Realizing Developer and IT Potential
2003 Financial Analyst Meeting
July 24, 2003

ANNOUNCER: Ladies and gentlemen, please welcome Senior Vice President, Server and Tools Business, Eric B. Rudder.

ERIC RUDDER: Well, good morning. Last year I had the pleasure to come out here and talk to you a little bit about developers, developers, developers, and as important as developers are to what we do every day, and we love developers, once you write an application you've got to get it provisioned, deployed, managed, operated, and so we realized that working together with IT pros is essential to really help our end users realize their potential. So, today, I'm going to spend a little bit of time reviewing what we've done in the server and tools business and describing how, on a go-forward basis, we're really going to help developers and IT pros realize their potential.

I love following Doug because he always gives a great metaphor for me to build on. And I think in terms of delivering the Wright brothers, we had a great year in Server and Tools. And we're flying strong. Year over year, we grew by 16 percent. Windows Server™, we really highlighted the launch of Windows Server 2003, had a great year. SQL Server™ grew its business by 37 percent, and continued to gain share from Oracle and DB2. And we had strong usage growth as well. We kind of balanced revenue growth and usage growth, especially in the developer space, and we have fantastic momentum around Visual Studio®.

When I talked to you guys a year ago, things weren't looking so great coming from a share perspective. We'd been out of the market for 40 months while Java got launched. We've seen actually more developers using Java than .NET. But we were excited because we had Visual Studio .NET in market. The industry's reaction was good. We had a 97 percent customer satisfaction rating with the product. And so, through the year, we started to build some share, started to catch up. And I'm pleased to announce that by the end of the year, you know, Java use has flattened out, and we've actually passed Java usage, Java and JSP with .NET developers. And so it's a tremendous accomplishment that the developer division has been able to do. And I think this will serve us incredibly well going forward.

So, not only have we passed Java in terms of percentage usage, but the number of developers using Visual Studio and .NET to create solutions has reached astonishing highs. We're actually over two and a half million developers now, and we're really starting to see the solutions come to market, and you can actually see that on the Internet. If you look at the latest Netcraft studies, for example, you'll see sites using scripting technologies, we have more than half using ASP and ASP.NET. And, again, you see the kind of bump in May '03 after we launched Windows Server 2003, we continued to gain share over Linux and PHP, and their ilk. And this is super important for us.

In addition to growing revenue and growing usage, we had a great year in terms of delivering products, the product pipeline. Exchange 2003 shipped in just under the wire at the end of FY03 and helped propel us beyond 150 million seats of Exchange sold. Again, also continuing to gain share over IBM.

I think one other thing that's a tremendous accomplish for us last year, if you think about where we are this year, is that we really moved the dialogue towards Web services. And I think it's pretty much agreed now that Web services are the new paradigm for computing. It's hard to think back a year ago when people were kind of skeptical on, God, is this Web services thing for real, you know, is Microsoft really going to interoperate with IBM, you know, WS-I, and are all those politics going to work. But we've been able to work together as an industry and really build on open standards, make sure that Web services aren't bound to any platform. That we were able to connect to the existing systems, and keep that industry support up, and really I think now that we've started to deliver products like the Web Services Toolkit, like Visual Studio .NET 2003, and Windows Server that have these features built into them, we've started to see the product validation, and the overall business validation that lets customers build Web services solutions. And really it has gone from if Web services will take off, to if you're an infrastructure player now, you'd better have a Web services story to be successful in market. And we know that we have the leading Web services platform going forward.

But Windows Server 2003 was really the key anchor accomplishment, and the tag line, as you know, is doing more with less, helping IT professionals operate their infrastructure more efficiently, helping developers build better applications faster, and delivering enhanced user productivity in terms of SharePoint™ and some of the real-time services as well. It was the best work we've done since I've been at Microsoft. I'm tremendously proud of the team, and tremendously proud to have been part of the effort. And we did the largest server launch in our history. We reached more than 158 cities and 175,000 attendees at launch, which is super.

We're now at triple the run rate of Windows Server 2000. You can see the momentum, not only in sales, but in deployment: we're approaching 100,000 Web sites in only 90 days since launch, which is a fantastic run rate. And we're starting to see now even people switching, and we've actually had over 8,000 Web sites move from Linux to Windows Server 2003, which is a tremendous accomplishment.

The customer momentum is great. I think I've chosen kind of three customers that kind of highlight some of the key opportunities. The first is actually the Austrian Ministry of the Interior, and that was a great case study, because it really highlights the opportunity that is ahead of us in really migrating our NT® 4 customers to Windows Server 2003. And the new features that they're able to take advantage of, in terms of shadow copy, and better productivity, and DFS can be delivered as you roll out. So as you roll out, as you consolidate, as you upgrade a directory infrastructure you can actually achieve the same level of service in your operational staff with less staff. This project had an astounding ROI, which is one of the reasons why I included it. But, the opportunity before us in terms of really going to NT4 and helping those customers operate their infrastructure more efficiently is tremendous.

The second example is actually Random House with their CodeNotes Web site. This opportunity is moving from JSP to ASP.NET. We have a new set of tools out, called the JLCA, the Java Language Conversion Assistant. We will definitely be aggressive in moving JSP sites automatically through the use of tools to ASP.NET sites, again, to reap the advantages of lower TCO and maintenance costs. In this case as they went through the migration, too, they were able to add features above and beyond the existing site, even through the migration, similar to what BMI was able to do above.

Finally, the opportunity as customers continue to band in proprietary UNIX solutions, we will compete aggressively for that business. And that's sort of the Western Digital case study below, people moving off of Oracle and UNIX, onto SQL Server and Windows Server, seeing increased performance, seeing increased ROI, and really what we've been able to achieve in terms of scalability and performance, and now seeing the number one TPCC result, that Windows® launch, the upside is basically unlimited for us there.

It's not just Western Digital where we're really winning business over UNIX. I've included a bunch of highlights here, you know, one of my favorites, we were able to replace a Sun E-10,000 machine with a comparable system and lower TCO dramatically. And I think this is an important highlight for us in FY04 as we compete aggressively for those UNIX migrations coming out to the Windows platform.

The other product besides Windows Server 2003 which was clear for us in the year, launching at the same time on the same day was actually Visual Studio .NET 2003, and it shared the same key themes that Windows Server 2003 did, in terms of connectivity, dependability, the best economics and productivity. Of course, we continue to drive Web services forward. Our dependability, really reap the benefits of the change in culture around security, secure by design, secure in development, secure by default, increased reliability, again, around scalability and large hosting scenarios, and we were really able to leverage the mature partner ecosystem, not just with hardware vendors, but also with the amount of controls, and the amount of community support that's available here, as well. On the productivity side we actually took the .NET environment for PCs and extended it out, kind of RAD for devices, by launching the Compact Framework, and the Mobile Control Framework, we were actually able to make great progress on Pocket PC Phone, and Smartphone, as well.

So we've seen great uptake in the corporate side, but also continue to make great progress with the launch of Visual Studio .NET with ISVs. We continue to see these guys bring .NET solutions to market. I think Christmas will be an exciting time, as we'll start to see some consumer solutions bearing the .NET technologies coming to market, as well.

So pretty much a great FY03 for us. What's left to do for fiscal year '04? Of course, we're going to continue to drive usage and business results around revenue. But, really I think our key challenge is to use the power of innovation to drive business value to customers. That's the most important thing we can do, sort of think through how we take that huge R&D budget that Bill talked about this morning and really deliver integrated innovation for developers and IT professionals. We need to continue to engage deeper with our enterprise customers, serve the small and medium business better. Orlando talked a little bit about Small Business Server, which is a product we're super excited about, it's probably the best work we've done specifically for the SMB segment on the platform side. Growing IT professional and developer satisfaction remains a key goal for us, I'll talk a little bit about that. And of course, we can't be successful unless we make our partners successful with us, as well.

Well, why is delivering integrated innovation so important for realizing business value? You know, if you look at where we are today, I think the reason is because we spend most of our time keeping the stuff that we have today up and running. You know, there's a reason there's application backlogs, and all these projects don't get done. Most of our resources really go towards the status quo. And our challenge really is to shift the investment dollars that people can spend on developing new capability and lowering the operational costs. Why is it that people spend so much time just with their existing stuff? It's because things are so people-intensive. If you look at this, 60 percent of total cost of ownership is driven by people cost. We've always known in these large systems that rollouts, it's not about the software costs, it's not about the hardware costs, it's not about training, it's all about staff costs. Why are those staff costs so high? What are they doing? Well, they're spending their time being manual administrators. If you look at the tasks that IT pros and developers need to do, you know—security management, performance monitoring, storage tasks, configuration, and change management—automated tools help somewhat, but the amount of manual work required to do it, just to keep your existing infrastructure and applications up and running, is tremendous. And that's really our opportunity, is to shift this balance so that more of it is automated and less of it is people-intensive. And the way we're going to do that is by delivering a common platform, for IT infrastructure, business applications, and information workers, the three pillars you see below on the right.

And by delivering a common platform we'll have fewer concepts, and we can drive greater simplicity, so it should be easier to deploy, secure and manage. And the idea is really to manage the entire solution, not just pieces of the solution. And when you think about the enterprise space, very few vendors are really in a position—in fact, I would claim Microsoft is in a unique position—that can really deliver end to end management on some of these solutions. Of course, Web services are the fabric that connects these things together, they connect applications to each other, they connect departments within an enterprise to each other, they enable enterprises to do business across the Internet with each other, and of course, they work with the existing systems that customers have, rather than requiring a complete rewrite.

I think sometimes the best way to actually demonstrate what we mean by a common platform, and what we mean by integrated innovation, is to actually talk about it in a demo form, and show how a lot of these products come together, rather than talking and slides. So I'd like to actually invite Ari out, and demonstrate the value of an integrated platform.

Welcome, Ari.

ARI BIXHORN: Thank you, Eric.

Good morning, or early good afternoon. We have been hearing a lot this morning about the concept of integrated innovation. And so in this demo we'll see how we can put that concept into practice for both IT professionals, as well as software developers, because in many of our customers' organizations it really is that challenge of integration that remains the key blocking barrier to the success of IT and software development projects.

So in this demo in particular we'll see how a clinic, as well as an insurance company, can overcome those problems, using Windows Server System™, Office System, and Visual Studio .NET. Now, the demo focuses on a fictitious healthcare services provider called Contoso, and Contoso provides software for clinics to help them manage patient information, and their appointments for the day, as well as to integrate their systems with healthcare payment providers like insurance companies. So let's begin the demo itself inside of the doctor's office, and inside of Visual Studio .NET.

What we'll do here is we'll run an application that doctors use to keep track of patient information, and also for their appointments for the day. Once this application comes up the doctors are going to be presented with a login screen for the application. And this is a Visual Studio .NET-built application that was built for the Tablet PC, so it takes full advantage of the Tablet PC platform. So when the login screen comes up I'll be able to enter information using my tablet pen, and then take notes on patient information, again, all using the tablet interface. So we see our login screen here. I can input my credential information, and when I log in my credentials are being sent by a secure Web service to the Contoso server where they're being validated.

Now, once inside the application, as a doctor I can see my appointments for the day, and we can see here that my very first appointment is with an unfortunate gentleman by the name of Joe White.

ERIC RUDDER: You promised that you weren't going to use my high school yearbook photo.

ARI BIXHORN: You look good in it, man. I don't know. Nice hair.

So Mr. White, as we can see, has received an unfortunate blow to the head. And prior to meeting with Mr. White what I'd like to do is to view his latest X-ray to see if we can provide a diagnosis prior to our meeting. So once I've logged in here I can see Mr. White's information, the reasons that he's been to the doctor's office in the past. We can see here his latest head X-ray, and I can bring that up inside of my application. Now, by the looks of it, it looks like, yes, indeed, Mr. White has received a concussion, so I can make a note of that directly on the X-ray, using the tablet pen, and I can make a professional annotation indicating that there is, indeed, a concussion on Mr. White. So I make this annotation, I click OK, and that info will be sent off to the Contoso server, again, using that secure Web service. And the ink data will be stored in SQL Server, actually as ink, and that's because SQL Server can store both structured data as well as unstructured. So we've viewed the X-ray now, now let's go ahead and meet with Mr. White. So to do that I'll create a new progress note, and I want to take some vital-sign information from Mr. White. So let's get some information on his blood pressure, and we get some handwriting recognition there, for the diagnosis specify concussion, and as we can see there, the handwriting recognition even recognizes the handwriting of a doctor. So we'll go ahead and jot down some notes here for Mr. White—"Get some rest"—and then for the purposes of submitting this to a healthcare payment provider, with just a couple of clicks I can indicate the services that we performed on Mr. White. So, a physical exam and an X-ray. I click OK, again, the information is stored in the Contoso database by a secure Web service, and we've finished up with that appointment, we're ready for the next one.

Well, what's the next step of the process though? Well, typically, we'll want to be able to submit a healthcare claim on behalf of Mr. White, and in the past this was a manual process, it was often very prone to errors. But, now Contoso has provided software that enables an administrator at the clinic to very easily submit that information. So if we switch over to the clinic administration machine, we can see that as an administrator I can log in to Contoso's extranet, and begin submitting my claim. So when we view the pending claims we can see that Mr. White's already shows up in the system. Another thing that you will notice here is that this Web site is hosted using SharePoint. And from an IT professional, SharePoint is a great product because it allows me to get Web sites up and running very quickly, and it also provides tools that enable me to provision those Web sites, and to generally maintain them with as little effort as possible.

So we've got Mr. White's claim here. We want to make a couple of edits to it, and so what I'm going to do is click on the icon that will invoke InfoPath™. Now InfoPath—we heard a little bit about it earlier—it's a new member of the Office System for creating and managing electronic, XML-based forms like the one that we see here. So we've got basic information on Mr. White, we can scroll down, and the beauty of InfoPath from an IT professional's perspective is that it digitizes forms that in the past were paper-based and, again, were prone to error. So now if I need to input information about the payment provider for Mr. White, I don't have to worry about user error selecting that, because we call a Web service that allows us to input all the details of the payment provider with just a couple of clicks. We scroll down to the bottom of the payment form, and we can see the costs associated with Mr. White's visit, as well as for the X-ray. I click Submit Claim, and we get a verification that we have, indeed, submitted that claim to Contoso.

Now, just to verify that, it would be great if we could get an e-mail response from Contoso saying that, yes, indeed, they have received that claim. And so I've just switched over to Outlook, and if I click on Send/Receive, we've already gotten a response from Contoso saying that the claim has been received. So we've already seen how within the clinic we've been able to use SharePoint, InfoPath and Visual Studio .NET to integrate the systems. But, now what actually happens on the back end with the processing of that claim? How is that claim processed?

ERIC RUDDER: Actually, it looks like it wasn't processed, it looks like it was rejected.

ARI BIXHORN: That is a very good point. In fact, it's all part of the plan. So what we can see here in the e-mail. Let's start off by looking at the e-mail itself. As Eric pointed out, this claim has been rejected, in other words, it's been suspended in the Contoso processing system. And the reason for that is because this particular claim, for a total of $550, has exceeded the maximum claim amount of $500; in other words, it's violated a business rule within the Contoso system. So let's see what we can do now to go ahead and update that, and continue the processing of Mr. White's form.

So I'll switch over to the Contoso server. This is a machine that's running on-site at Contoso, and what we're looking at now is the business rule composer. This is what manages the business rules throughout my enterprise, like the one that specifies a maximum upper limit per claim of $500. And the business rule composer is part of BizTalk® Server 2004. And from an IT pro perspective, this is a great way to go ahead and manage as well as deploy business rules throughout my enterprise.

So, in this case, I have a series of business rules over here. If I want to update this particular business rule and specify a maximum upper limit of, say, $1,000, you can see that rule here, all I need to do is click on the rule, select Deploy, and we're good to go. Only other thing that we need to do now is, since Mr. White's claim was suspended in the system earlier, is to resubmit it. So we can see his suspended claim, I'll simply say resume service, and the claim should now be processed.

So the IT professional can manage these business rules and deploy them throughout the enterprise. But what else might they want to do? Well, ideally, they're going to be able to get a unified view of everything that's going on inside of their enterprise at any given time. And traditionally to do this, they've used operation software like Microsoft® Operations Manager to get a unified view of what's going on with their SQL servers, their BizTalk servers, Exchange, and so on. But what would be even better than that is if, as an IT pro, I could get that information on my mobile device, regardless of where I am.

So, what we're looking at now in the Smartphone is an application called Smart MOM, or Smart Microsoft Operations Manager. And what this does is, it allows me to get that unified view of everything that's going on with my servers no matter where I am on my Smartphone device. And, if we go ahead, we can see that we have an alert here that we receive from the server. We can drill into the details of that alert, and it tells me specifically what has happened. So, while I'm on the road, I get an alert on my device saying, a business rule has been updated and deployed throughout the enterprise, we get the details of that, and I think, just as importantly, we can find out information on the status of the BizTalk queues. So, when Mr. White's claim was suspended in the system, the queue started to back up and we can see that indicated here on the graph. As soon as we updated the business rule, the order started flowing through again, the claims started flowing through, and the queues returned to their normal operating procedure.

So, meanwhile, back at the clinic, they're awaiting a response from Contoso. If we switch back to the Contoso workstation where my clinic administrator is working, now that the claim has been accepted by Contoso, we get an updated e-mail indicating that, indeed, that $550 claim has been received. Now, in addition to submitting claims and being able to get the status of the claim at any given time, we submit numerous claims from the clinic on a daily basis. So, it would be great if we could get a nice consolidated view of reports for which claims have been submitted, which have been paid for, and so on. Now, again, in the past this was a manual process, and it required a specialized server, and a specialized reporting software to do that. But Contoso has provided an integrated reporting infrastructure using SQL Server Reporting Services. So that, from the clinic perspective, they can drill into information about the various claims that have been submitted. From an IT pro perspective, being able to get this information seamlessly integrated with SQL Server and running on the same server as SQL Server makes my job of maintaining the application much easier.

So, we can see down at the bottom Mr. White's claim, which has now been processed for $550, and we can drill into the specific information about that individual claim.

So, what we've just seen here is an end-to-end solution built using Windows Server System, Office System, and Visual Studio .NET. We saw how at the clinic the IT pros were able to integrate their systems using SharePoint, InfoPath, and Visual Studio .NET, and on the Contoso back end you saw how BizTalk Server, Microsoft Operations Manager, and SQL Server Reporting Services empowered the IT pros there. So what it all adds up to is improved operations, more productive IT professionals and developers, and an enterprise that is truly integrated.

Thank you. Thanks, Eric.

ERIC RUDDER: Thanks.

Think about what we saw there. When you think about the number of elements that came together to provide that demo, starting with the rich client, and really taking advantage, exploiting the PC using the Smart Tablet, using ink, storing that ink in SQL Server. You know, I don't see Linux clients being used the same way. I don't see My SQL storing ink as a rich data type. I don't see management, I don't see smart phones being integrated in the same way with the servers, getting that information off of devices. The level of business value that we can drive by integrating the innovation we do is a tremendous opportunity for us going forward.

I want to talk a little about the product road map, and how we'll take some of these ideas and bring them to fruition and even drive them to the next level. I mentioned before that we're off to a great start with Windows Server 2003. It shipped, we're very happy with the response. One of the key milestones for how you take that technology to market really is, later this year, shipping Windows Small Business Server. We're super excited about this product, especially for the small and medium business segment. It will have an incredibly attractive price point. You'll see this product actually bundled with compelling OEM server hardware, for less than $1,000. It will bring the value of Windows Server and e-mail, and integrated services as well, allowing full remote access when you're on the road and seeing your remote desktop. It's a super product. It's designed specifically for small/medium business. It's not the enterprise product with a few pieces stripped out and a lower price. It really is designed to make the life of an IT pro in the small/medium business simpler. And I expect us to have great success with this product next year.

But that's not the only work that we're doing around Windows Server 2003. Later this year, we'll be supporting 64-bit technologies, both AMD 64 and Itanium. And we'll continue to deliver value to the Windows Server 2003 platform throughout the year. Some of this has already shipped, additional administrative tools around group policies, security configuration tools have shipped. We'll update some of the Terminal Services technology, and some of the demos you saw today around Windows Rights Management, and Windows SharePoint Services will ship later in the year as well.

On the application side, we'll launch ADAM, which is basically Active Directory in stand-alone mode for applications. And some key services around identity integration that really bring the power of Web services and Web services security to application developers in a new way. And, of course, it's not just Windows Server 2003 and its add-ons that we're going to be delivering, as well—it's the rest of the Windows Server and tools product family. SFU is our services for UNIX products, we have an update coming out later this year. Again, it will help us be very aggressive in targeting UNIX developers, and corporate people that have UNIX applications that we want to bring over to the Windows platform. Our management efforts will take a tremendous step forward with the launch of SMS 2003, and MOM 2004. Around security we have the next version of ISIS Server, and we'll be introducing some new servers throughout the year as well, Speech Server is one that we're super excited about for its potential in integrating some scenarios as well.

Around the IW side, we'll see SharePoint Portal Server shipping shortly, Exchange will have a key role in FY04, especially as Office System comes to market, that's a nice rollout; at the same time I expect corporations to upgrade their Windows infrastructure and their Exchange infrastructure and Office at the same time. Project Server, and of course the RTC Server and PlaceWare assets will come to market as well.

And on the application side, we'll start to see our e-commerce suite anchored by BizTalk Server 2004, which you saw today. And I think in the future, of course, we're going to continue to enhance Windows Server. Our key management initiative we call DSI, or Dynamic Systems Initiative, that's built on top of our SDM, our Systems Definition Model technology, which again is a broad industry effort to really model the application and help truly deliver end-to-end system management rather than discrete management of individual parts.

Our goal is to really get to a point where Windows itself is continuously monitoring, always up to date, and, again, reducing the burden for IT pros, signing that bar over to automated so that there's less manual work to do.

On the information worker side, you'll start to see, again, some new assets come, and we talked a little bit today about Win FS, our new integration service for advanced data services; we'll see that in the server, some great mobility enhancements, and of course we'll continue to push Web services forward and we call our framework for that Indigo today.

Windows Server, of course, will be continuing to enhance byproducts in the server family on this road map as well. We'll continue to push forward on our services for UNIX. You'll see our management technologies and products actually come together in a single suite, so we'll take MOM, SMS, and put them together in a product we'll probably call Systems Center. You'll see SharePoint Portal continuing to evolve, as will RTC, and of course Exchange and the next version of SQL and "Jupiter," our E-Business Suite.

And, of course, in every technology wave, we complement it with a wave of tools. In this case, that version called Visual Studio "Whidbey" is the next to ship with "Yukon," and then beyond that we have Visual Studio "Orpheus" in the "Longhorn" time frame.

One area I want to spend a little bit of time on going into more detail is around security and patch management, if I could. That's an area that is a great concern to IT professionals today. And today it's actually hard to know even how to keep your system up to date. There are actually seven places you can go on Microsoft.com and download new components. There's actually three different ways to kind of scan your system and see what's up to date, and it's a key objective of ours to simplify that.

So, you'll see us in FY04 bring those assets together to kind of a single Microsoft upgrade place, if you will. So, a single definitive place where people can go for the next component. Consumers will see it still as Windows Update, but, again, we'll slow those updates out to the corporation with Software Update Server, and SMS our management server.

Beyond that though, we will bring SUS and SMS together in Systems Center, and flowing those out. So, you'll see a base level of management services provided in Windows Server, and then built on the same technology flowing out as advanced features of Systems Center. This is a key initiative for us. We've invested a tremendous amount of resources in security and management going forward, John will share some of those investments together, and that's some of the most important work we're doing for IT pros throughout the year.

I mentioned that both developer and IT professional customer satisfaction were an incredible priority for us in FY04, and if you look at some of the key drivers of satisfaction, we do these surveys now on a worldwide basis on a fairly regular basis, and the same four or five things keep coming up that customers are concerned about: product quality, product security, the quality of technical support, and the quality of the communication that the customer receives from Microsoft.

The good news for us around customer satisfaction is that all of these key drivers are things we control and investments that we can make to deliver better customer satisfaction. We will continue to invest very heavily in FY04 around community. In the developer division we actually took our community participation up—that's people that actually work for me in the developer group—kind of up from the 6 percent level to 97 percent. So that's thousands of people actually interacting, going to user groups, going to their community schools, installing software, being on electronic bulletin boards, going out and talking, and really engaging, and making sure that there's no unique asset that Linux has that our developer ecosystem and our IT professional ecosystem doesn't have. And we'll continue to be very aggressive about community, both in terms of our participation and how we literally build community into our products. So that when you start Visual Studio you'll actually see Windows come up and they'll say hey, you're doing a project, it's got Oracle 1, .2, .3, .4, .6, .A. By the way here's a service pack for Oracle .1, .2, .3, .4, .6, .A. Here are some other people who have worked with it. You may have questions. When you interact with the community you'll be able to actually download code samples, see scripts if you're an IT professional or how to deploy that. You'll continue to see us build community tools into Visual Studio and into Windows itself.

Jeff talked a little bit about the feedback loop and what an important tool that is. That's been really closing the loop in terms of the quality that we receive on bug data; we actually also increment Microsoft.com to make sure that when people are searching for things they're actually finding the results and getting the results they need. And we have a huge investment around software assurance, which I think is a great program, really designed around enhancing customer satisfaction.

So we've significantly increased the amount of assistance that's available to IT professionals through TechNet Plus, and an online concierge service. We now have free Web support for all of our servers, and telephone support for all of the enterprise editions of our servers. It should be easier for IT pros to budget, and to predictably forecast what their IT resource needs, and we'll deliver incredible value through the programmers wave, not just through the increased products that are in the offering, and the training that comes with Software Assurance, but also through home use rights that we're offering our customers, as well. It's something we're super excited about, and I think it will really help us push forward in the next year on the satisfaction index.

Of course, no matter how much work we do on our own for customers, we can't complete the solution without partners. And the partner ecosystem that we've really kind of launched around the Windows Server 2003 wave has been incredible. We had over 200,000 server applications kind of ready to go. We certified Windows Server 2003 on more than 2,000 systems and devices, which is an incredible achievement. We are up to over 30,000 certified partners now. It's probably 800,000 partners overall that we work with. And already in the first couple of days we were actually able to train more than 86,000 partners on Windows Server 2003 and some of the .NET technologies. So really filling out the value chain, from our hardware partners to our solutions partners, and ISVs, and services, is something that's incredibly important to us.

Last year you came, and a lot of you came the day before and heard us talk about .NET and our strategy. And this year it's been a great year of progress, .NET is still software for connecting information, people, systems, and devices. It's kind of settled down a little bit, we've started really delivering business value and solutions to our customers, really echoing the themes of productivity for developers, for IT pros, and as Jeff showed, for information workers, as well.

And the comprehensive solution that we have, as you saw in the demo, that really spans clients, servers, and services, complimented by the best tools in the industry is something that we're super proud of.

So as we look ahead towards fiscal year '04, and really think about how we can take not just Web service connections, but customer connections, and help our customers, we promise to deliver greater productivity and higher business value. We will help our customers lower their costs, and enable greater return on their ROI. We'll tackle the key problems that IT pros have around integration, complexity and security, and we will own key issues, and partner appropriately. All of this is really designed to help IT pros and developers realize their potential.

With that, it's my great pleasure to introduce lunch. It's been a great time talking to you this morning. Enjoy the break and I'll see you this afternoon. Thank you.

END

Due to the varying sound quality and subject matter of tapes, the information in this transcript may contain inaccuracies.