JEFF RAIKES: Well, good morning. I'm Jeff Raikes. It's great to welcome you to our Financial Analyst Meeting. The area that I'm going to focus in on, in particular the Microsoft Business Division, including Information Worker and the MBS area, and also Server & Tools, we had a terrific year. It was a great year for us in terms of enterprise and business customers. We're executing very strongly on the vision that we laid out several years ago, where we said we were going to take the core of Microsoft Office and expand it into a much broader vision of information work, and deliver on that vision to encompass how the nature of information work is continuously changing. So, that's a big part of the driver of our growth.

But of course you want to know what's happening moving forward. The opportunities are plentiful, businesses spend approximately $200 billion a year on software, so we see a lot of opportunity ahead. Now, Steve gave you an overview of the seven key opportunities, the big areas of growth potential. What I'm going to do is I'm going to focus in on three of them. I'm going to talk about corporate desktop value and, in particular, how we are increasing the value of the desktop by delivering improved user experience, but also new high-value opportunities. And, in fact, we're going to show you some of those today.

Another key area is server units. We have, in this next year, the biggest launch ever in our server business with Windows Server 2008, and also Visual Studio 2008 and SQL Server. And when you put that all together, we're going to have a tremendous outreach, our largest outreach ever to IT professionals and to developers.

The third area I'm going to touch on is the opportunity in the consumer and small business area for productivity. This is a great area for us. We've got exciting momentum right now. There will be 150 million or more PC shipments in this next fiscal year, and that's a great opportunity for us. So our focus is to drive revenue growth in corporate desktop, deliver strong server products, and grow Office in the consumer and small business.

Now, I want to start with a set of core principles that really guide the investments that we're making. We have the unique ability to amplify the impact of people in an organization. Unique, in part, because we focus both in on the more structured information that you see in business processes, but also how that gets connected into the collaborative tools, the Office tools that people are using every day. And that's just another great opportunity for us to increase information work productivity.

Today, we offer a very comprehensive business productivity infrastructure for our customers, a complete foundation for them to drive their business productivity. I'm going to come back to that in a moment. At the same time, we have a strong focus on driving down the cost for information technology, in particular enabling companies to more effectively grow their business through faster application development. And we have a strong R&D investment in a set of targeted areas where we believe software will open up access to more and new capabilities and information work, business intelligence, enterprise search, collaboration, and we have the opportunity in many of these areas to revolutionize the economics. For example, what we're doing in the area of Voice over IP and unified communications.

Now, in consumer and small business we focus in on the evolving customer needs to increase the usefulness of the product. Now, take for example small businesses. Small businesses spend 10 times more on marketing than they do on IT. And especially as the world moves to more and more online marketing, they need the tools that will help them to market and sell. And our data tell us that these different audiences really have different needs and ways that allows us to have more targeted offerings that reach specific customer segments, and that allows us to tune the value and increase revenues associated with increased value per segment.

We're also innovating in our product distribution, things like Office Ready PC, what we're doing with trial software and conversions, and new business models that increase the value to consumers. So these are a set of core principles that help guide the investments that we're making.

Now, our goal is to make sure that we deliver the value and innovation that address the needs of these key audiences: information workers, IT professionals and developers. And each of them does have unique needs. For information workers, our focus is to make it very familiar and easy to use, a set of tools to help them really get their jobs done that work well together, and also that are innovative. One of the things that we always emphasize, because people think about what's going to happen with the future of Office, is just how much the world of information work changes and how many opportunities that opens up. And so they're looking for us to also be innovative in what we deliver to increase productivity and impact.

And for IT professionals and developers, there's another set of values that we have to deliver. We have to focus in on helping them manage complexities, to develop solutions and applications to advance their business objectives, and to protect data and content. And this all comes together in what we like to describe as the People-Ready Business.

Now, a few minutes ago I mentioned the business productivity infrastructure. And this is one of our key approaches that we use to drive discussions with customers. As you can see, we have a very broad portfolio of products. And so how is it that we bring that together for our customers in ways that they understand how they can apply the technologies in their business? One of the key approaches we do is called "core infrastructure." And we help the customer learn how to benchmark their infrastructure and optimize that.

Another one is application platform optimization. And here's a third that is very key in our discussions: business productivity infrastructure. We work with them to benchmark where they are today and how they can increase the capabilities by investing in the right software technology. This helps the customer—this approach of pulling these together into these themes really helps the customer move beyond discrete IT categories in terms of their spend, and think about a unified stack of technology on which the capabilities are delivered. And we see tremendous opportunities in these areas, in particular in business productivity infrastructure, we can help them make a difference with Voice over IP and unified communications, business intelligence, enterprise search, collaboration, enterprise content management.

This is clearly, for us, a multiyear vision where we're innovating against the strong delivery that we made in fiscal year '07, the foundation of Windows Vista and the 2007 Office system, as well as Exchange 2007. And also, as you're going to see, a great amount of R&D investment coming to market in the next couple years.

Before I go into that, I want to share some highlights from fiscal year '07. We had, as I indicated, a very, very strong year. And here are some of the key examples. For Office, we had very strong enterprise agreement renewals, and we also had very strong transaction business. The net result was that we delivered 71 million Office licenses in this past fiscal year. So both new licenses and upgrades, tremendous year for us.

Now, historically, our renewal rates have been about 2/3 to 3/4. And I know many of you wonder, well, with customers already licensed for the 2007 Office system, were they going to renew their enterprise agreement? We were very, very excited to see that because of the strength of our road map, the future that they see in what we're investing in the Office system, the rate was greater than 90 percent in this last quarter. So that means that not only were they excited about what they already were licensed for with the 2007 Office system, they're excited about our innovations, the road map, and how that's going to help them in the future.

Now, I'm very pleased by the adoption of the - of Office 2007 because it really sets the stage for fuller investment in information work productivity by our customers. Another great example of this is the enthusiasm for what we're doing with SharePoint, and also with Exchange. In the last year, just in our last 12 months, more than 1,000 enterprise customers who were using Lotus Notes have decided to move to Microsoft Exchange and SharePoint. And I think that shows the power of the significant investment that we make to improve information work productivity, and how that brings them up to date in messaging and collaboration infrastructure.

In addition to great performance in the information worker side of our business, we had a tremendous year in business applications with Microsoft Dynamics. We had 21 percent growth in customer billing in fiscal year '07, which means that Microsoft Dynamics, or Microsoft Business Solutions is now greater than a $1 billion business for Microsoft.

And this was, in part, fueled by the excitement people had for enterprise resource planning, or ERP products, and also fueled by greater than 50 percent growth with Dynamics CRM. In fact, we sold more than 85,000 seats of Dynamics CRM in the last quarter. 85,000. That's about the same as SalesForce.com. And as you're going to see later, we have a much more exciting vision for what can be done in CRM.

Now, I mentioned the importance of SharePoint. We have great traction with greater than 35 percent growth this last fiscal year, now more than $800 million, clearly one of the fastest-growing servers in our history. But equally exciting to us in addition to the financial results, the customers are just very excited about what it's doing in their business. We are constantly hearing from customers about how SharePoint is helping them with collaboration, with workflow, with document management, with electronic forms, and publishing business intelligence capabilities. So this is a foundation for us in information work that really integrates, interoperates very nicely with the Office system.

We also had great performance in the server area. With Windows Server, IDC reported in the first calendar quarter of this year that Windows Server is outselling Linux Server. Now, if you think about the size of the base that we have, that's very, very positive news. And I think it shows that our focus on total value of ownership for customers is a real winning approach.

We also had a great year for SQL, another year of greater than 20 percent growth for our SQL Server business. And just as a reminder, we sell more databases than IBM and Oracle combined. When you look at the unit volume in databases, we sell more than IBM and Oracle combined.

Developer tools grew by 19 percent. Our management tools grew by 20 percent. We're the fastest-growing management business in the industry. We've entered the security business with our Forefront product. So, again, if you think about that $200 billion spend, if you think about the opportunity, the investments that we're making, very, very exciting momentum in our business, and a lot of opportunity in R&D and market acceptance for the future.

Now, while fiscal year '07 was a key product delivery year for us, I do want to remind you, fiscal year '08 is huge as well. We're continuing to build on this vision of business productivity infrastructure with key deliveries in this year. I've mentioned that Windows Server 2008 will be the biggest product launch in the business division in this next year. But you also have SQL Server 2008, Visual Studio 2008, you have what we launched in fiscal year '07 with Systems Management and what we're doing in the security area. You put that all together, this will be the biggest outreach to IT professionals and developers our company has ever had.

In the CRM category today, I mentioned some of the momentum. We have 11,000 customers and 475,000 people using on-premise Dynamics CRM. This fall, we're launching Dynamics Live CRM, a new software as a service offering, it runs in Microsoft data centers, can also be hosted by our partners. It's offered in a subscription form. You heard Steve explain we can handle multiple business models simultaneously. That also gives us the opportunity to maximize the value to customers, using the software on-premise and in the cloud, and to give customers choice in terms of deployment.

So now our approach with CRM, single-code-based, on-premise, in the cloud, can also be hosted by partners, spans the traditional software approach, the Web-delivered software as a service, to a software plus services solution that really brings the best of what you get from the rich client together with server software, together with online services. So it's a great, great example of the strength of our software plus services approach that Steve mentioned earlier.

In addition, we're bringing updated versions of our ERP products, Dynamics AX and NAV to market. So we're going to continue to see strong growth in our Microsoft Business Solutions business, both ERP and CRM.

And SharePoint, Office and Exchange already delivering on key value like enterprise search, content management, collaboration capabilities, and we're seeing significant wins in the enterprise segment, especially with the competition in enterprise search. And it shows that it's not just about search. Our approach is finding, using and sharing information. And so when enterprise search is a part of a broader concept, it shows the power of what we can do for information work productivity, and we're going to show you just a little bit of that in a few moments.

We are delivering great innovation on our core strengths and IW productivity in expanding the usefulness of the Office system. Some of the areas where we're really expanding include the ability to deliver business intelligence very broadly. This fall, we will launch our Server 2007, which will help to deliver business intelligence capabilities to what we believe will be 10 times as many people as what are able to take advantage of business intelligence today. And we do that by putting it into the context of the tools that they already know, tools like Office and Excel, and give them the ability to gain business insight, make better decisions. We'll also bring the power of software to Voice over IP and unified communications. This fall we'll be doing a significant launch with Office Communications Server 2007.

In fact, we're making very, very fast progress on our voice and unified communications vision. More than 75,000 people have downloaded the beta in the last four months, and today I'm very pleased to announce that we are code complete and tomorrow we're releasing Office Communications Server and Office Communicator to manufacturing, and we'll be getting that out very broadly here in the next few months.

With this milestone, we're one step closer to delivering the products that established Microsoft as a major force in unified communications and voice. And as a reminder, this is about a $45 billion industry, in particular the software part of the industry by 2010. And I predict that with our approach, which focuses in on a broadly accepted software platform that opens up the ecosystem, we will be able to cut in half the cost of what companies spend on their enterprise telephony, and that is more than 100 million people will be able to do click to call from Office, SharePoint, and other business applications. So they're going to get more value at less cost by the focus on software as this approach.

So to give you a better sense of the power of bringing software to these new areas, like voice and unified communications and business intelligence, I want you to welcome Jared Andersen to give you a closer look. He's going to take you through just a piece of what we're doing in this area. Jared?

JARED ANDERSEN: Thanks. Good morning. My name is Jared Andersen, and I am a senior product manager in the Office Enterprise Group. As Jeff has just explained, business intelligence and unified communications are becoming an integral part of this business productivity infrastructure that we offer to customers. Office Communications Server and PerformancePoint Server will both be products that we release this year, and they really deliver these advanced capabilities to a much broader group of information workers than we have before.

I'm going to give you a quick demonstration of how these products empower people to make better business decisions faster. And to do that, I'm going to assume the role of a sales manager. And like most people who work in sales, I spend a great deal of my time managing communications with customers and with partners and with other people on my team. Using Outlook along with Exchange Server 2007, I have the added benefit of being able to manage voicemails, e-mails, faxes, and instant messaging conversations right here in a single inbox.

So I'm going to play one such voicemail that I have here from Monica Mendoza, who's actually my sales director. (Voicemail plays.) OK. So I'm accountable for sales performance in my geography. And I want to make sure that my meeting with Monica next week is a good one. So to do that, I really need to understand how my sales are tracking against our forecasts. And I also need to understand the factors that contribute to that so that I can be confident that I'm managing my part of the business effectively.

This is my dashboard right here in PerformancePoint Server 2007, which presents to me my most critical business metrics that I should be paying attention to. Everything that you see here is built on the SharePoint platform which, as Jeff explained, is becoming an increasingly powerful platform that our customers and partners are building on top of.

The data that you see here, the business data is coming from SQL Server Analysis Services, which provides us with powerful monitoring and analytics capabilities. Combined with the Excel planning application that I'll show you later, PerformancePoint really delivers a comprehensive performance management solution that, until now, has been available only to small groups of people in very large enterprises. I don't have to be a business intelligence expert to be able to use tools like these.

The scorecard that we see here on the left shows me the four key performance indicators, or KPIs, that I care about in my work. And I can interact with these to get a better sense of how I'm doing and understand what these mean. I can see, for example, that I'm doing fairly well on profit and in my sales, but there are a couple areas here that I also see that I might want to investigate, problem areas. And so I'm going to filter here to just look at the areas that are off-target.

When I do that, it looks to me like we may have some sort of production issue. I can see, for example, that we have some backorders. I can also see that we have some issues with our contribution margin. Now, KPIs are one very useful way of being able to see this information inside of a scorecard. But PerformancePoint also provides me with very visual ways of being able to understand how these KPIs relate to each other.

On the right-hand side, we can see a strategy map that shows me some of this information. I can see, for example, the total backorders related to our customer satisfaction initiative. I can also see the contribution margin contributes in some way to how we increase revenue. Now, these problems here may not be significant now, but by understanding that they actually relate to my future revenue, I want to make sure that I'm not missing targets.

By seeing information in this way, I can see how my sales contribute to other initiatives that we have in the business. And given what I see here, I probably want to click in and drill into some of the numbers. So by clicking here on the strategy map, I can get some of this additional information. What I see here is the description of the KPI that I was just looking at. And I can also see who owns this information, who's accountable for it. In this case, it's Bruno Aziza, he's our production planning manager. I can also see his presence information coming to me from Office Communications Server. This lets me know whether or not he's available.

Down at the bottom here, though, I can get some additional detail, a report that Bruno has published right here in SharePoint. And if I wanted to just view this in a browser, I could do that. This is a pivot table that was created in Excel. But I can also choose to open this up in Excel. And when I do that, I have access to all of the functionality, the visualizations, the analysis capabilities that Excel 2007 offers.

What I'm working with here is the same set of data that you saw on my dashboard. And we're really getting a sense here of the self-service capabilities that I have at my fingertips. I have the ability now to get additional intelligence, but typically I would have to go to someone else to ask, perhaps, to create or customize a report that I may not already have.

Now, based on what I see here, it looks like we do have some backorders of products that I care a great deal about. I'm probably going to want to contact Bruno in some way to discuss this. Now, there's a couple of ways in which I could do that. One of the ways that I can do that is using Office Communicator along with a telephony device like the one you see here. This device here is called the Catalina. And when I lift up the handset, you can hear a dial tone coming to me from Office Communications Server, that's what provides that functionality.

And I can also see that Office Communicator launches -- I have the ability now to select a contact, or to type in a phone number to make a call. This other device that you see here on the left is called the Tanjay. And it's very similar to the other device that I had, except it has a keypad and has a display running Windows Embedded.

So these types of devices are designed to complement the excellent Smartphone experience that we're delivering in Office Communicator. But given that it looks like Bruno is busy right now, I'm probably not going to want to call him right away. What I'm going to do instead is I'm going to initiate an instant messaging conversation with him just to begin with. I'm going to ask him if he's got some time for us to look over his production plan. I'd really like to make sure that our production plan and our sales plan are in alignment.

And it looks to me like Bruno -- hopefully he'll respond. Yes, fortunately he's got some time. He's going to initiate a Live Meeting session so that we can look at his production plan together. Using Office Communications Server, we have the ability now in our company to be able to host and manage our own Live Meeting conferences. (Phone rings.) And it's a very integrated experience, not just with Office, but also with my phone. You'll notice that my phone is ringing, and I have the ability to click here right on this link to join and participate in the conference.

In just a few seconds, we can go from having an instant messaging conversation to being able to have a full-blown Live Meeting Web conference with voice and video. So in a second here I should be seeing Bruno. Hey, Bruno. How are you doing?

BRUNO AZIZA: Hey, Jared, how are you?

JARED ANDERSEN: I'm doing well.

BRUNO AZIZA: I just want to show you my production forecast so we can chat.

JARED ANDERSEN: That sounds good. So what you'll see here is that Bruno is sharing his production forecast, and it looks like Excel. Actually, what PerformancePoint is doing here is it's fully integrated with the Excel environment. So what we're delivering with this release of PerformancePoint is really the ability for people to have powerful planning capabilities right here at their fingertips in an environment that everyone already knows how to use.

BRUNO AZIZA: That's right, Jared. What's really great about PerformancePoint Server, in this context here, is I'm able to input information in my forecast, but in the context of all the projections from the other stakeholders. Now, because PerformancePoint Server uses security from Analysis Services, now I'm really able to work only with the numbers that I'm supposed to input, which I highlighted here in yellow.

JARED ANDERSEN: That's right. So Bruno has just mentioned SQL Server Analysis Services, and he is working with the exact same set of data that you saw in the report earlier, as well as on the dashboard that I was working with at the very beginning. For the first time, planning, monitoring and analyzing my performance are truly unified.

BRUNO AZIZA: Now, Jared, one of the factors here that is causing our supply issue is shortage with the Mountain 100 product line. So why don't I raise my internal building capacity to 16,000 units so we can take care of this backorder problem? I'm also going to run an analysis here to see what the impact of my change to my forecast is going to be.

JARED ANDERSEN: Very good. I definitely see what you mean by context. It looks like the changes that you just made have addressed the problem that we had with backorders, and our contribution margin is certainly looking much better.

BRUNO AZIZA: That's right. The margins are looking good. However, it seems that we're actually planning to build over capacity, we don't have the overall manufacturing capacity internally to build these 5,000 units unless we allocate resources from another product line.

JARED ANDERSEN: Bruno, what if we were to go and get some of those additional products and purchase them from a supplier instead of building them ourselves?

BRUNO AZIZA: Right. You know, there's a supplier that I can think of that would be a really good fit here. Let me take a look at their information.

JARED ANDERSEN: All right. So what Bruno is doing now is he's going and searching for supplier information using the enterprise search capabilities built into SharePoint. What this allows us to do is to be able to get at data that, today, is trapped in perhaps half a dozen line-of-business systems. And it makes it readily available to us right here in this environment.

BRUNO AZIZA: So taking a look here at the business data catalog, a dynamic view for this particular supplier, it looks like they've been ramping up on production, which is really good. They're also producing this Road 100, and that is very good margins for us.

JARED ANDERSEN: All right. Perhaps, Bruno, what we should do is we should purchase the Road 100 product from this particular supplier. It seems like they'll be able to meet the capacity needs that we have.

BRUNO AZIZA: Absolutely. So let me go ahead and reduce the internal building capacity by 5,000 units here, and then I'll plan on purchasing an additional 5,000 units from the same supplier. I'm also doing an analysis just to make sure that by doing so, our forecast is going to be back in line.

JARED ANDERSEN: All right. So what you're seeing here is Bruno has the ability to perform "what if" analysis to determine what the impact of this decision is going to be. Decisions like this literally used to take days to accomplish. And now we can do it with these kinds of tools in just a few minutes. Bruno, it looks like that seems to address our problem. Why don't you go ahead and commit those changes to our forecast. And it looks like if that happens, given that we're working with the same set of data, when he submits those changes to the dashboard, I'll see exactly the same view of information.

BRUNO AZIZA: That's right, Jared, I just submitted my numbers and they're now committed. So you should be able to take a look at your dashboard.

JARED ANDERSEN: All right. I'm going to go here, I'm going to refresh this page. Sure enough, it looks like we solved the problem. Thank you very much, Bruno. All right. So what I hope you've been able to get a sense for here is how the capabilities that we're delivering with unified communications and with business intelligence are really designed to empower people to make better business decisions faster.

The capabilities that we're delivering in this release are really quite phenomenal, and it's something that I think every information worker is going to want to have at their fingertips. Thank you very much. (Applause.)

JEFF RAIKES: Thanks, Jared, nice job. Well, I think in addition to the value it brings to the customers, I think it shows the value of the R&D investment that we make. Keep in mind that the reason we're able to open up BI dramatically to critical business information is because you have the SQL Server platform, which includes SQL Server Analysis Services, extending to SharePoint and into Office.

Similarly, in the area of voice and unified communications, we can bring voice to customers in a way where they can get this value and they don't have to rip and replace the infrastructure that they had. You can see our ads where we say voice as you are, so that customers can build this new capability right on their existing infrastructure. More value, lower cost. And as Steve said earlier, we're really good at opening up the ecosystem. That's one of the things that we're doing in communications. We have a large number of partners. Great example is the work that we're doing with Nortel on the Innovative Communications Alliance. They have the strength in enterprise telephony, they're betting on our software platform as a way to open up new ways to serve their customers. So we're bringing voice and unified communications and business intelligence to the fingertips of all information workers.

So now I want to move on to the strong opportunity we have with Office for consumer and small business. And in this area, we want you to see that there are three key business opportunities to help increase our revenue in consumer and small-business segments. First of all, most PCs that ship don't have Office installed. And this is a big opportunity for us to increase the attach of Office to these new PCs in the small-business and consumer segment.

Second, a large percentage of the people using Office in the consumer and small-business area actually haven't paid for Office. And so we can come up with ways to smartly help people to pay for using our products in these segments. And the third is to drive usage of our product. We took a big bet with Office 2007, new user experience. And the data that we're collecting we can collect with the permission of the user electronically, collect information about their usage. We're seeing that there's much greater usage of the functionality of each of our products in the Office 2007 release. And that's across a broad spectrum of information workers, all the way from the light users to the deep users. All of them are using more of the functionality in 2007 than they did with previous releases, which points to the bet being the right one in order to increase the satisfaction, which drives this option of the product more broadly.

So it's really the combination of driving usage, getting paid and driving attach that are our greatest opportunities in fiscal year '08. So if we take a closer look and focus in on distribution pricing, packaging and software as a service, these are the key areas in which we're investing. In distribution, we have great momentum here. One of the key things that we've done or invested in over the last 18 months or so is the ability for customers to have trial downloads of Office that they can then convert to the packaging of Office that's going to best meet their needs.

We've had 6.6 million Office trial downloads since launch, and we have 22 million PCs that have the trial preinstalled. So this is a great opportunity, definitely high-growth segment of our business where more and more customers are actually getting the chance to try the product, liking it and then adopting it.

We're further expanding this with what we call Office Ready PC program. This changes the way our partners attach Office at the point of sale. So it means that the retailer can have the ability to switch on Office or convert the trial right in the store for the customer. We're going to continue to invest here by expanding the number of OEM and retail partnerships that we have to drive the attach of Office to new PCs.

We'll also get more people to pay for Office through Office Genuine Advantage. A slightly different approach to what we do with Windows Genuine Advantage, we incent the customer to have Office -- a genuine version of Office by giving them access to a set of additional capabilities, additional value through Office Online. And this really helps them to see and take more advantage of the value with genuine Office software.

In addition, we are investing substantially in innovative digital marketing. This is a very, very important trend for us, it increases our reach. But in particular, it fits in with what I was saying about trials and conversion. We make it very easy through our digital marketing to get the customer to a hands-on view of the product, either a demo or a product trial, and that can then be converted to direct sales of Office 2007. We've also had some very good success with pricing and packaging, with new targeted offerings and price points that really help to drive growth in the segment.

As an example, we had 30 percent year-over-year revenue growth in our finished packaged product business. And a particularly good example of our success there is that we doubled the number of Office consumer license sales in Europe, Middle East and Africa with the Office 2007 launch. And in particular, that's because of our Home and Student offering.

So we've got great traction with piloting new packaging and business model approaches,. A couple more examples that are exciting are we have Office prepaid cards in key emerging markets. That increases attach. It's a way for the customer to have a lower upfront cost to get into using Microsoft Office. We're using direct sales models to university students to increase their usage of genuine products. So lots of good things are going on in how we price and package and approach distribution.

And beyond the product innovation, we're also doing great innovation in areas that relate to software plus services. A great example of this is what we did initially, focusing in on small business with Office Live. Office Live Small Business is one of the fastest-growing service offerings on the Internet. We now have more than 400,000 companies, nonprofits and other types of small-business entities that are signed up.

Office Online, very strong in the online productivity space, more than 70 million unique users come to Office Online every month. It's one of the most popular sites on the Internet. It drove a substantial portion of the 6.6 million downloads. So you can see how these assets fit together to help drive us further.

We're expanding on Office Live for small businesses to more countries in fiscal year '08. It's a strong advertising revenue opportunity given that it's very focused in on a targeted audience with small-business ownership, and we're going to continue to invest in Office Online, it's a great advertising vehicle. But in addition, I really want you to understand that with our software plus services approach, we're going to use Office Live as a foundation to broaden our scope to all information workers, all people that use Office, and we are investing substantially in Web productivity as a complement to what we do in our traditional Office productivity. We've got some exciting things coming out this year, that's where I'll leave that.

So stepping back, fiscal year '07, terrific year for us. Tremendous growth in our IW business with the launch of the 2007 Office system, another strong year for our server and tools with now five years in a row of double-digit revenue growth. But, again, we want to emphasize we've got a great year coming up. In fiscal year '08, we have the launch of breakthrough innovations with Windows Server 2008, our tools, and other products. We're expanding our business in new areas like voice over IP, unified communications, business intelligence. We're investing substantially in software plus services solutions, both for enterprises and individual, Live CRM, Office Live, and I feel confident that if you think about the great year that we had in fiscal year '07, you should understand that our R&D investment, the innovation that we're bringing to market, the customer value positions us for a sustained growth in fiscal year '08 and beyond.

Thanks very much, I'm going to join the Q&A later.

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