Remarks by Bill Gates
Microsoft CEO Summit
Redmond, Wash., May 19, 1999

BILL GATES: Well, good morning. It's great to have you all here, I know we scheduled it this year in conflict with a very important event, which is the premiere of Phantom Force. So we appreciate your choosing this event over that one.

It was two years ago when I had to make some remarks about how we thought work would change at the first CEO event that I actually came up with the term digital nervous system. And during these last few years I've thinking about the opportunity to really give people better tools to work in a new way. And after all, at the end of the day, every company is going to have a very rich Web site with rich transactional capabilities. That will be a necessary tool, but not one that will differentiate one company from another.

The actual technology that gets used, these incredible chips, the incredible communications capabilities, those are available to everyone. And so it is how you take these tools and use them inside the company to actually create the products or provide the services, that is going to provide the competitive differentiation.

And so every company will be challenged to take its business and map in these new tools. This is a quote from Jack Welch that I think is very appropriate. In fact, I have a screen here that has a great quote on it, it will appear here in a matter of minutes. There we go. It says, "An organization's ability to learn and translate that learning into action rapidly is the ultimate competitive advantage." And I certainly agree with that, and I see ways that companies can actually do this differently than ever before. In fact, I'd say in every one of the organizations here, there are probably specific things, groups that are actually adopting advanced practices, whether it's having databases all online and mining those in new ways, getting rid of paperwork, collaborating through video conferencing, but I'd actually say if you take any of the organizations here in total the potential of how it possible to work in a new way is only being tapped to a very small degree.

Even if we take Microsoft, where we've been thinking about this and making ourselves a showcase for the last four years, things like having no paper forms, and putting in the wireless networks, I'd say we are only about halfway to what we think we can achieve. There are a lot of barriers to an organization getting the information to where it would be most valuable. Organizations have lots of feedback from customers, they have lots of employees with good ideas, and yet that doesn't come together for a variety of reasons.

You have people in different locations, you have people who don't know each other, don't trust each other, and really face-to-face is still the primary way that information is transferred. People have limited time, they are very busy, and they don't really have a directory that guides them throughout the organization. Very few companies have the ability to say, if I want to address all the people who are experts on this topic, or who might be interested in a certain type of experience, is very hard to notice people would be. And even if you do the trouble to go and do it makes it very unlikely that you'll get that type of sharing.

You also have cultural barriers that because all of this is done very ad hoc, and it's done through conversations, it's hard to measure, is hard to encourage, it's hard to really tie people's reviews into are they doing this kind of sharing. And so only by getting it into a digital form is there an opportunity to really look at that behavior and reinforce the people who are doing it in the best fashion.

This is still a world that's very, very paper driven. You know, I said last year that paper forms were on their way out, but even if you got rid of paper forms, you know, as people go to meetings and take notes, as people want to have long documents that they read and scribble on, there's a lot of ways that paper is going to be with us for quite some time. And the whole way that you tie in those paper systems into these digital systems, there is a lot of impedance there, it's a lot of trouble.

Also the computer has not made it as easy to find things as we'd really like. You know, most people they can probably find things in their office, in their drawers or on their messy desktop, a lot faster than they can find it by giving commands on the computer screen. And in some ways that's a limitation of the software, in some ways that's because we haven't made the categorization of documents as rich as it needs to be. And there's a lot of advances taking place in that right now.

Today when people think about interaction, when they think about meetings, they really think about all being in one place, having everyone there together, and meetings are just sort of a one kind. You come together in a room and take the time, and no matter what the type of meeting is, there are not digital tools that are helping you out to run that meeting in a new way.

So, I have some questions that I think really stimulate a company to think about the new opportunities. The DNS, it's not just there to cut down transaction cost, it's not just there to eliminate administrative overhead, it's really there to allow an organization to learn in some new ways. So a question like how do you find experts in the company, well, if you set up an electronic mail directory, you are categorizing employees and you can put in lots of information that would make a search like that very, very easy.

You can have a directory where somebody can sit down and look at photos of people, look at the place they work, go and see their work history, or just simply address a group of those people very, very easily.

In terms of a framework to encourage and facilitate sharing best practices, you first have to have the infrastructure where somebody can write up a post-mortem, where they can take an insight and put it out somewhere that other people can see it. And then, if you have that, it's very easy for somebody who is benefiting from that information simply to indicate, as they browse it and say, hey, this is very helpful to me, to give a few clicks and suggest that that was an important thing, that it's a worthwhile article for other people to look at, and it suggests that the person who took the trouble to create that really made a significant contribution.

Now, part of this is making it easy to find things. Now, Microsoft always does a very thorough job at the end of a project writing up post-mortem reviews. And we don't fall into the trap of just praising the things that were done well, they're really pretty tough; they are fairly numeric, they suggest doing things in a different way. And yet those documents are rarely read, because at the time when you might need an insight from them, the fact that it would take maybe a half-hour or 45 minutes to track all of those documents down and to sort of flip through and find the appropriate section, it makes it almost as though those documents don't exist at all. It's really just the people who are on the project who are getting the benefit of what went on there.

And yet, these documents are being created on computers, and so it's kind of crazy that they are not preserved and indexed in a way that makes it possible for somebody in less than a minute to go out and pulled up those related documents, have them ranked in an appropriate way, have the portion of the document that applies to their problem highlighted for them, and then be able to take advantage of that. So it's a pretty basic idea, but one that I think there are almost no companies today that really meet that test in its full implication.

Finally, there's the notion of using feedback loops in a different way. You know, I'm a big believer that feedback loops are very, very important. The customer feedback loop, you know, if you have a big customer base and you are listening to that customer base tell you about what's wrong with your product, or what's wrong with the way that you are working with them, you know, as long as you get that information to the right people, you should have a huge competitive advantage. The marketplace is taking time to help educate you, and help you set your priorities.

And yet, as companies get larger, that idea of taking that feedback and not just being anecdotal about it, actually in many cases being numeric about it, it gets to be very difficult. In fact, you go to lots of meetings where a decision will often be based on who has most powerful anecdotes and, as a CEO, you often wonder was that a statistically significant anecdote, or was it just the forceful story that was told there? Sometimes a horrific story that makes you say, okay, I guess we should go in that new direction.

What you'd really like is an environment where in any customer interaction it's possible for them to give you quick feedback. Here the Web site is sort of the ultimate in that you can take some percentage of people who visit your Web site and simply put up the screen at the end of that session, and say, did you like the Web site, at least get them to give a general rating, and if they were frustrated by what went on, if they give a low rating, then you tag all of the interaction that took place there and have somebody go and look at that. If they type in a search command on your Web site trying to find some product information and they get no results, you know, obviously they are not going to be too happy about that. You have all that information.

And so a Web site, if it's properly managed, if you look at the traffic, if you ask people to give you feedback, you know, that's something where every day you can go back in and say, hey, we need to make this Web site better.

But, you can also take the approach of getting feedback and use it in many other domains as well. Today, with electronic mail, it is possible with the right tools to sit down and, say, in 15 minutes, write up a little survey. You know, design the questions that are important to you and send at out. And so, whether it's going out to customers who have electronic mail, or whether it's simply inside the company, I often will compose something like that.

You know, say, I hear that a group in the company is skeptical about the schedule that their management is committed to, or is skeptical about the direction we're going in, if you just write a little survey -- four or five questions, and mail it out. You can designate it as something that is anonymous. So when people get it in their in-box they know that the answer they're giving is just unattributed feedback for management. And so in 24 hours, because you have electronic mail broadly out there, you can get a sense of what's really going on in a group, what's the morale like, do they understand where things are going, is a situation where you need to dive in and spend some more time.

So having that kind of information, I think, is invaluable. And these new tools make it fairly inexpensive to always be in touch in that sense. Certainly with internal employees that's very, very easy, and with customers, that is going to get increasingly easy and allow you to be on track. So the goal is to take all these knowledge workers, which even in companies that you think of as manufacturing companies or mining companies, the knowledge workers are a fairly big investment and a key point of differentiation. It's to take those workers and get rid of a lot of limits that they have had to deal with.

So I'm going to talk about corporate memory, a thing called digital dashboard, and a new way of thinking about meetings.

Now, we are very optimistic about this and how it's progressing. You know, it's kind of a mania today. You can't pick up a newspaper without reading about how the Internet is revolutionizing this or that. But, when you really look out at the statistics and see the percentage of people that are using it, or even when you look at companies that often say they have electronic mail, and you look at the volume of messages that are out there, you get a clear sense that we have a long ways to go. Even the most basic elements, some of the usability of these systems, making them easy to set-up, you know, we can do a lot better as an industry. And year-by-year we have to make sure we remember those basics.

One way that we try and stay in touch with that is by asking someone to go out and just talk to the man on the street, sort of get the consumer's view of how they think about all these new developments. And so we hired somebody to do that and put together a little video that captures the kind of responses he got. So let's go ahead and take a look at that.

(Video shown.)

BILL GATES: So we still have a long ways to go.

The concept of giving the knowledge worker all these tools is not some thing that can happen really in a bottom-up way. It's partly why it makes it and interesting topic for this group, because it's not something that can be done division by division or even project by project. A lot of the infrastructure is a one-time cost. For example, setting up the very reliable electronic mail, or changing the company culture so that people really get things online and categorize it in the right way so it's easy for people anywhere to access.

So it's a broad investment that applies across all the difference activities in the company. If it's only applied to one area -- for example, tracking sales data -- you can have a pretty good return on that, but you get a much better return if you leverage those across all the different tasks that people do instead of just the one thing.

As we go forward, we see the idea of having office information wherever you go. You often hear people now talk about these different devices, different screen sizes connected up either through wired or wireless networks. What we want to get to is where you can go any place and if you have a screen and you authenticate itself, whether that's a password or a little card for a voice print, however you identify yourself, your information is immediately available actually in the form that you customize it in, your digital dashboard appears wherever you go.

We also want to make some advances that have to do with how you think of the screen and paper, really get the screen to be superior in every way. And finally get natural interaction with the computer. And all of these things are very achievable over the next five years. I think these will be common sense in that time period. In the same way that there was a point at which computers were not graphical, they just had text up on the screen, and people were very skeptical. Well, within five years, you know, every computer had changed to work in that new way. So these concepts I think -- it will be surprising how quickly they move out and get implemented.

What is a good example of corporate memory? Well, the consulting companies have really seen that this is a key area for them to try to jump onto first, because they have a variety of engagements all over the world with different kinds of industries, they have different people, and they don't want to fly all their people around every time they have a new kind of engagement, and get people in one place, and yet they'd like to share the learning that has gone on.

And so KPMG decided to build the system they called K-World that captures all of those learnings. And I want to be clear here, it's not just capturing text documents, it's very important that systems like this deal with both numeric data and text data. And so whether it's PowerPoint slides, Excel spreadsheets, queries into databases, the idea that a system like this can let you navigate by industry type, by type of problem, by geography, any way that you might hone in and see if there is a learning experience that has gone on at KPMG, you ought to be able to get to it.

The fascinating thing is that when KPMG put this together, you know, they found out that the way they were dealing with information previously was really so ad hoc, for example, in terms of buying newsletters, buying industry data, they found there were often dozens of offices who were buying the same information. And because they were buying it in paper form and circulating it around, they had no idea the other offices were doing the same thing. So when you build a system like this, you can take that external information, go and get a digital site license for the information that really is worthwhile and applies, and get indexed into this system, so that way how you navigate to find that external data is the same as finding the internal data. They actually saved a pretty massive amount just on the inefficient buying that was taking place there.

This was the impetus for them to go from having three different mail systems down to a single mail system. And a mail system that people would really use, that they would attach rich documents, and rely on as opposed to one that sort of worked and was actually separate from their voice mail system. You know, some people like to use voice mail, some people like to use email, and if you've got two of those people trying to have a dialogue with each other, it was often very inefficient because the email guy didn't check his voice mail often enough, and the voice mail guy didn't check his email. And only when you get a unified messaging approach, were those are both in the same in-box, and easy to navigate, do you get over that.

So for KPMG, they are connecting their 93,000 employees around world to this system and the quote from the CEO is that the system isn't just to help the company, it is the company. Now, so for them this is particularly obvious that it should be done. And it's particularly obvious that when you have a learning that it needs to be categorized an inappropriate way, that that investment is very worthwhile. In fact, now they keep track of the different articles, who has contributed the ones that have the most impact, and make sure that positive feedback comes in on that.

A new term that we're using today is this idea of a digital dashboard. It's saying that for any person in the company, there's a particular sets of metrics they care about. You know, for example, say that the CEO gets up in front of a company and says, you know, we really care about customer satisfaction. Well, wouldn't it make sense then to have some sort of metric that's updated on a regular basis that really appears on all the key employees' screens that says, how are we doing on this customer satisfaction? You know, what are the and let people drill down and see cases where things have improved and see cases where things need to get better.

If you have some initiative around your company that relates to quality that you are going to make sure that your manufacturing reliability is super, super high, if you want to keep that foremost in people's minds, you know, on this dashboard there should be the numeric data there, the latest thinking there, and everybody should be reminded of it on a daily basis. In fact, you can say that having a customized screen that brings everything together allows an employee to essentially pursue the priorities that are important to them.

And what the technology lets us do now is get this information from a variety of sources. We are working with So. Cal. Edison where they were saying the technology that you have is very rich and very powerful, but what kind of impact can it have. And actually forced us to step back and say that we weren't thinking enough in terms of solutions. You know, we had this engine underneath that could pull data together and display it in different ways, but we hadn't done a good job of really showing how a business could take advantage of that.

So we actually sat down with So. Cal. and worked from the top and worked with some of the key managers there and really stimulated our thinking, in fact, some of the refinement of our technology on how we make this possible. And so this screen shot is actually a desktop that we're working on with So. Cal. that, you know, I think we'll have templates like this for different types of industries, and that really show people what can be done with the digital dashboard. In fact, in a few minutes I'll show you a little bit of what a digital dashboard would look like for me, and the kinds of things that are brought together there.

So, it's a concept that in the past you might have thought of as a something like executive information systems. And it would have just been for a few top people, it would have been, you know, millions of dollars to set-up, the system would have been sort of hard-wired and only seeing a subset of the data. Today, somebody ought to be able to sit down and literally in minutes say, okay, I'd like to add this sales information, I'd like to add the status on these customers, and boom their personal digital dashboard will reflect that, or top level management can say, here's a key metric we'd like everybody to work on, and have the IT personnel simply add that metric to everybody's digital dashboard and, boom, they would have that available.

The kind of business intelligence that can be integrated here is very broad. And depending on the job category obviously, you know, which of this kind of information and the way you want to look at it varies quite a bit. But, it is pretty phenomenal in many companies how little awareness there is of these key metrics. You know, do people understand the cost data and the trends in there? Do they have an ability to take, if the cost is out of line, sort of set a threshold and be notified if something is particularly high or different than it's been in the past? How easy is it to navigate sales data? When we have business review meetings, now and we are actually bringing in what we call pivot tables, the things that let you navigate these things, because during the discussion people will say, 'Well, this wasn't a problem in this region,' or 'This product came up with an approach that overcame that.' And you really want to just dive into the data and see that in real-time and be able to see if the propositions that's people are making really are borne out.

So having this as live data, you know, not on paper is something that makes a big difference. You know, as soon as data is on paper, in a sense, it's getting out of date, and if you look at the data on paper and it surprises you, what do you do, how do you share it with somebody, how do you dive into it?

Project status is a big one here at Microsoft. You know, I take major projects and I look at various bug counts to see how they are progressing on those things, like we have one called Windows 2000 that is pretty top of mind right now. And for me to have data information daily, kind of today's sense of the trends, to be able to send mail out to people, encouraging them and trying to find out if things are going wrong way what issues there are and how we might make trade-offs in a better way. That's very, very important.

And yet in many cases you want to integrate this information. You don't just want them to be in isolated places. And the stove pipes you've had is, you go out and buy one piece of software to solve one problem, another piece of software to solve another problem. The way that the software packages present the information is obviously just going to be confined to the area that application is designed for.

So you need a system that can actually pull the data from all of those, put it up at a very high-level, and yet let you dive into its and see what's behind it.

Another concept here is this idea of rethinking meetings, thinking about how can you use video conferencing, how you could send information in advance. If it's a meeting that's just presenting data, well, why not have people read that before they go to the meeting and restrict that time to simply having the discussion.

In fact, meetings come in many shapes and forms, and now with these new tools you need to think about those different meeting. It's not a case where you say, okay, lets get rid of all meetings, but it is a case where many of them go away and many of them could be made far more productive.

A classic example of using technology to get people together and get things done faster is British Petroleum when they had an oil rig go down and was able to use a very cheap video conferencing capability to get up and running very rapidly. The interesting thing was that that anecdote spread throughout the company, and so now BP today is really one of the leaders in terms of taking the online meeting capability that's built into the PC, called NetMeeting, where you can share screens, work on a spreadsheet together, work on a document together; it's used very widely because there was a key example that made people recognize that this being able to work at a distance really is a real technology. This is a case where, I think, even what's available right now is vastly underutilized across the world.

Another thing we're going to see that the way we've thought about Web sites, where we just think of them as just screens that come up, and you navigate through, that's going to change. Right now, there's a complete separation, calling a company on the phone and having a nice discussion with them, and going to their Web site is completely separate. In fact, if you go to their Web site and something confuses you, and then you call them on the phone, establishing the context of who you are, what you saw, what it was, it's almost not worth the trouble to go and do that.

What you'd really like do is to bring both of those together, so that somebody can browse, see the product offerings, know what's going on, and then at the appropriate point, if they are concerned about something, need a little bit of advice, they just to connect up and they are able to have a voice conversation. In fact, depending on the bandwidth it would either just put up a still image of the person you are talking to or, if it is preferred, you can have actually a video link, business-to-business; and in many cases you'll have that kind of connectivity.

And so even a Web site will become a place where essentially you can meet with customers, and have ad hoc discussions, not just the information that comes out of the Web site. And if you think about selling, banking, many different industries, this will be a huge step forward in terms of drawing more customers in to use that combination.

Here at Microsoft, we have a lot of meetings that we are doing in different ways. My favorite example is the group that works our product called Exchange. They have what they call a war room meeting, because they're not too many months away from shipping a major new version. And this is a meeting that took a lot of time for people, you know; it was 90 minutes in the morning, and you never quite knew when your part of the meetings would come up. So, you would always have to go up there and typically you would find that maybe some other part of a meeting was going on longer, so you would sit and wait and people who didn't want to take the time to go to the meeting would always have to say to people, 1Hey, what happened in the war room meeting? Did we decided to do something very differently?' So it is a huge overhead, but important because you've got 500 people who all work on this project, and you really need to be very coordinated.

So what they did is, they took the meeting and of course broadcast that over the network. So somebody attends the meeting without actually being there. They also made it so all the documents they were working with in the meeting they would display on the screen. And so even the people who actually come to the meeting room, they have a computer with a wireless connection, they'd just take their portable computer into that meeting and they can see the documents that were being displayed, they can navigate through and see the detail, they can sit there during the meeting and send off electronic mail relating to action items.

People who are not actually in the physical meeting, if they hear something they disagree with, they think is interesting, if there's a known meeting moderator they can send electronic mail into, and of course if you are monitoring at meeting from your PC and you're supposed to come in for a particular part of it, then you get a sense of the meeting flow, when things are going to happen, and you show up exactly when you should.

So this is sort of a case of using our own products and actually getting quite a bit of benefit out of it. In fact, that the whole idea of being wireless was definitely pushed forward pretty dramatically by the experience these guys had.

Let me take a quick minute here to show you what a digital dashboard would actually look like. So here I have a screen, this is not the digital dashboard, this is just a typical portal site. This happens to be the Microsoft portal site, which is very focused on consumer type information. So that's one of the screens I have, I have my normal in-box where I see messages, I have my normal calendar, and all these views are still valuable if I'm just working on that one thing, I want that kind of a screen.

But, here I have what is my digital dashboard. And this is something where I've taken the information that's meaningful to me, and pulled that together. So you can see I've got some commands up here at the top, it's a normal Outlook thing. I've just customized Outlook, which is our mail program that you use to navigate your mail. So up at the top, you know, I picked some stock quotes I'm interested in and they just scroll across, and there's news headlines. And any time I can just a pick one of those news headlines and see what have we announced, what's going on, anything there at happens to catch my attention.

Now, I've defined here an area that I've called critical messages. I take certain people who send me mail, anybody who marks it urgent, certain topics, and I have those come up to the top so they are easier to get to. So I might say, okay, here is a message from Steve about a monthly meeting we have, just letting us know he wants to do that. I can just note that and have it available.

Here, I've got another message, and when I open it I can see it's a voice mail message. So when anybody calls into my extension and leaves a message, it just shows up in the in-box like this. If I want to play that, I play that. So here I'd say, well, I don't think I'm going to do that. So I'll just send it to Steve and say, looks like you're going to Mexico. Okay. That's taken care of.

So then down here I've got my calendar, I can look at all the different things going on, navigate through that, any of these sections I can just closed them up if I want to devote more screen to different things. I've also gone out on the web and taken some things that might be of interest. You know, say I have to drive downtown and go across this bridge, there is a Web site out there that just takes photos on a regular basis and shows you what the traffic looks like, or if I'm ongoing home I can see my exit, it looks like I can go downtown or to the airport. And it's pretty trivial now to go out and find these things on the web and just say, okay, I'd like that to be incorporated into my dashboard, or you might have something like the weather forecast here I've taken different satellite views, or you can get whatever might be interesting. If you are going down to South America you can see some storms down there, so weather type information. So it's all here are and just navigating into the different pieces is a pretty simple click.

Up at the top I've created some commands. For example, one is a news services were the company as a whole subscribes to a lot of news feeds, and then they get categorized very carefully. There is external characterization, but then we have somebody here who understands our taxonomy for dealing with things, which product groups might be interested in something. And so one person does at, you don't have to have lots of people out there navigating around. So everybody, in their mailbox, can have things setup the way they want.

Here, I've got news relating to Microsoft in the last few days, the cable industry, telco industry, various competitors, Sun, IBM, Novell, our partners, things that are going on with them. So whenever I feel like it I can come in and navigate in here, and of course it remembers which articles I've read, so I'm only seeing the things that I either chose to keep or that I haven't had time to read.

I also like to keep track of various customers. I have particular customers that I want to monitor as a sample. And I have the customers I'm going to go out and visit some time in the next few weeks or that happen to be here visiting us. And so I've got shared folders for these accounts where anybody can put information in. So the account manager, or if it's a partner like Intel, there is an incredible number of groups around here at Microsoft who interact with Intel. So when I'm going to have a meeting with Andy Grove, I'll get different things put in. I don't want to just have them mailed to me. I mean, they could do that, but I don't really want to pay attention to that just as an interruption whenever they happen to send it. I'd like to see all the information about Intel at one time. And just having them put in this folder is a lot better than mailing it off to me.

Also I'll have the library put in the latest financial results from that company and just so I'm up to date on what kind of situation they have. So say it's BP, here you can see that's a spreadsheet icon, so when I open that up I have a lot of different slides here that show the information. And you might think, well isn't that a lot of effort to put that in there. Well it's about five minutes, really, because all this stuff is out all the web today and pulling it in and just putting it into that folder is a really just kind of a drag and drop operation. So you have a variety of customer information so you can be ready for any visits that you might be involved in.

Another thing that's an important part of my job is giving presentations, and I want to draw on presentations that other people are doing, if they've come up with good slides, and people like to see my presentations and take from those. And literally the day after I give the presentation they want both the transcript of what I said, because nobody knows in advance what I might say, there are no notes or anything that might control that, but if they just want a check how we are positioning something, what we're talking about something, or use the slides, there's a folder here that is shared out to everybody. I've actually selected to have the slide sets that Steve has, or Jeff has, or Orando has here, as well. Now in each one of these you can pick categories and sort of say what kind of audience you were targeting with them. But, if you just want to open up -- let's say you want to open up this one I did on Windows World, there is all those slides. You have this view you can scroll through those, and just drag and drop the ones that you might want in your presentation. So that's a pretty straightforward thing.

Now, let's look at this business intelligence part of this, the numeric side of it. I actually think more than half the value of the digital dashboard is the numeric information, and being able to navigate that. Here I've chosen to take some sales data and show it purely into graphical form. Now if I want to go down and see the numbers behind it, I can click on the pivot. We keep using this term pivot, what that means is the ability to see the data and navigate along in any dimension, zoom in on time, product, geography.

Here, let's say I'm going out to Chicago, which is in our Midwest district, and I want to see how their results are. See ,for the company as a whole, things look particular; we are a little behind particularly in this desktop area. There I can zoom in and see of the products that are in that group, which one is behind, I see that it is mainly Office that is, or I can go in by any region, or by any district. Let's say I want to take lead Midwest district and see them. So as soon as I do, it takes the subset of the numbers that relate to the Midwest. And so, I see they are actually a key driver of why we are behind in that category. And again, it's really in his Office area. And so I think, boy, that's a problem, particularly because I'm going out there are I'm interested in it. I can look it this data in numbers, I can look at it in charts. We actually have a new way of looking at it in terms of maps. This is a little add-on to Office that we call Map Point. And so it takes data that's at all regional and shows it to you on a map.

So what it does is it takes the average and then shows automatically it just colors, and who is well below the average, who is well above the average. It's just a map of the U.S. so I can kind of zoom in on it and see the different regions, or zoom out and see whatever you want. In this case is region by region and you see for Office overall, it's just at one region that's behind and then these few other regions that are ahead. Now, if I want to see -- zoom in on that in a different way, I can say, okay, well what about small business, which we have our own acronym for, SMORG, then I just select that. Now this is choosing a subset of the data, which is selling Office to small business. And here I see again the California area is the leader and there are actually three other districts that are substantially behind in how they do this. And so that actually kind of interests me, it makes me think are there best practices out there on the West Coast and things that they are doing well on that.

Well, I have sort of my corporate memory tap -- it's a thing called search up at the top there. So what I click on that, there are two ways I can navigate this. One is that somebody has come up with a taxonomy, where I can go look at the org chart, I can go in and look it different product groups. But, I can also just type in a text string and say something like 'success with Office in small business' and it takes those words and it goes off and tries to find the documents that relate to that. And not just the documents, that's actually a key point. If somebody has actually declared them themselves as focused on this problem and having some expertise there, they will show up as well. So here I see Betsy Johnson is there, I can ask for more information about her, it is goes up to the directory and sort of gives me some background there and I can see that there are some document here that talk about what people have done, what the issues had been in terms of how do you get seminars together. Selling to small business is a fascinating problem, because it's not something where you can afford to call in each one. You have to have a great partnership with the channel to get that done.

Now, as I'm doing this, I see that I've got a little message here that has come on that relates to -- I guess I had a meeting scheduled, and I see somebody is reminding me that it's time for that meeting. So I go back to the original view. I just click on this Outlook command here. And I see, okay, here is my schedule I can just click on the meeting and I see that it's an online meeting. And that was selected when the thing was set up. And so I can just say right there -- I can click the join conference button. So what it's doing is it's using the network, just the normal data network we have, and connecting me up to the other people who are signed up for this online meeting. Now what does that take? Well, it takes this little camera, this is about $100 camera, it's called a USB camera, it's a simple way of connecting these cameras into PCs. And they're pretty inexpensive now. So they will be fairly typical.

You can see the other people in the meeting, and this meeting was labeled Midwest District, planning the trip that I'm going to take out there and talking about what are their tough issues. What they've done is they have brought up the agenda so we can look at that, scroll through that, and edit that as a group while we're having this meeting. And so each of these guys is actually nominally out in the Midwest's sitting at their PCs, so we can have this conversation. I'm looking forward to going out to the Midwest, but I really think we ought to get some advice on what to do about small business. Okay. Let's get Betsy, I saw that she's an expert, let's see if she's available to come in and join us.

So I just bring up the little instant messaging capability here. And this is real-time communication, you have messages that go into the in-box and you have messages that go into the -- that immediately pop-up on someone's screen. And if I send a message like that people are surprisingly responsive and so here we say -- we ask Betsy if she'll join in. So she can just click on the meeting link and then she'll get connected up. It takes her about 20 seconds to get the video synchronized and we'll see that she'll come in and then it will just four of us talking and working on his agenda.

I think we'll see Betsy here pretty quickly. Now the idea here is not that video fidelity is fantastic or anything, but you do get enough video fidelity to get a sense of is somebody engaged, are they agreeing with you, are they bored with the meeting, the kind of clues that you would like to get that help a lot in face-to-face meetings.

BETSY JOHNSON: Hi, Bill.

BILL GATES: Hi, Betsy. Why don't you help these guys out their plans for selling to small business.

BETSY JOHNSON: I'd love to, we've done a lot of great learning here in Southern California over the past couple of months.

BILL GATES: Well, great. You work with them and I'll move on to some other problems.

So that's an example of the digital dashboard and the kind of things you can incorporate there, very basic stuff-- mail, messages, sales data, any of the numeric things that you are using to measure a business -- that's exactly what can be included. And when it would have taken a consultant company a lot of money to go out and build one of those things, you know, is really didn't make sense to do it. Now when and if you get the right infrastructure in place, rich electronic mail, the fact that for any job category you can take a few weeks and have a template and then people just take literally minutes to customize in the parts that they care about that's something that I think is very worthwhile.

I mentioned that we are going to have these different devices. Logically, they will all be connected to the same network. The fact that some will use wireless, some will use different wired connections, the fact that some will have big screens, some will have small screens, some will be TV screens, that doesn't really matter. You will be able to navigate out to anything that you care about. There are some technical issues about how you set up a Web site to automatically change its interface for these different screen sizes. And technology is going to do a lot to make that more automatic and make that easier. Today wireless data networking is fairly low data rate and not broadly available.

But, that's going to be revolutionized in just the next few years. It will start at the campus, where businesses will be able to have very high-speed wireless networking in their business area, but then as you leave and go off see a customer or whatever, you will still be connected, just a lowered data rates. So these devices are Internet devices. The one that's the full-screen is the one where you actually create and edit documents, that's what I call the PC. And all the other devices are companion devices that let you actually browse the same information, but they are not as rich in terms of the actual authoring and navigation.

This idea of the wireless connectivity is kind of a new thing; in fact, when we put it into a few of our buildings, I said we were amazed at how all addicted people became to it. In fact, when they transfer to a different group now they are sort of saying, hey, I really only want to go to this new group if we can get that wireless thing connected up as well, because they can take their PCs with them as they go and everything is absolutely connected up. It's a new kind of meaning. So in the next year we have told people we were going to go ahead and install this. It's pretty inexpensive, there are people like Raytheon and several others who have taken standards that are out there and built products that work in frequencies that you don't have to go through a licensing process to get. So it's just a matter of stringing up some wire and putting those up there.

The thing that we want to is not just have it be a data network but also be the voice network as well. And right now when we move people between offices it is very complex to reprogram the PBX and it's actually a fairly expensive part of the fact that we move people around all the time. We just prefer to have them have a little wireless, palm type device, that is a better interface than that phone, too, and they can just take it with them to their new office or have it with them wherever they go and not have the traditional way of having to work with the voice network.

Another key advancement is this idea of electronic paper. Why don't people read everything on the screen? Well, the simple answer is that the resolution isn't good enough, and the fact that you can't move around and change the angle of view and be comfortable; the book is a well-designed product. It's not just that people are used to it. It's ergonomically an approach that can't be matched. And so, the only way to allow people to really move to paper primarily is to have something that is virtually like a book, that is a tablet-sized LCD, where you can detach the keyboard and work with that. And that's another place where we are making great progress.

Actually, this is a case where the early progress is sort of paradoxical, which is, because there is so much demand for these LCDs, to move from the CRTs to these high-quality LCDs. They are actually in very short supply right now. Now, hopefully, the marketplace will response to that in the right way. Certainly the quality of what is being provided there is far better than you would have had in the past. So we've got to combine the appeal of paper with the power of the PC.

Let's take a quick look at some of these new things. We'll actually have, in the next break, we'll have some people outside who will be showing each one of these things. This is a kind of state-of-the-art LCD. It is quite expensive, its US$2,000, but this format, where it's quite wide like that, is really excellent for reading. In fact, if you combine it with some software we have, I would read off of this just the same as I would off of paper. In fact, the whole tradeoff of which magazines do I read on paper versus on the screen, since I got this about a week ago, has shifted quite a bit. So it's really very, very high-resolution, both for images and for text.

Here is a new form factor in which we talk about, it's the Tablet PC. And this one, actually, when you use the keyboard it's a detached keyboard and so you never have to detach it. You can just choose to take it into the meeting, just the screen itself. We have a pen here which works like the mouse, where you can take annotations.

We've also been working on the handwriting recognition software. And it's a lot easier to recognize handwriting than it is to recognize speech. In fact, some of you may remember a few years ago there was a whole fad of people trying to do pen-based computers, but the quality of the hardware and software wasn't good enough. Now, that's improved where we think this form factor, people taking a tablet in and literally taking notes or coming to a meeting like this and taking notes, that's going to be a mainstream scenario fairly soon.

Part of that is driven by the fact that these portable machines, this is actually a Sony machine here, but there are a lot of people who have gone down to these smaller form factors. The size has improved very dramatically. I mean, that is not that much different than a tablet. And having the addition that in some cases the keyboard can come off and you've got the pen for the screen. It's not a huge transformation here as long as the software applications make it more attractive to do your note taking that way.

Now, some people are talking about creating a device they call an E-book. Now, what's the difference between a PC and an E-book? Well, here you'd make the tradeoff that you don't have the richness to actually create and edit documents. You just have the ability, primarily, to read the documents. And so you can get rid of the hard disk, you don't need quite as fast a computer. This one just shows that the screens have gotten a lot better, and the form factor is pretty reasonable. You know, those things are coming off at $400 or $500, and the market is going to be pretty small until they can get down to lower prices, but people are putting electronic books up online, because you can read them on the portable PC as well.

These are some of these latest hand-held devices and, of course, the Compaq color one is the one that you all got just as a fun thing as part of attending the meeting. We've actually put this new technology in that lets text look better. I'm not sure of the camera, if you'll be able to get a clear sense of this or not. This is sort of a before and after thing, you may have to go out to the demo bench to see. But here we have the electronic version -- in any case, I don't think you can see it too well in the camera. It's pretty dramatic how you can make this text look better. I mean, it's the difference between if it's a novelty to show off to my friends, maybe I'll use its for a few hours and then go back to the old way versus something that you'd really use on an ongoing basis to read significant documents.

Here's another portable machine that is actually connected over one of these wireless networks. In this one, they've done a good job of making it so that you can use it with the keyboard when it's in this style right here, or if you just want to use it with the pen, you fold it down the end take it into meetings. So that's a touch sensitive screen, so I can take the pen and do something. In fact, what you're seeing up on the screen right now is this from this computer. Here is my digital dashboard, I can take is pen, go in, and I'll choose the pivot, expand entertainment, expand hardware, go up and say I want to do this in a different region, do the central region, see how they are doing. And so all that capability I have. I can walk into a meeting with this, and show it to people, have it projected up on the screen, and be sharing documents with them and, you know, it's a very good form factor. This one is actually using what's called Windows Terminal Server to run the applications, so that's probably why they were able to make this very small and easy to carry around.

So those are the hardware advances that fit into enabling these scenarios. In fact, Craig Mundie tomorrow is going to show a little bit more in terms of things like the vision capabilities that have been built-in. This idea of natural interaction isn't too far away. Now, it's important to differentiate, some things are easy like a command set that you work with. In fact, one more thing I wanted to show, which is that's doing a little bit with your phone, whether it's the screen or a little bit of voice recognition, that's also something that will in to complement these.

And I'd like to ask Craig Fiebig to show us that real quickly.

CRAIG FIEBIG: The idea of a digital dashboard, obviously, is a powerful one, because it allows me, as a knowledge worker, to have access to my information. That's mostly true, though, as you saw from Bill's demonstration when you're either at your desk or you have proximity to a wireless LAN. But, the information becomes most valuable when you can take it with you. So, what we've done is we've built a phone, in partnership, a Qualcomm phone, in partnership with them, where you have access to information from today, email, your calendar and your contacts.

Now, if you go back up and say, for example, you want to look at information from today, this is available through a service that we did in partnership, called Wireless Knowledge, that's available through wireless vendors like Air Touch. And what we're doing is sending information out to the Air Touch tower, and routing it through the Internet and back to the Microsoft campus, where it's reading the email or the today information off of my Exchange Server.

And so what you see it pulling up is a series of emails with the headers, which then scroll by so I can read them, it also brings up my calendar, or really the next three events on my calendar, and then there is a set of rules about contacts. The service itself brings up the three most recent calls I've made and then scrolls those names of by me, and since I have a couple hundred people in my contacts list, I can also search for others.

Now, if I go back up and just take a look at one of the mail messages, I can go ahead and, because this is just the header that's brought down, I send a request back through the system to bring the actual mail message down, which I can then read. And once I've read it, I can then elect to take a series of actions on it, things like reply or reply to everybody who sent it, or I can forward it. And one other feature that I think is nice is, because this is a working on a service that is integrated with my phone, if the system recognizes the person who sent it, it also of displays their phone number. So I could just call them directly and have the conversation now.

But, in this case, what I think I'd prefer to do is just reply to them, so I can request that this system make a reply to that individual. And, again, although this is a useful device for viewing, it may be tricky to type. So what we've done is set up a couple on pre-prepared responses, one that you could say sounds like, yes, it sounds great, let's do with it, or we should discuss this some more, which I think sounds pretty good. So we'll go ahead and send that.

And once we've send that mail, the reply has been sent, it's gone back to the sender's in-box, and as far as they know it is just a mail message. So I'm able to access all of that information using a micro-browser on this Qualcomm phone.

Now, this is great but, again, I spend anywhere from 45 minutes to an hour in the car every day, so I'd like to, if you will, walk to the car with this, get into the car, drop it into the cradle, and be able to talk through the speaker and continue this. Now, the challenge is, I don't happen to have a car convenient. So I'd like you to bear with me and just assume that this is the speaker system in my car.

So once I step in the car I could dial my in-box -- a key technical thing you have to do, which is turn it on. Check email. Read first. Accept. Reply. Absolutely, Bill, we are ready to launch the product on June 7. If you would like to review the plans in detail, I'm happy to meet with you and go through the specifics. Thank you, Craig. Close item. Main menu. Quit.

So you can see how we can work both with the phone and with the hands off device. It was a little more cumbersome than you'd like because we haven't yet gotten to the point where you can interrupt the voice. But, since you know the messages, we'll get to that's part next.

Now, the messages that I sent, Bill, is back in your in-box and you will be able to see that as part of your Outlook mail.

BILL GATES: Great. Thanks Craig.

If he's telling the truth -- okay, so this is what it looks like in the in-box. In that case, he said it up as a voice mail like this. So, it just shows up with all the other electronic mail. In fact, if I reply to that message it will go into his in-box, and then either at his PC he'll see it or if he is off on his phone it is available there as well.

That illustrates a point I wanted to make about speech, which is that the problem of recognizing a finite number of commands, for example interacting with your mail or checking a stock price or the weather, organizing a trip, that is within reach on very inexpensive devices. So, whether its selecting a channel for your TV, for interacting with your phone, that will be there.

But, it's somewhat more difficult and it's probably not won't see widespread use in the next three years is general dictation. And this is where you have to recognize an entire vocabulary. Now, it's getting dramatically better, there's four or five companies, including Microsoft, who are investing very, very heavily in that dictation capability.

And that will come, but the thing that's amazing is people are very demanding about the accuracy of these systems. You know, typing just isn't that hard that they want to put up with even a 2 or 3 percent error rate. And so to get down below that, using the latest hardware and software, is going to take a few more years of refinement before it crosses over that threshold.

The goal is pretty simple, to make interacting with the PC a lot like it is to interact with an administrative assistant, who has full command of all the information that you're interested in.

This thing here is really try and stimulate some thinking about getting rid of the limits on knowledge workers, because we have been stuck with the same tools for many years, and we take a lot of things for granted that employees, broadly, aren't going to understand the profitability equation or how that's changing, or they are not going to know the latest about all the different customers and be able to poll their satisfaction pretty rapidly. And the goal of some of these showcases is really to break all of our old expectations about how these things are done and really help knowledge workers work in a very new way.

So it's pretty exciting and I break down the sort of the things that make sense to us into a both basics and advanced. You know, the idea of email being part of the culture, getting rid of all the paper forms so people are navigating electronically, creating online corporate memory so all the documents are saved and categorized, those are first steps.

Much more advanced is this idea of getting that wireless networking in, bringing in not only data but also video connections, as well. So if you have key meetings people can watch from their desktop, you can save any of that, a way in so people can go back and review those meetings. You can rethink how the time is spent and how it should be done, and creating these digital dashboards.

So there are a lot of revolutionary things that are really within our reach, taking advantage of what we have here and what's going to come out in the very near future.

Thank you.

(Applause.)