BILL GATES: Good morning. (Applause.) Well, I’m very excited to be joining you this morning. What we’re announcing today represents a new generation of communications products. And it really represents taking the best work of all the companies that are here today and bringing them into something that has not been available before. This is a product that not only provides messaging and PBX capability, but has the programming richness, because it uses the Windows platform that allows there to be lots of third-party applications.

Let me just quickly show you a slide that will make it clear where Nortel and where Microsoft come in, in creating the value in these products.

The Nortel piece is building the messaging richness, the call center logic, the voice mail integration, and all the things that have traditionally been Nortel’s strengths.

What Microsoft provides underneath that is not only the Windows NT platform, but is the extensions that we’ve made in both our telephone API, TAPI and Exchange with it underneath the voice environment.

And so the Nortel work leverages off of what we’ve done, and yet brings rich capabilities that are not part of the standard Windows product.

One way to look at this is that there is an evolution that has been taking place in terms of the relationship of data networks and voice networks. Originally, of course, those were completely isolated environments. Your server, your data network, connected up to the computers, it was a different wiring structure. Your PBX connected up to your phones. If you wanted to have data integration, for example somebody placed a call, a customer was calling in and you wanted to see a screen full of information, it was actually the human operator who had to key in the information and get the two systems to work in synchronization.

Now, over the years that barrier has been broken down somewhat with what I’ll call "connected systems" where you could exchange information, although the infrastructures were still quite separate. And so here, when the customer would call in, automatically the message would be sent and the data would come up onto the screen.

Now, Nortel and Microsoft have put together products like the call center product that specifically addressed that connected environment. And there’s a certain flexibility there in terms of being able to evolve those two sets of systems independently. However, the best solution is where you converge the two, where you have the single server that connects up to the phones and connects up to the PCs. And so the applications get the full richness of both environments, and you see those fully integrated.

Now, there are several pieces that have had to be put together to make this a reality. On the Windows side, we’ve had to create a version of Windows that can be embedded into these communications servers. So we’ve had a special effort there, driven by the requirements that have been brought to us by Nortel. We’ve also evolved the TAPI, Telephone API, to be rich enough for this environment. And we’re one of the collaborators, along with Intel, HP and Nortel, in extending USB so it’s rich enough that it can be used to connect up the phones themselves. And so the products being announced today draw on all of that advance work.

So where is this all headed? Well, the idea is to take full advantage of the very fast-moving, performance PC server environment, and apply it really across the board. Historically, you would have thought of that being used for call center applications and electronic mail, but not for the voice mail, not for the keyed systems or remote access, and certainly not for the full PBX and the high-speed switches.

Today we’re changing that, we’re bringing the PC server into the keyed systems and into remote access capability. And it’s part of the collaboration with all these companies moving forward, we’ll take that even further down into the level of the switches themselves.

So the data networks are really converging with the voice networks, and at a profound level, where the actual controller logic will be the same and you’ll have phones and PCs connected up to the server, and therefore to the application in a perfectly uniform fashion.

Now this fits into what I think is the key theme that the computer industry is pursuing, and that’s allowing people to use digital internet approaches for all their activities, moving away from paper order forms, moving away from data having to move in an analog fashion, and therefore not being as integrated.

And so a key element of what we call a "digital nervous system" is having not only the electronic mail, but having the voice mail and the PBX systems connect in, so that if you want to track the calls that you’ve received from customers and get those up into the customer record, that happens very automatically. If you want to track how your time is being spent, including what’s going on with the phone calls or the expenses that you have through your long-distance calls, all of those things just flow across the digital network without having to fill out any forms or re-entering data that another system understands.

So I see this convergence of the voice environments and the data environments as really a key building block to achieve the vision of a digital nervous system.

The digital nervous system is something that every business is going to need to think about, because the pace of business activity is going to be much faster. This goes beyond just having a nice website. This goes to how all the information flows inside the company. Even at the website, the idea of voice and data coming together is very important, as Dave Haustus mentioned. And tracking what’s going on there back into the internal systems, is enabled by the approach that’s being taken in these new products.

Now, one of the ways that we’re going to make sure that we get the full benefit of the architecture being announced today is we’re going to reach out to application developers and customers. And so Nortel, HP and Microsoft are announcing the Center of Excellence Lab. We’ll actually have two locations for this. One will be in California at Nortel, Santa Clara offices. The other will be up in Ontario, which is the Bramson facility at Nortel, where a lot of their development is done.

Having this center represents a multi-million dollar investment on the part of the companies involved. And what we see here is bringing in developers, developers who understand vertical areas. For example, people who might build messaging applications for the medical environment, or the legal environment or the branch sales office environment. They’ll come in and test their application against the server products that we’re announcing today, and we’ll make sure that we’re evolving those products to fit the needs of those developers.

We’ll also have customers come in and see the kinds of scenarios that these products enable. And, again, it will be an opportunity to get feedback that allows us to take these products even further.

So I think having this Center of Excellence Lab indicates that we see this as not just a single product announcement that’s very innovative, but a foundation of these companies working together to go even further in the direction that allows for these rich digital nervous systems.

So we think this will be very interesting for customers. Customers, when they start to recognize that they can share the infrastructure, that they can move the information easily between these systems, they get very excited about that. Underneath the server, of course, is the full power of Windows NT, and the evolutions we’re making there in terms of the scalability, the clustering for very, very high reliability, the interoperability with other systems. All of those are part of what’s beneficial here.

In fact, Nortel, in building their applications, actually took some of the rich Windows NT features, like our Internet Information Server, and used that to present rich views of the PBX type information. In previous PBXs you wouldn’t have that access to information in any way.

We think the Centers of Excellence will be great, not only for the showcasing, but to allow other companies to come in and put their pieces on top of what we’ve got here. And it all fits the direction that we’re very excited about, which is allowing there to be these digital nervous systems, allowing companies to work in more competitive ways.

There’s a lot of work that Microsoft has done with all the companies here today. Intel and HP are partners that you hear from us a lot about the great things we’re doing with them. Also, if you just look back the last couple of years, there have been quite a few enhancements with Nortel, the call center work, the voice on Internet site type work. And you’re going to keep seeing more here; this announcement, though, I think you’d say is a major milestone, because it’s shows the vision of the data network and the voice networks coming together.

So I’m very pleased to be part of this announcement, and I really appreciate the opportunity to share my enthusiasm.

DAVE: Okay, Bill. We appreciate it.

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