Remarks by Bill Gates
Keynote, COMDEX Fall 2002
Las Vegas, Nevada
Sunday, November 17, 2002

BILL GATES: Thank you. It's a thrill to be back at Comdex. You're going to see a lot of great new products this year, some of them serious, and some of them kind of fun. The industry has had a lot of fun products, Reversi, Mine Sweeper, Solitaire. Perhaps the most powerful in that list is one that just went live last week, and that's Xbox Live, where you can play with your friends, talk with your friends, no matter where you are. One thing we're always careful about is that these products aren't a distraction. It's not that we don't want these products to be a distraction for the engineers and executives in this industry.

Last year, I talked about the Digital Decade, and this is the idea that between the year 2000 and 2009, all these scenarios, that are just at their beginning, will become common place. That is, that the advances in chips and connectivity, and the devices themselves will make so many things common sense to be done in digital form, whether it's sending a phone bill to a company, whether it's analyzing sales results or taking notes, organizing your music, sharing your family memories with other people. During the course of this decade, there's a lot of hard work to be done to build the foundation for that. Deep architecture, new tools, many of these requiring literally tens of billions of dollars to be spent, and collaboration across literally thousands of companies. And I say that this is the task that we're all engaged in.

During the course of the Digital Decade, we'll think about personal computing in a different way. It's not just sitting in front of that desktop PC. That's very important, but that's just a piece of what we'll do. After all, the magic of the chip that brings intelligence and the magic of software are now spreading out to all different devices. Those devices are connecting up in very flexible ways. And so, small devices, whether they're pocket-sized, or wrist-sized, tablet-sized, wallet-sized, all of these things will come together. The TV experience will be a deeply changed digital experience. Even in the car, when you're interested in information, or being notified, that will be deeply digital. The way we think about phone conversations, how we set them up, find somebody, how we share information during that phone call, all of that will be completely reshaped during this Digital Decade.

We can say that the idea of personal computing is far broader than ever before, broader in new experiences, broader in ways that systems connect automatically, and broader in greater productivity.

Now, Fred said this last year had a lot of highs and a lot of lows in it. A tumultuous year, a tough year, a year to test the people with the long-term commitments, a year to test which innovations really meet the demanding requirements that customers have in this kind of environment, a requirement that new advances deliver in both the dimension of improved cost, and the dimension of improved capability.

And when you think about the developments over this past year, there were some things that I think were a big surprise on the positive side. The continued improvements in price and performance. You know, Moore's Law is still hard at work. For the next decade, the things that allowed the chip to improve so rapidly still are there benefiting consumers. It makes it a very competitive business, because all of that extra capability improves price/performance. Not only is Moore's Law active, but even faster exponential improvement in optic fiber data capacity, or storage capacity, where disks have moved from a megabyte, to 10 gigabytes, to the end of the decade a terabyte will be the typical storage on a personal computer device, portable storage, literally, will be in the tens or hundreds of gigabytes. So, on price and performance, we did super well.

And the arrival of wireless, particularly the 802.11 WI-FI wireless. It's getting to the point where we will be able to take that as granted as part of the home computing experience, part of the office computing experience. Even when you're out in convention centers or airports, or anywhere that business people spend much time, there will be easy, inexpensive connections to get the high speed capabilities that WI-FI provides. WI-FI has succeeded partly because it's low cost. It doesn't have the per minute charges. Installing WI-FI into the home is now just a bit over $100 of investment, and it's getting easier to secure, easier to set up.

The whole world of hardware has been delivering at a quite phenomenal rate. Look at LCD resolution. You can find that resolution with proper font advances, particularly Clear Type: the idea of readability of the screen has moved forward in a major way. The digital camera: now new camera sales have shifted to where digital is the majority of what's being purchased, and that means that this flexibility of organizing and communicating around photos is beginning to take off. And then I mentioned storage, both the storage in the PC and the portable storage allow us to think about scenarios like entire movie collections or video collections, whether prerecorded or a home video being easy to deal with, easy to share with the low cost storage.

A final two points I think haven't been noticed as much as some of these others. First is the progress that has been made around the Web services architecture. A year ago, there was no industry organization focused on this. And although there were strong commitments and lots of R&D around it, the idea that there would be a clear profile to bring together all the elements of Web services that still hung in the balance. It was unclear. And so, this year the creation of the Web services Interoperability group was a huge milestone. We've seen virtually every company in the industry join up for that. The protocols being developed there are standard across all platforms. And they represent some of the very best R&D work that the companies involved are doing. Microsoft, IBM, many other companies are jumping in and saying, yes, we'll put our best people on it, because we need Web services to enable so many of the scenarios that will move the industry to the next level, to enable E-commerce. Internet connectivity alone was not enough, we needed that advance. And so Web services, I'd say, is a huge plus of this last year.

Server performance, some pretty incredible investments where the Itanium architecture, which has been pioneered by Intel and HP, is making huge progress. Some of the benchmarks there are really quite phenomenal. And the partners are being drawn in to show off what can be done there. The number of processors built into systems, now moving up to 32-way, and next year 64-way; server performance is clear, now that you can buy industry standard Intel-Windows type servers and get performance that in the past you would have had to pay five or ten times as much for. Even the most demanding computer loads are now met by those standards-based servers. And that can simplify things, ease development. It's a milestone that we've waited for, and was just achieved this year.

Now, on the more sober side, there's a number of things that have made this a tough year. The attitude towards capital investment, particularly in IT spending, the overall economic climate -- very challenging -- requires that companies have the strength to see these advances through; some of them that take many, many years of development. The complexity of managing systems: still a black mark in that category. And as you get more servers and more clients, the challenge that this represents is even worse. And management software today is not systematically bringing those costs down the way that they will in the future. And so a lot more work to be done there. Security, digital rights management, privacy, still so much work ahead of us in terms of the policies, and software approaches that will fulfill people's requirements in those areas, which the requirements are actually getting higher and higher, particularly as people are seeing what Web services can deliver.

A final negative is broadband deployment. Here, yes, there's been a growth in the last year, but the price has gone up somewhat, and it is not, in fact, moving as many -- including myself -- would have hoped that it would be. So, I would say a climate that requires the best work of the companies involved.

For Microsoft, we're very fortunate that the long-term commitment we have to R&D is one that our success and financial conservatism allows us to push forward, even increasing the R&D investments being made. Now, there's a responsibility incumbent back on us, being in this role of creating new platforms and driving things forward, to be a very responsible industry leader. Over the last year, we've learned new things about how to do that, sharing more information, reaching out to new partners, being very predictable in the things we're doing. And as more and more advances are coming out of this R&D, we're, in turn, dependent on increased partnerships for people to build solutions that live on this platform. So, very important to us, and something that we are very much rededicated to.

In fact, looking at this last year, I think, reminds all of us that this industry has had its share of surprises, it's share of ups and downs. Those of you here have enjoyed being part of this industry, and what's happened, and I think looking back on some of those things helps give us a guide as to how things will be developed in the years ahead. So, let's look at a video that captures some of the drama behind the technology.

(Video shown.)

BILL GATES: A lot of good stories behind the technology. One of the big investments for Microsoft, over almost a ten year period, was moving Windows to a single code base. We knew we wanted the power and reliability of that NT code base, and yet getting the compatibility, getting the applications tested, moving the drivers over was quite an extended process. We really reached a key milestone in that just a year ago. It's hard for me to believe it was just a year ago that Windows XP launched. It's been the fastest uptake of any new version of Windows. Virtually all the machines that have shipped in the marketplace in the last year have been based on Windows XP, either the Home Edition or the Professional Edition.

Now, having that single code base has been a big efficiency advance, both for Microsoft and for industry partners, being able to focus device driver work and testing on the single platform has been a big help. For Microsoft, it's meant that we've been able to spawn off in just the course of a year a number of add-ons onto Windows. Media Center, a big advance for us; Tablet PC, requiring the pro version; the smart displays that you'll see more about; and a version of Windows XP that allows people to select the pieces of the technology that they need for embedded applications. So it's been a key element that's allowed the pace of innovation to move even faster.

Today, the home environment is one where the PC is starting to play a stronger and stronger role; 70 percent of U.S. homes have a PC. Over a third of homes have a PC in the living room. And that machine in the living room can be used to control things, to simplify the interface to all these different devices. It can be the point of storage.

There are some things we realized that we're missing there, the ability to interface with the TV at a distance, the ability to get the TV guide up there and work with movie clips. And so, there's a lot we've done around Media Center to really advance computing in the home. Make it so the devices find each other and work together in a better way, making it so that not just bringing work home is part of the activity, or not just school work is part of the activity, but unique applications that are built absolutely for the home. Communication is changing with instant messaging, and the foundation that lays for a whole new wave of advances in real time communication.

So let's take a look at some of the neat new things that people are now going to be able to do in the home environment. To do that I'd like to ask Keith White, our senior director from E-Home to come and show us personal at home.

KEITH WHITE: What an exciting time. We're going to introduce a number of new products for the home, and as Bill mentioned earlier, we've just introduced Xbox Live last Friday. Xbox live combines the Xbox with broadband networking and digital communications to really create a very powerful online gaming experience. And what you see here is I'm actually playing a friend of mine, Todd, and he's sitting back in Seattle. So we're playing Mech Assault, the new game that a lot of people are looking forward to this holiday season. Besides playing friends of mine wherever they're at, at home or wherever, I can go online with Xbox Live, and I can join games, I can play against some of the best gamers in the world. And of course, using the headset I can talk across the Internet, as well, to the people that I'm playing. So that's enough of playing the game.

Let's take a look at a few other things that we're doing in the home. Now, I could get up off the couch and head back to the desk and sit down at my PC, but what we're hearing a lot from consumers is they want to really get away from that desk and that PC, to experience their Windows PC. One of the things we're introducing this holiday season is smart displays. Smart displays basically allow me to extend and access my Windows XP experience to any room in the home in a variety of relaxed settings. Now, what we've done here is we've added intelligence into a monitor, into a display device. And what happens is, everything is still running on the PC back on the desk there. All the applications are running there, the Internet is running there. Everything is running back on that PC.

What we're doing is we're remotely -- via 802.11 -- wirelessly remoting the display to this device itself. Now, the device that I have here is ViewSonic's airpanel V 150, the 15-inch version. They have 10.4-inch versions, as well. The way that we've connected the device to the PC is we're using the Microsoft's broadband networking product. For those of you who have gone through the struggles of trying to install wireless networking at home, we've found that it's really not that easy. But, with the broadband networking products from Microsoft, we've basically added a lot of smarts into the device itself, as well as into the software, so we automatically detect the network settings, the Internet settings, and make it really easy for anyone to set up a secure wireless network.

So one question I get asked a lot about the smart display is, how is this different from a Tablet PC? There's two analogies I like to use to try and explain that. First off, think of the Tablet PC as the evolution of your notebook or laptop computer. It's truly a PC that allows you to go on the plane, go on the bus, it's got local storage, local applications, it is a notebook PC. With the smart display, this is just the evolution of a monitor. Again, we've added intelligence into the monitor, and it's truly a display device, plain and simple. The power of the PC is still running on the PC device itself.

The second analogy that I think helps people a lot is to think about this as a cordless handset that you have at home. That handset is only good as far away as you are from the base station itself. Using the smart display, using 802.11, we can go about 150 feet away from the PC or the access point itself. Now, with the Tablet PC, think of that as a cell phone. You can go anywhere, you're on the bus, on the train, anywhere you can actually make a call from that. So a couple of analogies to give you a little separation there.

Now, the way to think about the smart display is it uses a touch screen and a stylus, so that I can easily browse the web, I can read email, I can view or look at documents or pictures, I can even listen to music if I like. The way I like to explain it is, think about when broadband networking came into the home. That truly made the Internet always on. With smart displays we make the Internet always available at your fingertips.

What I'm running here on this smart display is MSN 8. And with MSN 8, we've done a lot of changes to the home page itself. We've added a lot of new content. We've allowed you to customize it very thoroughly. In fact, you can lay out just about any information you want any way that you want to view it. We also have a dashboard along the side here and this gives me one click access to things that I might want to get quickly, for example the local weather, if I want to take a look at stocks, and I've even customized it with a picture of my daughter.

Now, speaking of kids, my son is actually online all the time. And as a parent, I get a bit concerned about where he's going on the web, and who he is interacting with. One of the great things about MSN 8 is the new parental controls. And what this allows me to do is set up controls for my children, so I have something for Cora, my daughter, and Garrett, my son, and you can see that I can basically set up a wide range of different parental controls. Finally, if Garrett wants to, he can send me some requests. And he can say, hey, dad, I'd like to add these web sites to my okay list, or add these people to my buddy list, or to my MSN mail list, or my instant messaging list.

It looks like my wife just sent me an instant message. It's time to take a look at what movies are available for rental tonight. We're going to talk a little bit about what DVDs we want to rent. And we can do this using instant messaging if we wanted to. However, there's a very powerful new feature inside of Internet Explorer, and that's the ability to do shared browsing. What we can do is, we can browse the web together, so it launches a new instance of the browser that both the person I'm IM'ing with and myself can use. And you can see my wife's cursor going across the display there. I'm going to go into entertainment here, and let's take a look at what new DVDs are on tap for us. And, again, you can see her cursor moving all over the place. It's a very cool way to collaborate online. I've found is it's also very helpful in helping my in-laws learn how to use the web, so I can do it online.

It looks like she chose Divine Secrets of the YaYa Sisterhood, which is the movie we'll watch tonight. I guess another key is to learn how to click faster than your wife does when you're choosing movies for what you want to watch. Let me go ahead and close that down.

It looks like Bill is sending me an instant message as well. I'm just going to close that. He's going to come over and check out the research for Zoo Tycoon. Basically, he's going to take a look at a video that we've worked on. Let me bring the smart display up here, and while I'm walking up here, I want to announce a couple of things about smart displays. First off is the fact that the ViewSonic devices, the airpanel V150, which is the 15-inch device, and the V110, which is the 10.4-inch device, will be available from retailers starting January 8th of 2003. We're also announcing today a preorder program, so that you can preorder your ViewSonic Smart Display from a wide variety of retailers online, so people can start to get these very soon.

Now, we expect a wide variety of other partners to come out with smart displays. In fact, some of them will deliver their smart display in the first quarter of 2003, and we expect our European partners and Asian partners to deliver their smart displays in those markets in the first quarter of 2003 as well.

So, what I'm going to do is go ahead and dock the smart display. And here it's acting as a primary monitor for me as well, so now I can sit down at the PC, and I can use the device if I'd like to. Now, I'm using the keyboard and mouse in order to use the PC itself, and it switches over. And you see we start off where we were before. I'm going to close these down.

Now, again, Bill is coming over. We're going to take a look at a movie that I created, and we're going to do that using Movie Maker 2. Now, this is the beta version of Movie Maker 2. It's on the web today, free download, and updated feature for all Windows XP users. And really what we've done here is, we've made video editing and sharing very, very easy. The pane makes it very easy to work with. In fact, what I've done here is, I've used the auto movie feature. And it takes my movie, and it basically automatically created a movie for me inserting transitions, inserting music, and really making that very simple.

Now, I want to do a few other customizations to this. In fact, I want to take this clip, and for me to put this into my movie, I just need to drag and drop it exactly where I'd like it to go, and you see that it drops it in there. If I wanted to add a title, for example, to my movie, I'd go over to the task list and I make titles or credits. I'm going to create a title at the beginning, and let's call this The Zoo, and we'll call this Summer 2002.

Now, let's go ahead and change this title animation. You see that there's a wide variety of different animations that we can make here. One of my favorites is moving tiles layered, you can see it layer over there on the right-hand side. So, we're done, so we'll add that title to the movie.

Let's work on transitions as well. Again, I can add video transitions if I'd like to. In fact, there's over 130 different effects, transition, credits, all different things that you can add, and, again, it's as easy as dragging and dropping a transition, and you scroll back up here, and you drag and drop this one here. And my movie is pretty much complete.

Now, to save this to my computer, I just click on save my computer. And, again, it takes me through a wizard. One of the nice things about the new Windows Media 9 Series compression is that I can save about 15 one-hour digital videos on the hard drive in about ten gigabytes of hard drive space. So, that's some excellent compression for you. So, we'll go ahead and save that to the PC. And it looks like Bill's here.

Hey, Bill. How are you doing? Come on in. It's amazing how that works. It's going great, actually, but instead of you huddling over my shoulder to look at it here, why don't we head on down to the couch, because what I've been using as a PC is my new Hewlett-Packard Media Center PC.

BILL GATES: Oh, great.

KEITH WHITE: So, it's running Windows XP Media Center Edition, and as you mentioned earlier, it really allows you to not only have a complete PC, but it brings a number of TV experiences to the device as well.

So, as you can see, what I've done is, I've connected that to my big display over here. And this is all controlled by a remote control, so we can sit back on the couch. I'm just going to push the start button here, and take us into our Windows Media Center experience. And let's go ahead and scroll on down, and watch the video that I just created. Notice the transitions and things that we added earlier on.

(Video shown.)

KEITH WHITE: So, again, very, very simple to create video.

BILL GATES: That's a nice video. Can we watch some TV?

KEITH WHITE: Yes, we can watch some TV. Yes, you're kids are always cuter to yourself than they are to anybody else. What we can do is we can go to the guide. We've got the complete electronic programming guide: it stores about 14 days of content. We can watch live TV, we can watch the PDR to record TV. Let's go ahead and just watch some live TV and see what we've got on. We've got on the football game. And again, this is basically recording television. So we can watch TV, we can watch it full screen if we want to. And one of the nice things is that you can actually pause the TV so you can get up and go to the kitchen if you want to get something out of the kitchen, or come back and pick it up right where it started. But, this is probably a good time for you to get back to your keynote, as well.

Now, one other thing I'd like to announce today is that we have two new partners that will be shipping Media Center PCs: Gateway and Alienware are planning on shipping Media Center PCs this week. I know I showed you a lot of things that we're doing in the home in a very short period of time, but we're very excited about all these experiences we're enabling for consumers this holiday season.

BILL GATES: Super.

KEITH WHITE: Great.

BILL GATES: Thanks, Keith.

KEITH WHITE: Thanks, Bill.

(Applause.)

BILL GATES: As the world moves to deliver content more and more in digital form, and give consumers more flexibility in working with that content, a particularly important set of partnerships for us are the partnerships with the media companies. I'm really pleased that, given our focus on software, we're able to reach out and work with all the leading media companies in various innovative ways, partnerships with people like Disney, NBC, Fox. In fact, Peter Chernin of Fox will be giving a keynote speech on Tuesday, and talk about this future of digital content, and how software and content can come together in some very exciting ways.

Let's now move on and talk about the office. The office is where the personal computer had its initial impact. And information workers really have benefited by having these tools, email, word processing, spreadsheets, but there's a lot more that can be done. The PC can be made far more natural to these workers. And we've identified some of the inefficiencies that take place in the office. Some of those the tablet was aimed very squarely at: note taking, reading, annotation. Over the last several years, as my COMDEX keynote, I talked about the milestone for the Tablet. Two years ago it was the kickoff of the idea, and some of the technology breakthroughs like Clear Type, a year ago I showed the prototype, and so it's very gratifying that this year we just had the Tablet PC launch, and we have five shipping systems with many more coming, based on that concept.

The key driving factor there is naturalness: holding the document you want to read in your hands, using the pen, either as ink or recognized text. So there's much more that we can do, to think about systems that work in a very natural way. Take, for example, the idea of communication. Today when somebody wants to communicate with you, they don't know whether to use instant messaging, or email, or call one of your many different phone numbers, and you have no ability to screen those things to make sure they're not interrupting you when you're busy in a meeting or when you're working on a document. The threshold of what comes in and takes your time should be set according to the context you're in. So having a single address, and having software work on your behalf to schedule things, and decide when to notify you, that's a very important advance that needs to take place. And so there's a lot we're doing to push for that.

Meetings. Meetings are still a huge time sink. People go to meetings just to see a small part of them. If you want to find out what happened in a meeting it's still very tough to do. And yet, the idea of digitally recording all the video and audio, and applying advanced software to recognize the words and the transitions in that meeting, that's the kind of thing that over the next few years we can build into products, cheap digital cameras, audio microphones, and meeting software that facilitates the meeting, helps you organize and advance, helps facilitate it, allows people who are far away to see the entire meeting and what's going on, let's them zoom in on different participants, automatically directs the camera to where things are taking place. Also, archiving that meeting, making it so that somebody who didn't attend, you can point to a clip and send that off to them. In fact, we've got it now so that the people who don't attend the meeting and just want to see a subset later can see it at twice the speed that the actual meeting took place. So it's a nice incentive not to actually go to the meetings.

So systems that help you work the way you want to, a lot that's been done, but a lot more that can be done. Now, these solutions need to work across all different types of devices. Making it so that essentially your Office power, your Outlook power, is available on a pocket sized device and on a phone is the reason that Microsoft got involved in the mobile platform. We entered a few years ago, our smart phone product just shipped a month ago, and the progress that we and our partners are making on this is quite phenomenal.

In fact, there's two new products that I consider huge milestones in the Pocket PC world that will be shipping later this month. One is the Dell, this is the Dell Axim X-5 Pocket PC. And this is Dell's first entry into the category, and they're coming in with a product that's priced very attractively under the US$300 range. Another announcement, and it's from our long-time partner in the Pocket PC space, HP, with an iPaq, this is the iPaq 1910. Again, very aggressively priced, under $300, and a very sleek design that takes the work they've done to a whole new level.

So we see these things improving very dramatically: price, performance, just the sleekness and the capabilities of the software built in are advancing quite rapidly. These are companion devices that, as we advance Office, we'll make sure that we keep these up to date for the entire experience to work very, very well.

Office itself is another major area of innovation. We have a major release of Office coming out next summer. And in that release for the first time in a long time we'll have some new applications that we feel will be used by the majority of all office workers. We've talked over the last few months about one called Xdocs. This is the first application to connect knowledge workers with XML information in back end systems. So that the information retains all of its richness and structure, and yet you can take a portable machine and have very rich viewing, and editing, and organizing of those documents. You can connect that up to a work flow application using SharePoint, so people are notified about what things have been handled or not handled around the XML data. Basically, the flow of information between the desktop and the back end applications is revolutionized by using XML and this new software application.

Another new application in the Office family is being discussed tonight for the very first time, and this is called Microsoft OneNote. The idea is that it hasn't been that easy in a very free form way, with lots of rich navigation, outlining type capabilities, to really organize your thoughts. There's been no member of the Office family that's aimed in that direction. This is partly about note taking, because that's part of the concept, but the concept is very broad: it's ink, it's text, it's a rich set of tools that are very, very free form. This is one that I'm sure the easiest way to understand why we're so excited about it is to see it in action. So I'd like to ask Bobby Moore from the Office group who has worked on OneNote to come and show us what's the concept here, and why it's a big deal.

BOBBY MOORE: Information workers have told us they have a problem. They have scattered information. They have information in notebooks, they have information in paper, they have information in e-mail, they have information in Web pages, but they really have no one place to actually capture all of this information. And consequently this information is often forgotten about: it's often lost; it's never utilized to the fullest of its potential.

So we've taken a step back and we've looked at the problem and we've asked ourselves how can we actually provide this one place to capture all of your notes, and we've created Microsoft OneNote, which we think is going to be that one place for information workers to capture all of their notes.

Now, pen and paper is actually a very, very strong analogy. People actually understand pen and paper. And so we've actually leveraged that analogy in our application. If you look at the top, you'll notice that we have what we call notebook tabs, and for each notebook along the right hand side we actually have what's called page tabs.

Now, if you think about pen and paper, pen and paper is really flexible and we know that Microsoft's OneNote had to be flexible also. So I can click anywhere in OneNote and I can actually just start typing. So when you talk about the flexibility of pen and paper, we're attempting to deliver that.

But now when you want to go from unstructured to structured information, I can just grab this content and Microsoft OneNote is intelligent enough to know that this represents a set of related ideas.

So now what I'm going to do is I'm going to take this information with me. I could do this in a notebook, but in this particular case I'm going to use a Tablet PC. So I'm going to go ahead and undock my Tablet PC and I'm going to enter a meeting where we're going to all be talking about the strength of our version of the Tablet PC and how we're going to deploy these Tablet PCs throughout our organization. Let's go ahead and join this meeting in progress.

COREY: Well, great, well thanks for coming, everyone. As you know, we're going to be deploying Tablet PCs in our division, which I'm really excited about and about a month ago I asked each of you to go out and pick a tablet and use it for a month. So I want to hear about what you like about the tablets you chose. Bobby, let's start with you.

BOBBY MOORE: So I'm actually using the Fujitsu and you'll notice it has a great ergonomic design. It's really thin, it's really light, very easy to use in portrait or in landscape mode and you'll notice that because it's a Tablet PC with great inking functionality I can actually inside of Microsoft Windows, which takes advantage of that functionality, very easily capture handwritten notes.

COREY: Great. Kelly, which Tablet did you choose?

KELLY: Corey, I chose the Motion computer. It has a huge screen, about the size of a piece of paper, which makes for a really great writing surface. It also has a nice docking station, so I can dock it at my desk and use my full keyboard and mouse and then just grab it and go when I need to go to a meeting. I also heard this available through Gateway within the next couple months.

COREY: Well, great.

Well, good. Well, I have the HP tablet, which is a really innovative design. HP kind of combined the best of a convertible and a slate, so on the one hand I've got a laptop with a keyboard but I can easily pop the tablet off and have a thin and light slate, so I can keep my keyboard separate. So HP's done a great job.

Bethany? Now, I understand you've been a long user of a tablet?

BETHANY: Yeah, Corey, I'm addicted to my tablet, my old tablet. I mean, you want to talk about thin and light, check this out. (Laughter.) My instant messaging is only as strong as my pitching arm and I don't think my coworkers enjoy that so much.

I finally found a fully functional Tablet PC with the new Toshiba. This convertible has a full size keyboard and a great display, 12.1 inches.

COREY: Well, great, Bethany, all right. Well, let's move on.

Allison, which tablet did you choose?

ALLISON: Well, Corey, I've learned that a laptop is just not enough for me. I'm constantly running to meetings, so I needed an ultra portable tablet. That's why I chose the Acer. It's lightweight, it's ultra portable and it's a convertible, so I've always got my keyboard with me and I can choose whether I want to work in tablet or laptop mode.

COREY: Well, good. Well, we obviously have a lot of great choices, so this is going to be a tough decision. I also found out that NEC is going to be coming out with a Tablet soon, and I was able to get hold of a prototype. This is a super thin and light tablet and it weighs only 2.2 pounds, so this will be an exciting one to see in the coming months.

Well, good. Well thanks, everybody. I think I've got pictures of all the tablets except the Fujitsu. Bobby, can you summarize the meeting and send me a picture of your Tablet?

BOBBY MOORE: Absolutely.

So I'm going to go ahead and head back to my personal office. And you'll notice here that it's very easy for me to go ahead and dock this Tablet PC and when I dock the Tablet PC, I can actually use it as a second monitor.

Now, the other thing you're actually going to notice is that I'm really completely wireless here. I have a clutter-free desktop and that's because I'm using Microsoft's Bluetooth hardware, Microsoft's Bluetooth keyboard, as well as the Bluetooth mouse, and again I'm completely wireless. It's the first mouse and keyboard to actually provide Bluetooth functionality and again it's a step towards a completely clutter-free environment.

Now, I'm actually going to return to creating this meeting summary and you'll notice here that I was actually able to capture some handwritten text. Now, handwritten text in Microsoft OneNote is actually as rich as typed text. So now what can I do with this? I can highlight this content and I can do things like create a numbered list. I can also highlight other parts of this content and I can do things like change the color, and I can even underline this content.

So again when you talk about the flexibility of pen and paper, I've just shown you how I was able to type in Microsoft OneNote, I'm also able to ink and I can switch very quickly between the two.

Now, one thing that I've always wished for -- and that's because my short-term memory is actually very, very bad -- was the ability to actually capture audio of specific spoken instances of text, but not only just to capture that audio but also to tie that into specific instances of when I was actually typing in text or hand writing text.

Well, Microsoft OneNote actually gives me the opportunity to do that. You'll notice here where I'm hovering over meeting summary and I actually get this little highlight, this icon. This icon is an audio note and this audio note actually links to this particular portion of the input that I typed in. And what this audio note is going to do in this case is it's going to remind me of what Corey wanted in the meeting summary.

COREY (AUDIO NOTE): Bobby, can you summarize the meeting and send me a picture of your tablet?

BOBBY MOORE: Now, isn't this cool? Isn't this great? (Applause.)

And again the point here is I have the flexibility of capturing not only typed input, I can also capture inked input, I can capture audio.

Now, Corey actually asked me to grab an image and if I was actually using pen and paper I'd actually have to flip through loads and loads and loads of paper. Well, with Microsoft OneNote -- and because this is actually digital content -- I can very easily just search for the term "image" because I remember I actually had an image already in my notes and I labeled it under the term "Fujitsu image". I can enable this search; it's going to go back and go through all of my notes and retrieve every instance of the word "image" and take me directly to the image that I'm looking for.

Now, because Microsoft OneNote has such an intuitive navigation, I can just go up and we're all used to the "back" button, I can just click the back button and return right where I started and I can very easily just paste this information.

And now as easy as it was for me to actually grab this picture, it's also easy for me to grab HTML content. So I'm going to open up a small version of Microsoft OneNote, I'm going to open up a Web page -- watch very closely, no smoke and mirrors -- I'm going to just drag this information over, drop it inside of the smaller version of Microsoft OneNote and you'll notice that when I open up the full version that HTML is captured exactly as it was captured on that Web page and it even provides the URL of where I grabbed this information from.

So again when we talk about flexibility of gathering information, not only ink, not only typed, not only audio, also HTML, also pictures.

And now that I'm actually done capturing this information, now that I'm done with my meeting summary, let's say I was actually using pen and paper again, I would actually have to go through and retype all this information or fax it or paper copy it and send it out to all the individuals in my team. Well, now because we have integration with Microsoft Outlook, I can very easily from inside of this application actually send this e-mail off and you'll notice here I don't have to even leave the application; I can just send this e-mail off.

So again, what have you seen? You've seen me flexibly gather information in ink, in type, you've seen me grab audio, HTML. You've seen me grab it in one place and you've seen me actually use this information to perform impact. It's got an action because I've been able to send it out to different individuals on my team. And again that's the strength of Microsoft OneNote.

Thank you. (Applause.)

BILL GATES: Thanks, Bobby. That looks great.

I mentioned at the start that I'm very excited about the progress that's been made with XML Web services over the last year. This architecture is going to revolutionize many aspects of the computer business. This is an architecture that was really needed, needed for many domains. It's something that from the beginning we decided would have to be based on open standards. So starting with XML, followed by SOAP, followed by WSDL, followed by UDDI and now being supplemented by standards like WS Security or WS Routing, we're seeing a rich platform that will exist on all systems and allow you to do things like e-commerce independently of what software implementation is being used. As long as those software implementations pass the tests put together by WS-I they will conform and you'll get the full power and capabilities that XML Web services provide.

This approach is something that's been talked about in computer science for a long time: making it easy to write distributed systems where the programmers on either end didn't have to meet and do design together, where the systems were robust so that if one system fails or is even malicious in the commands that it sends, the other system is unaffected by that and can distinguish exactly what the legitimate requests are from the non-legitimate requests.

I think if there's anything that I'd tell people to focus their developers on and make sure that in their new applications they're really requiring it would be this approach, understanding XML and how Web services takes that to a new level.

We're at the beginning here, but already pioneering customers are doing very exciting things with this technology. So we're seeing the validation of the approach already in the real world.

Now, one of the things that I think is greatly underestimated is how this approach breaks down barriers, barriers for information flow, barriers for how systems work together. Take, for example, the data center and this idea of taking the applications you want to run and the hardware you've got and componentizing those in schematized, self-describing ways so that a piece of software can actually manage the data center, so that it can start and stop applications based on the Service Level Agreements there are for any of the applications that need to be run.

Well, that can be done by using Web services. And so moving away from the idea that the complexity of the data center is proportional to the number of servers in that data center, moving away from the idea that the complexity of desktops is proportional to the number of desktops out there; Web services, by componentizing those elements, allows them to be put under software control, eliminating the maul steps that have been involved in those activities.

When we look at people discovering people who are trying to sell other products or who can play a certain role, these directory capabilities that let you reach out across the entire Internet are very key here.

When we talk about devices discovering each other, finding a peripheral that might be nearby as you're traveling around, that's Web services because you have a description of the peripheral capabilities you want and the peripherals broadcast out using UDDI capabilities their presence and so the two things are brought together.

So, interconnection needs to be done around one architecture. Not one architecture for e-commerce, one for management, one for interoperability; a single architecture, applied very broadly. For Microsoft, this is the center of our .NET strategy. This is what we committed our company direction to be several years ago. It's a very profound commitment. We had to rebuilt Visual Studio to release the .NET version early this year. We're doing substantial rebuilding in our database to not only support XML, which we already do, but to bring XML into the core of that database.

Likewise, in Office, we're having to rebuild portions of Office to bring the XML support up so that's it a native data type that Office understands in a very direct way.

Even the operating system itself, the entire idea of the file system will be affected profoundly as we move to a more universal XML storage that can store information of many different types and yet have a common search command, common navigation across those types.

So a huge investment and a huge part of what we're doing.

Now, one question that people ask is how will this all work. Given that you're talking about Web services being a key piece of infrastructure, the way that society does business, how do we know that we'll have the elements of trustworthiness that are necessary to play that role.

Well, there are many things that have to be done here. In fact, we've made all the issues around Trustworthy Computing the top priority for us, the biggest piece of our R&D budget. We've had many projects where we stopped and said okay, let's just focus in on these issues, review everything that we're doing to make sure we're bringing this to a new level.

The industry needs to step up on this one. Part of the solution is software innovation, things like tools that find security vulnerabilities automatically. A lot of breakthroughs have taken place on that.

Tools that make it easy to have an auto update infrastructure. Windows XP SP-1 is the first time that we've made it easy to set the updates so you don't have to get involved; the critical updates just come onto your system in an automatic fashion. That is going to increase the robustness of these Internet-facing systems very dramatically.

There's more than just software innovation here. Software innovation is necessary but not sufficient. In the area of security and privacy, there are a lot of policy issues that need to be resolved. These are complex issues, these are new issues. There are many different countries looking at these with various levels of depth and the industry needs to reach out and work with government. We can't simply say that we understand this because the policy pieces and the technical pieces really interact with each other, and so early discussion is about are there people who will try and exploit this infrastructure, literally criminal elements or terrorists who will be coming in so that the amount of resource and common understanding and tools need to be brought to a whole new level.

So Trustworthy Computing is a necessary element and a huge area of industry-wide focus being required.

Well, I said that Web services is going to let some neat new things happen and this is true for the individual worker and for the company as well. We've got a great example of that, that can really give people a sense of it, and so I'd like to ask Neil Charney and Steve VanRoekel to give us a look at Web services made personal.

NEIL CHARNEY: (Phone ringing.) Hello? Is this the wakeup call? Could you just push it back another hour? No, this isn't Bill Gates. Oh, this is Bill Gates? Bill? Gates? Mr. Gates? Mr. Bill. Yeah? What am I doing? I'm working. Working on the White Paper that we talked about that I would have ready and printed out for the booth right after your keynote tomorrow morning.

What do you mean the keynote's not tomorrow morning? The keynote's tonight? Who has a keynote at night? Oh, you do. That's right, that's right.

And it's now, the keynote is now? You're doing the keynote now. How's it going? Right, really not relevant at this point. No, no problem, don't worry; I'll have that white paper done for you and delivered as quickly as possible.

Yeah, and good luck with the -- okay.

Don't you hate when that happens to you? You're in bed, you're sleeping and Bill Gates calls you and asks you to print out 10,000 copies of a White Paper. I mean, how many times has that happened to you? Anyone out there? A couple in the back. No?

Okay, maybe it wasn't 10,000 papers and all right maybe you weren't sleeping in a hotel room. Okay, maybe it wasn't Bill Gates who called you, but chances are you've been in a situation where you needed to print something out and you didn't have a printer. Now, what do you do in a situation like that? You find out there's no business center in the hotel, so you figure out you have to bring your computer and you can go on the Internet and try and find someplace or you can drive around town looking for a place to print out, wait for the printouts to happen and then cart that printouts to the meeting that you were going to go to. That happens often, and there needs to be a better way, there must be a better way.

Well, with Microsoft .NET and Kinko's, things are about to get a lot easier. Tonight, we're announcing a new Web service from Kinko's called File Print Kinko's, and what this will enable is you to print from the client to the copy center as easily as if you had a printer attached to your desktop. We're going to show you a prototype tonight that Kinko's built of the solution that will be available mid next year for you to work with. So let's take a look and you can see here's that paper that Bill just gently reminded me that I needed to have printed out for apparently tonight.

Now, normally I would just go File, Print, Printer, because the printer would be here or it would be my network printer. But in this case I don't have a printer attached. What I do have is File, Print, Kinko's, the Kinko's add-in and Web service that is going to enable me to print directly to a Kinko's of my choice.

So when I select Kinko's, I'm going to get a printer dialogue box that should look pretty familiar, but there's something slightly different about it you might notice up here: location. Well, what it's asking is where do you want the printouts to go and where would you like them delivered. In this case we're going to want it at the MGM Grand, which is where Bill is speaking, and I can see where Bill is here at the MGM Grand. Actually, if I zoom in and what I'm using here is a MapPoint .NET Web service -- which is integrated directly into this solution -- and I can zoom in and sure enough it looks like there's a Kinko's really near where Bill is giving his keynote. In fact, MapPoint .NET also gives me a distance from where the location is and in this case it says there's a Kinko's 20 feet away.

Wow! Those guys are so convenient. I think I'll select that one.

All right, so I've selected that local Kinko's. It's going to be near enough to Bill. And now we just have to put in the number of copies we want and 10,000, that's fun to do. (Laughter.) Oh, I'd better put stapling. Bill does not like to sit and staple White Papers at night. That's not going to go over well at all, so we want it stapled, we want it collated and we're ready to go. And in this case, we want to be able to have this delivered right to Bill, so I'm just going to bring in a note here to deliver to Bill Gates center stage and I think they should probably send their best person because that's a pretty high quality delivery.

Now, I'm going to submit this print job to Kinko's and I just press submit and right now the file is being prepped and sent over the Internet and I'm going to get an alert from Kinko's that lets me know that that file was received. And you can see the alert is brought to me down in the lower side here and tells me that the "Digital Decade" has been received.

I'm starting to feel immensely confident that I may still have my job for the Digital Decade now that it's been handed to Kinko's, so if you don't mind I think I may just go and do a little bit more work in the back.

STEVE VANROEKEL: Well, Neil sent his print job over to Kinko's. Let me take a few moments to explain how Web services will bring a new level of flexibility and functionality to this solution File Print Kinko's.

Now, Kinko's has always recognized that technology is a core asset to business and very, very important, especially in the area of technology enabling customer value through simplicity. Now, we at Microsoft are very proud to be partnering with Kinko's on this solution and bringing our knowledge and our work in the area of XML Web services to this solution and to a Kinko's near you.

Now to be useful, solutions like the one Neil showed have to be very simple and elegant to use. But in the past, simple and elegant applications often meant that the application was very complex behind the scenes, complex in a way that it was very hard to make changes; it cost a lot of money to make changes and developer time was dedicated to not only building the application but maintaining that over a lifespan if any new things came up or your business changed. The ideal is really taking a core asset, in this case printing, and extending that as a Web service.

Now, as Kinko's utilizes the Web service they'll get some inherent benefits that come along with using Web services, namely interoperability. Interoperability with other Web services, and in this case Neil talked about MapPoint .NET, the ability to do location based services and .NET Alerts so Neil gets a notification when his print job has been received or printed and completed and ready for delivery, so integration at that level plus integration with other people, other corporations utilizing Web services. Take, for example, a corporation may want to outsource some of their printing, printing reports, printing marketing collateral, et cetera, they could simply use their Web service enabled software and connect to the Kinko's Web service and start doing business in that way.

Kinko's also has the benefit of reusing the service. So in the future if changes are made or business changes or as Kinko's grows, they need to modify this, XML Web services give you a way to very easily do that.

Now, that's real flexibility, and that's what comes along with Microsoft .NET and XML Web services.

Well, it looks like I can see on my monitor over here that Neil's print job is done and his career has been saved for another day, all through the power of Web services.

Neil did indicate that he needed a top person to help deliver this job, so please let me introduce Kinko's president and CEO Gary Kusin. (Applause.)

GARY KUSIN: Bill, I'd like to show you the Digital Decade White Paper that Kinko's printed for you this afternoon and I'd like to let you know that we've already delivered it complete to your booth over at the convention center.

On behalf of all of the team members of Kinko's around the world, I want to tell you how proud we are of this Kinko's-Microsoft partnership and all the opportunity that it enables.

You probably know this, but the amount of work that we receive digitally at Kinko's has over doubled each of the last three years, and we're sure this trend will continue. So this new concept is really hitting our sweet spot at Kinko's.

So we're very excited about this in the future. In fact, we think about it in terms of enabling Kinko's to extend the longest printer cable in the world from Kinko's to each and every one of our customers, so we're just delighted to be a partner with you.

BILL GATES: Well, that's exciting and I think it's a fantastic example of what Web services can do. We're really pleased to be in partnership and I know a lot of people are going to get the benefits of the work we're doing together. Thanks, Gary.

GARY KUSIN: You bet. Bye-bye. (Applause.)

BILL GATES: Well, a big milestone for Microsoft is the Windows .NET Server 2003. This is something we've been working on and getting customer feedback on and it's a very major advance for the Windows Server.

In the next few weeks we'll have the RC 2 along with likewise the RC 2 of Visual Studio .NET that is the release to go along with Windows .NET Server. So we're getting very close on this one and the RC 2 release will have very broad availability. What that means is that we expect to be able to release this product in April of next year.

What are some of the key advances here? Well, they're very broad. With reliability we brought in a new process model with so-called III-6 and it's got automatic help monitoring.

Availability: We brought in now, moving up from a four-node cluster to an eight-node cluster. We've made it very easy to set up and we support both SAN type storage and geographically distributed cluster capability.

Scalability: This is one where I think people are going to really be amazed. Moving up to 64-way processor systems, moving up to 512 gigabytes of memory support, support for hyper threading, which is an Intel feature, the 64-bit support, which, of course, is optimized for the Itanium II work, if we map this into the common industry benchmarks, the progress is quite clear.

Many years ago, I think it was three years ago now when we first shipped Windows 2000, Windows-based systems did not appear on either the clustered top ten or the non-clustered top ten. Well, after Windows 2000 came out the top clustered results overwhelmingly were the Windows results, whether in absolute performance or price performance.

Now we're even taking non-clustered systems -- single systems -- and we've moved up now to be two of the top ten non-clustered results, and, of course, our goal is very simple, to have the same position in the non-clustered systems as we have in clustered so that there's no doubt about scalability for even the most demanding applications, and that trend away from the expensive hardware to the servers will accelerate quite substantially.

Manageability: A lot here in terms of making auto update built-in, the policy management a standard feature, and so a very important release for us.

We're validating this release, as we always do, with some customers who are willing to work with us early on, and I just have a few examples here that I think are good examples of where Windows is going.

Danske Bank, of course, is a very big European bank and what they're doing now is they're moving applications that used to run off the mainframes onto the Windows Server. They're using the early Windows .NET Server to do this and so they'll be saving over a million dollars a year and getting more application flexibility with the work they're doing. They're also pioneers in using WS Security and WS Routing. In fact, their feedback on that has been very valuable.

One other example that I'll mention is Enterprise Rent-A-Car. They're rolling these servers out today. They've got 5,000 branches that they'll be taking advantage of this with and it's again a case where they'll empower their entire system to see information in new ways as well as save costs.

So let's go ahead and take a look at what we've got for this. In the enterprise area you've got very big systems and so we're talking about enterprise systems that are very large and Web services being used down to the very, very smallest device. When we think about small, we think about smaller than even the pocket-sized device, even the phone. We think about devices that are very small, you know, things like a little card that would have information on it, things like the wristwatch, many different form factors we'd like to bring intelligence to.

And we started the project to look at this about three years ago and it was incubated in Microsoft Research. It was a great example of taking a very demanding scenario and very advanced technology and working to bring those two things together to satisfy some scenarios that were very demanding.

Frankly, we've made a lot more breakthroughs on this than we'd expected to and we're very amazed that it hasn't even been subject to a rumor. Until a week ago there was nothing being written about this work at all even though it's a very important piece of work.

So I'd like to ask Bill Mitchell, who runs the group doing this work that we call SPOT, Smart Personal Object Technology, to come out and explain to us what the SPOT concept is.

BILL MITCHELL: Thanks, Bill. I'm super excited to be here today and have this opportunity to show off some of our first generation Smart Personal Objects, the things you see on this table.

When we first set out over two and a half years ago -- like you were saying -- in Microsoft Research to create some brand new technology, we set out with the mission of creating technology that helped us get to smarter everyday objects.

So what does that actually mean? Well, we needed to go out and actually talk to customers to figure that out. So, we spent probably six months before we even wrote a line of code and before we did any hardware work, interviewing people, doing focus groups and really calling down customers to try to figure out what it is that would make everyday objects smarter.

So, from those results we came back and we built a bunch of scenarios, and those scenarios helped us figure out what unique technology needed to be put in all of these objects to make them better at their core functions, better, smarter, faster, stronger, the whole thing.

So what we have here on the refrigerator are a bunch of seemingly relatively ordinary refrigerator magnets and what these actually are, are refrigerator magnets that are little time pieces. They're better at their core function, which is providing time, but they're also able to give you timely information, things like sports scores live, information on traffic, information on weather and potentially personalized information as well.

This illustrates really what we were trying to do here, take everyday objects and make them not just really good at their core function but sort of go beyond that in sort of logical ways.

What we have across this table mostly are timepieces. This is really our thrust in the first generation, but these timepieces are all better timepieces in that they're sort of analogs, but they are also extended so that the notion of time is sort of extended to telling timely information, timely, relevant, personal: the things that potentially make these devices better and more useful to you.

So we have an example of a key chain with information on it, we have an example of a travel alarm and, of course, a wristwatch because we all carry time on our wrist, but the one we'd like to show off today is an alarm clock much like probably what you guys all have in your hotel room because we thought this was going to be a particularly relevant example to everyone attending COMDEX.

One of the biggest problems people have with time pieces in general and particularly alarm clocks is that it's frustratingly difficult to be able to set the time and the alarm. With this Smart Personal Object Technology alarm clock you never have to set the time; it's always up to date for you, it's always accurate, essentially atomic clock accurate. But beyond that, setting the actual alarm is very trivial as well. So I'd like to give you a brief demonstration of that.

Right now it's giving me the time, 8:45. If I want to set it up for tomorrow to just wake me up, all I have to do is touch the screen and it gives me a default selection. The default is actually 6:00 AM.

BILL GATES: Now, how did it know that?

BILL MITCHELL: Well, it's a Smart Personal alarm clock so it knows a little bit about what I do and in this case it happens to know about my daily schedule and it also knows things about the ambient information. We're in Las Vegas, we have commute problems. You want to know things about the weather, if there happens to be a big rainstorm or something, all the things that potentially affect the amount of buffer time you need to get to your first appointment in the morning.

So let's go ahead and pretend it's 6:00 a.m. I'm going to set the alarm for 6:00 a.m. and I'm going to fast forward the alarm to six in the morning and I'll show you what happens when this alarm goes off. (Alarm sounds.)

There we go. So the alarm goes off. All I have to do is touch the screen and the alarm goes off.

The first thing most of us think of when we turn off our alarm clock is how much more time do I have to sleep basically. And a smart alarm clock can help you with that. So on this smart alarm clock in a glanceable display, something that I can see pretty conveniently when I've got sand in my eyes, I'm just waking up, I don't want complex information, are these very simple icons. I touch one of them and it gives me information about my first appointment. It says I've got a flight out, it's at 9:15 and, in fact, I've got about three hours and fifteen minutes before that flight. So far so good; it looks like I might be able to go back to sleep.

It also gives me information on what the commute route looks like, particularly to the airport, because again the information is tied together and I've also got information about my schedule so I know I'm taking this flight, it's about 32 minutes to the airport, looking at little tight.

The last bit of information that I might want to look at in the morning is what the weather is going to be like and again the smart alarm clock doesn't just give me the weather for Las Vegas, it gives me the weather for my destination city, Seattle, which, of course, in this case could have been hard-coded because it says it's 50 degrees and raining. (Laughter.)

So we think this alarm clock actually illustrates some of the key concepts in the first generation Smart Personal Object. These are all about extending time to timely information, but the real goal here with Smart Personal Objects Technology is to make these objects, every-day objects better at what they do so they're not just better but they're also simpler to use, and we think that this is actually going to be a big booming market in the years to come.

BILL GATES: Now, these devices are connected?

BILL MITCHELL: Yes, they are. They're wirelessly connected and we'll talk more about that at CES.

BILL GATES: That's fantastic. And is there chip technology that's key to this?

BILL MITCHELL: Absolutely. In fact, one of the things that we had to develop in the course of making these smarter through software is a brand new hardware technology foundation and we worked with our partner National Semiconductor on this to develop a custom two-chip solution and if you go to Brian Halla's keynote on Tuesday you can find out more about this technology.

BILL GATES: Well, that's fantastic. I can't wait 'til we've got the SPOT object shipping next year.

BILL MITCHELL: Thanks.

BILL GATES: Thanks, Bill. (Applause.)

So we're extending personal computing down to devices that really I don't think most people would have expected, and, of course, the simplicity, the low cost, all of those things are part of the concept.

Well, there are many advances that are beyond what we had time to talk about tonight. The idea of tools that do a better job of making it easy to take a model of an application and build the software around that, the idea of taking the disparate storage we've got in our systems -- registry, photo stores, music stores, mail stores, Web page stores -- and bringing those together in a single rich store with a deep programming model, that's part of the vision of our next major release of Windows we call Longhorn. Building real-time communications in so that the relationship between the phone and the PC is very different than it is today, letting people collaborate, work together on the screen, no matter where they're located; plenty of things that we can do to pursue this fundamental idea of creating tools that help people realize potential.

We've put together a short video that captures this idea of letting people realize their potential based on the work this industry does. Let's take a look at that.

(Video segment.)

(Applause.)

BILL GATES: I think that video captures some of the reasons why the information technology business is the most interesting business to be part of. It's moving fast and it's moving in a way that empowers people to realize their potential.

The tools we've built can be used anywhere, on more and more devices, and we've got a new architecture that's going to work in a far better more effective way. The vision we're moving towards will be realized this decade, it's a very ambitious one, and I hope you get a clear sense that innovation is going to create opportunities for all of us in the years ahead.

Thank you.

(Applause.)