone their entire sales force automation — (inaudible) — built it into VB.It resides in the Internet Explorer browser, and it uses these rich new SQL Server tracking technologies to replicate the technology.(Inaudible) — Clarify , really the leaders in Front Office customer tracking have moved in the direction of Microsoft technologies based upon what they see coming with SQL Server 7 and Access 9 primarily.

If sometimes you want to track or know about one customer, in business today many times the problem is to understand in aggregate what your customers are doing.I can go through and look at the records from this show and find out about you or you or you, but what will be most interesting for me is to really to manage and look at the sum total of the feedback that I trust you will all get us out on the show network,ComNet,this week.

But the tools to analyze and look through data need to be very rich and very user friendly.Through products like Excel on the client and SQL Server we’re trying to add in Office 9 and in SQL Server 7 a range of features that has proved the data analysis experience.We think we’ve got a lot of customers who have done exciting work already with the current versions of Office and SQL Server 6.5.If you live in the state of Texas, the Texas Department of Public Safety tracks all traffic violations, analyzes all traffic offenses and traffic tickets through its SQL Server 6.5 database.Aristotle is a company that publishes and analyzes voting records for elections around the country.They built their data warehouse using SQL Server 6.5.San Diego Gas and Electric does the analysis on billing and usage of power services in Southern California on the SQL Server 6.5 data warehouse.

What I thought I would do now is invite up to join me Tom Williams.Tom is program manager in our Office Group, and I’m going to ask Tom to show you some of the new capabilities of Office 9, particularly in the tracking and data analysis area.Tom?

TOM WILLIAMS: Thanks, Steve.

Okay, so what I want to do is show you how some of the improvements in Office 9 and also SQL 7 are going to make this an even better platform for building tracking, data analysis and other types of applications.Let’s dive right in.Here we are in the new database — (inaudible) — for Access 9.This is one of our new client server projects.I now have the ability to work with Access on the client, but have all my data on the server, and this is my server side object.In this case I’m connecting SQL 7– (inaudible).And the connection is directly through OLE DB.I no longer have to go through — (inaudible).

Another exciting new innovation is Access 9 is what we call data — (inaudible).It’s a totally new type of object — (inaudible).It allows you to build data bound HTML pages right here within Access.So I’m in my designer, and I’m going to open up my — (inaudible) — list here and all I need to do to start creating a simple application is drag these fieldsto my people database onto the page.And because this is going to be a Web thing, and I’m feeling very Webby, I’ll drag this one on as a scrolling marquis.

Now, I’ll use our new alignment tool here to clean that up a little bit, so that they align well here on the page for me.

And now I want to add some order detail data, so I’m just going to drag it onto the page, and you’ll see it’s going to create it as one of the new Office web components.We’ll talk a little more about this later, but these Office web components are really key innovations here in Office 9.

As you can see, this is a WYSIWYG authoring environment, so everything I’m typing here is going to look just the way it looks in the browser.I can even add some themes , just taking the themes from FrontPage 98.In honor of our Bayou background here, I’ll add some — (inaudible).

And now when I go into the view mode, we see all the binding happened automatically.If I scroll through my record set, I’m pulling in the data from the SQL 7 back end and seeing it displayed here on the HTML page.

Now, I need to distribute this to a large number of people.So I could either use Office — (inaudible) — or web capability and save it directly to a web server with the HTML protocol.In this case, I’m going to use the new Office mail integration, and actually send this page as a mail message to someone in my group.

STEVE BALLMER: STEVE BALLMER:But really what you’re doing here is you’re just mailing the application —


STEVE BALLMER: STEVE BALLMER:And that’s your distribution vehicle for this nice little — (inaudible) — tracking application?

TOM WILLIAMS: Exactly.So when I open up the mail message, you’ll see we’re here in Outlook, and because Outlook supports HTML mail, I’ve got that same — (inaudible) — ability right here within the mail frame.So I just — (inaudible) — the page, and re-establish — (inaudible) — ready to go.

Now, let’s take a look at an example of a simple application that we’ve built using this.This is a tool, a web page of the sales force of the venerable North Winds Trader Company, known and loved by us all, who use this to help their sales force track order history and other information about customers.

So, I go into the order history view, and I have a view of my customers.I can click on the expand button, and it opens up what we call a banded report.And this is something new you can build in the access.

STEVE BALLMER: STEVE BALLMER:You’re saying while this application is living here in Internet Explorer, it was entirely built inside Access, and you’re using live Access componentry right here in the browser.

TOM WILLIAMS: Correct.We’re pulling in data from our SQL back end.This is built in Access, and I used Front Page to build the actual frames environment.
And this banded report is another type of page you can build in that access designer.

Now, because this is something I want my sales force to use, it’s important they be able to work off-line — (inaudible) — go and visit — (inaudible) —

STEVE BALLMER: They really do.

TOM WILLIAMS: Okay.You told me that sometime.

So, I’m going to go into the off-line setup mode, and take this off-line.What we’re doing here is a couple of things.We’re using the new desktop SQL, the capability to now install SQL on a desktop computer, to actually replicate the data set from the server down to my desktop.

STEVE BALLMER: STEVE BALLMER:I want this clear.SQL Server 7 has a desktop version that is bundled in with Office 9 and works with that.

TOM WILLIAMS: And so here I am, we’ve also had to — (inaudible) — wrote some TV script to actually replicate the entire Web Site down.So now I’m here working locally.You can be very brave and disconnect my network connection here.I hope that’s a good idea.

STEVE BALLMER: Okay, so Tom’s off-line now.

TOM WILLIAMS: No — (inaudible) — no — (inaudible) — at all.So we’re working off-line, and I can go back into that order history view, and I’m going to go visit Alfred’s — (inaudible) — one of my favorite customers, and while I’m there I find out that Maria, my long-time pal has been replaced by Fred Winkel, a lot of turnover in the entire — industry –and so I’ve made that change here in the database on my local machine, and when I get back into the office, we plug back in, drum roll, please, and let’s go back to the server hosted version of this application that I was working on originally.And there we go.And now I want to synchronize the changes that I made locally.So I press the synchronize button and it’s going to synchronize that data back to the server.

Now, this is a pretty simple — and as you can see — now Fred has been entered into the server version of the database.

STEVE BALLMER: And SQL Server — (inaudible) — took care of that replication.


STEVE BALLMER: We did — (inaudible) — with that one.

TOM WILLIAMS: Oh, yeah, you know, we got a good one.All right.Let’s see if we can keep it going.

TOM WILLIAMS: Now, we’re going to talk a little bit about data analysis.Now, you all know Excel is probably the premier client side tool for data analysis, and I want to show you some of the enhancements we made there.One of the things that you mentioned was that we now support the OLE DB service for OLAP.So I can go, and I’m here in my pivot table wizard, and I’m actually going to connect directly to an OLAP queue from here within Microsoft Excel.So what it’s done is it’s gone out to OLAP and pulled that data here right into Excel.

STEVE BALLMER: Just a small show of hands.How many people in the audience have actually used Excel pivot tables?It’s my favorite feature, but I think we’ve under — no, we haven’t undermarketed it — it’s a little undermarketed.

TOM WILLIAMS: Oh, great.

STEVE BALLMER: STEVE BALLMER:Right.We’re going to show you — partly what this is, it’s just a demonstration of a feature of Excel that’s been there for a while.

TOM WILLIAMS: Yeah, so for people who aren’t familiar, pivot tables allow me to create these dynamic views on my data to do essentially — (inaudible) — if you will, data.

So here I am looking at a data set, you know, products, units of order by store type.If I want to pivot, change the view on the data, I can drag in the warehouse and drag out store type, drag in location, drag out — do anything, do any type of pivot that I want.

Now, for those of you familiar with pivot tables, you may be saying this doesn’t look new, but one thing you should be aware of, this is actually a one million row database that I’m pivoting against, stored on a server behind us on stage.And this shows some of the — (inaudible) — improvements you get when you put your data in an OLAP queue, because all the aggregations and hierarchies are built in, so it’s a much more efficient way of working with — (inaudible) —

STEVE BALLMER: STEVE BALLMER:Again, that’s sort of a mix of SQL Server 7 and the new version of Excel.


Another advantage of putting my data in the OLAP server — (inaudible) — SQL 7 is I get these built-in hierarchies — (inaudible) — double click on state, it expands out to cities.When I double-click on the country, it expanded out to states.So instead of me having to go in and set up these relationships, they’re built into the queue.It allows me to be a little more insightful about how to get my data — (inaudible) — more efficiently.

A nice — (inaudible) — Excel 9, notice I just click a single button and I turn this pivot table into what we call a pivot chart, and then I can drag in, for example, new data, drag the data into series.I get the same kind of pivoting capability that you had in the pivot table, but I get it here within a chart, so it allows me to make very rich graphical views of my data, just like I was used to.

STEVE BALLMER: STEVE BALLMER:So if you wanted to analyze a complicated, large set of information, pivot tables and SQL Server 7 OLAP sounds like a good foundation for that kind of data analysis.

TOM WILLIAMS: Yes.And the last thing we’ll show is how you can publish these out, because this is Office 9.We are trying to do more and more of our web integration.I mentioned the Office web components a little earlier on.Here you’ll see another example of this.This is actually the pivot table component from Office 9.So I’m not actually running Excel now.What I’ve done is I’ve publishedthat pivot table as a component here in the web, and I can go in and do all the sorts of things that I would do in a pivot table, but I’m actually working in a web-based component.

STEVE BALLMER: STEVE BALLMER:So, for example, you wouldn’t — you’d need maybe a license for Excel or for Office, but you wouldn’t actually have to distribute, roll out new Office versions here, you could just distribute the browser-based application?

TOM WILLIAMS: Correct.These new components, these new Office web components, they’re COM-based components.They ship with Office.As Steve said, they require an Office client license.But they give developers a whole new way of including Office applications in their Office functionality in their applications.

The last example I want to show is a page using the Office component that we actually built in Access.What I’m doing here, there’s a lot going on, but I’m actually pulling in data from SQL Server, pumping each record into a spreadsheet component, one of the other Office components here, and displaying it in the charting component.So you see as I go through the calculations are happening, the chart is updating.I can even go in, I’ve set up this field so I can go in and edit it directly, so if I want to do some sensitivity analysis on my data, I can see how it’s going to change.


For tracking, for analysis, for publishing, I think we’re really taking the right step forward with NT, with Exchange, with SQL Server, and with Office 9.

I want to focus on two other kinds of applications that you build.First is the line of business applications, the real applications that do the heavy lifting, that run the manufacturing, et cetera, in the business.Again, we think we’re providing with NT 5 — (inaudible) — technologies and SQL Server 7, together with the advancements in COM and the transaction infrastructure, a rich platform for line of business applications.This is an area where we’re really coming on fast.Companies like General Motors Acceptance Corporation, who does loan servicing applications that were built on the NT platform.We’ve heard from Merrill Lynch.Systron DonnerInertial Systems is a company that runs all of their manufacturing for electronic sensors for automobile breaks.Those systems are all NT based.SAP, Baan, JD Edwards have moved to embrace NT and SQL Server as platforms for their enterprise resource planning applications.Ford Motor Company has built the systems for their dealers that they’re using for dealer automation, their so-called focal point systems on the NT Server platform as well.

This is — what shall I say?This is an area of huge opportunity from our perspective.We grew up as a company in personal productivity.We think we’re very strong today and have a very strong offer in messaging, collaboration, knowledge management, tracking and analysis.But line of business of application is the next step forward for the PC.The PC server will be the most powerful available form of computing within the next three or four years.I mean, what Intel’s doing and companies like HP and Compaq and Dell with their clustered, high availability systems, I guarantee you that within four or five years all of the new operations systems you build will be PC based, and we have to make sure NT and SQL Server are ready.

I talked about commerce and the many forms of commerce earlier.We’ve had a lot of experience with this — (inaudible) — doing very important commercial web sites:
The Gap, which we’ll show you in a minute; Dell Computer, which does over $4 million a day on its Web Site is based upon our technology; the Barnes and Noble book offering.Perhaps the one I’m most excited on this list is the Los Angeles County Superior Court.They now accept documents electronically from the lawyers with whom they do business, and they’re expecting — hear this — they’re expecting over 1 billion documents a year to be transmitted, edited and exchanged over their commerce Web Site with the plaintiffs and defendants that do business with them.

My only hope is that the US Department of Justice doesn’t get access to this technology anytime soon.We don’t have time to submit a billion documents in the next year.

It’s really pretty amazing stuff, and with Site Server 3, with NT and with SQL Server, what we really see happening is that many — in fact, the lion’s share of most of the popular commerce sites are being built on Windows NT.I’m going to invite Jackie Borgess from our Site Server team to join me on stage, and to show you the Gap’s Web Site, which I think embodies some of the neat new ideas, integrating electronic mail, personalization — (inaudible).Jackie.


Steve, what I’m going to show you today is the Gap online store.


JACKIE BORGESS: Gap is one of the most successful retailers in the world, and when they decided to make an online store, they made two — (inaudible) — decisions.The first one was to use Windows NT, SQL Server and Site Server.The second — (inaudible) — decision was to make the online shopping experience as good as or better than shopping in person.

STEVE BALLMER: STEVE BALLMER:I have to say I’m sort of familiar with the site.This project had the attention from the CEO of the Gap.The Gap’s not — wasn’t really sure, was this a big deal or was this not a big deal.They were only sure that their key customers are by and large 15 years old to 30 years old, wanted to be online.And so really from the top of the company, this had to be a perfect experience.So let’s see it.

JACKIE BORGESS: Right.Let’s go shopping for some clothing updates.

STEVE BALLMER: STEVE BALLMER:You think I need a clothing update, okay.

JACKIE BORGESS: Well, maybe, you know, a new release.

STEVE BALLMER: I actually saw the CEO of the Gap last week, and he made exactly the same statement.He said I could be Gapped up a little, shall we say.

JACKIE BORGESS: So there’s two ways to shop at the Gap.The first thing is we’re going to walk by the store and see what are the key looks that they’re trying to promote, so these are the top three — (inaudible).What do you think?

STEVE BALLMER: STEVE BALLMER:The short pants, that’s definitely me.

JACKIE BORGESS: Okay, then.Let’s go for that one.So then you go from engaging with your customer to transacting just by one click.

STEVE BALLMER: STEVE BALLMER:So will we buy this set of khakis?Maybe not today.

JACKIE BORGESS: We could, but we’ve got to choose — we’ve got to look around some more.


JACKIE BORGESS: So here they show you the different options, and then there’s another way to also interact with the site.This is called getting dressed.


JACKIE BORGESS :Steve, come back, come back.Let’s see.Maybe a vest.


JACKIE BORGESS: Some nice trousers there.And maybe —


JACKIE BORGESS: I mean — I’m sorry, but there’s some things you can’t buy at the Gap.

STEVE BALLMER: STEVE BALLMER:Looks a little more like me now.

JACKIE BORGESS: So if that wasn’t enough, once you choose a pair of pants, you don’t even have to try them on; they take care of all that for you.

So, we’re getting you khakis.Do you want to try them on?

STEVE BALLMER: STEVE BALLMER:Yes, let’s try them on.

JACKIE BORGESS: Okay.Ah, nice.Very nice.

STEVE BALLMER: STEVE BALLMER:That definitely looks like me below the waist there.

JACKIE BORGESS: So you talked about personalization a couple of times.And one of the ways that they’ve made the site more personal, and actually what I consider to be even better than going to the store is that you can store your personal information like your e-mail, so they can send you reminders about sales and things like that.You also have an address book, where you can store different people’s addresses and phone numbers, so that once people interact with the site and invest time in the site, then they’re less likely to go to competitors.

STEVE BALLMER: STEVE BALLMER:But you could say it knows something about your grandmother, maybe her sizes.


STEVE BALLMER: STEVE BALLMER:You’ve stored that up online with the Gap?

JACKIE BORGESS: You’ve got gift reminders for that.So it can tell you when my family’s birthdays are, when Father’s Day is coming up, and then they’ll give you a two week reminder so you can make — (inaudible).So that’s good for us.

STEVE BALLMER: STEVE BALLMER:(Inaudible) — what you can do on-line that you can’t do in the store.It can remember the size.It can remember the birthday.Give the reminders.And all of this — (inaudible) — facilitate the underlying technology — (inaudible) —

JACKIE BORGESS: Right.So, yes, personalization is really key.And they’ve found that they’re able to sell so much that this online store is — (inaudible) — their top stores that are — (inaudible) — at a much lower cost.

STEVE BALLMER: STEVE BALLMER:Superb.Well, that’s great.Thanks, Jackie.


STEVE BALLMER: STEVE BALLMER:Jackie timed the Gap CEO when we had him in Seattle last week with talking to a group of his peers.He pointed out that the only place they carried my size is online.It’s a little too big for in-store.So it’s a chance to broaden out the demographic audience of the Gap, as well.

I’ve tried to highlight for you some new technology and the way they plug into the kinds of things that I think you’re being called on to do for your companies.We’re also trying to make sure that the building blocks that come not only from Microsoft, but from the partners with whom we do business, are also constructed in such a way that they comply with some of the core architectural standards and there’s a way for you to recognize that.So today we are announcing a new design for Office and BackOffice logo programs.These new programs will require compliance with the important new technologies so people comply with the management approach, the Intellimirror approach, the directory, the installation approaches that are architecturally suggested by Windows NT version 5, the database access approaches that are applied through SQL Server 7.And so those logos will be available starting with the release of NT 5 at the beginning of next year.But we wanted the ISV communities and our customers to understand clearly what we view as the next critical level of architectural support for the Microsoft platform.And you can visit the Web Site and take a look at those requirements.

The people in this room, the 9,000-odd people in this — 9,000 or so people — that’s a way to get into big trouble.The 9,000 or so people in this room represent the most important constituency to Microsoft.We provide a platform of products.We don’t provide solutions.And so while we’ll characterize what we think it is the business people in your organizations are asking for from you, we know that you and the service partners that you use are on the front line of delivering those technologies.So you are our core constituencies, the developers and IT professionals who build and deploy these applications.We need feedback from you.I seriously ask you to go to the show network, the ComNet.There’s a form on there.Please fill it out with your feedback.What do you need?Not just in this show, but what do you need out of the product line?Bill Gates will summarize what we’ve learned from that experience in his keynote later this week.

We know you need more and more information from us.We’re extending today, announcing today for MSDN and solution providers a subscription service which will allow you to download new MSDN material automatically and instantaneously off our Web Site instead of having to always wait for new CDs to arrive.We encourage you to all be MSDN subscribers and to visit the site.

We know you’re looking for a level of integration in our products.If we do the work of testing and getting these things to work together well, that’s work you don’t have to do.

We know you’re looking for more and better technical support from us.Whether that’s over the telephone or in sessions like this that we might conduct locally, we will extend this concept quite broadly, not with 9,000 people, but we want to be much more regular in terms of our ability to have a face to face technical dialogue in community events in literally all parts of the world in the next 12 months.

We know you want us to be innovative and we know that it’s very important for you not only to talk with us, to us, hear from us, but also have a chance to learn and talk with one another, to — (inaudible) — best practices and to really understand what’s going on and what’s possible.

We live in an exciting time in the computer industry.The explosion in spending on IT has been phenomenal.A lot of people attribute the improvements in productivity at least in the US economy to the great investments that have been made in information technology and the great focusfrom people like the people in this room on building solutions.

Today I’ll tell you an unbelievable fact:the largest industry in the United States is electronics manufacturing.The second largest industry in the United States is automobile manufacturing.The third largest industry?Information technology.Not just the companies in the business, but the people who do information technology in companies throughout America.That’s the third largest source of employment in the United States.I think we all should be proud of what we do.We’re proud to have you as customers and to have you take the time with us to come learn, to come see where we’re headed, to get ideas and tips from us and from one another.I hope you have a great Tech-Ed ’98 and I thank you very, very much for your time this morning.

Thank you.

If we could have the lights up.Just a minute.If people — people can go in they want to, but I’m glad to take questions.We have microphones in the aisles for people who do have questions.

Q: Steve, we’ve had a launch recently with Byte Magazine.Byte Magazine is not going to be published in the print version anymore.How does that get characterized in the changes that we’re seeing in our economy and in our lives?

STEVE BALLMER: Well, certainly the greatest impact of the Internet will be initially on industries that can deliver their products electronically, whether that’s the public industry, the financial services industry.That’s where the impact of the Internet will be most pronounced.Byte Magazine has a leading edge audience.They’re already making decisions to not publish paper.We’ve made that decision in our Slate Magazine.But I think we’re going to see that same kind of profound impact in the financial services world.The telecommunications world will move to embrace Internet far more completely.The insurance industry.There are a lot of industries I think fundamentally will reengineer themselves in the next two, three years around the Internet.

So people streaming out, nobody at the mikes.We’ll let you go.Thank you very much for your time.Enjoy the show.