Remarks by Allison Watson, Corporate Vice President, Worldwide Partners Group; Stephen Elop, President, Microsoft Business Division; Bill Buxton, Principal Researcher; and Kevin Turner, Chief Operating Officer
Worldwide Partner Conference 2009
New Orleans, La.
July 15, 2009
ANNOUNCER: Ladies and gentlemen, please welcome Microsoft's Corporate Vice President Worldwide Partner Group Allison Watson.
ALLISON WATSON: Good morning, partners. Wow, Clarence, Playing For Change, again you amaze us. It was fantastic to get to watch it from the audience. Thank you so much. (Applause.)
I love the theme this morning. Many of you asked about how you can get more information about Playing For Change, people have been wanting to buy their CDs. We have them available for sale. You can see the Web site here listed, and they're going to join us again tomorrow night at the jazz festival. I'll all be looking forward to hearing some more of this fantastic and inspirational group of dance people.
All right. So, partnership is the theme of our events this week. And I've had a lot of questions since we announced the new Microsoft Partner Network on Monday. People said, what does it take to be the best? How are we going to be advanced partners? What's the recognition that we need to do? So, I thought I'd put together a list of what I think makes the most successful Microsoft Partners. Here are the characteristics that you see our most successful partners deploy and adopt our products and our technologies as early as they come out. So, we've asked this week for you to get on Windows 7, the Community Technology Preview for Office 2010, spend some time with Exchange before it gets here, and help us make the products better so that you can be ready when we we're ready to go to market for our customers.
You leverage the partners network resources to drive business growth, because we know if you leverage those our statistics tell us you'll be faster, better, more capable, and more profitable in your business. You differentiate yourself, and you influence customers with solutions built on the entire Microsoft stack. You won't accept competition. You won't accept VMware selling their virtualization story for us. You drive share by taking it from Microsoft's competitors. And you'll hear the focus that we're going to ask you for later today.
If there's another partner, even if they're a partner from Microsoft that's been there offering a competitive solution, we're going to stand behind those partners that are going after the Microsoft solutions even in that same customer opportunity. It's important that our partners partner with each other, because we know that drives up the benefit for the customer and our partners.
Steve mentioned yesterday, but it couldn't be more carefully true. It's excellence and customer satisfaction. And I get a lot of questions. Allison, what does excellence mean? Well, excellence means excellence, and your customers will tell you if you're being excellent enough for them. And then, finally, the most important thing partners do for me personally and my team, and this conference is just the beginning every year, is constantly challenging us to make us better in the marketplace, because we can only be successful if you're successful, and it's your voice that make us better and better.
So let me give you that overview as the criteria for our most successful partners as you think about your journey for the rest of this conference, and into planning for your next fiscal year.
Now, I wanted to update you on a schedule change for today, as many of you may have heard we had invited and had planned to have Jack Welch here with us today, and we had some unfortunate news about a week ago that he had a serious fall and had a back injury. So, he had to cancel his appointment with us today. We did update you on Digital WPC, but I wanted to make sure you were aware that he will not be joining us this morning.
And at this point I want to get on with the show, and we're going to start out with what I find to be one of my favorite segments of the whole week is the A List.
So I'm still here. I didn't go anywhere. But, the first segment – that was just a splash screen so we can get the A List thing going. So, the first segment on the A List today is all about the Imagine Cup, and I told you last year as we came out of the award winners from Paris and we showed you a video in Houston of how important the Imagine Cup is, well over 300,000 students have participated bringing their ideas to life for participation in Microsoft's Imagine Cup in 149 countries around the world. This year we had winners from all over, and last week the finals were in Egypt.
Well, in addition to the Imagine Cup, where we spark student's interest in our technology, we took it one step further based on feedback from you by starting a Students to Business program. In the Students to Business program we invite partners who are interested in building their talent pool with great and imaginative students into positions. And so this year we had over 3,000 partners offer jobs up to our Students to Business community, and we had over 10,000 applications, and as best as we can tell 5,000 of our students in Students to Business were hired by partners around the world.
So we have some amazing people on site with us talking to us but their experience with Imagine Cup. Let's see what they are – some of their ideas are.
So I had the opportunity to bring our fabulous students on stage. So, we've got some pretty amazing stories here, so Dara from Ireland had success as a finalist in our Irish Imagine Cup. And since then was contacted by several firms, and is being heavily pursued by several VCs for his business idea. So, it's fantastic to see that kind of energy.
Mahay, which is also Michael, is that right, from Romania was a finalist in the Romanian competition and has some interesting ideas for changing how we do education in the world today.
Let's see, we come over to our first, and I'm so proud of you, all female team as Imagine Cup winners in the United States. Congratulations. (Applause.) And Ed and I were just chatting. So, Ed has already been hired. She's going to start as a software engineer working for Lockheed Martin. So, congratulations and we know you'll do a great job. (Applause.) And Ashley is also working, and these guys were interested in how – all of these folks especially were interested in the mobility field, and how mobility could be used to integrate with technology to make a real difference. So, it's fantastic to see. It certainly represents, I think, how we all feel about the interest in mobility.
So congratulations for all of you. We hope you have wonderfully long and successful careers. We'll invite you on stage for many years to come, and you can grow old with all of us. So, thank you so much. (Applause.)
All right. Well, speaking of mobility, we have some exciting things going on. Todd, what's going on in the world of Windows Mobile? We haven't talked about it much at the conference on stage this week. I thought we had some things that were too good to not get out here to this audience. So, what's going on?
TODD BRIX: Absolutely. Earlier this week, actually just yesterday, we announced a number of very new, exciting developments for Windows Marketplace, which will be our on-device, preinstalled application marketplace for users to discover and download applications conveniently. What we specifically announced is that we're opening application submissions for global submission of applications to the marketplace July 27th. And we're not only making that available, Windows Marketplace available on Windows Mobile 6.5, but also for over 30 million Windows Mobile 6.0 and 6.1 devices that are already in market, making Marketplace accessible for millions of customers.
ALLISON WATSON: So let me stop right there, because I've gotten tons of questions this week all about, when is Microsoft going to be in the marketplace, how are you going to get it so you can try and buy and download? How do we do something beyond Pinpoint? And we've got it here already. So, let's announce what's going on specifically with our Mobile Marketplace, because there's a call to action for everyone in the business today that's out there in the audience.
TODD BRIX: That's right. Today I'm going to show Marketplace, it's an opportunity for the over 3 million developers that have downloaded our Windows Mobile SDK to not only take their existing apps, but develop new, exciting apps and make them available for the Windows Marketplace. Perhaps I could show you what the user experience would look like.
ALLISON WATSON: Let's see it.
TODD BRIX: All right. So, preinstalled with every Windows Mobile 6.5 device we'll include the Marketplace. We kind of call it the blue bag. So, you simply just launch the application, you see a number of different ways that you would expect to discover lots of applications, Showcase, Most Popular, and Search. But, one of the great things that we've done in the Marketplace is to provide a convenient way to categorize applications for users to conveniently find the applications that they want to purchase and download conveniently.
One of the key categories that we also announced, which is a new development for Windows Marketplace, is the Business Center. The Business Center will be a premium destination site for business professionals, and business owners to find business applications for their small, medium, and even enterprise type of business, based on a wide variety of categorizations across horizontal, as well as vertical industries. So, you can see a wide variety of application categories that we have across finance, healthcare, manufacturing, et cetera.
ALLISON WATSON: I know quite a few partners out there have specialized applications in these areas. Now, you mentioned – so, July 27 is an important date. And you said partners can participate. Tell us how partners who already have existing mobile applications, or are working on them live in their home offices now, what do we need to get them to do on July 27th?
TODD BRIX: On July 27th you go to Developer.WindowsMobile.com, and we have a simple step process for you to upload a cab that you have. That might be a .NET Compact Framework application. It might be a native Win32-based application, or even with Windows Mobile 6.5 we're supporting widgets as well as application types. All three of those application types then can be uploaded into the server. Then we go through a brief certification process, and when we open the Marketplace for consumer use later this fall all those applications will show up and be available globally.
ALLISON WATSON: OK. So, a couple of important questions, first of all, what's the business model for the partners on this?
TODD BRIX: The business model is very straightforward. It's based on transparency and trust. Partners receive 70 percent of net sales of every application that gets sold. And that's paid out to you on a monthly basis, on a predictable schedule, right into your bank account anywhere in the world.
ALLISON WATSON: Fantastic. All right, so what else do we have on this great device? (Applause.)
TODD BRIX: Well, Microsoft has a strong reputation for lots of enterprise and business-grade applications, but we're also making Windows Mobile more accessible for consumer use, as well. So, a typical user of the Windows phone coming this fall they'll see a wide variety of consumer applications, as well as business. In fact, I understand that you have a son that may not be quite up for an ERP application.
ALLISON WATSON: That's right, he's kind of a gamer at 11.
TODD BRIX: Really, OK. Well, maybe we can check out then what games are available, for example. So, we have a wide variety of different kinds of games that will be available for user purchase or download, both free and paid for. But, let's see if we have any action type of games. Here's an interesting application from EA called SPORE Origins.
So every application that you select that's in the marketplace they'll usually have a lot of information to help describe the application, get a feel for it. It includes screen shots, and to be able to navigate that way. And if they want to download it all you do is hit the download button, and then this is a live sever that we're pinging against right now to go against, and to authorize a credit card purchase. So, we support not only credit card purchases, but mo-billing, as well, which are two of the most convenient ways for users to actually purchase applications across the board.
ALLISON WATSON: OK. So, you mentioned this is available for Windows 6.5, but then you mentioned 30 million users of 6.0 and 6.1. So, how are we the consumer who are using these mobile phones going to get that little blue briefcase thing on our phone?
TODD BRIX: Right, so for customers that already have 6.0 and 6.1-based devices, what they'll be able to do is go to our Microsoft.com Web site, and be able to download the Marketplace application, essentially, onto their devices and get all the full capabilities I'm demonstrating here for Windows Mobile 6.5. And we'll also work with our OEM and mobile operator partners to pre-install Marketplace or make it available for download through those distribution channels, as well. So, it will be broadly available across the world.
ALLISON WATSON: Fantastic. Well, it's amazing. I didn't think our partners would be excited to see this first foray. They're excited to see us competing, and going really after how Apple has done a really good job of pulling their marketplace together. Our model is better. It's a better partner opportunity for our partners, and with 30 million installed-base units, plus all the new ones we expect to sell, there's an incredible opportunity to really participate in building this mobile marketplace together.
TODD BRIX: Absolutely.
ALLISON WATSON: Thanks, Todd.
TODD BRIX: Thank you.
ALLISON WATSON: All right. Next on the A List, I have the opportunity inside Microsoft to look at all of the R&D innovation that's pretty far out. And one of the things that I've been looking at for the last couple of years is the innovation that Microsoft is driving directly in healthcare. And you take what we're doing, what we believe to be important in the healthcare industry and take over the innovation that we're driving with our computing technologies, such as the Microsoft Service Unit you see sitting here, and what we've seen in the last two years is some significant innovation that's come from the healthcare field and our technology field.
And two years ago at the A List we launched the Microsoft Surface, we announced the Microsoft Partner Program for Surface. We encouraged partners to invest early and get excited with us. And I'm pleased to have the team from Infusion with us on stage today to show you a little bit about the exciting innovation that we're doing, combined with Microsoft Surface and our healthcare products, and great partnering applications. So, welcome.
GREG: Well, thanks, great to be here.
ALLISON WATSON: How's it going?
GREG: Pretty good.
ALLISON WATSON: What do you have?
GREG: Well, here's what I've got. We are going to use the Microsoft Surface, that magical device, and we're going to have an experience that can only be done on a Surface, that improves the way that doctors and patients work together. Something that pulls through the Microsoft technology stack, Surface provides the presentation layer, and actually doctors tell us, who we've worked with, that this is a phenomenal up-tick in their ability to educate patients. Are you ready for this journey?
ALLISON WATSON: I'm ready. I'm ready to go. Healthcare is always interesting.
GREG: Well, we're going to play doctor. I hope our relationship is ready to do that. To make things more interesting you will be playing the role
ALLISON WATSON: I didn't get the joke.
GREG: It will hit you later. You're going to be playing the part of Alexander.
ALLISON WATSON: OK, at least I'm a male.
GREG: OK, yes, you're male. And also the thing about Alexander is you also have Type-1 diabetes, and you came to New Orleans, and you had shortness of breath, you felt some palpitations, you checked yourself in and I am your doctor, and we're going to go through your records.
ALLISON WATSON: Excellent.
GREG: So, we're using an application called Amalga, which is what hospitals will use and do use, Microsoft products are linking all their EMR, electronic medical records, systems together. You have something called HealthVault.
ALLISON WATSON: OK.
GREG: So let's take our cards and place them thusly. And through the magic of Surface and Amalga, I get to be the doctor, you get to be the patient.
ALLISON WATSON: Excellent.
GREG: Now, I want you to notice – yes, feel free. (Applause.) And if you order now, you will also – so, now you are green and I am blue. And green, you see that you have HealthVault there.
ALLISON WATSON: Yes.
GREG: That's your own personal HealthVault. You can access it on the Web, mobile phone, whatever it is that you want to do.
ALLISON WATSON: I see. That's important, because Microsoft in this market Amalga is the healthcare provider platform, and Microsoft HealthVault is the individual platform that Microsoft is offering out as extensible platforms for partners to build on.
GREG: That's exactly right. So, let's go through your history, Alexander. The first thing is, first we'll give you the traditional X-Ray. You look at your X-Ray here, and it looks like a good pair of lungs.
ALLISON WATSON: I've been working hard to keep those lungs in shape.
GREG: I'm sure your VO2 was awesome. But they're a little over-inflated. Do you know what that means? It means that they've got some early stage emphysema.
ALLISON WATSON: I must have been smoking.
GREG: Yes, you must have been smoking. So, here's what I'm going to do. I want you to go to your primary care physician, and I want you to show them this. I also want you to note, do you see all this green and blue?
ALLISON WATSON: Yes.
GREG: That indicates this is a record that's viewable by you and who you choose to make it available to, and the blue indicates it's also available to me. So, you always know where your data is.
Let's take a look at your EKG. Oh, my, yes, there's that old heart attack there. But that's OK…
ALLISON WATSON: So, working out isn't doing me much good.
GREG: Working out is keeping you alive, Alexander. What else do we have here? We also have, one of the things we always like to do is, we wanted to do a CT scan and make sure, because you had complained of some palpitations, I want to make sure that there's no obstructions or anything. It's pretty good. We can adjust the frame rate a little bit. We'll stop it, can you see that? I'm just kidding. There's nothing there.
ALLISON WATSON: OK, very good. (Applause.)
GREG: Also, I want you to go to your primary care physician there. And a little bit later what we're probably going to do is, I do want to sort of – what we're really looking for is your circulatory system here to make sure there's no blockages, that you're good, that you're pretty healthy.
ALLISON WATSON: Those veins and arteries are looking colorful.
GREG: Red and blue, the way they like to see it.
ALLISON WATSON: OK.
GREG: Here's an interesting part. We looked at factors, and one of the things we discovered was that folks don't always remember what kind of medications that they're taking. In fact, you, when you checked in, you said I don't remember what sort of medications. Here's what I would like to do, let's look at them visually, and you tell me if any of these medications stand out. That looks familiar to you. Any of these things you're taking daily, you can be honest with me.
ALLISON WATSON: Yes, I think I'm a purple pill girl.
GREG: You're a purple pill girl. Well, you know what we're going to do, we're going put them here, and you can make this available to a local pharmacy in New Orleans to get these prescriptions. But I'm going to make this recommendation, and put all these things here. The one thing that you do is, you do of course have Type 1 diabetes, and I hate to tell you, but I just don't think that you're really doing everything to keep that in check. So, we have a little education session. You notice over here you also have a parallel of all of the categories where you'll store all your data. So, under education what I would like to do, let's take a look here, and this is just a little chunk that we have here. I would like you to take this home to read it, to study it, and work with it, and I want you to keep your condition under check, and I want you to look for your primary care physician. Will you do that for me, Alexander?
ALLISON WATSON: Yes. What makes such a huge difference, because normally when I go to the doctor, if there's something going on, I can't even remember what they're telling me much less trying remember what I'm supposed to do when I get home. So, I'm glad to see that it's all going to be put in my vault.
GREG: And it doesn't end here, Alexander.
ALLISON WATSON: OK.
GREG: You can take your blood glucose monitor home, and you are going to have to hook up the data to your HealthVault account through the Web.
ALLISON WATSON: OK.
GREG: Pretty cool. You can cross check your medications with other medications you're taking, it's a complete solution.
ALLISON WATSON: Fantastic. So, now I'm going to go home and I'm going to visit my primary care physician. Show me what's in my vault.
GREG: OK. Everything that we have here is up here, and all by the category. So, here are the images I was showing you. Here are the medications that we discussed. And here's the education that I need you to study up on and do a little bit of homework.
ALLISON WATSON: Excellent. So, it goes with me everywhere I go. Fantastic.
GREG: Indeed, it does.
ALLISON WATSON: So, one of the big things we wanted to do here today was encourage partner to partner networking, and now that I know we have this great application available from a great partner, how could I get your information so that we can connect back together over time?
GREG: Well, through the magic of our connections cards, which all of you folks ought to have…
ALLISON WATSON: Does everyone have one of these yet? Has everyone been to the expo and gotten a connections card? All right. If you haven't, I encourage you to go and get one today. It's pretty interesting to see what we can do.
GREG: So, are you ready?
ALLISON WATSON: Yes. I'm so glad I'm Allison again.
GREG: My card, madam.
ALLISON WATSON: OK, my card is through.
GREG: Let me make sure you're really there. All right. There we go.
ALLISON WATSON: Got you there as well. All right, Greg. Thank you so much, and let's have a fantastic opportunity together on this new application. (Applause.)
All right. Next on the A List we wanted to spend a little bit more time talking about how we save customers money in the area of Online Communications Server. So, Eric, what do we have going on here today with OCS?
ERIC: What we're going to show is how software innovation can not only improve communications, but radically reduce cost versus the proprietary solutions that are commonly available today.
ALLISON WATSON: OK, let's get to it. It looks kind of like instant messenger to me.
ERIC: Right. So, we've seen this before. Albert is available, so we'll start a conversation with him. And because we can go right to a phone call, see he says good morning in his native Dutch, we'll simply click, it's going to ring him, and he'll come into the voice conversation.
Now, we done a lot of investments in Communicator to ensure that the audio quality is optimized whether you're on the LAN or whether you're calling in from your hotel. Let's say hello to Albert.
Albert, how are things going?
ALBERT: Hey, Eric. WPC rocks.
ERIC: Of course it does. Well, as we've mentioned before, those investments in audio quality and adaptability to different network conditions are also being applied to video. So, by adding video into the conversation with a single click, we can go into just a very simple video conversation with a Web-cam level quality, and Albert not only sounding good, but looking good.
ALBERT: I shaved just for this occasion, my friend.
ALLISON WATSON: And this is all just with this little camera, does he have one those same cameras over there?
ERIC: Yes. In fact, he has a Tandberg camera that we'll talk about in just a moment because a standard Web camera experience can't quite pick up all the subtleties of facial expression. So, we can go to VGA-level quality right form a standard PC, standard network, without any of the proprietary dedicated connections. So, let me go to that. Let me just expand Albert out here to a larger size, and the Codec will resolve, and we'll get a better, clearer look at his face there. So, we can see everything from winks and subtleties, and actually have a conversation. In fact, I think, Albert, we could probably do a lot of our one-on-one meetings this way, right?
ALBERT: Yes, Flying Dutchman no more, Eric. My frequent flyer days are over. We do everything via Communicator nowadays.
ALLISON WATSON: Well, Albert, the good news is that you can stay home and exercise more, so you can stay in shape for your Microsoft HealthVault.
ERIC: It's also great for the CFO, right, because we have been able at Microsoft to radically reduce our travel by utilizing these tools. But, as we see, in terms of innovation, HD video is becoming more and more common. And we see very expensive capabilities that are out there today, because people want to see that kind of quality.
ALLISON WATSON: Are you talking about like Cisco Telepresence, or those other competitive things that are out there in the market?
ERIC: Exactly. Now, in a room-based system where you can go and have that full experience, that might be great. But what about people that are working from home, or working from an office environment, and they need it right on their desktop? Well, Communicator now supports high definition. So, by simply going to full screen, I can now get a 720p high resolution image.
In fact, can you tell us a little bit about the camera you're using, Albert?
ALBERT: Yes. So, partners are really with us on this one, because we want to drive down costs. This is a Tandberg Precision HD USB cam, and it's actually providing this full fidelity 1280x720 pixel resolution. So, that's really awesome.
ERIC: Yes, and it's projecting that at 30 frames per second. Right over, again, a standard Internet connection added onto your phone call along with all the other capabilities provides that rich experience, and in the end cost savings that you can actually see.
ALLISON WATSON: Yes. Well, I know we've been talking this week all about saving customers money. And in this particular space, it is such a fast way to take 30 percent on average out of the cost of meeting and travel and phone connections for our customers. So, in my opinion, this is something there isn't anyone in the room that shouldn't be taking advantage, not only of where we are today, but where we're going, you can see these kinds of advances. I thought it was interesting, we looked inside Microsoft, and in Microsoft in May alone we saved $300,000 on our telephone expenses just by moving to this kind of solution. So, with those kinds of savings, we have lots of conversations to have with customers.
ERIC: And many more to come. Thank you.
ALLISON WATSON: Eric, thank you so much. (Applause.)
All right. So, next on the A List, I've invited Stephen Elop back to the stage this morning, because in addition to all the innovation we're bringing out in the productivity platform that we're launching with 2010, we have a very strong vision that's backed up by our R&D team on where we're headed. And so we have some exciting visions about the future of productivity, and I thought it would be great if Stephen could give you those in his own words.
STEPHEN ELOP: Good morning again. (Applause.) Thanks, Allison.
Now, as you've seen throughout this entire conference, there is so much great innovation available for you and your customers today through solutions based on SharePoint, Unified Communications, Dynamics, Microsoft Online Services, and so many others, we have a tremendous opportunity to improve the productivity of customers we serve, and of course to help them save money.
In the next 12 months as well, we're going to see so much more. You've seen it a lot at this conference, Windows Azure Services, Windows 7, of course Office 2010. So, let me be clear, I don't want there to be any distractions from the work that we have to do today delivering to our customers today's innovation, and certainly preparing for the future, those are our top priorities.
However, at the same time, we are excited to lead the industry forward long, long into the future, drawing on ideas from Microsoft Research, Office Labs, product teams, and other groups across Microsoft, we are steadily working to build a long-term vision for business productivity. This vision for us serves somewhat as the North Star, guiding our product planning process. I find the best way to articulate this is to immerse ourselves in this vision, to actually dig into it, look at it, and experience it, and imagine what our world could look like some number of years from now.
So, we're going to show you a video, some of you may have already seen this, but it's a video that gives us a bit of a glimpse into the future. I've worked with it dozens of times, and I still see new sources of inspiration every time I look at it. So, one warning, this video every single frame is based on something we're working on somewhere within Microsoft today. We believe that everything you see here someday might be possible with one notable exception, and I challenge the audience to identify that one thing that we think will never happen in this vision.
Let's take a look at the video.
(Video segment and applause.)
ALLISON WATSON: Fantastic, so do we get a guest? How are we going to do the game…
STEPHEN ELOP: OK. I don't have any formal game. Any guesses, just yell it out, with all of the power of our partner community, and the depth of resources of the might Microsoft, what is the one thing that will never be able to be delivered by all of us? Did you say something about the aircraft? You're right. Leg room in the aircraft, no amount of technology is going to solve that problem as all of us in this room understand, absolutely.
Let me spend a few minutes, just a minute or two introducing you to some of the pillars that support that vision, because it's not meant just to be an interesting thing to watch, but indeed it's intended to guide our future development. There are three pillars. The first pillar is about delivering seamless and secure connections across people, information, and process. We envision a future where all information will be semantically connected and dynamically assembled, with access implicitly authenticated across teams, organizations, and networks.
Think back to the office scene from the video, where we saw an engineer sitting in front of the interactive workspace. If you watch closely, he was actually connecting and collaborating with people from within and outside of his organization, through a workspace that provided him with real time insight into those colleague's activities, information about their availability, their physical location, and so forth.
The second pillar of that vision is about contextual, and anticipative insight. This relates to how people will derive insight from their information. Thanks to ongoing innovations in things like business intelligence, more and more the information we deliver will be contextually relevant, enabling search, discovery, and analysis based on our profiles, and on our intent. As you saw in the meeting scene in the video, we envision a future where the meeting itself is an intelligent participant, accepting communications, monitoring resources, organizing content, and providing contextual insights real-time through the process of having a meeting.
And our third pillar, if you like, is to enable people to communicate and express themselves naturally and intuitively, to enable them to share experiences even across geographic and cultural divides. For example, at the very beginning of the video we saw kids from India learning together with kids from Australia. Not only were these kids separated by time zones, but they speak different languages and they have different cultural backgrounds. Yet, we saw how they could be brought together through the power of software to explore the new world of learning.
This vision, all that you saw in this video, serves as a guiding light for our path forward. It's yet another reason for all of us to be inspired by the promise of our long-term partnerships. That's what we're going to be doing over the next 5, 10, 15 years. I look forward to doing it with all of you.
Thank you very much.
ALLISON WATSON: Thank you, Stephen.
It's amazing to think about that tour of the future. So, let's get onto the next segment of our A List.
All right, so I'm pleased to introduce everyone here to a principal researcher with Microsoft Research, Bill Buxton, who is not only a principle researcher, but an avid mountain climber, accomplished musician, in fact that was his first love, and an author. He's also renowned in the engineering field. It's fantastic for me to have the opportunity to get to know Bill, and to get to spend some time with him. We've had several high-definition video teleconferences ourselves, in getting ready for this event today.
And, Bill, I think you're also favorably known as the father of multi-touch. What does that mean?
BILL BUXTON: That means that – it gives you a sense of how long these things take. We started doing multi-touch in my lab in 1984. And that's how long it takes. And it's really important that you take in the context of this video, the history of the evolution of technology, information technology and in telecommunications, is it takes generally 20 years from first inception of the idea to the point that it reaches maturity, where maturity means a billion dollar industry.
And the key thing is, so I'm here from Microsoft Research, you say what's that got to do with the partners? Well, because of the investment, if you think about innovation as a long nose at the tip of the nose is where the curiosity-driven research happens. That's seeds into advanced development, things like Office Labs that generated the video you just saw, and then the product groups. And the key things that cause us to go forward is that we've got an investment portfolio that covers the full span.
ALLISON WATSON: So it looked like – we just saw that video, I have to admit I've now gotten to see that a few times, but the first time I saw it I thought, wow, I can't even imagine that we made this video. It's like, I don't know where we are in this 20-year thing, but that feels probably 20 or 30 years out as far as I can figure out.
BILL BUXTON: Well, there's two ways we can think about this. The first thing is, remember 20 years, that's when the first version of Word came out, in 1989, that's recognizable as Word today. So, that wasn't that long ago. And the way to think about this, remember I said about this 20-year period, is that says that anything that's going to have impact over the next 10 years is already 10 years old.
So actually innovation and what we see there is not so much about invention, but about prospecting, and finding things. So, the seeds for everything you saw there already exist, and what we're doing in research is then putting together and generating the seeds for the next generation. The key thing is you need that envisionment to give you focus, because if you don't know where you're going every direction is the right direction for how you think strategically.
ALLISON WATSON: Right.
BILL BUXTON: So, we can give you some examples here. So, this is Surface. It's the same Surface you saw earlier. It's a product you can sell and build applications on. I'm not going to try and dazzle you with new invention, I want to give you insights, because it's more important you understand how research thinks and how we work, rather than the products, that changes.
ALLISON WATSON: Tip of the nose stuff.
BILL BUXTON: The tip of the nose stuff, take Surface, well, what is Surface? First of all it's a product, but it's also a way of thinking. So, what is that way? So, we can touch the Surface. So, if you just touch – see, there's the finger, so we've got multi-touch. But, if you put your hand down all of a sudden you see you get your whole hand. Now, what's really important here is throughout our experience with cathode ray tubes and LCDs we've always thought of displays as being presentation devices, like a television. And the first thing is, that's not how it works. So, watch, I'm going to go through the deep science of mathematics called string theory to teach you why this is important.
ALLISON WATSON: I'm not sure deep science and math is my speed.
BILL BUXTON: This is it. So, here's my string theory apparatus.
ALLISON WATSON: All right.
BILL BUXTON: All right. Now, every one of you, we don't have to do much here, because the finger is already here, but I can speak to you.
ALLISON WATSON: Hey, Bill.
BILL BUXTON: Cool, now yesterday Steve Ballmer talked about the glass half-empty and the glass half-full, right.
ALLISON WATSON: Right.
BILL BUXTON: Well, this proves that the glass is actually two glasses in one. It's four times what Steve was talking about, it's four times better.
ALLISON WATSON: That sounds like four times the growth we can all get.
BILL BUXTON: Yes, and it's great, but here's the deal, what's interesting about this stupid little exercise is the Microsoft Surface is also a loudspeaker, right, which says that every acoustic transducer is input and output. The way you want to think about that, because once you go that way, if every microphone was also a speaker why isn't every display also an imager? And that's what's important about what we just did here. See the fingers touch, but it doesn't matter what else is touching. It's bi-directional. You've got red, green, blue pixels, but you've also got an I-pixel, imager. Right now we do it with cameras and projectors, but this is going to become thin film very, very soon, and really cheap. And this lets us get experience now, so when the technology is really there for volume everybody's got their experience together.
ALLISON WATSON: I see, so it's not just about the Surface with multi-touch. I have to say, I don't think – I'm not sure I wanted to be the daughter of multi-touch, because you always have to clean after you touch stuff.
BILL BUXTON: That's OK, you put it on the wall.
ALLISON WATSON: All right, OK.
BILL BUXTON: So we're talking about outdoors, I've got this canoeing book that I've just been reading on the plane.
ALLISON WATSON: Aren't you going on this big canoe trip?
BILL BUXTON: Yes, I built a birch bark canoe last summer and I'm going to go up into northern Canada. But, here's the thing, there's the book, right, so I plunk it down and first of all you notice what I'm talking about here, this says that Surface computing is actually like – the surface is like a scanner, you can read it. So, it could read that, and do optical character recognition. And that's sort of how the cards were working, among other things you did earlier with Greg. But, what this says is, if you think about when Stephen was talking about seamlessness, it says that putting things onto the surface, whether it's horizontally mounted or on the wall, a wall surface, is as easy as taking your children's art work from school and sticking it on that most important information appliance in the home, the refrigerator door with a magnet. But, if it's not that simple, then we've got it wrong.
ALLISON WATSON: OK.
BILL BUXTON: So let's go back –
ALLISON WATSON: We've got to get imagination going here, because this is some deep stuff.
BILL BUXTON: OK. So, what's fun about this is that over here I've got a couple of toys. So, the first one I have here is you saw using a card on the surface, you saw the book, but what about if we take a camera. So, this is an HTC Touch 2.
ALLISON WATSON: OK.
BILL BUXTON: So, when I put it on the Surface notice that the contents just flow out around it. Now, this is stuff that you can actually get on Surface today, and then AT&T in the stores are working this with Mobile Connect. But, what I want to say is that the stuff you saw in the video, where I can grab things and bring them out onto the surface is there now. And this is the type of thing on the video that you're seeing. So, if we actually then come and say, this is the new Zune HD, and if we put this on, as well, the contents there are – so the notion of being able to take these two devices, these appliances, and when you put them on the surface it changes the relationship. It's a social relationship. Do you know the term common ground?
ALLISON WATSON: Yes.
BILL BUXTON: OK, Surface becomes the common ground which enables these handheld appliances to communicate and make visible the relationships and interactions between them. So, you don't have to use your imagination, it's visible. So, you can drag things from object to object, and bring them back and forth. And this is – what's important here, yes, you get the user experience, yes you get it of the Zune, yes you have a Surface, but that's not the important part, it's the social relationship. It's like, if I get close to you this is a different relationship than if I'm here, right? But, that's true with the society of people, but it's equally true for the society of devices. How do we use these social conventions, social mores.
ALLISON WATSON: Right.
BILL BUXTON: And so it's as much about the sociology of devices and the appliances. So, here's where Microsoft plays.
ALLISON WATSON: OK.
BILL BUXTON: To get it right it's not enough to get a great user experience on these products. The real goal is how do we get the great experience of these things working together as a family in these larger ecosystems, in the ecosystem of the society of people, and the society of context, and the society of technologies. And with this Microsoft is the only company that plays in a broad enough section to get that right, and we have a huge investment in research, which includes sociologists, ethnographers, anthropologists, as well as computer scientists to try and get that done so we can realize that vision.
ALLISON WATSON: Yes, I was kind of – so I think you're starting to get at something here. So, we've got these devices, which I guess personally I think in a device-centered world I can understand them. I get what you're saying about how things should seamlessly go between them. How does it launch from this into the idea of the future, at least a little bit, because it sort of seems like there are computers everywhere and I'm trying to think how are you going to get the data around.
BILL BUXTON: So there's this notion called ubiquitous computing, and the basic tenet of ubiquitous computing is the access to the technology potential is available everywhere, meaning everywhere you need it, but it's transparent. So, you're dining room table doesn't get in the way, because it's in the dining room. It's transparent. Again, you can see it, but it's transparent. If you put it in the bathroom it would not be transparent, right?
ALLISON WATSON: It wouldn't fit, either.
BILL BUXTON: And the same thing is true about these technologies. You have to think about them in context. That's why the video is so important. It showed the technology in a social, and a physical and a cultural context.
ALLISON WATSON: OK.
BILL BUXTON: To make it invisible. To make it invisible, and this is a funny thing, instead of less is more, more is less. More technology in the right place, properly deployed, means less complexity and more benefit.
ALLISON WATSON: Interesting. So, what about, Stephen was talking about this being the future of productivity, and we talked about the 20-year thing. Getting these thin devices, the Zune HD, which you all can't really see up here, but it is incredibly thin, and seems to be getting thinner, explain how we get things thin, like everything in that video was thin and how would that ever be possible that the wall would suddenly be a computer?
BILL BUXTON: One of the most important things we're working on in research with our partners, hardware partners, is new types of display technology. And what's emerging are thin polymers, basically flexible plastic about the thickness of what you use for a rain sheet or an umbrella, or a projection screen, where that is – circuitry is printed right on it, and they're light emitting polymers, and they're organic LEDs and so forth. But, these things that are very, very thin, very low power, very flexible, and then you can get them in there. And, because they're so low-power, you need smaller batteries, as well. And that's what's causing these things to shrink.
The new Zune has an organic LED display on it. It's one of the nicest, but that's how we get the beautiful high-definition video, and so on, on it. And what's happening is these things are getting here, but they're going to get bigger, and thinner. Here's the important thing, it's that do you remember maybe eight years ago if somebody came up to you and said, imagine if bandwidth was free, right, you could get unlimited bandwidth. And people, if you're old enough, I absolutely remember a 300-baud modem. You'd say, no way, dude, that's never going to happen, couldn't be. And it happened way sooner than we thought. It kind of costs, but it's essentially free.
The same thing is going to be true with screen real estate, and that's why the displays are there. That's the Surface. They're not going to be television screens. It's going to be $10 a square foot. It's going to be cheaper to put 100 dot per inch full color bi-directional display on your table or on your wall than it is to put up a whiteboard today per square foot.
ALLISON WATSON: That's fantastic, and how many years in the future does it take to get that? (Applause.)
BILL BUXTON: But the point is, if you think about what I just said, bandwidth is free to get at the cloud, and you've got displays everywhere. Now the screen is not precious. That changes how you think about delivering business intelligence, personal displays, ambient intelligence. And so once you've got these apps in mind, you can start to plan. So, everything we do today is leading to that so that in 20 years, like Windows, your product still has a lifetime. You want to design for success. And time-wise, it's an incremental thing. It always gets better. You're going to see direct impacts of this within the next couple of years.
ALLISON WATSON: A couple of years.
BILL BUXTON: Within the next couple, and it's going to get better and better as we go along. And the main thing is, by being out in the front end with research, and our investment and commitment there, we're staying ahead of the game, and my job, and my colleagues jobs, for you, and for your partners, is to help give you guidance so that you can make informed decisions today so that you're not going in any random direction, but here's the vision, here's how to get there, so we can measure every decision we make in terms of planning the products on that path. And our job is to make sure you have the tools to get there in the most efficient manner.
ALLISON WATSON: All right, Bill, there's one final thing we discussed yesterday that I thought would be interesting for this group to hear. You talked about being in Microsoft Research, but one of the most important things you said is the way it's changing how computing research is done. It's about users and experience. And I know one of the things we talk about is, we all build things that people use. It's not trying to figure out what data we want and then trying to figure out how to present it, it's kind of the reverse. You mentioned something yesterday about how the users get involved in making research a reality.
BILL BUXTON: So, the ultimate thing here is, the most important technology to understand is not hardware or software, it's wetware, it's the brain, 90 percent water. Understanding human technology, you saw that with Greg's stuff, with the medical stuff, right, the analysis. And that's what's going on in the video. And then you don't let the tail of technology wag the dog of the customer, and you work backwards. And the key thing of all this stuff, and that's why I wanted to talk about ideas here, because I'm a researcher, right, and it's a way of thinking.
If you remember what I said about 20 years, the stuff that's out there already, there's nothing affecting the world today that you or I didn't know about ten years ago. Now, we didn't actually know what the impact would be, otherwise we'd be gazillionaires. But, it was there. And in retrospect you all knew about that. It's there now for the next 20 years, certainly the next ten.
And then the question is, how do you become a good prospector. And I'm just going to talk to a quote from Marcel Proust, right. Who thought we would be quoting Marcel Proust at the partners conference, but the thing here is, because “the only true voyage of discovery is not to go new places, but to have other eyes”. And so hopefully this has helped you see the stuff that's out there right in front of us now through a whole different set of eyes.
ALLISON WATSON: It gives me a whole different view of wiping my screen off every day.
BILL BUXTON: That's right. But it will be a pleasure.
ALLISON WATSON: Thanks, Bill.
BILL BUXTON: Have a great conference. (Applause.)
ALLISON WATSON: All right. That wraps up our A List today. I just wanted to take you through a journey of the things we're delivering, a little bit in the short-term, and the things we're thinking about that really get me inspired about how does that R&D innovation, and what is that US$9.5 billion really mean as Bill said, at the tip of the nose.
And I thought this quote was so important that we have up here in front of us today, because I thought this applies to whether it's research or whether it's applies to the businesses that we're all in today, becoming the most successful partners, and the most successful businesses that we can be, the only true voyage of discovery is not to go to new places, but to do it with new eyes. And I'm hoping the A List gave you some of that inspiration as well as the Worldwide Partner Conference.
So, thanks so much, and let's get on with the show.
ANNOUNCER: Please welcome Microsoft's Chief Operating Officer, Kevin Turner. (Applause.)
KEVIN TURNER: All right. Good morning. Let me try that again. Good morning! (Cheers.) All right. It's great to be here and the energy that we get from our partners really fuels us for the whole years, so it's my favorite meeting to come to all year long because I'll tell you, the best feedback I get, I spend the most time with any audience in the company with our partners throughout the year. And I travel to 30 to 35 countries a year, and in every stop, we do partner roundtables and partner meetings to really figure out how can we grow our business together. And this is a great setting to be able to assimilate 125 countries from around the world and it's just fantastic to be with you all this morning.
The spirit of my remarks today -- I'm going to set it up and frame it like this: I want to talk to you around why should you bet on Microsoft. What is our approach and strategy? I'm going to look back a little bit at '09, which our year ended on June 30th, as you all know, and then I'm going to flip into what we call FY10, which started on July 1st. And I really want to talk to you about the spirit of how do we grow our share together.
And before I do that, the most important thing that I need to do is thank you for the partnership and the incredible hard work this past year. I mean, this was a year like no other. You know, they say that this sort of reset happens once a generation, at least I hope this is the only one in our generation.
Candidly, I know that this was a time that really took a lot of hard work and passion to grind it out, to scratch, to claw, to grow business and grow market share. And certainly in my 28 years of business, this is the toughest business year I've ever had. And so I want to start by saying thank you or the partnership, but I also want to say Microsoft is a company that was built with and by partners. And if anything this year has taught us, that is even more so and more important as we go forward.
So in a lot of ways, it's helped pull us together with partners and really galvanize and solidify our approach to the marketplace. And so I think that that's a real important sort of moment of truth, if you will, for all of us at Microsoft and all of us in our partner ecosystem and so there's a positive in that. But again, thank you very much for your time investment, thank you for being here. Clearly, thank you for the partnership and we're committed to helping you win in the marketplace.
Now, as we think about this past year, I'm going to sum it up in four weeks. Between September 15th and October 15th, our world changed. I mean, we had a pretty good Q1, we had an okay Q2, and wow, in the process, the world changed.
And when you think about that, I had a trip scheduled on September 29th to Wall Street, and it was a trip that was booked a year in advance. And I was going to see some of the largest financial institutions and houses on Wall Street and biggest customers that we have.
And when I got off the plane and I'm getting my bags off the bag carrier, the baggage handler came over and said, "Hey, can I help you with your bags?" And I said, "Sure." You know, we're shuffling them around there in the airport. And he said, "You do know the market crashed today." And I said, "No." I didn't understand. I mean, only in New York would the baggage handler be the first person you greet that tells you about the market.
But clearly, when you look at it, what we saw from a churn standpoint globally was unprecedented. It was incredible. And when you think about the external factors that each one of us faced this past year, you know, it's an awesome number. GDP went down, the foreign exchange rates became decimated, unemployment, which is arguably the most concerning metric today continues to rise, the credit crisis which brought a lot of things to a screeching halt, bankruptcies, IT budget cuts. And the one that was really, really interesting for us from a management standpoint, from a leadership standpoint was what happened to PC growth and server growth.
And so if you look at this chart, the orange line was the IDC forecast in June of 2008. So, when I would have been standing here a year ago, that's what we were anticipating from server and PC growth. In four weeks' time, this is what happened.
Clearly, there are no management systems or leadership processes that are built to really take advantage of the opportunity that was created from this particular slowdown in both PCs and servers. And it created a lot of tension on the system because our budgets basically were written as the orange line is drawn.
But what did that do for us as a company? You know, I don't know who said it, but certainly our company adopted it, and that is a crisis is a terrible thing to waste. And so what can we do about that is the most important thing for us to focus on as a company and with our partner ecosystem.
And I have to tell you, the energy we got from our partners on this topic, on this philosophy is really what helped drive the company at Microsoft. And turning that anxiety associated with the economy into a determination to win and move now is what brought about our approach. And we have a five-point approach, a five-point game plan to dealing with this macroeconomic crisis at Microsoft.
And the first one was, let's look at the environment. These are the things that can't control. But let's look at our strategy and ask ourselves regardless of the environment, is our strategy still right? And I'll talk to you more about that in a moment.
And then we said, you know what, this downturn, it's not a recession or a depression, it's a reset. And the build-back is going to be gradual, so we need to build business plans around that and invest for the long term. And we need to deepen and strengthen our customer and partner relationship. As I said, if anything, it's brought us closer to you because all of us when we went through this process, at least looking back at it, it helped us get great clarity, great clarity on what are the moments of truth that we need to be concerned with as an organization?
And one of the things that we said is no matter what, during this situation, we have to lean in. We have to listen better, we have to work harder, we have to get closer to our customers and closer to our partners or we're not going to win in the long term.
And so that's been the focus that we've been working on ever since. And the ability to grow our market share and compete to win in FY10 is at the heart of what I'm going to talk about. And of all these things, we have to do it with the highest sense of urgency that we've ever had. We have to win and move now because if we don't, someone else is going to.
And so when you think about the Microsoft strategy and you take a look at that five-point approach that we had, we said, "What is our strategy?" Well, number one, it's been to innovate for the long term, and number two, it's been to grow our market share. And so we went back and looked in history of all the different societal economic crashes that have happened back to the 1600s. And you might say, well, if you had people that had time to go back to the 1600s, you might have too many people. There's an opportunity for us to learn from each one of those resets because, again, they happened once every generation.
And the companies that came out stronger when the reset began to turn around were those companies who had committed to innovate during the downturn, and had the ability even with revenue decreasing to grow their market share.
And so we said our strategy is right and we're sticking to it. And so the first thing I'd like to talk to you about is really backing up innovation for the long term and our approach. Now, our total R&D investment this past year was US$9.5 billion, US$3.2 billion more than the next closest technology company. And what an awesome responsibility. And you know what? It's important for us to get value in what we call ROI, return on innovation, out of that $9.5 billion.
And when almost every other company in the world is pulling back, is shrinking their R&D investment, we're hanging in there. And we're going to continue to invest US$9.5 billion again this year. We didn't decrease. And so we're going to stick to it for the long term.
Now, we're going to invest that US$9.5 billion in four key areas. Steve talked about the ability for the PC, the phone, and the television, the three-screen approach, I'm going to talk to you about the four-pillar approach that those three screens run left to right, or horizontally and vertically.
So the rich client is number one. Man, have we got some of the best releases we've ever had in our history. And you've seen the demo and the opportunity that we've got with the Office version 2010. It's incredible the opportunity we have, that we're committed to that rich client for the long term and continuing to find ways to increase productivity and derive value.
Server and enterprise. The fastest single growing area in our company both from a revenue, market share, and profitability standpoint. And I'll talk about some of those products in a moment.
Entertainment and devices, the importance of us winning in this particular space is because of the connection of the digital work style and the digital lifestyle. Because where people work, how they work, and when they work continues to have more and more overlap between the workplace, computing on the go, as well as the home or the living room.
And so the reason those three screens are important is being able to connect the work style to the lifestyle from a digital standpoint.
And then certainly software plus services that cut across all three of these different pillars of innovation. And we talked to you at this conference about our ability to monetize and have a business model for our services platform and Windows Azure and SQL Azure, and Azure.NET and Live Services, how exciting that's going to be. And we don't know what we don't know on that, but we're going to figure it out and we're going to figure it out with partners.
And we need you to continue to push us, continue to help make us better, continue to tell us what's working, and continue to tell us what's not working. And one of the things that I told you a couple three years ago was this idea of S+S. S +S is here. You know, I remember showing a slide and it was a tunnel with a light. And, you know, the analogy is is that a train or is there a light at the end of the tunnel? And clearly, there's light at the end of the tunnel.
S+S, we talk about today as a trend. Three years from now, ladies and gentlemen, it will just be another accepted way for people to find, use, share, and provision software. And so it is so important that you continue to embrace it and find ways to make money around it and build business models with it because we're clearly in it for the long term, and we're in it with partners.
And then we're going to continue to chip away at consumer services because those are important because they marginalize some of our business services if we're not really great at that. And so this ability to continue to invest that US$9.5 billion across these four pillars makes us very unique in the marketplace. But we're committed to that for the long term.
Now, when I think about the opportunity, I remember at this conference almost four years ago that people were talking to us about, you guys have to get the innovation out quicker, you guys have to make faster progress as it relates to new releases and continuing to share road maps with us. And you know what we've done the last three years is we've really had that innovation engine going. And right now, we're on the front foot. And what we need from partners, I mean, just have a look at this slide as it builds, these are just some of the fantastic releases we're putting in the marketplace this year, and we're just going to keep coming and coming and coming. (Applause.) And keep building that.
And there's wonderful revenue opportunities in this for and with partners. But one of the things, one of the calls to action that we've got to have help from you on is you've got to run the latest stuff. You've got to have it deployed in your business, and you've got to be on the most current version to be able to sell it.
One of the most amazing things that we had in the history of Microsoft was we had a CRM system called Siebel before Microsoft CRM. And then another company bought that company and things became very difficult. And our sellers said -- and then our Dynamics group developed the product, Microsoft CRM, Dynamics CRM. And our sellers said, hey, we got to get this out, we've got to deploy it. And so we began a rollout of displacing Siebel with Microsoft CRM. And we couldn't get it in the marketplace fast enough. And everywhere we put that product, our sales grew over 40 percent country by country as we rolled it out.
So ladies and gentlemen, deploy the latest stuff, get on the latest stuff, create your business model around moving people forward because that’s how we're going to show value in the marketplace with customers. So, this is an incredible list of innovation that's coming to the marketplace that we really have momentum in that innovation engine. And we've been working hard on the operational excellence of delivering consistent innovation.
And I love the comments that people tell me, hey, I don't have your old version deployed, you're giving me a new version. That's right. And shame on us for not helping you get the old version deployed, but let's get on the new right now and moving people forward is what we have to do together with our partners.
And you think about some of the big dog revenue opportunities, and these are just a few. Clearly Windows 7. The momentum we have in the marketplace around Windows 7 feels really, really good. And after the Vista launch, how could it not? That's a tough one. (Laughter.) That's a tough one. I'm a sales guy. Okay? I got a few of these taking them out of the back on that. But you know what? The reason Windows 7 is going to be successful and the most secure operating system we've ever developed in the history of Microsoft is because of the pain we took on Vista. The pain we took on application compat and device compat was warranted. And could we have done a better job enabling our partner ecosystem? Surely, we could have. And, clearly, we paid a dear price for that.
But you know what? If it's compatible -- and after the service pack two that we've got with Vista, we've got almost all the issues fixed. We still have opportunities with line-of-business applications, and what a great opportunity for partners. If it's compatible on Vista, it'll be compatible on Windows 7 and we've got an incredible operating system in Windows 7 that's going to give us a great foundation to continue to drive market share.
And in this tough environment with Vista, we grew market share this past year with our Windows operating system. And think about the opportunity we have collectively to do that with Windows 7.
Windows Mobile 6.5, what an opportunity for you to create applications that extend the business needs to more of a platform and leverage our System Center product to provide enterprise management of our mobile devices. Dynamics. We've got all kinds of releases coming out on the Dynamics platform. And I know we've got a lot of Dynamics partners here.
And Kirill is still running our Dynamics group, and it feels really good to be here multiple years and tell you we have the same leader in charge with the same strategy in the Dynamics business. I don't know about you, I feel great about that, and we're going to keep driving that. And the opportunity we have with CRM is incredible.
Office 2010 and the productivity story and you saw a little sampling of the future roadmap of where we're headed. Exchange Server, SharePoint Server, the hottest single product in the history of Microsoft, the fastest product, ladies and gentlemen, to US$1 billion, faster than Windows and Office continues to be SharePoint. Continues to be SharePoint.
We still do not have in many, many countries enough partner capacity to keep up with the demand of SharePoint and collaboration. And the platform is so important too.
So Microsoft Online Services, being able to get on the front foot with our software plus services strategy is very strategic, and boy are we the leader in the marketplace in this space. What an opportunity from a business standpoint.
The progress that Bob Muglia and his team have made on Windows Server, and we've got R2 coming out, and boy, what an opportunity with R2 both on SQL as well as Windows Server, and I'll talk about virtualization in a moment.
And the development platform with Visual Studio. New releases of .NET, new releases of Silverlight. We're continuing to move that. The pace of innovation is moving very, very rapidly. And one of the biggest concerns I have is that we may be leaving some partners behind. And so really ask your team, are we keeping up, are we running the latest stuff, are we helping drive deployment and adoption and the value-add that goes with it? That's a question for all of us to look at in our businesses and make sure that we're developing our business plans around that.
And so big opportunities to continue to drive innovation in the marketplace. And what a competitive advantage that is for us over our competitors. One of our biggest single competitive advantages, as you know, one of the envies of all technology companies is the partner ecosystem.
You know, when Bill and Steve set the company up almost 35 years ago now, this was an important part of the foundation in the company was enabling third-party providers to build applications and build services around our suite of products and solutions and that continues to be the case.
And now I want to transition to the second part of our strategy, growing our market share. Innovation certainly is a key enabler to us being able to grow our market share. And providing you as partners with countless opportunities is another thing that we're very committed to over the long term. But let's talk about how we grow our market share.
First, let me set it up that the importance of growing our market share, and this is our battle cry, our rally cry, the sense of urgency is built around this statement because I have truly deducted that the winners and losers in this environment are going to be determined by the market share won or lost.
I think it's unequivocally accurate because if we've got a higher market share on the back side of this situation, we are going to be that much more ahead to leverage that market share to grow our business with our partners.
And so clearly we think this is our number one opportunity that we have to do. We've got that innovation engine working. We've got more solutions, candidly, than we've been able to accurately land in the marketplace, which is a great opportunity to have. But now it boils down to really growing market share and the importance of that.
When you think about what does it take to grow market share, we think it takes three things. Number one is earning the right to be a trusted advisor with our customer. Number two, we have to find ways to create our own demand. And number three, probably my favorite, we've really got to have that fighting spirit to compete to win in the marketplace.
And so when you look at this, let's start with earning the right to be the trusted advisor for our customers. The ability to listen and respond to the needs of our customers has never been greater in the marketplace. And, you know, I get asked all the time by partners, what should I bet on? What should I bet my business on? And my answer is simple, and it's universal. Regardless of the partner type, it's universal: Bet on what your customers are telling you to bet on. Bet on where your customers are going. That's what you should bet on. That's how we're trying to align our R&D portfolio, our solutions, and our go-to-markets and that's the advice that we would have for you as partners is to get close to those customers. Earn the right -- we earn it or lose it every single day by what we do.
And in this particular environment, those companies, those partners that step forward that lean in, that raise their hand and say, hey, I'm here to help, people will not forget that. And it's a very, very powerful thing for us to continue to drive as we listen and respond and help people derive business value with our solutions.
Work hard to earn the right to be that trusted advisor. Now, I do believe that the greatest single liability that we, both Microsoft and our partners have is the amount of products that people own that we haven't helped them deploy and adopt. Make deployment and adoption key in your business. What a great opportunity for you to build services around that. It really, really is important so that people get the value. And making sure that we've got -- all of us can articulate and evangelize and leverage this incredible R&D road map and story, what an advantage.
And we've made a lot of progress in this area by sharing and being more transparent with you, and I know we'll be working on this all of our lives. You'll always want more. The reality is we're telling you what we know, we're still figuring out a lot of what we don't know. And we're going to continue to share with you as we know what the models look like. But you can know this, you can bet your business on this, that it will be built for the spirit and in the spirit of partnerships with you. And so that's an important opportunity.
Now, the ability to create our own demand, you know, this is something that as I came back from that Wall Street trip on September 29th, I wrote a note to every single person in our organization. And it was around the idea that we needed to get after a saving customers money initiative. And, yes, it includes our direct sellers, and yes, it includes our partner ecosystem, the entire company needed to galvanize themselves around this saving customers money initiative.
And what a success it's been. If you haven't operationalized that within your organization, I encourage you to really take a look at it. It's been the most successful campaign and initiative that we've ever launched in the history of Microsoft, and immediately getting and resonating with customers. I mean, think about it. What customer is not going to give you an appointment if you've got 13, 14, 15 things to help them derive business value and show them the ability to save money?
And sometimes it just means using what they got in a different way. Sometimes it means displacing a product. Sometimes it means, you know, displacing a product and buying something new and paying less for it. It means a lot of different things in a lot of different scenarios. But making sure that we continue to get your feedback on how to continue to work with customers to save them money and drive business value is an important part of our strategy.
And you know what we're beginning to see? 100 percent of the companies in the world, ladies and gentlemen, worked on the first initiative. Budget cuts, all the things that went along, 100 percent said, hey, we want to become more efficient and more effective.
But what we've begun to see is that the market leaders that are country specific and market specific, they're now saying, hey, I want to invest some of that savings into new business models, new revenue streams, new ways for us to achieve excellence with our customers. And so being able to innovate with the market leaders and the market makers is the next step. And so creating our own demand and focusing in on what we can control clearly is a great way for us to be effective in FY10.
Now, let's talk about competitive displacement. And when I look at this slide, there's a lot of things that come to mind, okay? One is we've got lots of competitors. We've got great competitors. They're out there every single day trying to take our market share. But you know what? We've got incredible products and solutions. And in each case, they're built on that high-value, low-cost proposition with partners. The ability for us to take these one at a time and find ways to work with the various partner types and get more centric.
And I'm so excited about the new partner model that Allison launched on the first day of this conference, but it's going to be more partner specific, making sure we give you and equip you and enlist you as a partner type, not just a broad general we need our partner ecosystem to do X or Y, but it's really talking to ISVs and getting feedback from ISVs and SIs and OEMs and developers and down the line of all of our partners.
And that's an important shift for us, and we're going to get better and better at that, but we're going to count on your feedback. We're going to count on you continuing to give us that feedback to help tune that message to make it more specific. But the ability to displace a product, to sit down with a customer and say, look, Cisco is a great company, but you know what? If you're buying WebX, you're paying two-thirds too much. Let me show you what I can save you.
You know, if you're deploying CRM, you've got Siebel, go displace it. We've got the largest test case in the world that that will be one of the most positive things you can ever do. If you find a happy customer on Siebel, send me an e-mail on that. It's an important opportunity for us to continue to get aggressive in there. We're in the game against SalesForce. Getting out there and pushing that product against SalesForce is an important way for us to continue to grow our business together because we've got a great partner model.
And down the line, each one of these is important. And so we've got to really rebuild this fighting spirit and competitive muscle around how do we get more and more excited about that.
And when I think about this opportunity of competing to win, I have to tell you, this really gets my blood flowing because we're very fortunate to have the incredible decade and economic environment we've had the last decade. We're very fortunate to have the innovation. But you know what? Competing is a test of will. Competing is personal. Competing is partner specific and it's employee specific. Competing is just what's in here.
We can give you all the training materials. We can give you all the great products and solutions, and some of these things, in fact, do sell themselves. And we love those products that sell themselves, who doesn't? But when you have to go displace a product, I mean, there's not a single person in the world, not a single person in the world if they've got the exact same product knowledge and selling skills that they have today, that they had a year ago, that's able to grow their market share. Every single person who's selling and growing their market share today better have better skills, better have better product knowledge, better be able to understand customers' business problems better than they did a year ago or they're going to lose share. They're making themselves very, very vulnerable.
And so to the Microsoft people in the room, we've got to keep stepping up our game and improving our selling skills, improving our product knowledge, understanding how to derive business value with our partners in the marketplace. And the same goes for our partner ecosystem. Competing to win is not about a potential, it's not about what we're capable of. It's simply about, ladies and gentlemen, what are we willing to do? And having that fighting spirit.
And so I encourage you to think about that opportunity as you build your business plan. And we've got some tough competitors. You know, clearly Oracle and the Sun acquisition. Our customers continually ask us, "Should we trust these guys?" You know, I don't know how to answer that. It's customer specific.
Let me tell you two things that are fact based because trust is a feeling. Truth is fact, trust is a feeling. All right? Fact: I told you a year ago when I talked to you that Oracle had just raised 100 percent of their prices across the board. Fact. On June 23rd, just a few weeks ago, their co-president said: “We delivered the highest Q4 operating margin in our history, crossing the 50 percent threshold for the very first time”.
Ladies and gentlemen, if you raise your prices and you take it to margin and you've got customers hostage, how long do you think customers are going to put up with that? So as people build their business case on competing with Oracle, it's a big compete for us. And it's one that we're going to continue to get right after 'em and sell the SQL Server advantage. And our opportunity not only is around the total cost of ownership, which we're a third of the up-front cost and we don't have the high maintenance, the 22 to 24 percent maintenance cost that they put on, but it's the ability to connect the family and the solution around mission critical and the BI platform and our opportunity with new releases of .NET, new releases of Visual Studio, new releases of BizTalk Server, new release of Office, and a new release of SharePoint, giving us that foundation to have an easier-to-run, integrated development and deployment of a server architecture.
And what a great opportunity with our business intelligence now being built in and all of the value add that we've got in R2 coming out. And so it's clear to differentiate our approach, to give customers better value, long-term TCO, and we're going to continue to find ways to solve problems with customers. But evangelizing the SQL Server advantage is something we need your help on in getting after that database share is an important metric for us that we're going to goal ourselves on in FY10.
Let's talk about Google Apps. Are they partner friendly? And so when you think about Google and the buzz that they're creating, you need to think about what are they doing for you as a partner. It's clear that partners are in our DNA. We've talked about that, we've also put our money where our mouth is. This year, ladies and gentlemen, we're going to increase what we spend with partners from US$2.9 billion to US$3.3 billion. That's a US$400-million increase for you this year. (Applause.)
So not only are we continuing to invest in R&D, in fact, we're keeping that spend flat because it's so much more than any other technology company, we're increasing by $400 million our investment in partners this year, backing it up. And so when you think about the opportunity with Google Apps and competing against Google Apps, and as we get compared to Google Apps, there's only one thing we won't do, and that is we're going to continue to have a great strategy for partners. They win out on the low- to no-margin strategy for partners. That's the one green I'm going to give them as it relates to Google Apps in the marketplace.
And the easiest way to compete with Google Apps is to simply just go out on the Internet and print out the number of outages and security problems and privacy problems that they've had with that particular application. Just print it out. Staple it. It'll be about that thick if you go back 18 months and just hand that to anybody thinking about it. Who's going to bet their business on that? And making sure that we continue to get that message out is an important one for us to enlist that fighting spirit in continuing to compete against Google Apps.
We've done a pretty good job competing, but we're never going to give up. We're never going to be satisfied, we're going to keep that divine discontent as it relates to competing with Google in the enterprise. And you know what? It feels really, really good to be able to talk to you about the momentum we've got with Bing. And it's well documented and it's in the press and there were share gains out today. You know what? We've still got a long way to go as it relates to where we need to get to from a search share standpoint. But we have momentum.
I love the fact that we actually have a brand and a name for all of our search engines, and whether you like the word Bing or not, it's pretty unforgettable. And it's up to each and every one of us, ladies and gentlemen, to turn this into a verb because searching with Bing helps us help you. It helps all of us.
And we're going to keep investing, and we've got some of the smartest people on the planet working on this starting with Dr. Qi Lu. And you know what he told me? He said, "Kevin, this is just a start. This is just round one. Because every six months, inside, every six months we're going to put a new release out and get better and get better and get better.” He's committed to two-plus releases a year to make this product the best that it can possibly be in the marketplace.
And it's not a "me too" product. Check it out. It is a new way to think about searching and getting answers. And so we've got great momentum in this particular space, and it's important for us because we aspire to be a world-class digital advertising company. And so we're investing here for the long term, and it feels really good to be able to have that to talk with you about today.
Now let's talk about virtualization. And the Microsoft partners in the room that have adopted our Hyper-V and our virtualization story, this is for you. For the partners in the room that haven't entered the virtualization business, this is for you. The partners in the room that are selling VMware versus us, just please tune out during this segment because we want to take your market share.
We launched this product in October of last year. Since October of last year, we're at over 24 points of market share from the day we put it in the marketplace. Loving that. Loving that. (Applause.) The R2 product that we've got coming out gives us the one thing, the one friction point that we hear from our customers, and that is this ability on live migration. V Motion, we're giving them live migration with R2 and keeping the same value proposition.
And so I hear a lot about margins, hey, the VMware program's got higher margins. Well, if I charged you US$58,000, I'd give you higher margins too. That's not what we charge customers. We charge them US$9600 and that's why our margins are what they are. So, as you line up to make your bets, if you want to bet against us in this particular space, we're coming right at you. And I encourage you to partner with us and take a look at the program because we've got an incredible solution. 100 percent of what we're putting in our Microsoft datacenters today is virtualized using our product. And so we're very, very excited about what we do.
And just like we did with Apple, and I'll cover that in a moment, we're going to get this virtualization tax, the VMware tax out there and start driving people crazy with the value proposition. We took 24 points of market share, with a product as you can see in the center column that had lots of things that VMware didn't have.
And I've tried to be very, very candid and honest with this comparison so that there's nobody in the room thinking we have our head in the sand and we don't understand our opportunity or where they're better than us. We do. And Bob Muglia and his team are committed to it. And we're just going to keep improving the product and keep growing the market share.
But this is a space we're not going to lose in, ladies and gentlemen, and so as you think about where to put your investments, we encourage you to take a hard look at our value proposition because we want our customers to pay less and get more and the ability to build solutions around that stack is an incredible partnership opportunity that you have.
Let's talk about Windows Server. As this environment came down, you know, everybody heard, well, Linux and open source and those type of things are going to become the hot commodity. And you know what? We've competed with the fraudulent perception of free really, really well.
This is a great slide for you to take a look at. We've got the highest market share that we've had in the last three years. We grew two points in this tough environment in market share with Windows Server. And one of the things that we've learned is we also run, when needed, wonderful open source applications on Windows Server. So, we're open for business with our stuff or somebody else's, but the opportunity that we have there continues to be a really, really incredible one for partners.
And getting the facts out about the fraudulent perception of free is something that's really resonating with customers. Our TCO (total cost of ownership) story, our security story, where we're headed from a platform standpoint. It feels so good for customers to finally understand the truth about open source and Linux and we're making incredible progress in this space, and we're going to continue to drive that.
Now let's talk about Lotus Notes. Let me show you a little history. I've talked to you each time in the last four years about Lotus Notes. In FY07, we took out 3.1 million seats. In FY08, 5.1 million seats. This past year, 4.7 million seats. What an incredible opportunity that we have. 12.9 million seats the last three years. Do you know what? There's over 15 million seats out there left. So, what we've done the last three years, we can more than double that. 15 million seats of Lotus Notes exist in the marketplace.
We're going to have countries this year -- I'm going to give an award next week to some countries that have completely eradicated, with partners, Lotus Notes from that country. I feel good about that. (Applause.) That's the fighting spirit, ladies and gentlemen, that we need in this company and we need with our partner ecosystem. Eradicate Lotus Notes. It's costly, it's cumbersome. If you find a happy customer on it, send me an e-mail. It's like Siebel, okay? I won't get any e-mails on both of those. I talk to a lot of customers that use those products. And what an opportunity for us to get aggressive.
Open Office. This is another incredible -- we compete all the time with good enough. Are we good enough. I get this question all the time. And, sure, we go through the different value propositions with document fidelity and productivity innovation and the ability for e-mail and if you use Outlook, there's no -- and security and all the different things that we have that they don't have. But I want to talk to you about what's really important. The real important opportunity is the SharePoint opportunity that comes with Office, it's the Exchange opportunity that comes with Office, and it's the BI opportunity that comes with Office.
Those dollars right there all add up to US$17.3 billion in partner opportunity. Embrace Office, embrace the stack. It's the fastest-growing stack we have in the history of our company, and it's a wonderful opportunity for you to build your business and bet your business on that. And Office is the foundation of our entire partner opportunity and our entire partner ecosystem. Continue to take a look at that and take the Open Office threat seriously.
Now let's talk about Apple. What are you going to do about those Apple ads? That was a year ago. Gosh, when I went home for the holidays, brothers, sisters, cousins -- hey, hope you don't have anything to do with marketing over there at Microsoft. What are you guys going to do about those Apple ads?
Stay tuned, stay tuned, stay tuned. Wow. Did we punch right back? The PC Hunter ads, the PC Rookie ads clearly have been winners in the marketplace.
I pulled this out of my Sunday newspaper. I have an old habit because I came from retail looking at the Sunday tabs and circulars that are in newspapers. This is straight out of my paper last Sunday. This is a comparison out of a leading electronics retailer that you can get a 13.3-inch Macbook for US$1199 from that retailer. Guess what. That same retailer, you can get the same PC with more RAM, a bigger hard drive, and almost a three-inch bigger screen for US$649. What an incredible opportunity.
And so we've been running these PC value ads. Just giving people saying, hey, what are you looking to spend? “Oh, I'm looking to spend less than $1,000.” Well we'll give you $1,000. Go in and look and see what you can buy. And they come out and they just show them. Those are completely unscripted commercials.
And you know why I know they're working? Because two weeks ago we got a call from the Apple legal department saying, hey -- this is a true story -- saying, "Hey, you need to stop running those ads, we lowered our prices." They took like $100 off or something. It was the greatest single phone call in the history that I've ever taken in business. (Applause.)
I did cartwheels down the hallway. At first I said, "Is this a joke? Who are you?" Not understanding what an opportunity. And so we're just going to keep running them and running them and running them.
This is out of last Sunday's paper, the Apple tax. It's getting out. And when we put Windows 7 in there, which we've got coming out in October, what an incredible opportunity for us to fight back. And it feels really good to be on the offensive here. And we know we've got plenty of work to do. We don't have it all figured out. But I want you to know, ladies and gentlemen, we're doing stuff and we're in the game and continuing to take some of these hard market share opportunities head on and compete because it's a test of will, as I said.
And we're going to showcase this opportunity of Windows simplicity, choice, value, and partners. And stay tuned, because we're going to have some retail stores opened up that are opened up right next door to Apple stores this fall. Stay tuned, just stay tuned. (Applause.)
Every single thing we learn in those Microsoft stores that we put on the street we're going to share that openly and transparently with all of our retail partners so that they can do the exact same thing. And we're going to get that customer feedback directly. We're in the game for the long-term here. And I know something about retail, and we've hired and incredible team to do an incredible job on retail.
So our twofold strategy of innovate for the long-term and growing our market share was our strategy before and it's our strategy now. And even as you think about this, you know, this was a tough environment, a gut check, a once-in-a-generation opportunity. In many, many ways, ladies and gentlemen, it's made us as a company want to listen more, want to work harder, want to run faster, and want to compete. And those are the things that we're taking from this because you can get all caught up in all the different things that you read and all the different things that you hear. But the reality is, those companies that are committed for the long term that continue to fight for market share and work hard to satisfy their customers are those companies that are going to win in the end.
As is customary with me, this slide is not only for the partners in the room, it's for the Microsoft people in the room. This is our call to action that we're asking you to enlist on this journey to us. Number one, launch, evangelize, and sell our innovation story. Don't underestimate the importance of you deploying and getting on the latest and greatest version and helping your customers get on the latest and greatest version. It's critical to us.
Number two, continuing to work hard to earn the right to be the trusted advisor. This is an environment where there are no short-term sales. There are no short-term revenue opportunities. We're all in it for the long-term. And keep focusing in on listening to where the customer is going and aligning your business in that way.
Number three, compete. Have fun with it. Competing is fun. Now, competing is a lot more fun when you're winning than it is when you're losing. But that competitive spirit is what has built this company and it was built with and by and for partners. And so I tell you all that I'm excited about the opportunities that we have in FY10 and beyond, and I tell you all that we're more committed than ever to our partner ecosystem, as I said, we've increased our investment, we're getting more partner specific as it relates to the type of partner that you are. I want you to keep giving us the feedback, okay? The biggest room in our house is the room for improvement, and we need that feedback from you.
I want to thank you or the partnership, I want to thank you for attending this conference and giving us all the different feedback throughout the year, and I really want to thank you for the hard work that went into last year as well. And if can be of any assistance to anyone, firstname.lastname@example.org, and there's my phone number. I'm a resource. Let's get out let's grow our share, bet big, and win share together. Thank you very much. (Applause.)
ALLISON WATSON: So much energy going on this morning. We've had over a million visitors to Digital WPC since we launched three days ago. So, that shows you the power.
Lots going on on Twitter as well this morning. Interest in the vision of innovation. People saying profound technology advances. Thumbs up on continued R&D investment. How are we helping together to move you forward? And lots of great feedback as Kevin went competitor after competitor, we're going to beat VMware, we're going to beat Oracle, we're going to beat Cisco, we're going to beat IBM, we're going to beat them because we're together winning for our customers and saving money. Lots of great feedback on the real tools we're providing partners to help them save customer money and back it up with real evidence.
Now, I'm sitting here today with a very special community of partners in the audience, and I'm going to start with a Microsoft employee, our PSMP lead from Microsoft Nigeria, Fatimata -- tell us a little bit about what's going on in Microsoft Nigeria.
PARTICIPANT: Oh, we're doing lots and lots of great and incredible things with our partners. And today with us we have about 37 of our partners, of which 90 percent of them are here for the first time at WPC.
ALLISON WATSON: Let's say hello to Microsoft Nigeria. (Applause.)
PARTICIPANT: And so we have lots of competition in our market, but the partners are committed and they're doing so much. In fact, we have 23 banks in Nigeria, of which only on has Notes still, and we're trying to get that. So, the partners are really energized and we're excited about the opportunity and we're looking forward to having other partners partner with us so we can go out and really kick butt.
ALLISON WATSON: All right. Well, you can tell she wants to win that award next year at the sales conference, and I think those 35 partners are going to help her get Notes out of that last bank.
All right. So a lot of information on compete today. One of the ones that I really want to go after because I started my career there is Oracle, tell me a little bit about how you're competing against Oracle.
PARTICIPANT: Compete to win, that's all we do. You know, we're an ISV with a solution for large banks, large enterprises, and a lot of them have a preference for Oracle because of their line of business obligations. And it's incredible, I mean, any time we have an opportunity, we show them the value of the SQL Server platform, especially reporting services, and of course the cost. And I can tell you, we have large banks, we have state governments, we have 100 percent success record. We've moved all of them to SQL Server.
ALLISON WATSON: Fantastic, I like 100 percent.
PARTICIPANT: 100 percent. 100 percent.
ALLISON WATSON: 100 percent. All right, fantastic. Let's go beat Oracle in Microsoft Nigeria and everywhere else around.
ALLISON WATSON: All right. So, I want to give a little bit of information and a little bit of a sneak peek here. So, if you'll bring up the slide. As you all know, the conference is going on today and tomorrow. This afternoon we have value keynotes following this session that are broken down by partner type. So, I'll encourage you, depending on what particular partner area you're interested in that you'll join us this afternoon in the value keynotes.
And then tomorrow morning, we've got regional keynotes going on. I think the most important thing is if you invested the time to come to New Orleans, hear all about the great things we're doing from a global perspective, it's time to really bring it home. What are you doing in the local market, how are they going to support you to get things to happen? And ideally, you leave this conference with a business plan and a strategy of how you're going to compete, grow share, and drive profits next year.
(Break for direction.)
ALLISON WATSON: Before we close and get on with the day, I'm often asked, "Where is the next WPC?" And so this year, next year WPC is going to be in a special place. A special place for me. Let's see if I give it away, no one will know this, I don't think. I was born there. Okay? That's the hint. I'll give you another hint. Some people will know this. My son was also born there. So, now you'll know we were both born there, and it's not Oklahoma where I grew up. So, let's roll the video and I'll encourage all of you to join us next year in this amazing city.
ALLISON WATSON: (Applause.) I thought there would be some excitement, and now you know where I was born.