ANNOUNCER: Ladies and gentlemen, please welcome the President of Microsoft Executive Council of New York, Bob Johnston.

BOB JOHNSTON: Well, good morning, and welcome to the Impact People Forum where, in just a couple of minutes, we have the great privilege of hearing from someone who has had quite a positive impact on quite a lot of people, Mr. Steve Ballmer, CEO of Microsoft.

But first, I would just like to take a moment and thank each of you for coming here this morning and for your leadership in really taking charge of relationships with your clients as well as your customers, which of course is the theme here this morning. When you think about the title of this event, it’s just two words, Impact People, but it is absolutely full of meaning, and it means developing great customer relationships. It means strengthening partnerships. It means improving operational efficiencies while reducing cost, and it means creating innovative products and services. And the speakers we have lined up here are absolutely world class, and will be speaking regarding these themes.

[Logistics business]

So, Steve is just about to come out to speak, but wanted to leave you with a quick quote from legendary baseball player Jackie Robinson, who, after his famous baseball career, he spent his life celebrating and aspiring people. And the quote goes like this: “A life is not important except in the impact that it has on other lives.” So, think about Jackie Robinson’s quote, stay inspired today, and we’ll see you at 10 a.m. Thank you. (Applause.)

STEVE BALLMER: Well, thanks. It’s a real honor and privilege to have a chance to be here with you today. I think I was last in this room about 20 years ago, we did an early developer conference for what was then a fledgling product from Microsoft called Windows, and it’s good to be back here 20 years later knowing that that product is probably used by at least a few of you here in the audience.

What I want to set the stage for here today is the year of perhaps the greatest innovations Microsoft has ever had in terms of bringing innovations to market that I think really will be empowering and important to our business customers. The innovations that you’ll see over this next 12 [months], though, are really grounded in a basic view that we think it’s important for you to understand and appreciate, and that view is the view that successful businesses succeed based upon the quality and performance of their people. Successful businesses make a practice of trying to hire the very best, the very brightest in all jobs inside their company. The best businesses work very hard to facilitate their people’s success. That’s got many, many components. How do you make sure people share common goals, and that they have a chance to coalesce as teams? How do you trust them and empower them? How do you give them the tools that they need to then work together and to drive against the directions that people share in common. These kinds of successful companies, I would call people ready businesses, businesses that really believe and act fundamentally with deep conviction that people are their number one asset.

When we think about innovations that we bring to market for our business customers, we think our innovations have to facilitate the empowerment of people and people-ready businesses in exactly this way. Our innovations, of course, also have to embrace what the information technology needs, the productivity of software developers, and people who are managing and running big IT networks, all of our business customers have a watchful eye on information technology as a cost that needs to be run very well. The heart and soul of business that is people ready is also a business that employing IT, information technology innovation, as tools to really help empower their number one asset, their people.

The Role of Software

We think this is a pretty unique vision. We don’t think it is shared necessarily broadly by folks who serve business information technology needs, but this people-ready vision, or this people-ready approach, this people-ready drive is really a natural extension of our founding vision of empowering people through software. And so, for us, we think it’s quite a natural thing to embrace, and we do think it is front and center to where people are going to get the next wave of improvement in business operations.

It’s interesting, as I travel the world and talk to business executives, the real heart and soul theme that I’m hearing these days is, how do I drive growth? Not just, how do I cut costs, but how do I drive growth? And in every sense, it’s only people that will facilitate that objective in all businesses.

Why are people, and everyone asks that, everyone has their own view, but as we talk about our vision, and certainly as we talk about the way we’re driving our innovations, we start with a few kind of fundamental premises, people drive outcomes, it’s people that develop customer relationships, it’s people that will drive innovation in process, in products, in services for your companies. It’s people who build the connections with your business partners and trade partners in this increasingly flat world. And it’s people who improve operations.

When you think about operations improvements, you think about companies like Southwest Airlines, the way Wal-Mart connects with its suppliers and trading partners. We’re going to hear from Tim Huval from Bank of America today about how they connect with their customers, and from Tommy Hilfiger about how his business, which is really an innovation to business uses information technology to help people drive business outcomes. Business really is, in some senses, this never-ending cycle of discovering insights, figuring things out, making decisions, sharing goals, collaborating in teams, taking action, and we think a lot about the processes that facilitate that, but at the end of the day, world-class businesses, people ready businesses, it’s not just about the standard processes for all of those things, world-class people-ready businesses do very well on the getting that extra insight, making that extra special decision, handling the exceptions in the operational process well. They don’t do just well on the routine.

And so software and innovation that would help the people ready business needs to facilitate that kind of operation. Your people do have ideas, they drive innovation, your people care dearly about what your customers think about you, and they build the connections that your businesses have. They really know where the inefficiencies are inside your organization, and they drive operations. And at the end of the day, this flat world in which suppliers and businesses are much more closely linked are driven by a certain kind of connection. Your people want you to succeed, you want your people to have the tools that facilitate letting them succeed on your behalf.

Software, we think, is an important part of enabling people in a people-ready business. Software, in some senses, is the one tool that can really keep pace with people. It’s an investment that has the flexibility and capacity to adapt as your people increase their capability. It’s extensible, it’s flexible. As your people have new ideas, software facilitates them going in new directions. People say to me all the time, Steve, I’m not sure our people use all of the capabilities that are there at their finger tips. They may not use it all, but as they grow and they develop, as they have new insights, as they have new things they want to get done, software is flexible enough to allow them to be the tool that allows them to continue to push, push on partner relationships, push with the customer, et cetera.

Software can help facilitate and support teamwork. Software can help foster compliance in a world in which compliance is becoming increasingly important. Software is a tool that facilitates getting insight into what’s really going on in the market. I was with the top 50 people at Proctor and Gamble two nights ago, and I sat at dinner with the woman who runs market research for Proctor and Gamble, and talking about all the information that they have about consumers around the globe was fantastic. What’s the big problem? Actually facilitating letting their people get access, and get insight out of the incredible bank of information that they have.

Software lets you find information that you need to gain insight, to take action. It enables process excellence. And in this day and age, increasingly it helps people work more flexibly anywhere and any time. To some that’s a great advantage: I can work at a distance, I can live where I need to live, I cannot make the trip I need to make, I can handle a problem or exception late at night. To some people it’s just a chance to work more hours. The good, the bad, and the ugly, so to speak, you get it all. Software is flexible enough to support all of this kind of work operation.

We think what businesses need to do, what you need to do, is to empower the people in your company and you will empower the company. That’s kind of the idea behind the way we think about the software innovations we’re driving for a people-ready business, and it’s really quite that simple.

Why Microsoft?

Why Microsoft? Why Microsoft? I think you’ve got to start with the fact that, as I said earlier, this notion of driving innovation to support a people-ready business is a reflection of our heritage. We grew up, in some senses, with end-user computing, and while we have spent many decades also investing in the consumer, and in the enterprise, our heritage is in empowering these end users. The way we think about software design, people are at the center of the way we work. We have a concept we call in our development process persona. We have all of these personas, Joe the financial analyst, and Suzie the order entry clerk. We have about 110 personas that we’ve defined, that our software developers are using to drive innovation that really is people-ready in every sense.

It’s really only Microsoft software that I think we can fairly say supports people, from the human interface, into the data center, and on into the Internet. There are other companies that will support people one of those places, or maybe two, but I think it’s very important, and quite unique that we can do software that links that together, because as your people are trying to do the things that I talked about, they have a variety of needs, some that are very personal, some that are very team oriented, some that are very company oriented, some that are multi-company oriented, and some that involve access to the entire world of information.

There are four key areas in which I think our software is distinguished. Our software is familiar, it’s easy to use, and we’ll show you some of the innovations, in fact, that will make our software even easier to use over the course of the next 12 months, and that’s very important. If you want to be people-ready and you want to give people tools that empower them, they’ve got to be tools that people use.

Many companies, for example, have implemented CRM systems. And many of the sales people aren’t so sure they like those systems, and don’t like their system, because more they’re often not as familiar and easy to use as the basic tools that sales people use themselves in their own productivity to manage their time. And familiarity and ease of use is a driving point.

No. 2, you want to make sure, and we think Microsoft anchors this position, you have software that is widely used and supported. You want to be able to get talent that can build off of the tools that you use, to extend the possibilities in the people-ready business. You want to make sure that there’s a wide range of applications that connect, and talk to, and add value to the people-ready business.

You need software that is easy to integrate and connect with, which we think Microsoft software is. The widest range of systems in the world are accessible from within Microsoft Windows and Office, and other applications. And we’re constantly pushing ourselves to connect and integrate better with other things. Certainly in this era of the Web, and Web services, and new technologies, there’s many more opportunities to integrate and connect with systems from our partners, our competitors, and many, many others.

Last, but certainly not least, software that is innovative. Your people are fast learners, and you might say, hey, I know my people, some of them are, and some of them aren’t. But, they’re all learning something quite quickly. I was with the CIO of our and he’s a business CIO, he didn’t grow up on the IT side, but from our very largest customer, one of the branches of the U.S. military, yesterday. We were talking about his people, and his people are military people, they’re very tech-savvy. He knows that there are folks who are very deep, and can build complicated models that help them get understanding and to logistics and personnel and materiel movement. He knows he has people who have other skills, and capabilities, and having tools that grow and facilitate the things your people want to do, innovative software, I think is absolutely key.

Businesses are based on people. Software is a tool that can empower those people. I think Microsoft software is fairly unique in the way that it can do that. I talked at the beginning about how we’re kicking off this new 12-month period of incredible innovation, and I want to give you just a sense of what some of those innovations look like.

Innovation Investments, Innovation Delivery

I’ll put it in the context of products, and all that stuff in a minute, but in terms of themes that really empower people, and help the people-ready business, we’ll talk to you and show you incredible improvements in the way people communicate and collaborate, in the ways in which your businesses can manage the content and information that are very important to your people to do their job. Tools for business intelligence, to help people sort through this mass of information, find patterns and trends, and important conclusions, so they can take decisions.

Search, simply finding the things that people need to find to get their job done wherever they are in the world. Mobility, consistent with this theme of working any time and any place. Customer management, an important area of innovation, particularly with the focus amongst business leaders really on growth. Work flow and portals, as I said, a lot of things happen as exceptions, and being able to have people get at the information, route it to somebody else, have somebody look at something and take an action, informally and on an ad hoc basis, is important. Of course, there’s a range of things in the technology infrastructure space, including certainly security, which we as a company have made a job-one priority, and particularly in this environment of compliance, the people-ready business has to care about its underlying infrastructure.

What I’d like to do here in a second is have Chris Capossela from Microsoft come on out and start to show you a few of those scenarios. We’re not going to talk about individual products today, but we’ve got a range of things coming, some of which we just shipped, new products like Microsoft Office Enterprise 2007, new versions of Windows Mobile, our SharePoint, Exchange, and Live Communications Server technology and others. And it’s the combinations of these products, new, advanced, enhanced, that we’re going to show you in combination how they might facilitate through some of these investments a real people-ready business.

So please join me in welcoming on stage Chris Capossela, Vice President, Microsoft Business Division. (Applause.)

CHRIS CAPOSSELA: Good morning, Steve.

Good morning everybody. I’m very excited to give you a sense of some of the innovations that we’re driving across these categories, unified communication and collaboration, mobility, customer management and search. So for the next 20 minutes or so I’m going to play the role of a sales manager, and we’re going to see how it’s very important for me, of course, to stay incredibly connected with my customers, with my core business outcome, and then see how some of the innovations we’re working on let me do that.

The first thing I want to focus on is some of our work around unified communications. A lot of us think about being connected to the workplace when we’re on the road using some of the more sophisticated PDAs and Windows Mobile devices. We also think it’s important to be connected just using a very basic phone, no matter where you may be. So I’m on the road, I’ve got access to a simple phone like this, I’m actually going to check in, and see what’s going on in the office itself, let’s listen in. What you’ll see on the side is somebody showing me my inbox and my calendar, so you can follow along as I control is using my voice.

VOICE: Welcome to Microsoft Exchange, to access your mailbox, enter your extension. Please enter your PIN. You have no new voice messages, and one e-mail message. Please say calendar, voice mail, e-mail, personal contacts or directory.

CHRIS CAPOSSELA: E-mail.

VOICE: First message, unread message from Lori Cane, the subject reads “Contago Proposal,” received 7:38 p.m. March 15th. The message has an attachment.

“Hi, Chris, Contago needs a proposal by Monday and I’m out of the office. Can you please work with my team and put this together, thanks.”

To replay this message press one, to delete press seven, to reply press eight, for the next message press the tab key, to exit press the star key. Please say calendar, voice mail, e-mail, personal contacts, or directory.

CHRIS CAPOSSELA: Calendar.

VOICE: Sure, and which day shall I open?

CHRIS CAPOSSELA: Tomorrow.

VOICE: Thanks, and by the way you can save time in the future by saying, calendar for tomorrow at the main menu. Opening tomorrow’s calendar, first a meeting that you organized from 9:00 to 11:00 in building 12, conference room A, entitled “Discuss Sales Numbers.” You can say next, cancel the meeting, I’ll be late, clear my calendar, or more options.

CHRIS CAPOSSELA: Cancel the meeting.

VOICE: Just to confirm, you’d like me to cancel this meeting, is that right?

CHRIS CAPOSSELA: Yes.

VOICE: I’m about to send the cancellation. Would you like to attach a recorded message for the attendees?

CHRIS CAPOSSELA: No.

VOICE: Message senT. Continuing the calendar.

CHRIS CAPOSSELA: When we refresh, you’ll see, of course, that we’ve deleted the meeting from Exchange automatically. So to give you a sense of some of the things that are making my life a lot easier as a sales person, I can spend more time with my customers, and check in with the office really no matter where I am. We can take this and make it a bit more sophisticated and powerful if we were to move over here. I’d love to show you a device that I have the pleasure of using. This is a new Windows Mobile device called the HTC Wizard, and this one is from Cingular. You can see, this device, of course, gives me the all the power to do things like check my calendar, change my calendar, do e-mail, et cetera.

Let me just quickly show you, here’s my e-mail, and I’m just going to open up that e-mail that we just saw from Lori, notice there’s a PowerPoint file that she’s attached, I’ll just click on that and using the new viewer here, with PowerPoint Mobile, now right on this device itself I can view my Word attachments, my Excel attachments, and here’s that PowerPoint presentation that I can quickly click through and get a sense for what we’re doing here in the presentation itself, maybe how much work we still have to go, so immediate access to all the information I need even if I don’t have my laptop handy for me.

The other thing that is very important for me is to be able to not just find data, but to find people. So you’ll see on this device we have a Communicator, mobile product that allows me to log in and see everybody who I work with, and whether they’re online or offline, or away from their desks, someone is marked as do not disturb here, so we’ll leave them alone.

I’m going to just open up Jeff, from here, of course, I can see his calendar if he wants to share it, send him an instant message, call his computer, et cetera. If I choose to send an instant message to Jeff, sure enough now I can just move this device around, there’s a beautiful keyboard built right into this. See the screen rotate, and I can say, hey Jeff, and type something out very quickly to him, and just hit the Enter key, and that’s going to send it off and I might want to connect with him and talk about that sales proposal.

So very quickly you see a lot of innovation, not just on unified messaging with a basic phone, but also on unified communications with a more sophisticated device like this. Now, in this scenario what I’d like to do now, I’m back in the office, I actually want to work on putting that proposal together. So here I am in front of my PC, and I’m going to open up Outlook, and you’ll see the same inbox that we were looking at before, there’s the e-mail from Lori, there’s the PowerPoint presentation, I can click on it. And you can see that we can preview the PowerPoint presentation right here inside of Outlook, which is nice.

I can go back to the message, I now have a sense for it, and you’ll also notice that all the people who are on the e-mail, I can see which of these people are online right now, which of them are away, which of them might want to be open to do a quick instant message. So I’ll click on the icon next to Angela, and I can from here do all the things I might want to do, schedule a meeting, perhaps view her own internal site, where she posts information about her job and her expertise. Again, I can call her. My favorite here is I can relay all to this e-mail with an instant message, so I can quickly bring everybody together and say something to all these people.

You see that we added everybody that was on that mail, and I can say, click in here, say hey everyone, can someone point me to our proposal site? Hit Enter, and now we’re going to add all those folks, and hopefully someone is going to be nice enough to reply. Dave Richards says, sure, here you go. The library for our proposals is right here. We’re going to click on that, and this is going to bring me to an internal Web site that this particular sales team uses to put all of our proposals together. We save a lot of time, we do a much better job teaming together when we have one place to go, and we can see all of the proposals. Notice all of the different proposals. We’re tracking who each proposal is checked out to, which customer the proposal is for, who is the project lead, when is it due, who is the sponsor, how big is the deal, and where is this proposal in our approval process. We do this in one internal site, everyone has access to it. It saves us a tremendous amount of energy.

So, I’m going to switch back to the instant message, and I’m going to say, great, will let you know if I need help, and send that off. I’m going to go ahead and close down this instant message session, and I’m just going to quickly show you that inside of the e-mail client not only can I manage all of my e-mail, but you’ll also notice an instant message history folder that when I click on, it shows me all of the history, all of the instant messages I’ve done. Today, you lose a lot of that information. Now, I use one tool, in this case Outlook, to manage not just my e-mail and my calendar and my tasks, but in this case my instant messages as well. So, it’s a very easy to use tool to get all that work done.

Let’s pop back over to our sales documents here, and let’s just sort on the customer, and see if we can find that Kontoso, Kontoso is the customer we’re working with, let’s open this up, and edit this inside of PowerPoint. And notice all of the columns that we were tracking on that internal site, you’ll see those show up right here inside of PowerPoint itself.

So, here we are inside of PowerPoint, and there is the customer name that I might want to change, maybe as I’m working I realize the deal size is a bit larger than I thought. This is actually due tomorrow. And rather than Lori being the person on point, I’m going to take this over. So, we can go ahead and make sure we get that information updated right. It’s me. Now, when I save this, of course, all that is back up on the site for other people to see. I can click through the proposal and see how we’re doing. It looks like we’ve got some comments here that I can read. It looks like we’ve got a process our company uses. Very quickly, we’ll make it very easy to create very high impact presentations. So, I’m going to take those bullets and just turn them into more of a diagram with a couple of clicks of the mouse. We’ll make it simple for me as a sales person to create a high impact document. I’m not spending a lot of time with fiddling around with graphics here. I can just pick the one that I think looks best, and in a few quick clicks I’ve built something that looks fantastic, and I’m ready to go.

As I build my presentation, one of the things I realize, I probably want to tap into the assets we have inside our company about this customer. So, I’m going to switch back over to Outlook and, of course, one of the things I want to learn is, what are the opportunities we’re engaging with this customer on? Rather than using some other tool, as Steve mentioned, we get to use the tool I’m familiar with as a sales person, in this case Outlook, and I have integration here with our customer relationship management system right inside of Outlook itself.

So, I’ll open up the Microsoft CRM folder, open up sales, click on opportunities, and it will show the opportunities that I, as a sales person, am working on. Again, I’m helping out a co-worker, so let’s look at all the open opportunities in the system, let’s sort them by the customer type, and quickly I can see Kontoso, we’ve got four or five different opportunities going on with them. We might want to export this to Excel, analyze those opportunities, maybe we can come up with an offer that pulls all four things together as opposed to doing individual offers to that customer. So, quickly I have very easy access to a very structured database, our customer relationship management system, but I do it in the context that I’m used to working in, in this case Microsoft Outlook.

Interacting with structured data like this is great. It’s also important for me to be able to reach out to experts inside my company and find other information that’s very unstructured. So we’re going to sell Kontoso some bikes. So I’m just going to come back to my internal Web site and search on the term “bike.” Click on that search, and now we’re going to run a search that shows us a whole bunch of information very quickly, bike case studies, some sales plans, some contracts that we’ve used. But perhaps most interestingly, it also finds people inside my company who are experts on dealing with bikes. When I click on people, we’ll show these people not just on how much of an expert they are but actually by social distance that they are from me, so actually seeing the folks that are my colleagues at the top, then my colleagues’ colleagues, then everybody else at the company, so I get a good sense that these are probably the folks that I’m more likely to know and want to work with. And again there’s that presence information, so I can instant message with Dave or schedule a meeting with Dave right here from the results of the search.

In this case, I actually want to pull some case studies from some customers that we have had success with into my proposal. I’m going to click on bike case studies, and this is going to bring us to another internal Web site where we’re managing all of our slides on this particular topic.

So this is a Web site that has all our case studies for our bicycle division, and I can quickly look at the different slides, see who’s modified them last, see perhaps what industries they’re applicable to, and when I want a couple of them, I can just click on a few, send it off to the PowerPoint presentation, I’m going to add it to this one, and more importantly, I’m going to have the system tell me when any of these slides change. So it will add the three slides to my deck, but if somebody changes one of those slides on the internal site, I’ll automatically get notified and I can automatically update this presentation right here, which is obviously key.

OK, let’s go ahead and save that off and let’s move on with our process here. We’re starting to build our proposal. Now what I’d like to do, if I switch back to our site of documents, our internal site where we manage our proposals, there’s the Kontoso proposal. You see that it’s been updated with the information, it’s over 500,000, I’m taking the lead on it.

At our company we share information with partners that are outside our infrastructure. In this case what I’d like to do is to actually share this proposal with a partner that I collaborate all the time with. They don’t have access to our IT systems. So I’m just going to save this file right down onto my desktop, and let’s go to the desktop, there it is. We’re using Microsoft Office Groove as a brand new collaboration technology that allows us to work together across our corporate systems and collaborate on documents and discussions, et cetera.

So here we have a Groove space set up to work with Trey Research, a partner of ours. We have a whole bunch of documents that we’re working on together, I can see who’s in the space and who’s out of the space. I can click on the discussion tab here, and we can have threaded discussions.

So very quickly I’m just going to take this proposal, drag and drop it into my Groove workspace. This will be replicated onto their machines, so in a few minutes Lori and Pavel and Robert will have this document show up. I don’t have to send them an e-mail, we don’t have to worry about who’s got the right version of the document, we’re always working on the same document. I can add a quick discussion thread right here and tell them, hey, I’ve posted this, what do you think. We move a lot of the e-mail that’s just plain e-mail attachments of people pinging back and forth, move it out of the e-mail system, put it in context of the project that we’re working on together across corporate boundaries.

OK, let’s fast forward a few hours. We’re finishing up this proposal. Let’s just take a look at it. Notice that as I click through here we’ve got some notes on the slides. You see that we’ve got some comments down below here. Before I send this off, I want to polish that up. So I’m just going to quickly choose to inspect the document, and in this case I’m going to look for comments and annotations, I’m going to look for invisible on-slide content, presentation notes, et cetera. And rather than this being a manual process, as a salesperson I can save a tremendous amount of time. Notice it found comments and annotations. Keep your eye right here; when I choose to remove all, they’re gone. Notice it found presentation notes; click remove all, those presentation notes are gone. Now I know I can share this, post it to a Web site, I don’t have to worry about an analyst finding hidden notes in my PowerPoint presentation and talking about if I don’t want them to talk about that.

Close that down, save that off. And the last thing I want to do here is to actually start the approval process. I’ve got a presentation I like. I want to kick off what Steve talked about, a workflow. Notice I can do it right from within the tool I’m used to, in this case PowerPoint. I want someone to approve this sales proposal. There’s the workflow that I can start, and I know that Tracy happens to be out of the office, so I’m going to put someone else who can approve this into this list. I might want to copy Laurie since she was the one who asked me to work on this, she might want to see the proposal, and hit start.

What we’ll do here is to basically start a workflow. We’ll send e-mail to the appropriate people, we’ll add tasks to their task list automatically that will show up in Outlook for them, and in a minute here we’ll see some of those e-mails starting to be generated. There’s one. If we go back to the internal team site where all our documents are stored, and I refresh it, sure enough, there’s the Kontoso proposal and now that workflow is now in progress, and I can see who’s got it on their plate to move it along.

So a whole range of technology here, but all coming together to help me as a sales manager drive the key business outcome I care about, staying in touch with my customers, and not spending time doing a lot of manual rework of proposals, not spending a lot of time figuring out how to reach the people I need.

So with that, let me turn things over to Steve, and thank you very much. (Applause.)

STEVE BALLMER: Well, thanks to Chris. There are two things I think are absolutely clear: No 1, if you have Chris in your business, you really better be people-ready; and No. 2, I think there’s a lot of advantages we can all see for giving people tools like this in their command. We showed you a particular scenario, but the tools are customizable to let smart people run where they want to run with these kinds of technologies.

What I’d like to do now is to have one of our customers talk to you about some of the things that they’re doing to empower their people. It’s a very innovative business, a very people ready business, and that’s the business that Tommy Hilfiger started. And he’s going to tell you a little bit about what they’re doing to empower their designers and production people and distribution people around the globe. Please welcome Tommy Hilfiger, chairman, and Eric Singleton, CIO, from Tommy Hilfiger. (Applause.) Welcome, Tommy.

TOMMY HILFIGER: Good to see you.

STEVE BALLMER: Good to see you.

Eric.

ERIC SINGLETON: Steve.

TOMMY HILFIGER: Thank you, Steve, and hello, everyone, it’s great to be here.

I can’t agree more with what this campaign stands for. It’s about recognizing the importance of people. Ideas, creativity and innovation are the ultimate drivers of success, and those things come from people. Technology is the enabler, the tool. We believe that empowering our people with the resources they need will position our company for success.

At Tommy Hilfiger we believe that a single great idea can move a company forward. I’m so lucky to have so many great people working with me, who not only understand my vision, but who are critical in helping me realize it on a daily basis.

In order to leverage a global brand through innovation, you need the right group of talent, the right people, the right schools to empower your people to realize the vision. We live in a [fast-] paced world today, and the fashion industry is one of the fastest moving industries out there. Fashion by definition is about constant change and evolution. Customers in the fashion world have become trained to expect new merchandise every four to six weeks on the selling floor.

In order to stay on top of trends, and more importantly, to create trends, you have to constantly stay in tuned with what is happening in the world around you. You need to be engaged in pop culture, you need to connect with your customers and speak their language to be a part of tomorrow.

Connecting people drives innovation, and helps our business to grow and evolve. And integrating innovative ideas with proven technologies helps us leverage powerful thinking inside our company.

Many different functions and departments must interact and connect on a daily basis to keep this company in motion. Everything is interconnected: collaboration, communication, and speed and efficiency are all crucial to helping get our products into the hands of consumers fast.

Creative people need creative and time efficient ways to realize their objectives. Providing them with the proper tools and technology allows them to do so. We strive to help our employees expand their creativity and drive through technology.

When you combine people with technology, you have a very powerful combination.

I’d like to thank you again, Steve, thank you for allowing me to be here; it’s an honor. And now I’d like to introduce Eric Singleton, the CIO of our company. He’ll be speaking to you about the impact technology has had on the Tommy Hilfiger Corporation worldwide. Thank you very much. (Applause.) Steve, thank you.

ERIC SINGLETON: Thank you, Tommy.

Hi, everyone. It is such a privilege to be a part of this great company, and to be here today.

To Tommy’s point, we do have powerful thinking inside the organization, and we strive continually to leverage and promote it with our application of technology in every way.

When I first joined the company, I wanted to take on a challenge to exponentially increase our intellectual productivity, in other words create true information value for employees by incorporating software that made sense for us, into one integrated hybrid model. This needed to be done quickly across our enterprise, recognizing the value that would be created by harnessing this power.

The next challenge was to create a single version of the truth; we needed to integrate and implement platform solutions so that every corner of our organization would be receiving the same information, and that our employees would be able to access this information on-demand.

Now, there are two other key principles that I believe are essential to enable this type of integrated system that we’re talking about, in order to thrive. Reliability: reliability is one of the key things that I believe the software industry must stay focused on. A craftsman must be able to count on his tools.

The second principle we must be careful with is flexibility. IT tools need to not only allow but encourage alternatives to best practices. The models that are already imprinted in the system design need to be able to foster innovation. It’s difficult to take the risk of thinking outside the box if the software you’re using, or the systems they are part of, or the education, or the corporate culture are all screaming do what the box tells you, this is the best way to do it. We cannot afford to not take the risk. At Tommy Hilfiger we challenge ourselves every day to stay outside of that box, and to look for a better way to do things that delivers solutions to our business. The software that we select enables us to stay on this course.

As Tommy said, to have IT become a competitive advantage for us, everything – business processes, communications, our supply chain – must be as tightly integrated as possible, and connected on a global basis to respond to any change and stay in front of it.

So I think IT must also accelerate and increase the intellectual productivity, which is our most valuable resource, our people. The systems we assemble must create a positive feedback loop that forces our teams to not only execute but to educate, change, propose, act, and evolve within, and ultimately reward our business with profit, while at the same time informing the business models themselves to capture progress made and foster change when needed.

Do the tools exist to allow us to assemble this kind of system? Are the people there that if understood can be crafted together in such a way to achieve these goals? Absolutely. The tools are here today to permit the information architecture, build such enterprise systems, but each IT leader must recognize the challenges of their business and create the design from within.

Like many of you, we choose to stay on a platform and strive for continuous improvement. With the outstanding tools available, like the ones we’ve seen today from Microsoft, achieving our single version of the truth is that much easier.

Thank you again. It’s been a thrill to be here and part of this terrific event. (Applause.)

STEVE BALLMER: Thank you very much.

I have to admit something before Eric and Tommy get totally away. I mean, obviously Tommy has built a great business and I was excited to have a chance to be on stage here with him today, but I was nervous. I am not a generally fashionable guy – (laughter) – and so I have the Tommy Hilfiger tie on, and I thought that looked good, and I was all excited, I went and shook hands with Tommy, and the first thing he pointed out to me was I didn’t have my collar buttoned down properly, and I’m still working on the fashionable side of life, but we’re glad to provide the technology that helps them make their people, people-ready. (Applause.)

I want to transition a little bit and talk about another one of these areas of innovation, and that’s the area of business intelligence. Getting insight, finding data, looking into it, and getting the insight that helps you decide what the new fashion is, what needs to go on the market, where is the problem in our supply chain process, what’s going on is one of the things that is sort of the most clear example of people ready business. Getting insight is something only people can do, but the difference in the tools that can help people and allow them to find those insights is really quite dramatic.

I’d like to get Chris to come back on stage and give you a little bit of a sense of what’s going on and what kinds of innovations are coming in business intelligence that would facilitate and empower people to get insight, make better decisions in the people ready business. So please welcome back Chris. (Applause.)

CHRIS CAPOSSELA: Thanks, Steve.

So again let’s take a look at some of the innovations that we’re building around business intelligence to help me get insight, again as a sales manager. What I’m looking at is my boss’s internal team site, internal Web site that he uses to run the business. And I see right away that I actually have to put together a quarterly review for him. I see that the R&D team has already done it, the sales team has not, so let’s work on putting that together and see what insights we can glean.

I’m going to click on the sales link here, and this is going to bring me to the internal site that I use as the worldwide sales leader for our organization to run the business. And we’ve created here what we call a scorecard, with key performance indicators that we all track to tell us what’s important for us in our business.

So you can see we track the marketing indicators, some sales indicators, some product development indicators, and some people development indicators. And we’ve got the different graphical representations to tell us what’s going well and what’s going badly.

These obviously automatically update as our data changes in our system. My whole team rallies around this one way to measure the business, and we really know what’s important for our business.

We’ve got some charts that tell us how our sales are. When I look at this in prepping for my executive review, I can see that Q1 sales aren’t doing so well, Q1 profit margins aren’t doing so well. If I click here, you’ll notice we can update the charts to get some more information about my sales, which is great, but I might want to drill into what’s happening in the Q1 sales.

Now, we’re starting from a centrally managed internal site and now we go right into a tool that I use all the time as a sales manager, in this case Excel, and I can see my sales amounts for some of my key products. I can expand out one of my product lines to get a little bit more detail, and I can see that this data is connected to our data warehouse. Our IT folks have done work to build this data warehouse maybe from multiple systems, and this data just automatically updates for me, I get to bring in the different views that I want to glean the insights that I need about my sales.

One of the first things I might want to look at is how is our gross profit margin. So I’m just going to add that dimension right away, and we can see those numbers.

As Steve mentioned, insight is something that people uniquely do, but the software can actually help us really understand things by helping us visualize it.

So, for instance, I might want to add some bars or data bars to our information right here, so I can quickly see that bikes actually make up a large percent of our Q1 sales. That’s an important product line for us. When it comes to gross profit margin, I actually might want to see what’s going well and what’s going badly, so I’m going to choose a color gradient, if you will, and now I can quickly see that in our bike line we’ve got a real gross profit margin issue around our touring bikes. As the worldwide person, I might want to see if this is a regional issue, so I’m quickly going to come down and just add the sales territory information to this, and you see how the visualizations automatically update, and as I look at my bicycles, I can see that touring bikes are pretty bad everywhere. The red tells me that I’ve got a gross profit margin issue that’s not regional, it’s for the touring bike line itself.

So let’s go ahead and get rid of sales territory and let’s add some other elements to the data here. In addition to profit margin, I might actually want to look at the discounts that we’re doing around the world, so I’ll add our discount percentage. In the case of discounts, big numbers are bad, so let’s choose a color gradient that does the right thing there, and now I can see, lo and behold, we’re doing a lot of discounting on our touring bikes. Bad gross profit margin, bad discount percentage; that’s obviously a bad thing.

If I drill into touring bikes, I can see the specific items, the specific bikes we’re selling, and I can see that in general it looks like our touring 1000 and 3000 line in certain colors are doing pretty badly on both of these dimensions.

Notice as I hover over one of these items, all of the rich data that comes from the data warehouse is coming forward to me in a tool that I know. Right here in Excel I can find out what our list price is, a whole bunch of information that gives me the insight that I might need.

OK, so I have a pretty good understand of what some of my issues are, particularly around touring bikes when it comes to gross profit and discount percentage. Let’s actually get to work on building the presentation itself.

I’m going to switch back over to the internal site, going to go back to my boss’s internal site, click on the reports, and here are the reports that our IT team has automatically prepopulated for us, and now I can just add my insight. Here is my sales report that I need to work on. So let’s go ahead and open it in Excel, and you’ll see in a moment that the IT folks have automatically added the scorecard data from that site to the Excel spreadsheet. I don’t have to do that, they only do it once and it’s automatically generated every time. If we look at the quarterly financial information, it’s automatically being populated for me. These are non-debatable numbers, we all know this is one version of the truth that we’re working from. It saves a lot of work on my part.

I get to focus on the commentary, what are the additional insights that I’ve gleaned from working with my data that I’m going to use when I have my presentation.

Let’s switch back over to the sheet we were working on. Let’s go ahead and grab this data, and I’m just going to copy it very quickly, go back to the one here, and just paste it in. And you’ll notice when I paste it, not only do we bring the data, we bring the connection to the data warehouse with us. I could actually use this live in the meeting, and we could actually have a great discussion, add some more elements of data to it, if my boss wants to go deep in one way, we can have a great business discussion rather than a very static view of this information.

I might want to quickly make it easy to visualize some of our sales, so let’s just insert a quick chart. I’ll just choose one of the 3-D pie charts. We’ll do a nice job, again high-impact graphics here to build something that looks much better than I typically create, and I do it very quickly. And then notice we’ve decided to have a section where I can add my commentary. I can, of course, give my insights around the touring bikes, but again this is a case where I might want to tap into the expertise of other people inside my company.

So I haven’t learned much about promotions yet. Let me go ahead and do a quick search on bike promotions from my internal site, and here we can quickly see we’re retrieving information that might be unstructured information about bike promotions. Click on that internal Web site, and we can see some Key Performance Indicators of how our promos are doing. Again, the touring bike one is doing badly, some other ones are doing well, but one interesting thing is we’ve created a Web site, a Web blog where different employees can basically add comments about these different promotions and add onto the intelligence that they’re getting in the field. So I can read through these, and I might decide this is some intelligence that I want to bring into my report, just bring that over and paste it in.

Very quickly as the worldwide sales leader, I’m not spending a lot of time trying to find the right data or the right query. I’m using the same reports that everyone else in the company is using, I’m connecting to the same data warehouse that everyone else is using, and I can get the insights very quickly and then focus on what’s the action we’re going to take; so a big, big set of innovations coming from us.

Again, thank you very much. Steve, back to you. (Applause.)

STEVE BALLMER: Just another context, another theme of innovation to enable people in this people ready business.

I’d like now to bring on stage another one of our customers, one that’s been focusing in on letting their people connect better with their customers. Please welcome Tim Huval. He’s the CIO for BofA’s wealth management business, and Tim is going to talk a little bit about how software has helped them enable their people ready business. Please welcome Tim. (Applause.)

TIM HUVAL: Thanks, Steve.

It’s a pleasure to be here. I must admit when I heard the topic, people-ready business, I was jazzed about coming, and I’ll tell you why in a second, but I was also equally as excited about the fact that I knew there was an outside chance I would score a Tommy Hilfiger tie. (Laughter.) A signed Tommy Hilfiger tie; I think there’s one in the back.

Actually, as we think about what we’re doing at Bank of America and in particular in the global wealth and investment management business, every interaction, every interaction has to start with driving the ultimate customer experience. There is no way to drive the ultimate customer experience without driving the ultimate associate experience, and there’s actually no way to do that without driving or enabling the associate to absolutely realize their full potential. We get that, and we’re driving and striving towards that every single day.

Our partnership with Microsoft is absolutely critical to us achieving that vision. In wealth and investment management right now, I’m going to talk to you briefly about a project that we’ve got going on. And keep in mind my background actually is in HR, I came from HR into the CIO role, and the people readiness is relevant, very relevant for all of us, not just HR leaders, but I get it and understand it.

As we think about what we’re trying to do, there is a project underway right now called Client Connections. And what Client Connections does for us is it enables us to take a total view of the client relationship. So, for example, if you’re a wealth and investment management advisor, and a client calls in, they want to place a trade, for example, there’s a relationship nine times out of ten way beyond that, that in many cases our associates aren’t enabled to clearly understand. And so having that 360 view of the client enables us to offer a wide array of products and services to our customers that they would typically be fragmented in trying to get.

And so we enable our associates to provide that ultimate end-to-end seamless experience which customers ask for day-in and day-out, and they deserve, and they should demand, and through the SharePoint work that we’re doing with Microsoft and through our partnerships we’re able to deliver that. We’re delivering that throughout the course of this year. So again a customer calls in, we’re able to understand that end-to-end view, 360 view of the client relationship, and deliver ultimately what the customer wants. If they want to place a trade and yet have a question about a mortgage or a checking account, everything from mass market throughout our franchise, we’re able to deliver on that experience.

So that’s what we’re doing with Microsoft. We are absolutely thrilled with our partnership and relationship. We think we’ve only just begun. And being people ready is absolutely what it’s all about.

So thank you very much. (Applause.)

STEVE BALLMER: Thank you.

I want to move to infrastructure, but before I do, I think it’s really important to take the kind of stuff that BofA is doing as a proxy for the broad discussion. Somebody calls, you want a full record, it’s the person who’s going to decide can I sell this person something else, can I serve them in a better way, can I extend our relationship, but information really is the empowering tool for that person to do their best job growing revenue, improving customer satisfaction just every day, absolutely every day.

Infrastructure

Infrastructure: I’m not going to talk a lot today about infrastructure. We get a chance to do that a lot, we talk a lot with IT people about infrastructure, but I think it is important to say that there needs to be a strong technology foundation that underpins the people ready business.

We talk about infrastructure that enables high-performance employees, the directory, the presence information that Chris talked about, the way of keeping track of people; very, very important.

Increasingly, the protection and access to business assets in the form of this information is an important issue. We have made security job one. We’ll have a set of new technologies to help you protect access to specific people or specific information types, and restrict and control much more closely who has access to what; very important in this day and age of compliance.

Everybody, if you’re going to empower your people, you want the ability to move IT solutions out to them more quickly, and that means giving the folks who work for you, as well as the non-IT people who want to do customization and extension the tools to do that rapidly, rapidly developing the solutions and applications that enable your people.

And last but certainly not least, in order to get the money to invest in your people and being a people ready business, we need to continue to work to radically simplify IT so that the basic cost of operating existing applications doesn’t overwhelm the ability to invest in being people ready.

People Drive Business Outcomes

All of these things, all of these innovations, all of these investments are really driven from that fundamental view that I talked about at the beginning. We grew up as a company in which the PC and IT was a form of empowerment. People are at the center of our world. The people-ready business is the driver, the personas are the driver of our investment. And people do drive business outcomes. People, people, people. And software and technology need to be a tool right there in front of people every day, letting them figure out new things, do new things, grow with the technology, and letting the technology help them grow in their ability to fulfill the goals of the organization, innovation, partner connection, operations and customer relationships.

We think Microsoft software, Microsoft innovation does the best job possible supporting that people ready business, and we’re also committed through the innovations and investments you’ll see from us over the next 12 months and beyond to continue to extend and enhance the capabilities that we provide businesses to enable their companies to succeed, to help you empower your people and truly be people ready businesses.

I want to thank everybody very much for your time and attention today, I want to thank you for all of the business we do together, and all of the business I hope we do together as all of you push to be people ready.

Thanks a lot. (Applause.)