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Keynote Remarks by Bill Gates
COMDEX - Fall 2001
November 11, 2001
(Cheers, applause.)
BILL GATES: Well, it’s great to see you all here. I think you know I try very hard during these keynote presentations to try and limit the number of times I mention Microsoft products. (Laughter.) So I want to welcome you to Comdex XP. (Laughter, applause.)
This next week is going to be a big week in the world of entertainment. We’ve got all the things going on at Comdex. Tuesday we’ve got the 200th episode of Frasier, where I was privileged to have a chance to make a cameo appearance. Thursday we have the launch of the Xbox that’s a very big event. (Cheers, applause.) And then on Friday Harry Potter makes it to the big screen for the first time. (Cheers, applause.) I want to go on record as stating very clearly that I was dressing that way before Harry Potter was born. (Laughter, applause.)
Well, this has been a challenging year; as Fred Rosen said, probably one of the toughest years for several decades, for the world at large and for our business. If we look at just one indicator, the NASDAQ at its peak was over 5,000, when we were at Comdex 12 months ago over 3,000 and now in the 1,700 range; a big change in terms of how people look forward in terms of what companies are doing.
We also had the tragic events of September 11th, and I know for everyone that’s caused us to step back, think about our priorities. It’s a tragedy that affects us personally and affects our businesses.
For the computer industry in particular, I think it highlights the importance of security, giving that far more importance than we’ve had in the past. We don’t want our digital systems to have weaknesses that allow for tragedies, exploiting the weaknesses that are there. And so there’s a renewed sense of focus on that.
Those events, and the economy in general, have driven consumer confidence down. If we look at PC sales, a key metric, we can see for the first time that people are talking about saturation. We’ll have somewhat of a decline from last year, but off of very high levels.
So all of these things put together have people saying, "Hey, has technology played out? Was the hype really ever justified, and is there more to come? Is this really it?" And they can certainly point to things that are hard to use, predictions that were made on an untimely basis, and ask all of us where does it go from here.
Well, I find myself being particularly excited about this next decade, excited about the things we have not yet delivered. In fact, I’m reminded of a quote from Winston Churchill that he said back in 1942, at a pivotal time during World War II. He said, "This is not the end. It is not even the beginning of the end. But it is perhaps the end of the beginning."
And I think that’s a very apt statement about where our industry is. The potential we have is barely started. We have not really even scratched the surface of what we can do.
And many of these big advances will take place this decade. It’s often said that people overestimate how quickly things will change in a two or three-year period, and certainly we had a lot of that during the dot-com mania. But people conversely underestimate the profound changes that take place over a period of many years, where you have long-term research and development driving big breakthroughs, where you have changes in behavior, changes in the way that people think about using these tools. And that’s why I think this next decade will be so phenomenal.
We can already see evidence of some new ways of using the tools: electronic communication, instant messaging, which will become a replacement for all types of real time communications, where you’ll have screens, sharing, editing, video -- that’s really quite explosive; digital cameras, which will eventually be common sense for sharing of photos, are now over 20 percent of camera sales, over 18 million during this calendar year.
Closer to home, Microsoft just two weeks ago put out Windows XP. It was a very important launch for us, as important as the initial launch of Windows or the launch of Windows 95 that brought us into the 32-bit era.
With all the uncertainty, we weren’t sure what the sales would be like, what the OEM sales would be like, what the retail sales would be like. Now, two weeks later, we have that data. Our OEM sales are far beyond any new product we’ve ever had. Our retail sales are more than double any version of Windows or, of course, any software product that’s ever been released.
So it really speaks to an openness to new approaches, to the kinds of scenarios and experiences that these new products will bring.
And that’s why I’ve titled tonight’s speech "The Digital Decade." When I say that, I mean from 2001 to 2010 the new things that will happen, taking digital innovation and bringing them to be an integral part of life.
Now, the impact of this will not be limited to our industry. In the same way that during the ‘90s every industry was energized by the kind of productivity that our tools provided, that will happen again. If you think about knowledge workers, the people who have to examine information, make decisions, the productivity we’ve brought to those workers has been significant, but in the decade ahead I can predict very clearly that we’ll provide over twice the productivity improvement as we did during the ‘90s.
For enterprises we’ll take the rather shallow approaches that are being used for digital commerce today and drive the real promise of B2B. There’s an underpinning of that that’s just come into focus recently as a key industry standard, which is the approach of using XML called Web services -- a very, very important set of advances.
And in the home, things like having shows when you want, music, video, you’ll almost have to think of that as an entertainment revolution that will come together.
Now, in thinking about this, we wanted to verify our enthusiasm by going to outside experts. And so we decided we’d get them to really go out and talk to people, think about it, and report back on how they see this digital decade unfolding. Let’s take a look at that.
(Videotape presentation.)
(Cheers, applause.)
BILL GATES: It’s going to take a lot of energy to meet the challenges of the digital decade, and it looks like Steve’s got enough for all of us. (Laughter.)
Well, the digital decade is not just about any particular aspect of computing, taking enterprises, knowledge workers and homes and building standards that connect all of those together. The key piece in the center is trustworthy systems, systems that do what you expect on an extremely reliable basis. So in each of these areas we have new scenarios, new ways that people will be using their computers that they never did before.
The basic theme here is the theme of empowerment, a theme we’ve been talking about for a long time, but we’re moving into a far more advanced stage of the different ways that people get empowerment.
Why can we do this? Why is it now as opposed to some other decade? Well, the answer partly comes from the work that the hardware industry is doing. The advances there continue to be quite magical. We have Moore’s Law driving chip advances forward. It’s clear now that during this entire decade that same sort of doubling in performance will happen again and again and again. And that extra power will be of critical importance in driving things like natural computing, speech recognition, handwriting recognition. Our storage capacities are also going to be quite phenomenal. In fact, those are going up even faster than the processor speeds. The mobile devices, whether it’s the new portable machines or the smaller devices, the Pocket PCs, the cell phones, the digital cameras; every one of those is coming down in price while improving in functionality quite dramatically.
The one area that requires the greatest investment is connectivity. Here, businesses worldwide are getting very high-speed connection. The backbone prices have come down faster than anyone expected.
Wireless networking, in the form of 802.11, will also be completely pervasive.
The only area that has held back somewhat is the price of broadband connections into the home. A few countries, like Korea, have moved out in front and they have that pervasively, and although that will happen during this decade, it won’t happen in the next two or three years. It will take the next four to six before we get out in the majority of homes.
But overall the hardware advances are really quite incredible, and that’s why coupled with software we see new scenarios coming forward.
I’d like to give you an update on some particular work we’re doing with the hardware industry form Jeff Raikes, who runs our Business Productivity Division.
JEFF RAIKES: Hello, Bill.
BILL GATES: Welcome, Jeff.
(Applause.)
JEFF RAIKES: How are you doing?
BILL GATES: All right, good.
JEFF RAIKES: Nice video. Well, Bill, I too am very excited about the PC innovations that are underway, and in particular, you know, I think a lot about the knowledge worker scenario, of course. And a key to the knowledge worker scenario is mobility. And so tonight what I’m doing is showing a new prototype.
This is from Acer and it shows the kind of form factor advances that I think are necessary. It’s very thin, very, very high powered, it has really nice screen density. I hope you can see that there, so you get a really, really crisp look.
In addition to this particular form factor, I think with this next generation we're going to see real improvements in battery life, approaching six to eight hours in the next year.
You know, Bill, we’re down here in Las Vegas. You’re a convertible kind of guy in my opinion. So what I want to do is I want to show you one of the nice things about this. This happens to be a notebook convertible.
So what I have done now is basically I’ve switched this over to be a Tablet PC. And you’ll notice also I switched from landscape to portrait.
(Cheers, applause.)
Now, Bill, this is the kind of form factor that I think is really going to be a part of those improvements in knowledge worker productivity that you were talking about.
Now, a year ago you talked about the concept, the vision of Tablet PC, and I think it’s a good opportunity for us tonight to give a little bit of a progress report. Now, I’m very excited about the work of our hardware partners. We're seeing tremendous advances. In fact, tonight what I’m going to do is show you some of the work that’s going on in the hardware area, and they share all of the same kind of characteristics -- really lightweight, high speed, great density, the ability to give long battery life, and you can use the keyboard, the mouse, run Windows XP Professional or run them as a tablet.
Why don’t we go ahead and take a look here? Now, what you see right here is a set of devices. I kind of group them into some clusters. These are what I would call the convertibles. You see like the clamshell design, very common for notebooks, but again these are Tablet PCs as well, so you can use the keyboard, you can use the pen. You have the choice in that kind of a form factor.
Now, here are some designs that I call the slate design. They’re like a portfolio. You see a lot of different opportunities. This one is from FIC, a really nice form factor as well from Tatung and it shows that you can have a detachable keyboard that could be wirelessly connected or could be connected via wire, a very nice slate form factor from Compaq. Here we have one from Fujitsu.
Now, over here we have some other ones. This is a slate form factor from ViewSonic, one of the key OEMs in the marketplace. That’s an original design and manufacture, and that’s going to help stimulate some of the growth in the device market.
This is a particularly impressive design, as well. This is from Toshiba. It looks very, very small. Obviously, it is small. But it’s running Windows XP Professional. So it’s a full-powered PC.
Now, this is from Via and here’s one that I’m very excited about as well. This is Intel’s reference design, and it really shows that with the great work of our partnership with Intel what you can get is very, very high performance with very low power consumption. And that, of course, is going to be very important in getting the most out of these kinds of devices.
So tonight one of the key announcements that we’re making is five new hardware partners, including NEC. So it shows you some of the progress that we’re making, good progress on hardware.
BILL GATES: Great. Well, let’s see what we can do with the software. How is that going?
JEFF RAIKES: Software? We’re kind of software guys, so why don’t you come on over here? What I’d like to do is show you a little bit about the software. Now, with that kind of advance in hardware, what we can do is do a lot in the area of software. We can run all of the existing Windows applications, but tonight what we’re doing is announcing several new software partners that show that what you can do is take advantage of the tablet, the extensions for pen and ink to do new software and new software enhancements. And that’s going to support scenarios like note taking, reading, markup and annotation, vertical applications.
Now, I want to begin with this Acer convertible that I showed you earlier, and here what I have is a new software utility that we’re announcing, so another announcement today, a third announcement. And this happens to be Journal from Microsoft. It’s the kind of utility that we will make available to all of those companies that are building Tablet PCs running on Windows. And what you can do with Journal is the note-taking scenario. That’s going to be very common.
Now, one of the things you and I encountered in our note taking is, you know, you think of something, you want to add it in, you know you want to finalize the org chart. Well, what I’m going to do here is I’m going to go ahead and insert a little space. Now, that’s the kind of thing you can do with a Tablet PC. You get, in effect, electronic paper.
And, of course, because you’ve got the nice ability to do direct manipulation with the pen, what I can do is go ahead and draw in a little org chart, and I’ll demote myself down here to work for the VP, and we’ll put you in here, too, Bill.
BILL GATES: Great. (Laughter.)
JEFF RAIKES: Now, one of the things that I think is very important is the ability to use ink as well as handwriting recognition. Now, keeping all of my meeting notes, and because of the power of this form factor, I can have years and years of notes, and I can search for ink.
Of course, the other thing that I think is very important in the knowledge worker scenario is the ability to take things that came up in the meeting and immediately repurpose that into action. You know, basically you want knowledge workers to be able to say, "Hey, I need to go get this done. I need to finalize the budget for each region." And what I can do here is I can go ahead and I can convert that, and in this particular case I’m going to convert that to an Outlook task.
And you’ll notice that we used the ink as well as our handwriting recognition software, which we believe is the finest in the world. And just so you can see that, I’m going to go ahead and make that a little bigger, and there you can see the recognized text that came along when I did that.
(Applause.)
So you can see that we have the opportunity to really help the knowledge worker be more efficient in their note taking scenarios with a great tool like Journal.
Now I’d like to go ahead and move on to this next device. This is a prototype from Compaq, that slate device that I showed you earlier.
And, you know, one of the things about these devices and knowledge work is that there’s a lot of horizontal knowledge work, e-mail and documents and that sort of thing, but also one of the things that I think will happen during this decade is better support for the vertical applications, and this is a great example.
Here one of our key software partners, Autodesk, is taking advantage of the work that we did with the software development kit. That software development kit for the PC allows them to take advantage of the pen and ink.
And what you’re going to notice here is that this is a very high-powered application. You know, just a few years ago this is the kind of thing that required a technical workstation. And what we’re able to do is to take all of that great processing power, put it into a very small form factor, and put that at the hands or at the fingertips of somebody who’s in this case a service technician for heavy equipment.
Now, let me just show you how impressive the processing power is. I’m zooming in, zooming out, and basically you can see the kind of detail in this diagram here. In addition, I can go ahead and I can rotate it and I can basically add things to the design. And then when I’m done I can go ahead and report it as part of the customer service record.
Now, let’s go ahead and take a look at this third form factor. This is the Fujitsu. And this particular device shows the power of wireless connectivity. See, I think all of these hardware devices are going to have really -- they’ll immediately support wireless connectivity. Some of them will have it built in. It might be 802.11. In some cases it may be GPRS or G3.
Now, one of the things that’s going to do is change the knowledge worker scenario for how we communicate, for example instant messaging. Here we have Windows Messenger, but this is a prototype version that our group is working on and it gives me the opportunity to show you some of the inking capabilities.
What I’m going to do here is ask a very important question, which is, "Where is the Luxor?" So now you can see in instant messaging I can use ink.
Now, I’ve mocked up the responses and here I get a little diagram back; in this case the directions for my very important meeting that’s going to occur this evening.
Now, one of the things I might want to do is I might want to take that last response and put it into my next instant message, because what I want to do is to check and make sure that I know exactly where I’m going to meet Andrew. So I ask him, "Are we going to meet there on the North side?" And then he can respond and say, "Yes."
So this is a great example of where now I’ve got the meeting location confirmed for my important poker lesson later this evening. (Laughter.)
Now, another great ISV is Groove Networks, led by Ray Ozzie, one of the great leaders in our industry. And what Ray and his team are doing are creating a new metaphor for collaboration, taking the connected world and basically making sure that we can use that connected world for a whole new generation of collaboration software.
What Groove does is they create workspaces. For example, I can create a workspace here, a shared workspace that might be a white board. Now, this particular white board you can see somebody else has asked us, What’s the name of the tablet work that we’re doing? And what I can do is I can go ahead and say, "This is the Tablet PC edition." And so now what I’m doing is I’m using the ink. Groove is very excited about the tablet and the pen and ink capability and they’ve already begun to enhance their applications to take advantage of that.
In addition, Groove really recognized the broad use of Microsoft Office. There are about 300 million users of Microsoft Office, and so a big part of knowledge worker collaboration occurs using Office documents.
So what I’m going to do here is to bring up an Office document. Groove in particular takes advantage of Office XP. And this is an Office XP Word document that discusses the issue of when we are going to announce the name for our Windows Tablet PC work.
What I’m going to do is show some of the comments that people have, basically comments related to here’s one from Andrew Dixon, you know, and in this particular case what I’d like to do is to respond to one of the questions, "When should we announce this name." But in this particular case what I’m going to do is I’m going to use the inking capability and make my point: "We should announce this at Comdex."
So now I’ve been able to mark up the document using ink. And this gives me the opportunity to emphasize one of the key announcements that we’re making tonight is that because of the steps forward we made on Tablet PC work, we’re going to announce Microsoft Windows XP Tablet PC edition, the software work that we’re doing.
(Cheers, applause.)
Now, I want to show you one more knowledge worker scenario. Obviously, e-mail is the lifeblood of communications for many people, many companies. In this particular case, I want to go ahead and reply to Andrew Dixon and tell him that I’m very excited about the fact that we’ve closed on the name. But again now what I can do is I can use the Tablet PC as a way to ink a response to Andrew that says, "Hey, that’s great, I’m excited about it."
And because of the work of the Tablet PC group, they’ve opened up all of this as APIs, all of this work of APIs, and in particular they treat ink as a data type. So what I’m going to do is I’m going to select that ink and I’m going to go ahead and make it bold and highlight it. And so you can see how ink is treated as a data type, with the kind of attributes that you and I would think of as a programmer in order to be able to enhance the application that we’re working with.
And this brings me to the last announcement that I want to make here tonight, which is that we’re going to be offering these enhancements to Office XP for the tablet environment at the same time as the launch of the Tablet PC.
So very exciting developments in terms of the hardware, in terms of the software. Basically I think that these are the kinds of things that are going to help deliver on that vision of tremendously enhanced productivity for knowledge workers.
And I hope you like the progress report. Last year, concept; this year we’re showing real hardware, real software. The next year at Comdex we hope to be standing up here with you with the final releases of the Tablet PC and our software.
BILL GATES: All right, go to it. Thanks, Jeff.
JEFF RAIKES: Thanks, Bill.
(Applause.)
BILL GATES: The tablet is a great example of something that’s required a lot of patience. Just one piece of R&D in that product alone, the handwriting recognition, is something we’ve been refining and refining over a decade, and it’s only now with the advanced hardware and the software breakthroughs that that’s ready for primetime. So next year a lot of people in the audience I hope will be taking their notes with those Tablet PCs.
I mentioned that a key building block for the digital decade is trustworthy systems, and there are many elements that go into this. One element is that people have to expect that their device is going to work. Today people are fairly reluctant to add new applications and they’re concerned -- will they understand the application? Will it have an effect on the other applications that are in that system? Things are not isolated in a way that we can guarantee that the user can always get back to exactly where they were, and so as you add things, you never go backwards.
Also today, whenever you have a problem with the PC, it’s a fairly laborious process, describing what went wrong, trying to figure out what version of the software you have. You don’t have a digital database that shows exactly what you’ve got, exactly when you’ve had problems in the past, and the ability to take that machine and connect it up so that someone else can come in and look around and help you out on a purely digital basis. Of course now we’ve kicked that off as a standard feature with Windows XP.
And we need servers that are far more reliable than what we have today, using the basic approach that fault-tolerant servers have been used to manage phone exchanges and stock exchanges over the last few decades, but taking those techniques and making them mainstream, so that any Windows application you write automatically gets the transaction capabilities that allows it to run in that fault-tolerant way.
People need to know that their storage is backed up. It’s got to be a lot easier than it is today before people will put their family photos there, and even just the frustration sometimes people have right now, the information has to be stored and it has to be very easy to get it replicated out into the cloud where you can know it will always be available.
One element of these systems is they’re going to have to be self-repairing. We can’t involve the user every time we want to make an improvement. And in terms of the servers we shouldn’t even have to involve the users when we want to go get more capacity or if there’s a hardware failure go out and find another system and get that running with the application immediately without the delay of human involvement.
So this basic idea of thinking of the system as just one element that we can program against, it’s a new approach but a very important approach that will be central to these systems.
One feedback loop that I think will be very, very critical is what we call the continuous improvement cycle. Windows XP has built into it the ability to detect when something goes wrong, and extreme things like system crashes offer the ability to send a problem report back to a Microsoft Web site. And so Microsoft gets visibility of exactly what’s going wrong -- what application, what driver.
And so instead of having just a limited understanding of how all the different third part pieces come together, we get a totally perfect view of where there’s any conflict between these pieces.
In fact, when we first put this system together, we were stunned to see that many of the drivers out there are causing a number of crashes. Now that leads to a lot of action on our part, making it so you don’t have to write such complex drivers, having a more rigid testing program, and working with the companies whose drivers those are to get those numbers down to zero, to make sure that there’s never a problem inside that piece of the software.
And so with this statistical view, with this error reporting we engage the entire industry, our hardware and software partners in getting fixes, and those fixes flow back to the system through Windows Update.
And so this is quite a dramatic change. You’re not waiting until 18 months later to get those improvements. You’re not waiting until we get a system that has a lot of new scenarios in it; you get improvements to the things you’re doing on an ongoing basis.
And so instead of thousands or even hundreds of thousands of people running into a problem, the first few people who do get the information there and that information gets on the systems and no one else runs into that problem.
This same basic idea is very important in the area of security, but we need to do a lot more than even that in security. The move up to the rich kernel, the NT kernel is a big step. It’s a big step because we get the whole industry focused now on drivers and application testing around one technology. We don’t have the two different forms of Windows.
We also get the richness of that kernel, a protected kernel, the encrypted file systems, the firewall capabilities actually built into the system and shipping with it, and we have a very different engineering process that was instituted several years ago where the final reviews and the whole methodology of testing and checking is designed to optimize for the security.
In fact, there were literally hundreds of improvements and fixes that got into the system based on this new methodology, so if you compare to Windows 98, there are many, many hundreds of advanced security improvements that differentiate those systems in a pretty dramatic way.
We’re right now in the later stages of putting together a round of Windows Server releases. We’re at beta 3 of the set of releases we call the .NET Servers, and for those as well, security has been the top priority.
We had our servers configured to offer all of their services automatically, and that meant a lot of administrators didn’t even know what services were running. And so now we’ve changed the configuration to automatically be set up just for the things you asked for and to configure those at the highest security level.
Likewise, this kind of security improvement will be fed to the server side of the system as well.
So trustworthy systems are a big challenge, and one that underpins everything we need to do. It will allow people to get more out of today’s scenarios and allow them to dive into the new ones as well.
One of the most developed ways that people use personal computers is productivity, the Office software, word processing, spreadsheet through Excel, electronic mail. And people often say to us, "Where can we go with this? Have we really done enough here?" It’s the one category people somehow don’t have the imagination that we can do a lot better for the user.
And yet if you take the most basic prophecies inside a company, for example, say you want to distribute information and you want it be limited, so you want to send it out only to 20 people and now have them forward it or not have them print it out, the software doesn’t have that kind of management built into it.
If you look at a forecasting scenario, how people gather information and share models with each other, just having a non-XML based set of software doesn’t let you get at the information and work with that in a high level fashion.
As we build XML and workflows into these packages, it’s a dramatic change. Sales analysis, employee reviews, marketing studies, all of these things will be done in a far more profound fashion, letting people get at the data that really counts for their business.
The next scenario is communication. The maturity here is very, very low. Today, people are dealing with, "What e-mail address do I give out, how many e-mail addresses do I have, how many phone numbers do I have?" If you want to control how somebody uses that to call you or even interrupt your e-mail, if you’re sitting in your office trying to get something done, how do you know that you get to decide what interrupts your valuable time? Well, there is no user control for that today. You’re fragmented with all those different addresses.
If you want to be notified if something changes, there’s no easy way to do that, so you find yourself going out and looking to see, was this document updated or did this flight time change. And yet that’s something that is valuable to you. You’d like it to be brought to you automatically.
In the area of real time communication, if you’re on the phone talking to somebody, say you want to look at the schedule or the list. Well, you’re both there in most cases with a computer screen. Why isn’t that automatically brought up so you can share and exchange information, work on that information together.
It’s being done by a small group of people using a feature that we call NetMeeting, and yet it’s been too hard to set up. It simply hasn’t been mainstream. People don’t think that most of our phone calls today will instead be phone calls where you have the voice and the screen working together on your behalf.
Scheduling: Yes, it’s great that it’s there, but for rich scenarios, group meetings, or family coordination, it’s simply not rich enough, particularly when you think about corporate boundaries. Corporate boundaries cause all sorts of problems. Say you want to secure documents as you send them across that corporate boundary or control how they’re forwarded or what’s done with that. That technology simply doesn’t exist.
So in communication it’s not just instant messaging as we’re thinking of it now. It’s not even just NetMeeting. It’s a whole new way of thinking of putting the user back in control for both real time and asynchronous communication, and not fragmenting so that fax and voice and instant messaging are different than e-mail and the other ways that people communicate.
Jeff mentioned reading. This has been a Holy Grail for many decades. If we can get people to read off the screen, then things like taking the sales report and letting you dive in to see details or analyze those trends, it’s very natural because it’s right there and you say, "That figure strikes me as very big; show me it by geography or by sales person." And you just point and that happens.
Say you see something that surprises you and you want somebody to work on it. You scribble your little annotation or make a voice note there and forward it to the other people and immediately they have it.
Say you see an article that relates to your company out on the Web and you’d like to write a little note so that everybody in your company as they go to that Web Site sees your comment about that article. It’s really not a scenario that can be done.
Wireless connectivity is key here. 802.11 or "Wi-Fi," as Jeff mentioned, we think of as becoming totally mainstream, mainstream in the office, mainstream at home, mainstream to the places that businesspeople spend lots of time: hotels, convention centers. We’ve got to make sure the 802.11 infrastructure is there.
This will take many years to be fully in place. Pioneering businesses are there already. In the home it’s a key technology, because people don’t want to go back and put a lot of wires in their home.
The price has come down very dramatically and so as we get richer software for voice, for prioritization, for video around that and make sure that all the security elements are fully pulled together, this will be something that we just take for granted.
The use of ink and voice can be very explosive. Today I don’t get many e-mail messages with ink in them or little .WAV files for voice, because it’s simply too hard for people to set those up, and yet in three or four years that could be absolutely commonplace.
Reading is enabled by having a small device with great resolution and great software, and so the tablet is fundamental to that.
An even harder thing to tackle is meetings. Are meetings as productive as they should be? Can you just after the meeting see the part that might have been interesting to you? Well, very rarely are they captured digitally and available for search so you can forward off to somebody what you think they ought to see about it.
Organizing for the meeting, getting the documents together so people can understand what they’re going to be looking at, facilitating the meeting itself, including people who aren’t locally present, that’s been very tough.
Video conferencing has never caught on, because it hasn’t been built in. It’s not at your desktop, not in that PC, not simple, and there’s not software there to make that interface quite rich. We believe that with software that this idea of video conferencing can become incredibly mainstream, as well as making sure that people who don’t need to be at the meeting don’t have to be there, that it’s really about the kind of discussion and interaction that meetings are great at.
In fact, if you want to watch the meeting afterwards, we can actually show it to you at double the speed that the meeting took place. That’s pretty nice. It means some people are going to say, "Well, I don’t want to be the one who has to go to the meeting and listen to it in its normal real time mode."
For knowledge workers I think the sky is the limit. There is so much more that we can do.
Let me talk now about some of the server issues, enterprise issues. Scale is critical. The kind of scale that new applications will require, that number of transactions, the amount of data will go far beyond what people have done with mainframes or high-end Unix systems to date.
So just matching those systems, that’s not good enough. Just matching their scale, just matching their reliability, that won’t work. What we have to do is take the virtues of the PC market -- we have many people doing the hardware, high volume/low price-type market -- and bring that to the highest end servers and have a software approach that you can add scale whenever you want, and if you want fault tolerance you can have servers at different locations but they all notice which ones are getting the work and take over whenever there’s any problem.
So scale has been something we’ve been working hard on. A few years ago, before the Windows 2000 launch, no PC servers appeared in the transaction benchmark records whatsoever. Today, of the four categories of the transaction benchmark, PC servers with Windows dominate. The clustered systems in terms of performance, PCs dominate all top five. Clustered systems in terms of price performance, PCs with Windows dominate all of the top five. In on-clustered systems, again, top five in price performance.
The one area that we haven’t had all the interest in is in the non-clustered transaction pure performance measure. We have now moved up, and this is just this last week, and with our partner Unisys on their high-end system we have now created a system that’s in the top ten there. It’s the best price performance of those top ten systems at about $20 per transaction, and the absolute performance is quite phenomenal. This single system without clustering is doing over 160,000 transactions a minute.
We’re going to continue to drive that forward, and as we get the IA-64 coming into maturity, as we have Moore’s Law and software improvements, our commitment is to have the same position for those benchmarks that we have for the others as well.
Well, last year my Comdex speech was very focused on XML and the fact that we were betting Microsoft’s strategy, the .NET on the emergence of XML Web services as the key standard for the decade ahead. That’s the standard that’s really necessary to treat the Internet as a programming environment.
Today we’ve treated the Internet as a terminal environment. We connect up a browser to a site and it’s like connecting a 3270 to a mainframe. And that’s fine. That’s really led to some wonderful things.
But if you want to connect a program on one computer to a program on another computer and have those computers be any two computers on the Internet, there are some tough problems, problems that have been discussed in computer science for a long, long time: How do you deal with finding that computer? How do you agree on the protocol to discuss? How do you deal with the security issues between those systems?
Well, it turns out that these standards around XML, things like SOAP and UDDI, are the standards that allow us to do that, to turn the Internet into the programming backbone.
And with that capability we can actually fulfill the promises that have been made about e-commerce: friction-free capitalism, finding buyers and sellers with no middle man, and no costs in terms of those direct searches.
So the XML standards work of the last year I’m pleased to report has gone extremely well: The backing from many of the large companies now pushing those forward, not just Microsoft but IBM and many others. VisualStudio.Net -- we’ll go final on those bits this year.
We had our Professional Developers Conference just three weeks ago, and that was focused on VisualStudio.Net. And we were surprised that we had record attendance there at a time when many developers’ conferences are actually being cancelled or cut back very dramatically. And I think it’s a testament to the fact that the pioneering developers not just in the finance sector but in every sector are now seeing what XML Web services can do.
It’s not about rip and replace. You can take existing applications and put XML capabilities on top of them. In fact, many e-government scenarios take that layer of XML and get done things that governments thought would take years and years of time, and using these tools achieve those results in literally months.
And so XML is key for business to business, it’s key for interoperability inside the business, it’s key for the business applications having their information easily available to the knowledge workers, to the front office.
And so for us this is a profound change, and we’re a year further along on this, but there continues to be work to be done to make this something that people just take for granted, all systems interoperating using these rich standards.
Well, to get a look at some of the progress we’ve made and some of the examples of why we think this is so powerful, I’d like to ask Robyn Pierce from our .NET division to come out and give us a look at some of the new work.
Hi, Robyn.
(Applause.)
ROBYN PIERCE: Hey, Bill. I’m very excited to address the audience and talk to them about our Web services. Microsoft’s .NET is our Web services platform. What I’m about to talk to you about is going to explain what .NET and Web services is about.
Web services are small reusable application components that can be shared seamlessly between Web Sites as services.
So I’m going to show you a couple of examples here about how you can implement Web services. The first example is an expense-reporting template. Most of you out there are going to be implementing an expense report when you go back to your office, and my guess is you’re going to have a wallet, a briefcase or even an envelope that’s full of these paper receipts that you’re going to have to sort through when you get back to your office.
So here you see a simple Excel spreadsheet, but in the world of Web services this is going to go out and pull in data on my behalf and populate the spreadsheet for me.
So let’s take a look. Here I have a component that will go out and register with the appropriate Web Sites via my Passport ID and pull in the data and put it into the spreadsheet for me. You’ll see my hotel is coming in, my meals, my rental car, my MSN expense, as well as my cell phone. Now, this is only made possible because these vendors have implemented Web services and XML.
Now, in early December we’re going to be releasing our Microsoft Office Web services toolkit. That toolkit will allow you to write custom functions to do this same task.
For example, if I want to pull in my airline information, I could put in the date and go and put in a custom function called GetMyFlightName that I’ve generated, and I just simply tell it the name of the date that I am flying, and there it brings up my flight from Seattle to Las Vegas. And because these functions can be saved, I’m going to go into my user-defined functions and pull up my GetMyFlightPrice function that I created with the toolkit, and again reference the date, and it puts the price in for me.
Okay, now what about these cash receipts that you have, for instance, the tip to the bellmen? They aren’t on my credit card or my debit card. So what I’m going to do is most of you have a Pocket PC that you’re carrying around for your calendar and your contacts. Well, I’m going to use an application that I have to store these cash transactions so I don’t have to remember them when I get back to the office next week.
So let’s see. When I came in, I took the taxi from the airport to the hotel. So let’s go ahead and select taxi and with tip it was $25. Then I came in and I tipped the bellman. So let’s go ahead and put a tip on there of $5. And then, oh yes, last night I went to dinner with a group of people and we split the tab, so I’m going to go into my tip calculator and the total bill was $98. The service was good; it wasn’t excellent. The food was good. And there were three of us, so we want to split that. So with tip my portion is $36.59. So then I go to dinner. I do $36.59 and I’m done.
How cool is that? Would you like to have this application to use this week?
(Applause.)
Well, we’re going to give this to you. Tonight when you get back just log onto PocketPC.com and you can download it compliments of Microsoft.
(Applause.)
Now, that application generates XML on the back end and so when I synchronize with my PC that XML is going to be brought into my spreadsheet just like the rest of these transactions. So I go up and I click on this component and you’ll see these items that I just punched into my Pocket PC being brought in as well.
Now, Microsoft Office not only understands XML coming in, but it can also generate XML going out. So when I go to hit the Submit button, I’m going to show you the XML code that’s being generated that can then be processed on the back end for the approval process.
Okay, Bill, there’s another one in your Inbox. I bet you didn’t realize that Bill approves all expense reports for employees here at Microsoft. (Laughter.)
In the world of anyplace, any time computing, this is just one example of how Web services can benefit the individual.
Bill has been talking about the digital decade being a lot about business-to-business communications. This was a pretty simple example, but I think through the next scenario you’ll start to see how these tools can apply to business to business just on a broader scale.
So let’s say that I’m a purchasing manager of a company called Cycle Central. Well, in today’s paradigm a lot of suppliers are going to spend a lot of money creating a catalogue of their products and sending to a finite customer base. Well, with UDDI even the smallest company can expand their customer base around the world very easily.
I’m going to show you how Web services can be used in my purchasing capabilities. As a buying manager, one of my key tasks is to maintain my inventory levels. And so I’m going to go in here and pull up one of my common products that I order all the time, and you’ll notice that over here I’ve set up some business rules that could be processes, and so that my inventory would be automatically replenished. But because of this expected upcoming sale, I’m going to go ahead and manually generate an order. And I’m going to say that I want this order to be delivered in a day and I want it to be under $2,000.
So I’m going to go pull up my order template and I’m going to put in the quantity that I want to order and place the order. And you’ll notice that I just typed that into an Excel Web part. Just like in the expense-reporting tool, I’m using common applications such as Excel. Now, this is going to generate code and send to my vendors on the back end and then could be stored in a database, Great Plains or even SAP.
You’ll notice I have a notification coming up saying that this could not be fulfilled by my existing suppliers, and it’s suggesting I use UDDI search to fill the order instead.
So in today’s world most purchasing departments have a finite list of vendors that they can do business with. However, with Web services’ ability to go out, retrieve company information and analyze their qualifications on the fly, we can now go beyond EDI with UDDI. UDDI will allow you to find businesses around the world that have products and services to fit your needs. For more information, please visit UDDI.Microsoft.com.
(Applause.)
So I’m going to go and pull up this request again, and I’m going to search for companies that have the same product code that is standard across vendors and then I’m also going to tell it that I want to be sure and only work with vendors who support my protocol so that we can do this automated fashion.
So I go ahead and pick a search and it came up with one company who has my product, meets my criteria and talks the same protocols that my application does.
Let’s go ahead and send this company this same RFQ and see if they can fulfill my order. So as I send that, it’s going out and sending XML out to these companies. However, even the smallest companies that don’t take advantage of UDDI could retrieve this as an e-mail message and parse it in Excel. Now, here the response is received and it’s asking for my approval to process the request. Well, let’s go ahead and go over to the purchasing approval, bring up this quote -- they say they can deliver it in a day and under $2,000. Let’s go ahead and approve.
Okay, this is just one example of how .NET can apply to the business world. It is the same paralleled application that we saw in the expense reporting application.
So Web services will allow you to extend your existing business beyond what you have access to today. Microsoft is very proud to be a leader in this industry to extend our products to take advantage of standards in the environment.
Thank you very much. I appreciate your patience.
(Cheers, applause.)
BILL GATES: Well, Web services is another thing where the actual work around taking XML into this new role actually goes back over five years, and yet now we’re starting to see that come to fruition as the whole industry gets behind it.
Let’s now talk about the home. It’s sort of the last frontier. Technology in the home has to be particularly inexpensive. It has to fit in with the things people want to do there. But we believe that wireless networking, advanced PCs, next generation set-top boxes and next generation videogames are going to come together in a very synergistic way as they connect out to consumer services out on the Internet like MSN.
The connectivity is going to have to be very, very simple to put together and very inexpensive. And so with Wi-Fi 802.11 you should be able to bring a device into your home and with Universal Plug and Play protocols at the layers above, it should automatically be identified.
So say you bring in a little screen and put it on your refrigerator. Your PC should say, "Hey, I’ve noticed there’s a screen there. What would you like me to project out to that, the family schedule, the news? What kind of homepage default would you like there?" And by the PC being able to project onto it, that device won’t have to run special software and all your information, photos, music, schedule, anything of interest will be available to that remote screen.
So the story is about integration and it’s about the pieces working together in some new ways.
Well, why aren’t we there today. Well, in the case of music, there’s some tough rights management issues, but there was a lot of progress, and the music industry is showing a willingness now to license things out with new digital licensing models.
In the case of video, the advances in storage and having built-in software in Windows XP should drive that forward pretty dramatically.
With the cameras it’s the resolution, it’s the ease of use of the software; all I’d say very ripe for becoming mainstream activities at very, very low cost for people to get involved with.
Every one of these things will spread very dramatically once the core group of people that’s talking about how they’re using it, showing other people, then the adoption rate can be very rapid.
The TV itself is a very important part of this. Getting the kind of advanced graphics that we’ve had in PCs, having those available in the living room is very important. Connecting up to the Internet so you’re not just there by yourself but you can play with other people, you can watch other people, the idea of being a spectator is pretty important there.
TV shows themselves, being able to see them when you want without having to get a special device there, simply using the power of the PC or the videogame or the set-top box.
We had a lot of different investments in this area and they all come together around a digital home strategy that has as a theme putting the user in control, making existing forms of entertainment more accessible and then bringing out a whole new generation of interactive entertainment.
Of course, the centerpiece of this is what we’re introducing next Thursday, the Xbox, and I’d like to ask Seamus Blackley to come out and show us a little bit about why we’re so excited about Xbox.
(Cheers, applause.)
SEAMUS BLACKLEY: Xbox! Hey, Bill.
BILL GATES: Hey, Seamus.
SEAMUS BLACKLEY: How are you doing?
BILL GATES: I didn’t know you’d be bringing one with you.
SEAMUS BLACKLEY: Yeah, I brought one along because I heard that people wanted to see some games. Anybody want to see a game? (Cheers.)
Well, you know, about 18 months ago you and I stood on stage at the Game Developers Conference in San Jose with this idea, with this crazy dream that we were going to make a game console that kicks so much ass and was so powerful that it would change what interactive entertainment meant.
And today not only do we have a physical manifestation of the Xbox, but we have several of the games that everyone is agreeing, including most of the major game press worldwide, are going to change the way people actually think about games.
So let’s show some. Bill, I’ve got a lot of stuff to say to these guys, so could you hook this up for me?
BILL GATES: All right, I’ll see if I can do it. (Laughter.)
SEAMUS BLACKLEY: Thanks. Let’s see how this goes.
BILL GATES: All right. It’s got the power back here.
SEAMUS BLACKLEY: Power.
BILL GATES: I’ll put the screen connection back here. We’ve got to do this for the PC. (Laughter, applause.) I’ll connect up my game controller. There we go.
SEAMUS BLACKLEY: All right, let’s see how Bill did. Wow! It’s so simple even Bill Gates can hook it up. (Laughter.)
Ladies and gentlemen, the Xbox.
Now, the first game that I want to show you is an example, part and parcel, of what we’re talking about with the dream of Xbox, which is making entertainment experiences, which not only compete with but actually are richer and deeper than the experiences you get say watching television or watching a movie or in this case watching football on your PC.
This is a game from Microsoft called NFL Fever 2002 and the goal of this team was to make a football experience so real that you’d be scared of the opposing linemen -- (laughter) -- a football game so real that you would feel like you needed to take a shower after playing a game. (Laughter.)
Let me show you a little bit about that. Now, I understand there is a game going on right now in Seattle between the Seahawks and another team. (Laughter.) And it’s taking place in Husky Stadium at night, so we’ve got that going on. And I want to win, so I’ll just pick the other team. (Laughter.) Sorry about that. It’s a tech demo only.
BILL GATES: I won’t tell Paul. (Laughter.)
(Videogame demo.)
SEAMUS BLACKLEY: How’s that look? (Cheers, applause.)
Now, I was going to play Bill initially, but we played backstage and Bill smoked me so bad. He’s Bill Gates and my only reputation is built on how well I play games, so I can’t do it.
Let’s get right into the game here. I want to show you a couple of features. We’ll do the coin toss and see how luck I get.
Well, that’s not bad resolution, is it? All right. Pick a play. (Videogame demo.)
Yeah, baby, yeah! All right. We like that. I can do that in the real world too, no problem.
So let’s see what I’m going to do here. Let’s go for a crazy play. (Videogame demo.)
Oh, no! What happened there?
Well, let’s use the magic of Xbox to take a look at what’s happening here on the field. There’s the quarterback. (Cheers, applause.) Don’t try that on your Playstation 2. (Laughter.) That’s ugly.
Okay, so he’s going to throw the ball here. There we go. Oh, did I mention that our ball actually has more memory in it than Game Cube has video memory? (Laughter.) But I digress. It’s a football game.
Let’s see here. Where is my receiver? Let’s see what my receiver is doing here and what is problem is. Why did you screw up? Okay, he’s looking at the ball. (Laughter.) That’s okay. Oh, no, that’s not going to be good, is it?
No, I think he does have his Xbox gloves on though, so I don’t understand how that could happen. (Laughter.)
So there you go. That’s football on the Xbox. That’s not so bad. That's not so bad. (Cheers, applause.)
Now, one of my favorite things about demoing the Xbox is when you’re done you just turn it off and it’s pretty much okay. You can turn it back on again and it will boot, and you can just turn it off and it’s fine. (Laughter.)
We were doing it earlier and all the PC guys were losing it. They were like, "Aargh!" (Laughter.)
Now, I actually have this box configured as a dev kit, which is what game developers use to make games, because I want to be able to show you a couple of games, which are going to be launched, or one very nice game, which is going to be launched next year, so it’s not quite ready for primetime, and I’ll give you a little sneak peak.
But before I do that, I want to show you something called the dashboard. Now, this is the thing, which many of you who are videogame players will know, is the thing that comes up when you don’t have a game in the machine and lets you set up the machine, so you can manage, for instance, your memory, your 50,000 blocks of memory on the Xbox hard drive. It lets you actually record your own music onto the Xbox and substitute your music for the music in a game. That’s not bad. (Cheers, applause.)
But the most important thing, and something many people get confused about my enthusiasm for, is parental control. I’m not the kind of guy who has control in general, so they wonder about the parental end of it. (Laughter.) But the Xbox is the only game console that actually has parental control for games. Now, Playstation 2 has it for movies and so do we. You can set the maximum movie rating that will actually play on the box. But for some reason nobody else has game ratings and we do. And this is really crucial not only because it’s extremely important that parents have a tool to ensure that their children don’t see any inappropriate content, but the guys who make the games, the guys who I talk to, they don’t want to have to censor their thoughts. If they want to make a game, they don’t want to have to think about having a violent slider in the game, and this enables them to do that as well.
So I think this is probably the most important feature in that dashboard and something that is very unique to Xbox and very exciting for us.
(Cheers, applause.)
I’ll go through one of these tedious reboots again. They take upwards of 11 seconds. You know, it’s just awful. In fact, it’s about twice as fast as on any other game system. So even by game system standards, this is pretty speedy.
Now, the thing I want to show you, which is a little bit of a preview into the future, is a game called Reckless. Now, you’re all familiar with driving games on consoles and they look pretty good and there are a couple of games out for other systems that look almost like real driving around a track. They’ve got three or four cars or six or seven. But these guys had the idea that they wanted to do a driving game in Hong Kong downtown at rush hour. (Laughter.)
And actually when I first saw this game, I saw a videotape of it and I flew to Tokyo the next day. I got a coach ticket through; it was cool. (Laughter.)
So I’ll show you one mission here, and this is interesting in that it’s a mission about dim sum stands. Apparently the Hong Kong police have a big problem with illegal dim sum stands and they want you to take your car and basically drive over them all and blow them up. (Laughter.) And it’s pretty amusing. And just for fun they have like another car trying to do it faster than you.
Now, I could pick any variety of really sexy cars, like that or maybe even that, but I’m just going to go for the police patrol car because I think it’s cool. (Laughter.)
Now, I want you to look at this. I want you to look at the lighting and I want you to look at the number of effects going on and just the reality of this game as I drive down the sidewalk hitting dim sum stands. (Videogame demo.)
Get out of my way! You see, even the shininess of the road is modeled. (Videogame demo.) Oops, back out of that.
Now, one of the most interesting things about this game is the replay mode. Now, those of you who are familiar with games know that, for instance, there’s a driving game for a competing platform that has this replay mode that’s really beautiful, but you can’t actually play the game in that mode, so it’s interesting because when you’re playing is when you really want the graphics to look good. So these guys, it was kind a challenge to that team to put in this camera mode, which, I don’t know, looks like police video to me. (Laughter.)
Ow! And I can actually switch it to different modes. I can make it black and white, for instance. I can switch it to inside the car, and this is nice, this is terrifying. (Laughter.)
So that’s just a little glimpse. I don’t want to show you guys too much of that. (Cheers, applause.)
Now, the last thing that I want to show you is one of the many games that we’re actually launching with an Xbox that’s been called the best of its type. This is Dead or Alive 3. Every single magazine that’s looked at it has reviewed it not only as a great fighting game but as the best fighting game of all time. Now, if you consider that not only is it a launch title, but the very first generation of the titles for Xbox and has been in development only about 16 months, you start to see where we’re going.
So here it is, a little bit of a catfight going on for us in Dead or Alive 3. And I’ll just let it speak for itself. (Videogame demo.)
Ow! Yes, the Xbox technology is used to create digital pain.
Now, again each one of the heads of these characters has more memory than Game Cube has video memory. So again you kind wonder what the designer was thinking there, but this is the result of all that great Xbox technology. And thank you, Bill, for letting us execute on that vision. It’s an awesome thing.
(Cheers, applause.)
BILL GATES: Well, let’s give one away.
SEAMUS BLACKLEY: Let’s give one away?
BILL GATES: Sure.
(Cheers, applause.)
SEAMUS BLACKLEY: All right, let’s give one away. I don’t feel like I’m done yet here. Who wants an Xbox? (Cheers, applause, whistles.) I don’t know, Bill. I think I’m just going to take it home myself. I don’t think they really want it.
Who wants an Xbox? Come on! (Cheers, applause, whistles.)
All right. Now, in the interest of public safety, we have selected a random seat. One of you is sitting on an Xbox and you don’t know it. Don’t check your seats. You’re going to get it backstage. And that seat is in Section 10. Come on, section 10, where are you? (Cheers, applause.) It is in row U. Come on, Row U! (Cheers, applause.) Seat 16, where are you? (Cheers, applause.) All right, you’ve got an Xbox! (Cheers, applause.)
But, Bill, do you feel done?
BILL GATES: No, let’s do three more.
SEAMUS BLACKLEY: Okay, we’ll do three more. (Cheers, applause.)
What section? Four-B; where are you, 4B? (Cheers, applause.) Which row? P? Oh, where’s Row P? Come on, Row P? And which seat? Seat 11, where are you? (Laughter.) All right, give that man an Xbox! (Cheers, applause.)
All right, let’s do two more. Give us a section: 209. Row F. And which seat? Seat 12. Where are you, Seat 12? All right. (Cheers, applause.) Your marriage is over, men. (Laughter.)
All right, next section. Section 1. (Cheers, applause.) I like section 1; they’re pretty good. What row? Row R. (Boos.) I’m so sorry. (Laughter.) Now, it wasn’t random; I did it to disappoint you. I’m sorry. (Laughter.) And which seat? Seat 14. All right, there you go, another proud owner of an Xbox. (Cheers, applause.)
All right, so I apologize that we didn’t bring tens of thousands more, but I guarantee you there are tens of thousands more waiting for you on Thursday. Go out and buy an Xbox. Thank you, guys, very much.
(Cheers, applause.)
BILL GATES: Well, we saw a lot of different things tonight, and I hope I’ve gotten your enthusiasm for this digital decade at a very high level. There’s no doubt in my mind that breakthrough hardware and software really are coming together for some neat new things. We saw it with the tablet. We’ll see it with communications. Those things are happening faster than people are expecting.
Web services are a very key element. The XML standards, the new development tools, that’s where the new actions is.
And finally a new priority for Microsoft and the industry around all the elements that make up trustworthy computing.
I think when we put this all together, it reminds us why we love our jobs, why we love this business: Because there’s no doubt there’s more opportunity for all of us here to improve the world than people working in any other business.
So let’s go out and do it. Thank you.
(Applause.)
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