Remarks by Will Poole, Senior Vice President, Microsoft Market Expansion Group
Microsoft Windows Hardware Engineering Conference (WinHEC) 2006
May 23, 2006
WILL POOLE: Good morning. You know, I noticed a few of you are probably thinking about dashing out to grab one of those first copies of Windows Vista beta 2, that will announced that we’ve shipped. Don’t dash out quite yet, you’re going to have to wait one more day. We sent them to manufacturing yesterday afternoon, and we’ll have them for you tomorrow, we’ll have one for everybody here in the audience. So please be patient for one more day.
I know you’re going to be excited about it. And to help you keep being excited about it, in my presentation I’m going to have about 30 minutes of demonstrations of some really innovative features and scenarios that are enabled by people’s innovation here in this room, and Windows Vista. So it’s a very exciting part of how we are driving hardware innovation and platform innovation with Windows for many years to come.
So my presentation is really going to talk about three things. First is to look at just the entire investments we’re making in Windows Vista, in the platform, setting this foundation for platform innovation. Second is, I’m going to talk about some key programs that we are driving to ensure the continued vitality of the PC ecosystem, from here until our consumer launch in January. And third, I’m going to go into a little bit more depth on the pioneering innovation we’re doing in business models, and looking at emerging markets, and the program that Bill just talked about called FlexGo.
So talking about Windows Vista, we’ve been very focused on three substantial business customer segments, business users, mobile users and consumers, and driving breakthrough innovations in each of those areas. For business, Windows Vista is going to raise user productivity and lower IT costs. For mobile users it’s going to enable people to connect easily, communicate, and to stay entertained on the go. And for consumers, Windows Vista delivers on the dream of whole home and advanced media, digital media, and whole home entertainment.
Now, beyond those benefits that are targeted at those specific customer segments, a number of ground breaking innovation work that we’ve done, features, and actually engineering process innovation that we’ve done, is going to help all Windows Vista users. So I’d like to start and take a look at some of those innovative areas, and talk about what they can do for all of the users that will get this product over the next couple of years.
First and foremost, Vista’s users will be confident in their PC, and their ability to get the most from it. And security is fundamental to the Windows Vista architecture, and delivering that confidence. Vista is the first operating system to be fully developed under our security development lifecycle, and it’s the most secure operating system that we have ever shipped.
An example of this innovation is IE7, in Windows Vista only, it provides the new protected model browsing that helps stop drive-by downloads that have been plaguing users for years. Another key innovation is user account control, which will reduce or eliminate the use of admin accounts and therefore protect the PC in the event that malware comes on.
Second is that Vista users will have clear ways to organize and use information. That’s going to enable them to focus on what matters. A few key innovations here, Aero is going to deliver the best design, best performing user experience that we’ve ever had. Media Player 11 has unique features in Windows Vista, for library sharing, enabling you to connect to media throughout your home and see it on any given PC. And we have high DPI enhancements, to enable the latest high-definition screen, without sacrificing usability or readability. Vista users are also connected to the information, people, and devices that make them more effective. An example of this is a network center, to dramatically simplify networking such that an average user can now get a PC connected to devices, and connected together more easily than ever before.
So now I’d like to start off and take a look at some specific features and innovations in Windows Vista for business users. Now, we all know that the key issues for business users are around security and cost. These are the challenges. As an example, CSI and the FBI report that a single stolen laptop can cost a business US$89,000 just in out-of-pocket expenses, not looking at downstream liabilities and other indirect costs. Last year a PC stolen from the University at Berkeley had something like 98,000 student records and Social Security numbers on it – think about the mess it is to clean up that problem.
So there are technologies on the horizon that are going to help us address these opportunities and challenges for business users. They include new form factors, dramatically increased CPU power, unprecedented local and network storage, and continuous connectivity. These together are going to enable the evolving user models that we are seeing from our business customers, as they move from doing isolated task work on their individual PC, to an environment where they browse the Internet and intranets, to when they intelligently search and get the right information more quickly and easily than ever before, to an environment where they subscribe and have the information brought to them on their desktop ready for their every need. And all these things together are going to empower users for the next generation of the continuous collaboration and productivity enhancements that they can get from this technology.
Now, Windows Vista is going to raise user productivity, and lower IT costs. How is it going to do this? First, looking at security, it’s going to decrease the security exposure in lots of ways, and it’s going to help users comply with regulations such as Sarbanes-Oxley, directly taking cost and risk out of the PC equation. It’s going to help users find and use information more easily than ever before, help them leverage the corporate knowledge to make faster and better decisions. IDC reports that companies spend up to $18,000 per year, per employee when employees either can’t find the information they need, or have to invest time reworking stuff they’ve already done.
Windows Vista is also going to help directly reduce the cost of managing desktops. We have a very large pharmaceutical company we’re working with in the TAP program, and they recently told us that based on their experience with the Vista TAP that they’ll be able to save several hundred dollars per PC in annual total cost of ownership, in the combination of direct and indirect cost. That’s exciting news for us. It’s starting to prove out what we believe these investments are going to deliver for our customers. We’re seeing that the PC management best practices, and image management features, and security and reliability are all contributing to this reduction of TCO.
Finally, for mobile users, we’re going to improve the efficiency and reduce support costs for these workers in ways that they can use on the road or in branch offices. Giga Research has estimated the cost of supporting a mobile worker to be between 1-1/2 and 3 times the cost of a tethered user. Well, Vista can help.
Now, if you look at the features in Vista, there are always going to be more features than I can talk about today, so I’m just going to take a couple of them throughout my presentation to home in on, and we’ll also be showing you a whole lot of these. One of my most favorite ones now in Windows Vista is Bitlocker Drive Encryption. Why is that? It’s going to secure the information on a hard disk, whether it’s in a laptop or a desktop PC, and if it’s stolen nobody can get the data off of it.
I personally burned the better part of a perfectly nice Saturday just a few weeks ago, after being informed by a financial services company in New York that a PC had been stolen from their office that had my name, account information, and Social Security number on it. You hear about these things, you think they happen to other people, well it happened to me. I sure wish that company had available to it Windows Vista and Bitlocker Drive encryption to take care of that personal information of all their customers.
Another one, I was astounded to find out, talking to CIOs a couple of years ago, that they have a tool they use to protect corporate information called a Hot Glue Gun. That one kind of blew me away. What do they do? They squirt hot glue gun into the USB ports to make sure people can’t put a key drive in there and copy information out without authorization. I’m a hot glue lover, but it doesn’t seem like it belongs in this scenario. Well, we’ve got group policy that’s going to help make sure that users can be locked down, and only take the information that they’re allowed to on a USB keydrive.
Another key feature for business is transient multi-monitor support. How many of you have watched somebody fumble with the alt or function key and try to get a projector up on the screen, while everybody in the meeting sits around twiddling their thumbs wondering when it’s going to start. Well, no more. Windows Vista, plus the right hardware innovation can enable transient multi-monitor support to make that happen incredibly easily, and automatically.
So what I’d like to do now is to ask Tim Richardson to come up and show you some of this, and we’ll take a look, and see some of the innovations in Windows Vista.
TIM RICHARDSON: Thank you, Will. How are you doing today?
WILL POOLE: All right. Great. What have you got?
TIM RICHARDSON: Today we’re going to talk about XPS. So XPS, last year at WinHEC we introduced the XML paper specification, since that time we’ve seen great industry momentum. XPS is an open, platform-independent, royalty-free document management format, that enables customers and partners to effortlessly create, share, print, and archive their documents. XPS, and Windows Rights Management services help address security concerns in today’s business environments. With these technologies you can now control access to your confidential documents wherever they go.
Today I’m going to show you two aspects of document workflow. First, I’ll scan directly into SharePoint 2007 Server, which allows administrators to supply server side permissions to confidential information. This helps enterprises comply with security regulations targeted at who can access sensitive information. I’ll do that by stepping over to the Konica-Minolta BizHub C450-MFP. Here’s the document I’m going to scan in. I then select reset, scan, choose the address book, and then XPS, and then start. And I’m now scanning this document directly into the XPS format, which is being uploaded to the SharePoint server. Now, here I am in the SharePoint document library, and I’m going to refresh, and as you can see here, here is the XPS document I just scanned. You can notice the date/time stamp, which shows I just scanned it in.
Now, a new feature in SharePoint is the ability for administrators to apply RMS to document libraries. So let’s take this XPS document with the XPS viewer hosted in IE. As you’ll notice here in this document, the XPS document has restricted permissions. This is possible, because XPS implements the same packaging technology as the new Office file format. So when I right click on this document and choose copy, the copy feature is disabled.
Now, that’s great, but we talked about administrators, what about information workers? What can information workers do to control document workflow? Well, as you see here, I’m authoring a document in Microsoft Word 2007. I’ve restricted the permissions on this document. I’m now going to publish this document directly to the XPS format by choosing file, save as, save as XPS, and then publish. Now, here’s the XPS document I just published, and as you can see the XPS document has restricted permissions. It’s actually inherited these permissions from the Microsoft Office Word document. The way this is possible again, is because XPS implements the same packaging technologies as the new Office file format.
So in summary, XPS provides hardware manufacturers with the ability to provide new value into document workflows. Microsoft encourages hardware manufacturers, particularly printer and scanner manufacturers, to support XPS in their drivers and devices.
Thanks a lot.
WILL POOLE: Thanks, Tim.
TIM RICHARDSON: Thanks, Will.
WILL POOLE: You know, we were here last year and we talked about XPS. And we had very limited early industry support, and I’m very pleased to show you a slide there with some very substantial industry leaders, who we’re very pleased to be working with, and it’s showing great momentum behind the XPS technology, and we have really quite a bit of excitement, that we’re seeing throughout the industry, for where it can take us.
What I’d like to do now is talk about mobility. I’ve got to say, the minute you go and use Windows Vista on a mobile laptop, you’re never going to switch back. It is just such a better experience, and I think users will appreciate that immediately as they start to see the software come out on their mobile devices.
Windows XP, honestly, has been hard pressed to keep up with this incredibly innovative area of the PC industry. But, now Windows Vista can really take full advantage of this innovation, and tap the value in delivering to consumers. Let’s take a look at why Windows Vista is going to be the best ever operating system for mobile PCs.
Now, if you go and read reviews of mobile laptops, mobile PCs, what do you find out? PC Magazine, for example, they’re going to look at performance, they’re going to look at battery life, they’re going to look at reliability, connectivity, and weight. Now, I think software can help in all areas with the exception of weight. We haven’t figured out how to do that yet. But, all the rest of them I’m pretty sure you’re going to see substantial advances in what Windows Vista can do for those mobile devices. I want to give you some facts about what’s happening in the mobile market, because it’s really quite exciting for all of us in the industry.
Mobile PC sales in U.S. retail surpassed desktops for the first time about a year and a half ago, in February of 2005, and IDC has reported that they’ve had a continual compound annual growth rate, and they are expecting it through 2010 at about 15 percent in business, and 20 percent in consumer. That’s a pretty astounding number, and it’s also about three to four times the CAGR in that same period that’s expected for desktops. So mobiles are a great growth opportunity for all of us.
We also see that about two-thirds of mobile PC purchases are what we call Nth PC purchases. Bill showed the Origami device, ultra-mobile PC, this is something that might be a second PC for somebody that’s got a desktop at home, or a desktop at work, and they add that as their second device. We’re seeing people buy laptops for home who also have a laptop at work. Also, we’re seeing the velocity of purchases of mobile devices is faster. Gartner is currently recommending a four- to five-year refresh cycle for desktop PCs, but only a three-year cycle for mobile PCs. So that’s a great way for us to see continual purchases from the customer base of mobile devices.
So the value that Windows Vista can bring to mobile. The first thing is around helping people be more effective. It is absolutely going to help those few workers left who are what we call deskbound. There’s only about 35 percent of them in the U.S. that are still deskbound, 65 percent are mobile. That number is expected to move to 70 percent over the next couple of years. So those mobile users are all going to get more effective ability to do their work while they’re in mobile scenarios. That’s going to happen because of innovative form factors, new input such as touch, smaller device sizes, and the overall convenience that can really deliver that value to mobile users.
The next is what I call continuous collaboration. The proliferation of cell phones and e-mail has many people really thirsting to always be in touch. Occasionally you’re cursing about the fact you’re always in touch, but the fact is it’s become a reality for people’s life pretty much everywhere in a technology intensive industry. And then you add to that WiFi and 3G, and we can enable people to be connected, and communicate, and collaborate from virtually anywhere.
Finally is IT costs, the IT departments may be expecting that all this value is going to cost them more, but we think we can actually drive cost down, while still delivering on the value and productivity that mobile users demand. When you look at the features that Windows Vista brings to the mobile space, there’s a huge list of them. And rather than talk about the specific features here, because I’m going to show a bunch of them to you in a minute, I want to talk about a model that I think is probably on all of your minds, it’s how do you innovate, differentiate, and profit.
I think in the space of mobility, there’s no doubt that there’s a broadest possible domain of innovation opportunities. This rich functionality can address a very broad set of customer requirements, and that’s going to create the opportunity to differentiate. You can differentiate by creating novel and optimized configurations that target a very specific segment’s needs. That way, your innovations will stand out versus the competition, and your product will be differentiated from the alternative. When that happens you get the profit with increased margins. Highly differentiated products are already proven to provide clear end user value, and driving higher margins. By incorporating premium features, such as SideShow that you saw earlier, and we’ll show you again today, we’re going to enable unique experiences, and attract new customers to mobile computing.
In addition to the devices themselves, there are greater margins for add-ons on top of that. NPD reports that about 50 percent of mobile PC buyers also purchased something in addition, at the same time they get their notebook, extending their purchase, and about one-third of those people spent over $500 incrementally on their purchase.
What I’d like to do next is to ask Greg Graceffo to come out and show you some of the great innovations in mobile computing. Let’s go, Greg. (Applause.)
GREG GRACEFFO: Thanks, Will.
Okay. The first product I’d like to start with was just recently announced by Microsoft at the CeBIT conference this year in Germany, the Ultra-Mobile PC, or perhaps as it’s more commonly known at this stage by its codename “Origami.” This is a Samsung Q1, one of the first ultra-mobile PCs on the market. This unit weighs in at 1.7 pounds, has a 7-inch wide-screen touch display, and features the full power of Windows XP Tablet PC Edition. Okay. Whether I’m using this around town, on vacation, in my car, this is really a powerful companion PC that can really go everywhere and do everything. Let me show you some of the scenarios that are capable with this device.
I’m going to start with the Program Launcher, the Program Launcher is part of the Microsoft Touch Pack, a set of software designed specifically for machines of this size with touch screens. The Program Launcher makes it really easy for me to access those applications and Web sites that I need frequently with just a touch of the screen. Touch is a really intuitive and flexible way to navigate a device like this. It means I can use it while walking, while standing, sitting, really anywhere.
Okay. I’m going to switch over to another UM PC that’s connected to the displays so you can get a better feel for what I’m doing. To start this off I’m going to click Connect and then launch Internet Explorer. Now, Will, let’s say I’m out and about, trying to figure out what movie I’d like to go see. More than just show times and listings, I want to actually read reviews, take a look at trailers, and that kind of thing. So, to do that, I want to get to my favorite movie site. So help me get there I’m going to launch this innovative keypad called Dialkeys. I type in my address bar and start entering in the URL. Hit enter, and there we go. Dialkeys comes in handy any time I need to do some short text entry, or like an e-mail, or an instant message.Okay. So now I’ve had a chance to scroll up and down, check out the movies I want to see, but we still need those directions. So to do that I’m going to pop out over to Windows Live Local, and here you see I get the traditional map view, and that’s great, but I want to take a look at the bird’s eye view, and get some high resolution imagery of that theater’s location. So there we go, I know exactly where that theater is going to be.
Okay. But, now we still want to take a look at that trailer, so to do that I’m going to head back to the Program Launcher, I’m going to touch View, and I’m going to launch Windows Media Player. Now, here you’ll see we’ve got a customized skin for the Media Player developed specifically for this device. All the buttons are large, easy to access and control with my fingers. I can stop it, start it, no problem, and the video looks really good on the wide screen.
Okay. So to sum that up, the Q1 is really just the first step in a new ecosystem of fully functioning Windows PCs. This is a powerful and useful device now, but just like everything else in the PC industry, it’s only going to get better with time, lower power processors, more choice in display sizes, better integrated wireless technologies, and these devices are going to get smaller, lighter, and run longer.
The Q1, as we said, is really just a first step here. These new form factors, and interaction methods really create a new opportunity, a growth opportunity for the PC market. Now is the time to build UMPCs, and Microsoft is excited to work with its partners to make that happen.
All right, moving on, now I want to talk about Windows Sideshow. Now, Windows SideShow is a new technology in Windows Vista that allows us to take applications and PC data, that’s normally bound to the PC itself, and extend it out to a range of nearby displays. You may remember we demonstrated this technology last year with this laptop here from ASUS, with the SideShow enabled display right in the lid. This is still a great scenario for the mobile PC user, I can get at my calendar, my contacts, my latest e-mails right here in the display, whether the laptop lid is opened or closed, whether that PC is on or off. But, Sideshow doesn’t stop with just mobile PCs.
Today I’m going to demonstrate how this technology can extend to a range of devices. Now, let’s start with this keyboard. This is the Logitech G-15 keyboard, it’s available on the market today. It has an integrated display already in there, that’s for use with certain PC games. We’ve done a little prototyping work to make this display function as a Windows Sideshow-enabled display.
Now, Will, when I’m at home sometimes I like to play PC games when I have a little time, and even though I’m playing them at full screen, I still like to know if certain e-mail messages have come in, or certain IM buddies have signed on, like from your, for example, those are the important ones I’m looking for. So I don’t want to have to pause the game to go and check that out. Now, with the SideShow display enabled right here, I can access special software components we call gadgets to get that information right here on the machine.
Here you can see I’ve got the number of unread e-mail messages in my mailbox, I can see what song is playing on the Media Player, I can look at my calendar, it says we’ve got the Will Poole keynote there, and all kinds of information. The great thing is that anybody can write these gadgets for these devices. It’s an open platform for software vendors. And the more gadgets I have the more value I get out of these hardware devices.
Okay. Let’s move to another existing device where we’ve integrated Sideshow technology. Now, this digital picture frame is from A Living Picture, and it exists to help me get all those pictures I have buried in my hard drive out and displayed nicely on my desk. Here’s a few shots of me and the family. Now, again, we’ve done some work to integrate Windows SideShow technology into this device, so now in addition to the pictures I can also get instant messaging data, calendar data, Voice over IP notifications, RSS feeds, whatever makes sense on that device. And I am happy to announce that A Living Picture will be shipping this device with support for Windows SideShow in time for the launch of Windows Vista.
Okay. One more SideShow device, the last one here is this WiFi remote from Exceptional Innovation. This remote is used to control your Media Center PC. It can function as a Voice over IP handset, and even as a portable music player. With SideShow technology integrated into this device we’re able to access your media library from any PC in your house, and select songs for playback. You’re also able to see your program listings for your TV, and select shows that you’d like to record. So really some cool scenarios, and that’s whether the TV is on or off, and whether that PC is in the room that you’re in or in another room in the house.
Again, to sum up Windows SideShow, it really creates a lot of opportunities for partners to create combinations of hardware and software that leverage the power of Windows Vista, and really deliver some compelling scenarios with a whole range of connected devices.
Okay. Let’s move to our last demo, and we’re going to talk about Windows ReadyDrive. Now, Windows ReadyDrive is a new feature of Windows Vista that enables a PC equipped with a hybrid hard drive to extend battery life, improve performance, and increase reliability. Now, a hybrid hard drive is where we take a traditional hard drive, like this one, and we add some flash memory right in the hard drive. So here is an example of a hybrid hard drive.
WILL POOLE: We’re going to be clear when you say we, it’s actually the drive manufacturer.
GREG GRACEFFO: Absolutely. This one, I believe Samsung is already committed to build these drives. ReadyDrive is the technology in Windows Vista that works with that hardware. Let’s take a look at how this technology can help us improve battery life. To do that, what ReadyDrive does is, it caches reads and writes from applications in the flash memory that’s there on the drive, and when it does that it’s able to spin down that hard disk and keep it still, reducing the amount of power that’s consumed, and extending battery life.
Now, to show this, we’ve got this video running, it’s sort of a day in the life of the mobile user of various applications, and we’ve recorded it as a video so we can play it at double speed, and you get a better feel for what’s going on. Now, the thing to look at here is this bar down the bottom. Where the bar is red, that means that the hard drive is spinning, and consuming power. Where the bar is green, that means that the hard drive, the physical spinning disk, is still, spun down, consuming much less power, and extending battery life. Now, a traditional hard drive, Will, would be red the whole time, but we’re getting the red and the green, even though applications are writing and reading from the drive the whole time.
WILL POOLE: This is not just a Web browsing example, this person is doing productive work here, they’re opening documents, they’re doing real things. This is a real-life scenario.
GREG GRACEFFO: Absolutely.
WILL POOLE: The other thing is, when you’re green, if you drop that laptop, you’re not going to have a drive crash either.
GREG GRACEFFO: That’s right. There’s a couple of benefits here, we think that by stopping the hard drive from spinning we can add up to 30 minutes of battery life in the course of a day, but we also increase ruggedness and reliability of the drive. So, because it’s spun down, and still, and parked, and locked, so to speak, it’s more resilient to damage should it be jostled or damaged.
Okay. One more way we want to talk about Windows ReadyDrive, and that is to increase performance. To do this we’ve got a scripted workload that I’m going to kick off on these two machines. These are two identical machines, they are identical in every way, except that one has a Windows ReadyDrive-enabled hard drive, and one has just a standard hard drive. Now, we’ve got this scripted workload that’s going to open a series of applications, Outlook, PowerPoint, OneNote, while at the same time another application is reading and writing to the drive. So a lot of work is going on here.
Now, everyone is familiar with the shortcoming of traditional drives, if you execute a long file copy all other work on the machine kind of grinds to a halt. What’s going on is there’s a competition for the hard disk, sort of a tug of war, competing for that resource, and there’s a massive number of drive seeks going on.
WILL POOLE: So if you’re late for the plane, and you’re syncing up your information over here, you’re going to miss your plane, when it happens over here.
GREG GRACEFFO: That’s right. Well, here, because we’re able to cache those reads and writes in the flash, we can reduce the number of drive seeks, and we improve the performance. This is also helped out by Windows SuperFetch, which we heard about this morning in Bill’s keynote. SuperFetch is a feature of Windows Vista, it’s an innovation in memory management that looks at your past behavior on the machine to predict what data you’re going to use most in the future.
Now, let’s take a look at what we’ve got here. We can see that the ReadyDrive has opened these applications, it actually finished out this workload at 36 seconds. The standard hard drive managed to get Outlook open in 65 seconds, remember, it’s still competing with that other workload going on there. It’s still struggling, so we’re just going to let that one go.
So to sum up Windows ReadyDrive, Will, this technology will deliver a range of benefits for the mobile user, improved battery life, improved reliability, and improved performance. The combination of Windows Vista with a hybrid hard drive really delivers a range of benefits for the mobile user.
WILL POOLE: Great. Thanks, Greg, appreciate it.
GREG GRACEFFO: Thanks a lot. (Applause.)
WILL POOLE: Well, for our third segment on Windows Vista, we’re going to talk about consumers, and I’ll tell you, the opportunities for consumers here are pretty substantial. Again, here, rather than talking about challenges and opportunities, I want to give you a little bit of a view from the industry perspective of what’s happening with consumers in this space.
First of all, just think about the user knowledge, the end user experience and education around whole home, or digital entertainment scenarios, and think about the complex world that they live in. Now, I don’t have a particular stat for this one, but every one of us is a consumer of this technology, and if we’re not an avid consumer ourselves, you probably know somebody that is, or you’ve been asked to help somebody who is. And it’s quite clear that the world of whole home entertainment is still way too complex, and not widely understood, and certainly not as easy as it could be for consumers.
But, at the same time, we’re seeing PCs increasingly used as the place to store media in the home, 44 percent of consumers store media of some form, music, videos, digital photos, on their home PC. And 32 percent of them want to record TV on their PC, but only about 9 percent of them actually do so today. So, we’ve got a world of opportunity and excitement, but also a lot of complexity that we have to address. Part of that complexity also comes in in the area of networking. Lots of home networks are proliferating, but very few of those home networks are video ready, that are capable of playing a video from a home Media Center out to an extended device of some kind or to another PC. InStat says that in 2005 fewer than 9 percent of home networks worldwide were video capable, but they also see a huge growth by 2007, about a quarter of home networks will be video capable. So, that’s moving along very nicely.
We also see a continued thirst for quality, fidelity, audio fidelity and video quality in the home. And HDTV is certainly the centerpiece of that. The Yankee Group says that about 33 million U.S. households have high definition screens installed now I’m sorry, by the end of 2006. And, that penetration is going to exceed 50 percent of U.S. homes by sometime between mid-next year and mid-2008. But even with all those great screens in those homes, a very sizeable percentage of them still do not have any high definition content playing on them. They’re playing standard DVDs or analog cable. So, there’s a great opportunity to light up those screens with new content, and new experiences.
And when you sum all this up and you look at the overall size of the connected device network in the home, today it’s estimated to be about $14 billion worldwide, and it’s growing to an astounding $72 billion by 2009 according to Strategy Analytics. Again, a big opportunity for all of us here to deliver value to consumers in the home.
So, let’s take a look at what Windows Vista does. Simply enough, we believe it is going to deliver on the dream of advanced digital media and whole home entertainment for consumers. It’s going to do this in about four areas, digital memories, PCs are the place for digital memories. In 2003, the market was split about 50/50 between digital and analog photos, and only three years later it’s about 75 percent digital, one-quarter analog. So, you see digital memories are definitely where consumers are going from a photography perspective. Camcorders are already there. You’d be hard pressed to buy an analog camcorder today. So, all those camcorders are sources of more digital content onto those home PCs.
Second is looking at gaming. Now, consoles are really exciting. They’re a hot market, and they’re straight industry battles waging. But the fact is that those of us in the PC industry know who have been around for a while, that a lot of the big innovations in gaming come from the PC. They may start in the PC, or continue on the PC after a console comes out. Online multiplayer gaming, advanced graphics, and first-person shooters all began on the PC, and if you look at the numbers of online, you see about 60 million people in China and Korea doing online PC gaming, an amazing market there fueling the industry.
In music, portable music players have definitely captured the imagination of a generation of people. And these are fine things for the PC industry as they are driving the use of the PC as the media hub, the media storage, the place where people find, manage, and take care of their music collection.
And finally, TV and movies. Bill mentioned about Media Center Edition, it’s just been a breakout success for us. Today we’ve sold over 10 million copies with our partners of Media Center PCs, and we’re selling at a rate of over 1 million per month. So, I’m really pleased with the success we’ve seen in that scenario picked up in the Media Center PCs.
Now, if you want to look at the features here, again, there’s a huge number of them that are covered by Windows Vista in the consumer area. In the past, we’ve really seen that mainstream consumers were buying their PCs for primarily communications and productivity. But now that’s changing, and these four scenarios, memories, games, music, and TV/movies are really driving the places where you can differentiate and where consumers are placing their bets on new technologies they buy.
Some key things that you’ll see in Windows Vista, Photo Gallery now supports RAW formats, increasingly popular with digital photographers. Movie Maker HD supports importing from a high def camera, you get great quality video, and also be able to create DVDs with it. In gaming, DX10 has just an astonishing leap in graphic fidelity using the current hardware, or the new hardware coming out in support of DX10, up to six times performance increase over previous versions of DirectX. We also have a universal controller now that works between the PC and the Xbox 360, big win for consumers who are dual gamers. And music, we’re seeing Windows Media Player 11 providing the fast, integrated, great experience between the content on your hard disk, the content on your devices, and content up in services like MTVs URGE service. And in TV and movies, you see a whole collection of features that we’ll show you in a few minutes that give you this better and easier integration in the home, all leading up to this delivering on the dream of whole home entertainment.
Another key element to make this possible in the home is a collection of technologies that we call Windows Rally. And Windows Rally provides network and device vendors an architecture to enable effortless setup and secure and manageable connectivity to other devices and computers and richer end user experiences. Simply put, Windows Rally lets you put all that stuff together in a way that’s easier than ever before. And we’re making it easy for our partners to license these technologies and to tell their customers that their devices are compatible and work well in a Windows environment in the home.
Well, so speaking of Windows Rally, let’s take a look. I would like Lorrin Maughan to come up and show us how Windows Rally is works, and just how easy it actually is.
LORRIN MAUGHAN: Hi, Will. (Applause.)
WILL POOLE: Hi.
LORRIN MAUGHAN: Nice to see you.
Okay. Well, as you’ve just said, one of the key challenges facing consumers today is building their home network and adding devices to it. So, now Windows Rally provides the ability with tools to provide solutions to that problem. As you said, Windows Rally is a set of technologies to help you discover, configure, and coordinate devices attached to a Windows Vista network. These technologies include Plug and Play Extensions, Web Services for Devices, Link-Layer Topology discovery, and Windows Connect Now. What you should also know is, Windows Connect Now has recently been adopted as a configuration standard by the WiFi Alliance, which makes it an easy choice when you are building solutions.
So, let’s see this Windows Rally in action. I’m going to connect this Buffalo Wireless AirStation. All I do is connect my PC, open Network Center, and then what I’m going to do is add a device to the network. My PC searches for that device, looking for it, it’s going to take a little while, there it is. So my Buffalo Wireless AirStation is identified.
Windows Vista automatically sets up a secure wireless profile for my network. I can configure that, but today we’ll just go with the default. It asks for a PIN to authenticate my device, and that PIN is here on the device. So, I’ll just pop that in.
WILL POOLE: The PIN will make sure that you don’t connect to your neighbor’s device, and your neighbor doesn’t connect to your PC, right?
LORRIN MAUGHAN: Correct. The last thing you want to see is their content, and them seeing yours. All right, pick next, that’s going to configure the AirStation, and now we’re done. We just set up a secure wireless network in under two minutes.
WILL POOLE: I urge you to try that at home in under two minutes.
LORRIN MAUGHAN: Even my grandmother could do it.
WILL POOLE: That’s pretty easy.
LORRIN MAUGHAN: Okay. So, what we’re doing now is, we’ll add this, this is a Canon MTP/IP Prototype wireless digital camera. What we’ll do is, we’ll add this to the wireless network. Wireless cameras are pretty new, so they can be difficult to add to a network. What we’ll do here is, we’ll use Plug and Play Extensions to detect it, Windows Connect Now over MTP to configure it. So, I just plug it in, turn it on.
WILL POOLE: Now, you’re not trying to pull one over on the audience by using a wire there?
LORRIN MAUGHAN: No. You’ll see in a minute, we’ll go wireless in a second. Now that I’m connected, I’ll just confirm that that wireless network that I just set up is the one that I actually want to connect to. It’s going to transfer some settings to my device, and now we’re done. Let’s go no wire. So, I’m going to turn my camera into taking picture mode, take a quick picture of this little PC here, and then I’m going to synchronize my camera just by pressing a button and connecting it to the network. So, you’ll see that it’s actually connecting, you’ll see a little display that shows me that. My PC will detect it in just a second, here we go, and now we can see no wires, we’ve got our camera connected as if it’s a USB connection. We can actually go in there and see that photo that we just took.
Now, watch this. This is my favorite bit. Smile, Will. And there we have it, working just like it’s connected by a USB. (Applause.)
WILL POOLE: That could not be much easier.
LORRIN MAUGHAN: It couldn’t be any easier. So, Windows Rally is part of the Windows Hardware Logos Program, and what you will do is, it will help you build devices that connect seamlessly with Windows Vista PCs.
Let’s talk a little bit about some entertainment. All right, these days in the U.S. you can access premium high definition cable TV using actually this small cable card. And over the last couple of years, what we’ve been doing is working very hard to get the approval of the cable TV industry, and to build a secure video pipeline into Windows Vista. As a result of that, what we can do now is offer native support for cable card high definition premium programming with Windows Media Center, which is in our premium SKUs of Windows Vista. In fact, we believe that Windows Vista is the best platform for viewing HD content, and that’s because our premium content providers actually are now happy to provide content into that ecosystem.
So, let’s launch Windows Media Center.
WILL POOLE: You can get premium you can get high def content on Media Center today, that’s over the air, and it’s not premium.
LORRIN MAUGHAN: Correct.
WILL POOLE: So, the real innovation here is the connection with the cable card and premium.
LORRIN MAUGHAN: High definition premium cable content.
All right, so this is Windows Media Center in Windows Vista, where you can see that we have a great selection of movies now available to us as a result of this support for digital cable TV. What I can do now, it will take a little while, there we go, what I can do now is I can actually watch and record the latest movies from premium channels like HBO right onto my machine in high definition. Previous versions of Windows let you record standard def over the air, now I can watch and record the high definition.
Let’s go back and have a look at our recorded TV. Now, this TV I actually recorded directly through my Windows Vista PC using his ATI Open Cable Unidirectional Receiver.
WILL POOLE: OCUR.
LORRIN MAUGHAN: OCUR. And we’ve decrypted it using the cable card from my cable provider. Now, we’ll go and have a look at some specific HD content. This was provided to us by our friends at HDNet who produce and televise more original HD content in news, sports, and entertainment than any other network every week. So, you can see high definition content on my Windows Vista PC, pretty amazing.
WILL POOLE: It’s stunning.
LORRIN MAUGHAN: But the story doesn’t end there. Let’s take a walk over here. Now, what you’ll see here is the Windows Media Extender experience that will be available on devices when Windows Vista launches next year.
WILL POOLE: The experience looks pretty much the same.
LORRIN MAUGHAN: It looks pretty much the same, exactly. Now, for those of you who weren’t familiar with the Extender, it was introduced in 2004 as a standalone device. It’s now a technology built into every Xbox 360. So, what we see here is that same high definition content we were watching on the PC a minute ago, it’s playing securely in high definition over my home network. My equipment is dual band, that’s 2.4 and 5 gigahertz, and it qualifies for the Windows Vista Premium Logo for Devices. Now, over a million hours of extended usage have been logged today on Xbox 360s. People are really enjoying the fact that they can extend their Media Center experience around the home, and it’s not just the Xbox 360 that can do this. What you’ll be able to do is build Extender functionality into a whole range of devices, and these devices can also talk to Windows Media Player NSS, and even DLNA servers using software that we’ve licensed from Allegro Software.
WILL POOLE: So, we’re taking the innovation that we’ve put into Xbox 360, which grew out of last year’s standalone, and now we’re making it a component for anybody who wants to innovate in whatever scenario makes sense.
LORRIN MAUGHAN: Right. We’ve been working with several companies to have products available to for launch, and today we’re announcing the Media Center Extender Partner Program. What that program will do is, it will allow companies to have access to design information, documentation, and the necessary components to embed Extender functionality into devices like TVs, DVD players, set-top boxes, and digital media adapters.
WILL POOLE: Awesome.
LORRIN MAUGHAN: I’ve got one more thing to show you. This is actually a reference board from Sigma Designs running Media Center Extender. We’re not talking about future stuff, this is actually running today. In fact, one of the reasons that we believe that Windows Vista is the strongest platform for viewing high definition content.
WILL POOLE: Without a doubt.
LORRIN MAUGHAN: Now, while we’re talking about high definition, I’m sure you’re aware of the momentum that HD DVD has been gaining over the last few months.
WILL POOLE: It’s hard to miss it. I think maybe you’d have to be in the cosmetic industry or something not to be deep into the high def battles here.
LORRIN MAUGHAN: Exactly. For those of you who have been in the cosmetic industry, HD DVD is the next generation optical disk format of a superior quality, video quality, great interactivity, and features like managed copy which let you actually copy, which let you actually copy the movie onto your PC. It offers a cost-effective solution, because it uses really well-tested production processes, and some of our largest studios, like Warner Brothers, and Universal have over 20 titles in the market right now. They’re targeting about 200 by the end of the year. So, that’s an awful lot.
Now, we also have devices available in the market currently. We have consumer electronics devices, and even PCs like this Toshiba Qosmio. Let’s take a look at Warner’s latest HD DVD release of Phantom of the Opera. This is playing backstage for us on one of these Toshiba Qosmios, we have it muted for obvious reasons. Now, one of the best features about HD DVD is its interactivity. What we can do here is, we can browse themes in the movie while we’re still watching, so we’re not interrupting our viewing experience. The other thing that we can do is actually set bookmarks for our favorite scenes so that we can go back to them. And then, finally, we can access the latest trailers, and download additional features at any time. So, we’re looking at basically shipping titles, all of our shipping titles currently are using the VC-1 video format, recently standardized, and what that does is allows for great quality and compression, so you’re looking at being able to have room for all those additional extras.
WILL POOLE: And compatibility with the PC ecosystem.
LORRIN MAUGHAN: Absolutely.
WILL POOLE: I think anybody that uses one of these new disks with the interactivity features is going to be pretty unhappy when they go back to a conventional DVD.
LORRIN MAUGHAN: Exactly.
WILL POOLE: It’s really a great experience.
LORRIN MAUGHAN: You just can’t do any of this on the traditional DVD format.
So, I’m very excited about what HD DVD is doing right now, but when we look at what’s coming in the future, we can really work with our partners to make sure that HD DVD’s playback is an integral part of the PC consumer experience.
I’ve got one more thing for you. In the PC industry, where you know that gaming has been driving innovation in graphics fidelity and systems performance, so since we introduced DirectX with Windows 95, we’ve had additional updates, we’re expecting that DirectX 10 in Windows Vista will continue that trend in innovation. So, what I’m going to show you now, and I’m very excited about this, is a montage of games for Windows that debuted recently at E3. Several of these use DirectX 10 to deliver unprecedented quality and realism in graphics and game play. Some of them are actually available now. Some will be shipping shortly, and even more with the release of Windows Vista. Take a look.
Very cool. So, what we’re going to also see, just finally, to show you the power of DirectX 10, you’re probably pretty familiar with this desktop background, the picture that we took in Glacier Park.
WILL POOLE: And if you’re not familiar with it yet, you will be soon, because it’s in Windows Vista Beta 2.
LORRIN MAUGHAN: Exactly. Now, this is that same terrain rendered in DirectX 9 in Flight Sim. It’s looking pretty good.
WILL POOLE: Not bad.
LORRIN MAUGHAN: Okay. Well, this is an artist’s concept rendering of what we believe the same thing will look like in DirectX 10 in Flight Sim using the appropriate hardware of course.
WILL POOLE: Pretty darned close to the original.
LORRIN MAUGHAN: Amazing. DirectX 9, our prediction of what DirectX 10 will be able to do.
WILL POOLE: All right.
LORRIN MAUGHAN: Windows Vista is a world class gaming platform. I mean, you only have to look at this sort of thing to see why.
WILL POOLE: Very nice. All right.
LORRIN MAUGHAN: Thanks.
WILL POOLE: Thank you very much. (Applause.)
I would like to change gears now and talk about what we’re doing to help drive vitality in the PC ecosystem between now and our Windows Vista consumer launch in January. First of all, you know that we’re intensely focused on shipping the highest quality operating system we ever have. We have had continuous improvements in our engineering process, and how we interact with the community, and delivering community tech previews on a frequent basis to get feedback, and we’ve been making these security investments in the underlying system, and the software development lifecycle, and penetration testing, and all the things that we’ve learned over the past five years, we’ve continued to apply these investments to drive quality as high as we can possibly make it.
We also are working to build customer demand for Windows Vista when it ships. Now, to think about the opportunity for upgrading a PC with an operating system, maybe with some new devices that hang off of it, you should assume that there’s going to be on the order of 200 million upgradeable PCs when Windows Vista ships. And there will be then about 500 million new PCs sold over the two years following Windows Vista shipment. So, that’s a huge opportunity to deliver value to customers that have PCs that are young enough, and new enough, and capable enough to run Windows Vista, and to get the new devices that you guys are all building.
We’ve also been working with our business customers. We have over 500 customers who are working, using Windows Vista in our Technology Adoption Program, they represent about 8 million desktops. So, we’re really making sure that we get the feedback from these guys, they’re using it in production, and we can drive quality into the system.
We’re continuing to have scenario-based platform investment and campaigns. You’ve seen in this in some of the features we’ve shown you. We try to make sure that everything we do in the OS is grounded upon solving a problem for a customer, that it delivers for them in a scenario that’s important to them, and where we can, combined with you, sell the solutions that deliver to their needs. You also see us do scenario-based campaigns. Our marketing is going to be focused on these areas to make sure that we can drive better device attach, and hardware attach, so the overall system is more sophisticated and capable for the user.
Finally, we’re investing in our Logo Program to make sure that we can increase the awareness of the innovations in devices and things that sit around the PC, and to create demand in particular for premium devices that help deliver on some of these key scenarios.
So, let me give you a look at what our road map looks like here in what we call Getting Ready. So, just last week, we launched our Get Ready Web site, and this is a program working in conjunction with the industry to just get the messages out to customers very clearly, and broadly. And the simple message to consumers, or to business customers, is that if you’re going to buy a PC before the Windows Vista launch, make sure it’s capable. That’s the baseline message, that’s what we want people to start looking at. So, PCs with the Windows Vista Capable logo can run the core experiences of Windows Vista. PCs that are Windows Vista Premium Ready are going to get access to the additional experiences, like Windows Vista Arrow, and we have a tool up on that Web site called the Windows Vista Upgrade Advisor, it’s in beta now, we have it out earlier than we ever have before, and that’s going to help anybody easily and quickly determine if their PC can upgrade to Windows Vista, and what set of experiences will be possible for them based on the hardware they have.
Now, the next thing we’re doing is to get our customer program going for Windows Vista Beta 2, the preview program, and that’s going to happen in the next couple of weeks. We’re going to make it broadly available. You guys are all going to get it tomorrow, but it will be available to others, consumers, and others in the industry quite quickly. We’re also working with the Application Compatibility Toolkit. We got feedback that last time we didn’t get this out fast enough with Windows XP SP2. For the first time now, we have this out early, and we’re enabling you to run this and test product without even running Windows Vista. So, the Compatibility Toolkit Version 5 is going to need people to monitor using Windows 2000, or Windows XP, monitor their applications and see how well they will work on Windows Vista.
And then we look at getting the product business availability in November, as we’ve said previously. Obviously, it still depends on us getting great feedback from Beta 2. We’re expecting it to be good, but we’re going to have checkpoints along the way. We’re getting our logo programs out the door. And these logo programs I’ll talk about in more detail in a moment, are very imp for us to work with you to help communicate for customers what they’re going to get in the various Windows Vista experiences.
And, finally, consumer availability targeted still at January 2007.
So, let me talk about the logo program some more. I’m specifically talking about devices that attach to the PC. And the baseline is the Works With logo program, the gray logo that you see there on the slide. And this is really an evolution of the Designed for Windows XP logo. It’s going to increase customer confidence in compatibility, and tell them that they’re going to get the baseline experience. And we’re going to make it very clear to customers that if they buy software or hardware prior to launch, to make sure that they are at least a Works With capable device.
The next is the Certified Program, and this is really where we’re putting a lot of our weight behind. For the Certified for Windows Vista is going to be talking about premium devices that are going to align with the key scenarios, some of which we’ve shown you here today. And it’s going to be the customer assurance of quality. It’s going to get more differentiation on the quality and the experience that they get. It’s going to be visually differentiated as you can see in the logo, and it’s going to make it easier for people to match up that logo with the Windows PC logos, and get the right device to go with the experience that they want.
For you, it’s going to create the ability for you to upsell from your basic product up to a premium product. It’s going to create a refresh opportunity to tell somebody to go and get a device with this new premium logo. And it’s clearly differentiated from the basic Works With capabilities. Both of these logos will be available this Holiday 2006.
Finally, I want to point out Windows Marketplace. Windows Marketplace, we’ve had it out for about two years now, and it continues to grow month over month. We’ve been refreshing it. We’ve had a number of great releases recently, and if you’re not already listing your product in Windows Marketplace, I encourage you to do so, and you should assume that we will continue to invest in this and make it as a way for you to connect with customers, millions of customers, and we’re going to put special priority on Certified products. So, we’re going to make sure that we highlight those in the scenarios on Windows Marketplace.
So, the third part of my presentation, I would like to talk about some innovative new business models. Now, we as an industry have been working in emerging markets for quite some time. And I think that if you look out broadly, what you see is that we’ve done a really good job serving people in the emerging markets who are pretty similar to people in developed markets. And we’ve had excellent growth year over year. It’s been a great place for many people to extend their businesses and drive new volume and new revenues, but there are hundreds of millions of families in the emerging markets who have modest incomes, maybe more importantly, they have unpredictable or variable incomes. And they do not have access to consumer credit, or even if they did have access to consumer credit, they wouldn’t necessarily want to commit to a fixed monthly payment. So, it’s these customers that we’re looking to help address with our new efforts around FlexGo. Now, to give you some dimensions here, if you look in the developed markets, you see between 50 and 85 percent PC household penetration. If you look in the emerging markets, and you see only about 6 percent. And yet, at the same time, among consumers, or people in the emerging markets, you see a huge penetration of cell phones, 27 percent according to Merrill Lynch. That’s a big discrepancy there between people with cell phones who are adopting technology, and people who have PCs in their homes.
And the other thing you find out is those cell phones are powered by the business model called prepaid, or pay-as-you-go. And, if you look worldwide, you find out that about 70 percent of mobile phones in the emerging markets use a prepaid card like this, you scratch off the back, or peel off the back, you type in the number, and that’s how you get access to your phone. This is a very familiar model. It’s not only used for cell phones, it’s also used for ISPs, dial-up access in many places, and there are many different scenarios in which consumers think about prepaid as a very viable way for them to control their expenses, and get access to something that they want.
So, the simple observation here is, why don’t we combine the business model that has been pioneered and proven with a billion customers in cell phones for pay-as-you-go with the business model of the PC. And that’s really what the opportunity that we’re going after with our industry partners in Microsoft FlexGo. So, yesterday we made this announcement, we teamed up with a number of leaders in the industry. We’re very pleased with the participation that we’ve had, and we’re exceptionally pleased with the feedback we’re getting from customers, and you saw in the video that Bill showed that our initial trials are proving to deliver a value that these consumers otherwise simply wouldn’t get. They’re very excited about it.
So, taking this technology, and making it available in two different models. We can make it available as a very convenient subscription computing model, simply bundled with broadband or dial-up access from a telco. We can also make available with a flexible, pay-as-you-go model like the cell phone. I’ll spend most of my time talking about that today.
Here’s how it works, and it’s pretty straightforward. The customer walks into a retail store, and they’re going to go and buy a full-featured PC. They might only play about half price. In the case of our trial in Brazil, we had about a $600 PC that was purchased for $250 or $300, and they walk home with that PC. It’s now in their home, it’s their PC.
And then, they use a prepaid card to pay the balance of the difference between the price that they paid when they walked out of the store, and the value of that PC. And when I say PC, I mean PC plus applications, and peripherals, and whatever is with it, they use those prepaid cards to pay it off over time on the budget, on the schedule that works for them. Once they’ve used a certain number of hours, that number could be four, six, 800 hours of time, then that card is no longer required, and the PC is paid off.
So, let me explain how the ecosystem works here, because it’s somewhat more sophisticated than many of the ecosystems that we’ve had to put together before. We, of course, begin with CPUs and chipsets. And we’re very pleased again to be working here with AMD, Intel and Transmeta to really innovate deeply in the hardware and get the FlexGo technology implemented in their silicon. We then take this out to the system units. We take it out to the system board. We work with the BIOS manufacturers. We’ll work with other people who make components to go around the PCs, and we build these things into PCs through OEMs and Lenovo, again, is our launch partner with Flex Go and we’re very pleased to be working with them to help drive some of our first trials in China and India.
Windows is enhanced with FlexGo to support the underlying security technology, and you can also add applications from third parties, from Microsoft, from whoever you want to that package, and take it out to retail. We have a number of retail partners, again, in the trial locations around the world. We also have telco partners who are doing the subscription-oriented sales, selling it as a bundle with broadband.
Here’s the new addition to our ecosystem, which is absolutely critical to make the FlexGo business model work, is we partnered with leaders in consumer finance, ICICI in India, HSBC in Brazil, International Finance Corporation, and these guys are helping to underwrite the risk of the PC, so that people can then purchase those PCs at the discounted price, and pay for it with a card over time.
It’s really the combination of this integrated hardware/software and Web services put together that secures the PC asset, and enables these hundreds of millions of customers to get access to something they otherwise simply could not get. That really is our vision, is to use this technology to bring the PCs within reach of people in the emerging markets, who otherwise could not get access to it. We expect them to use it for education, for communication, entertainment, and productivity. These are all things that are, again, out of their reach.
FlexGo will be a growth catalyst. Wherever you are in the ecosystem FlexGo is going to enable us to reach these new customers and to supply software services, and devices to them. And we’re looking forward to working with many of you to help make this FlexGo business model a reality as we scale it over the next couple of years, and we expect that every major OEM is going to be building PCs, and make them available to PC users in these emerging markets.
So I’d like to close and talk a little bit about the industry opportunity we’ve seen here today. Windows Vista is clearly delivering for business users, raising user productivity and lowering IT costs. For mobile users it’s enabling people to be the most more effective in more places, and for consumers it’s bringing the dream of advanced digital media and whole home entertainment to them.
Our investments in the PC ecosystem will ensure that all of our partners continue to thrive over the next few holidays, and continue to see Windows as a basis for ongoing innovation. And our work together with the industry, and the FlexGo technologies I believe will give us the opportunity to profitably together serve hundreds of millions of families in these emerging markets.
I think the next step for you in this audience, first, embrace the opportunity to differentiate with the wealth of innovation that Windows Vista is delivering. You’ve seen some of it here today, there’s piles more of it. Now is the time to get in there and understand it, and make it happen. The next is to get ready for Windows Vista. Install Beta 2, get personal experience with it as soon as you get it home. Take it to your office and make sure that you know how it works, what it can do with your product and your company. Begin application device testing immediately. It’s ready, now is the time. Give us feedback, and make sure that you can differentiate with a Certified for Windows Vista logo.
Finally, I think you’ll appreciate that the opportunity in the emerging markets is large enough to make it worth it now for you to begin to integrate this opportunity provided with Microsoft FlexGo technology into your three-year plan for your products and services, to ensure that you can take advantage of that market as it grows.
Thank you very much. (Applause.)