Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
Microsoft Professional Developers Conference 2005
Los Angeles, California
September 13, 2005

BILL GATES: (Applause.) Thank you. It's very exciting to be here for the PDC. This is not an event we give every year. It's an event that we give when we have new tools, new foundation software and new developer opportunities for you.

This is a record-breaking PDC. It's even more amazing when you consider that most trade shows are having a hard time getting large audiences, even the most famous trade show of our industry, COMDEX, –isn't held any longer. And technical events are not as popular, because people can go out on the web, get information, see the streaming video. For this PDC we pulled out faster than we ever had before. We have more people on the waiting list than we've ever had before. We had more sign-ups for the pre-session. We have double the exhibitors than we ever have had before. And so it's great to see the energy and enthusiasm about building next generation of software.

Over the course of this event, over 30 gigabytes of software will be handed out to all of you, from [Windows] Vista to Visual Studio 2005, SQL 2005, Win FS and many other software products, so enabling you to get going with that latest software.

PDC has always been -- we've always had some interesting challenges around it. Two years ago, in 2003, there were a lot of forest fires in this area. People had a challenge getting in. Here yesterday we had the electrical blackouts that were interesting. A while ago, when I was talking about our security challenges, I used to say that our goal was to make software as secure and reliable as the electricity network. (Laughter.) And what I meant by that was we should become as good as them, not that they should become as good as us. (Laughter.) So, we need to become as good as they should be. So -- (applause) --

The Biggest Change Agent in the World

The software industry has grown to be, I would claim, the biggest change agent in the world, the industry that's really driving things forward, changing how work is done, how entertainment is done. It is a phenomenal industry. I think it is by far the most interesting industry in the world.

Back in 1975, when Microsoft got started, there really hardly was a software industry at all. People were given awards for selling a thousand copies of products. And of course that was because there was very little hardware out there; what there was, was very expensive. And so it was through the idea of common software platforms, high-volume, low-cost, the founding vision of Microsoft around the personal computer helped birth the software industry -- created opportunities for lots and lots of developers, brought forward the idea that packaged software could meet the specialized needs of businesses and individuals.

Every 10 years or so we get to a point where there's something we can assume. That is, we can build our software on top of a richer platform. The PC came out in 1981, and by 1985 people were willing to say, yes, MS-DOS is there, that's the standard thing, the PC is going to be out in very high volume. That wasn't true in 1981. IBM had multiple operating systems, there [weren't] threats of software. But by 1985, that was established, and the flourishing of applications around that as fantastic to see.

A decade later, I would say that all the experimentation and early work around graphics interface, particularly with Microsoft Windows, had been accepted. And so with Windows 95, Office 95, the 32-bit machines of that time, we had a foundation, and people went on to build a generation of graphical software that was pretty fantastic.

Now, soon after that, the Internet came along, and that's been a period of great inventiveness, lots of start-ups. I'll tell you we're now at the point, almost a decade after the beginning of the early Internet work, where we have the foundation pieces we can take for granted, that we can take this idea of any computer talking to any other computer; the idea that we have ways of formatting the information, finding the other software components we want to talk to -- and we can say that's a foundation that applications can be built on. So I'd say this is the period of greatest opportunity for people building software. I'd say that whether you're building software inside a company, to give the company you work for a special advantage within your industry; or if you work in a software company, building packaged products to get those out there.

Software is redefining how people do things, and we're nowhere near halfway through what we can do. Think about communications. Obviously very revolutionary what we're doing as we move communication onto the Internet, bring together video, telephony, bring together the notification, the context, your schedules, the richness of information that you can edit and share with people. It will never be the same.

Business insights, the ability to know what's going on before the things that are urgent. Software will provide digitalization that will make that far better than ever before.

So the software industry, I believe, people are underestimating. Across the board it is the enabler for the great new things that are going on.

So for all of you here who build this magic software, this is a great time. In fact, one of the challenges that companies have now is simply getting enough great software developers. I get involved in some of the recruiting. In fact, I do college tours and things like that. I put together a short video of one of my recruiting trips, and I thought I'd share that with you. So let's go ahead and take a look at that.

(Video segment.) (Applause.)

BILL GATES: Amazing what you have to do to recruit good people nowadays. (Laughter.)

Hardware Breakthroughs Enable Software Ambitions

Well, there's lots of trends in the industry that software gets to take advantage of. After all, going back in time, we can see it's really the advances at the hardware level that have allowed us to be so ambitious with the software that we've built. First there's been the increasing power of the personal computer itself. This has been a pretty important year in that we're making the transition from 32-bit addressing to 64-bit addressing. And, amazingly, because of the way that's been handled by Intel and AMD, simply putting more transistors onto their existing chip families, and getting those out there, becomes essentially standard, this will be the smoothest transition that we've ever had, allowing 32-bit applications and 64-bit applications run together. Obviously the transition on the server will be the most rapid, but even down on the desktop overtime 64-bit would become commonplace.

If there's any challenge in that transition at all, it's making sure we get all the device drivers done, because there, as we switch into 64-bit mode, we do need all 64-bit device drivers.

The PC form factors have continued to get smaller and better. Even the radical approach that we call the Tablet PC, which has ink input, we're starting to see really good volume growth there, more than doubling over the last 18 months. And we see that continuing to become more and more of a standard form factor there.

PC sales worldwide [have] been fantastic this year. For Windows machines, it's been over 12 percent growth in the Internet, takes us now to about 200 million machines a year. This is a phenomenal number, because after all a PC is not super inexpensive. The price has come down, but it's still on average over $1,000. People buy software for that, they connect it up. It really, both at home and at work, is becoming a tool of empowerment that is getting very, very broad use.

The adoption of Wi-Fi and other wireless technologies now mean that you can get your data wherever you want to go. That availability is something that we just want to reinforce by making it simple inside Windows to reach out to those new connections.

Looking further out, things like the Ultra Wideband, the WiMAX, the data coverage of the wireless carriers is getting broader and higher. And the cost of those data subscriptions is coming down as well. In fact, if we look at connectivity, this year in the United States is the first year we have more broadband users than we have dial-up users -- so very significant growth there, not just in the United States.

The scope of activity around the PC in terms of how people work, what we call digital work style, that's outstanding, as people are thinking that they're connecting up to their screen and collaborating in a richer way, and going well beyond e-mail as to ways you kind of structure and dive through information.

Obviously at home, it's not just music and photos now; it's the whole way you organize your calendar, your buying, your coordination of activities. We're able to make that better and better. So digital lifestyle is being embraced as a deeper phenomenon than it ever has before.

Now, to drive this forward, we not only have the hardware breakthroughs, the systems, the network, but we also have software breakthroughs. As cameras are getting very cheap -- you'll see those more and more as a standard peripheral. As the ability to have better screens [is] there, we need richer visualization. With microphones, things like speech recognition will eventually be commonplace. And the idea of this ink input also is getting more and more mainstream.

Service-Oriented Architecture

The framework that people use to design their applications is clearly going to be around service-oriented architecture, and it's the building blocks of the software platform that mean you can just visually set those things out, and know that the software that underlies that will be simple to implement and connect up to other people, no matter what their software platform looks like. So the standards work there has made very good progress -- an important foundation for our industry.

Looking back just five years ago, we had probably the most important PDC of all time. That was in the year 2000. It was in Orlando. That was pretty radical, because we brought people and said that there's a new thing called .NET, there is this new thing called XML for representing data, there's a new way of doing protocols, which is now called Web services. That was quite a proposition to put forward when the so-called Win 32 programming model was dominant -- people were using that for virtually everything they did -- and we said, no, for these new kinds of applications we're going to need a different approach. And so .NET was introduced at the time.

If you remember the year 2000 it was the year people were thinking of start-ups as sort of the center of activity; there was sorts of other things going on -- people thought maybe Java will be the only language that gets used -- how does .NET relate to that? A lot of question marks around it. But year after year, starting from that point, we just made it a better and better platform, taking the feedback, and driving the popularity up to the point we're at today where we can say this is the most popular development platform. The .NET platform now, in terms of breadth and depth, is the platform that people use the most. And that's great, because it's the foundation for the new things that we're doing.

The three points I had there, where it says PDC 2003 -- that was actually the slide that Paul Maritz presented when he first kicked off that PDC. And I remember at the end of the PDC thinking, wow, we have really bitten off a lot here to evangelize something new and different like that, but now here it is and we can talk about that and the high level runtimes that let you build software around those assumptions.

XML. It's important to remember that's really at the heart of all this. Going out of document format now, all this interchange is going to be around XML and the rich environment it provides.

For Microsoft software, we've gone now through three generations. The first generation we had XML just as the top layer. We put sort of XML connectors on. And the second generation, we built it in a little bit into the software, but it was not fundamental to the formats and the processing logic of our software. Now with the generation of software we're coming out with [now], XML is built into the core. That's true of every element of the Microsoft platform. Microsoft SQL Server, it's the release SQL 2005, which was codenamed "Yukon," that is built around XML. With Office, that we'll talk more about, this is the version where XML is in the core. It's the way data can be moved in and out of documents. It's the standard document format.

So the pervasiveness of XML and the things it has fostered -- the idea of notification through RSS, the idea of industry standard schemas that are XML-based, the idea of protocols that now can encapsulate that rich XML data and address issues of security and bulk data transfer -- that's where these Web services protocols come in.

Now, we have to couple these advances with the tools that make it reasonable to build those applications. At every big milestone the tools have been key. So, for example, when graphics interface came along, writing those modeless applications was hard -- the idea of the event loop, the idea that the user could click anywhere and drive your application, and how would you debug an application that worked that way. We had to bring the system runtime up to a much higher level to make it reasonable to have a broad set of those applications.

For us the place we've done that for XML and Web services of course is in Visual Studio and with this on [the] .NET Framework. We have over 300 companies that extend Visual Studio, and of course thousands that build components that go on top of that [the] .NET Framework. So it really has become a key foundation piece for people doing state-of-the-art software.

Our investments in the platform are at record levels. You can see that through our R&D budget. You can see that through the breadth of new things that we are pulling together. We put the new things together, and we integrate those in through a few very high-volume offerings that we provide. So at the same time that the platform is getting richer, there's a key message out to our customers that they can simplify their infrastructure. They can have less moving parts. That is, Microsoft, with a few major SKUs, like Windows Server, SQL Server, we will provide a number of functions that used to have to be bought as a separate thing. In that way the richness that you find on literally millions of servers as an application platform will be a lot stronger.

Innovating on the Client

It's important to understand that the client is a place of great innovation. We've seen clients now with great graphics processing power. We see them with great storage capability. We see them want to work online and offline. So ideas of things like IntelliMirror or the task mode that we've brought forward, replication just means something that you can connect into, that we provide a lot of logic more -- clients are getting better.

And clients are getting more diverse. The PC, the portable PC in its various forms of course, [is] the most powerful form of that, because people are now connecting up to phones, and so we're doing runtimes in ways of connecting these protocols up there as well as the data services there actually become as important as their telephony type functions.

At the server and service levels, we're driving the symmetry so that people can think of connecting up to a service that we or our partners run, or they can think of connecting up to a server that they run and having similar capabilities being made available to them. Giving people a choice -- on premise, off premise -- is a great evolution of a platform, but that can be done without a discontinuity.

Some of those new services around search or Virtual Earth or instant messaging are things that during this PDC we'll talk about how we're exposing those and making those easily available, and how we're driving the symmetry of server equals service, and having those richer tools.

At the client there are many ways that we need to richen up the user experience. We need to make it easy for people to visualize information that comes from many different locations. That term we used in 2000, "beyond browsing," is probably more apt today than ever. People are not paid to simply go to work and browse and look at Web sites, they're paid to take information from many different sources, pick the most urgent things to work on, visualize those in rich ways, edit those things and share those with other people.

And so getting this user experience on the client itself, so that state replication is very easy, so that searching and finding things is easy, so that the presentation of the information is ordered in the priority that user wants, that can be done far, far better. Things like RSS are driving us to do this, things like the rich media availability that's out there that people want to organize, are driving us to do this.

Windows Vista

We will improve the user experience, the presentation level both for HTML connections and for the far richer experience you get when you actually run code on the client. At the HTML level, the code name we use for our work there is "Atlas." That will be outlined in a very deep way at this PDC. As you move up to the smart client, obviously there you have the built-in [Windows] Vista richness, you've got the runtime underneath that. You've got Office as an exemplar of that. And we have the new name for "Avalon," the Windows Presentations Foundation that gives you the deepest experience of all. I want to bridge to exactly what we were saying two years ago at PDC 2003, that was a kick-off year for a lot of the technologies that are coming to completion between now and a year from now. Windows "Longhorn," of course the client version of that we've named Windows Vista, and we've got a new way of involving you in this last year to make sure we're getting that just right. That's our Community Technology Preview that we're kicking off here.

With the new subsystems on top of it, "Avalon" and "Indigo," we've given those real names now, Windows Presentation Foundation, Windows Communication Foundation, and we're packaging those up in WinFS. The feedback we had in 2003 was that people wanted to see those available down on Windows XP. And so, we've made that possible. And so somebody who wants to assume those runtimes to write on top of those doesn't even have to convince somebody to move up to [Windows] Vista, they can be Windows XP users as well. With WinFS, we put that forward as a client only architecture with some advance in the data model. We had very strong feedback about the need to get that not only on the clients, but also on the server, to make that an even stronger data model. We've continued the strong dialogue with people who see WinFS as a big opportunity, and we've got a beta of that WinFS out to those people now.

The next big milestone for that is more ambitious, but further out, which is taking client and server, taking what we do with SQL, what we do with the server file systems, the client file system, and bringing that together. Of course, some of the richer organization capabilities that we talked about there, we provide through both the desktop search add-on that's free on Windows today, and built-in in a deep way to Windows Vista, but the deep idea of schematized information, rich links, rich replications, that will come as WinFS comes out on both client and server, and we really value the engagement we've had on that as we continue to push that forward.

Windows Vista, a lot in this product. We've tried to organize the new benefits under three headings, confidence, clear, and connected. A lot of it has to do with IT departments that want easy management, good event logging. A lot of it has to do with security. Investments we've made making it easy to monitor, troubleshoot, and avoid the kind of security problems that people have had. [Windows] Vista is a very broad product in terms of its richness. And there's no doubt that as we are putting that out there, all the new PCs will have [Windows] Vista, and several hundred million existing PCs will be upgraded to get into that environment.

Office "12"

We'll also be talking, I mentioned here, about Office. In 2003 when we had the PDC, the most common question we got was, hey, what are you doing with the exemplar application for Windows in terms of the interface? What is your message about those of us who want to feed data in and out of Office, or even build on top of that? So, here we're showing the version Office, showing it for the first time publicly ever, talking about user interface, the way that we connect up to XML, the way we drive the extensibility, we are showing off a lot of Office "12" here for the first time. That will be released in the same timeframe as Windows Vista. And so what we're going to see in the marketplace is two major releases that are very synergistic, and so a whole wave of corporations saying, let's get these new capabilities out onto our desktops, and that's a wave that all of you, in terms of your applications, should be able to ride as well.

So, to give you a clear sense of why we're excited about [Windows] Vista, give you a glimpse of some of those capabilities, and talk about Office "12", and how it's got the rich user experience, and more platform opportunities, I would like to ask Chris Capossela from our Information Worker Group to come out and give us a look at these.

Welcome, Chris.

CHRIS CAPOSSELA: Thanks, Bill. Thank you. (Applause.)

Well, good morning everybody. I'm incredibly excited to be here and show you Windows Vista and Office "12" for the very first time together. As Bill mentioned, Windows Vista is very focused on providing you clarity so that you can work the way you want to work, focus on what you want focused on. I'm going to start with Windows [Windows] Vista and, as Bill mentioned, there are really three ways that we provide this clarity. No. 1, we connect you to the people and information and devices that you care most about. No. 2, we enable a new level of confidence when working with your PC. And, No. 3, we provide clarity when it comes to searching and organizing all the information on your PC itself.

So, let's go ahead and take a look. What you're looking at here is a post Beta 1 build of Windows Vista, and you can see I have the Document Explorer up. Let's start by focusing on clarity. I'm going to actually launch a few things, Internet Explorer, the Control Panel, maybe the calculator, and maybe a video. Like many users, I run with a whole bunch of windows open at the same time. It would be really nice if I could have a more clear experience on how to close my windows. So, in Windows Vista, when I hover over the taskbar, sure enough we'll show you a beautiful preview of each one of those windows, including that live preview down below with the video running in place.

In addition, we've taken Alt-Tab and code-named this the "flip" feature. So, when I Alt-Tab, very nice, much clearer which windows I'm switching to. (Applause.) Click on just the one I want, and I'm back.

Of course, we also advanced this a bit and went to a feature that we call the "flip 3-D" feature. Hit the Windows key and the spacebar, and we'll give you a beautiful 3-D view of your windows as we slide through them. (Applause.) Really test the graphics accelerator on this particular PC as I scroll through these using the wheel on the mouse. It gives you a sense of some of the things you can do in your applications to take advantage of the beautiful graphics capabilities here in the Aero desktop.

OK, let me go ahead and close a few of these down. A bit part of clarity is making it easier for you to search and automatically organize the information you want. I'm going to hit the Windows key, and you'll see throughout Windows Vista the Quick Search box is just about everywhere. So, here it is in the Start menu. If I start typing, we'll filter that down, there's calc, and I'll hit enter to launch the calculator. Do that again, and we'll type remote, and we'll hit enter to hit remote desktop. Do that again, and I'll type new, and you'll see that it went out to find your applications, but here you were finding your favorite Web site, like The New York Times, documents that have the word "new" in them as well. So, the Quick Search box makes it very easy for me to find exactly what I want to find.

Now, I use the Document Explorer all the time when it comes to working with my files. And one of the key ways we've made things clearer is actually build the thumbnail technology in. So, in your applications you can save thumbnails of your data. So, as I'm browsing my files, I actually see the data that's in the file itself, which make it very easy for me to pick the exact one that I want.

Here are my views, I can switch back to a detailed view, and see some metadata. And here's a Quick Search box right in the document Explorer as well. So, I'm going to go ahead and type "Frank," and you'll notice that we'll filter this. Frank has written all these documents. If I scroll to the bottom, Terry Adams wrote this document, but Frank is somewhere inside the text of this document. So, we're doing a full-text search here across the entire system. So, some quick examples of how search is built in just about everywhere.

Now, those are things that I think everyone sort of expects to be in the system. Windows Vista also introduces the concept of virtual folders. So, here's the document folder which ships with the product. And this, when I click on this, it will show me every single document across my entire PC in one flat list, no matter what folder it's in. I can quickly stack these by type. So, now I've stacked all my Excel spreadsheets right here, all my PowerPoint presentations across my entire PC, or perhaps by keyword, or perhaps by author. So I can see all the things that Frank has authored on this machine, or Eric has authored on this machine.

Now, these virtual folders are very cool, but they're great for developers. If I right-click on this and choose to open this virtual folder just with Notepad, you'll see that this virtual folder is nothing more than an XML file. So, in your applications, you can build these virtual folders of XML files, and when you install them, you've got the virtual folders that you want your users to see built right into the system. A very, very cool way to see that.

Let's drill into Frank and take a look at his documents. You'll see that we've got the metadata at the top here, name, date, keywords. And I can do things like stack by keyword, or perhaps group by keyword. So, now I'm seeing one PowerPoint presentation that has the administration keyword and the finance keyword on it. And I see the preview pane down below, I can actually take those with the finance out, and when I hit Enter, you'll see that it is no longer in that particular stack. If I want to add metadata, I can just grab a document, and drag it into another section, and now I've painted that document with metadata, too. So, very easy for you to sort of paint your documents with metadata just by dragging and dropping the various keywords that you have. Of course, all of you can add metadata to your files when the user does an action like save, just like Office does already today. So, over time this metadata gets richer and richer, and navigating the system stays very, very simple.

So, a quick look at how we work with search and auto-organization features to bring clarity to the experience itself. Now, many of you may have noticed that the right-hand side here looks a bit different than Windows XP. We're super excited to be shipping the Windows Sidebar with Windows Vista. And the Sidebar makes it very clear on how I connect to the real-time information that I deal with all the time. You see some gadgets that we've built for the Sidebar. Here's a Web-feed gadget, a clock gadget, a search gadget, a picture-library gadget, a picture slideshow gadget. Of course, we expect lots of you guys to build tons of gadgets, this is a fantastic platform to build on top of. I'm going to bring up the gadget gallery here, and you can see that we've built the Windows Media Player gadget. I'll just double-click on that to add it to my Sidebar, and it is a full-fledged platform. You can use everything from DHTML and script all the way up to "Avalon," or the Windows Presentation Foundation, to build very rich mini-applications that live right here in the Sidebar. You see some of those nice animation effects.

If I don't want it to be on the Sidebar, I can just drag it, and drop it right onto the desktop. Click a button, we'll do some beautiful animations, some beautiful visuals, and give you a sense of the types of things you can do with this platform right here, and Windows Media Player will actually do a version of "Name That Tune," and let me guess the actual song. So, we expect many of you to actually build gadgets for the Windows Sidebar, a great new platform that connects people to real-time information.

Now, there's an additional platform that I wanted to highlight that's new to Windows Vista that we're calling the Windows SideShow, and the SideShow is another platform that you can build fantastic gadgets for. We're working very closely with our hardware partners to support the SideShow, and I'm actually going to hold this up and hopefully people can get a sense of the hardware here. This is just a laptop that's got an auxiliary display built right into the laptop, with a couple of hardware buttons here that I can click on. And it's running some mini applications or gadgets for the SideShow. Let me go ahead and put it back under this camera, so that you can actually see what I'm doing. But this connects me from my information when I'm actually away from my desk. So, when I'm on the road, I can get quick access to my calendar, to perhaps my e-mail, and Expedia as a third party has built the prototype gadget right here. I'm going to drill into this gadget, and you can see that I can get information about my flight to the PDC. So, you can imagine me getting out of a taxicab on the way into the airport, and just making sure I have that flight information, that flight number, right there. Some of these gadgets run when the PC is turned off, such as that Expedia one, and the In box or Calendar, and some of them require the PC to still be powered on, such as controlling your music.

But, between the Sidebar and the SideShow, we've got two fantastic platforms for you to build gadgets for, and if you go to MicrosoftGadgets.com, you can get a tremendous amount of information about how to build those gadgets right now with Windows Vista, which is great.

New Level of Confidence with PCs

Let me move on from how we've done things to make the experience clearer to what we're doing to enable a new level of confidence when working with your PC. One of the deepest things that we've done is to add a parental control platform right into Windows Vista, so that when your children are working with their PCs, you can remain confident that they're safe. And all of your applications can plug into this platform, so instant messaging applications, browsing applications, et cetera. The way I want to show it to you is actually through games applications on my system.

I'm going to launch the Games Explorer, and you'll see like here I can manage all of the games on my system in one place, that's new to Windows Vista, and you see I have a Parental Controls button. I'm going to click that. I'm going to go ahead and complete this action. Now I'm the admin, but my daughter is actually just a standard user on this machine, so I'm going to choose to set up parental controls for the standard user, and I'm going to control the games. Click on that and set my games rating. We've actually worked closely with ESRB, or the Entertainment Software Ratings Board, to bring all of their ratings information right here into Windows Vista. Since I don't think my daughter is ready for Grand Theft Auto yet, since she's 2, I'll go ahead and select early childhood, and I'll go ahead and make that change. Now, when she logs onto the system she can only play games that meet this particular rating. So again, making it very easy to apply parental controls to the system to make sure kids are safe when they are using the system itself, not just as applies to games, but the entire platform, as well.

Let me switch over and show you another big area of investment for us when it comes to increasing the level of confidence you have when working with the PC, and that has to do with all of our anti-phishing work. How many people here have gotten an e-mail recently asking you to update your PayPal account? I get them all the time, I don't even have a PayPal account. That's a big issue for us.

We've done a lot of things with IE 7 and Windows Vista to really combat phishing, and we know that there's been a 500-percent increase in the phishing sites that have been created in just the last year. So we're really stepping up to the plate to help here. This is the actual, real PayPal site, and you'll notice that there's an icon right up here that I can click on to get a security report, and you can see that this site is actually an SSL secure site. You can see that they've got a certificate, and we'll even tell you where they got that certificate from. So you can have confidence when you're working with this site that it's a real site.

Let me switch to a different site, which is a fictitious bank site, that's actually a suspicious site. IE 7 has a whole bunch of heuristics built right into this to watch the way the Web site behaves, and look for that sort of suspicious behavior that a lot of phishing sites use. In this case the IP address is actually in the address line, which is a common phishing tactic. So IE will automatically color the address bar yellow and tell you that this is suspicious. Read a little bit about it and you can report whether or not this is a phishing Web site. So we're using the community to make this a much stronger service to protect you. And of course, we have real people that are monitoring these reports to make sure that we don't have any false positives there, and that the list is quite good.

Let me switch over to this last site. This is actually a known malicious site. And what we've done here is to introduce something called the Dynamic Protection Service, which tracks known bad sites, that you can opt into all of our phishing work is opt-in -- and if you go to a site that's a known phishing site, we'll simply block it. We'll tell you it's a phishing site. Again, you can read about it, report that it's not a phishing site if you want. And of course we give you the ability to continue on to the phishing site, enter your Social Security and your credit card info and take your chances. But, we actually think that this is a big step forward in helping you sort of fight the phishing problem that we all face when working with our PCs.

So two quick things, parental controls platform and our anti-phishing efforts that really should enable a higher level of confidence when working with your PC. Jim will show you some more in the next session.

Connecting to People and Devices in Windows Vista

Let me move on to some of the things that we're doing with Windows Vista to connect you to the people and devices, and information that you want to work with all the time. Here I am in IE, and you'll notice one of the first things here, we've got tabs in the actual browser. How nice, how nice to have the tabs there. Let me go to the PayPal page, there we go. Let me type in a quick search, notice that we've got the Quick Search box in the Start menu, in the document explorer, inside of IE, it's everywhere, integrated throughout the product.

If I do a quick search on Windows Vista, I'm going to control click on these links, and keep your eye on the tabs at the top, and not surprisingly for every one of these clicks that I do we're going to go ahead and open up a new tab. There's a [Windows] Vista Web log, there's maybe some beta news, et cetera. And of course, all those tabs open up at the top and I can click through them and get what I want to see, relatively quickly. Here's the [Windows] Vista tab, it looks like this one is still loading, et cetera, et cetera.

Once you have all these tabs open it's really nice to be able to work with them, but wouldn't it be nice to quickly see them at a glance. We've taken tabbed browsing to the next level by introducing what we call quick tabs. So with a single click of the mouse, there's a beautiful slide overview of all my tabs.

From here I can close down a couple that I don't want. Maybe I'll close down the search one, this one looks like it's taking a while to load, I'll go ahead and close that down, I can right click, and I can close all the others, or refresh all of them at once. Of course, I can save all these as a set of tabs that then show up in my favorites, and just open them all with a single click of the mouse, which is really, really nice.

In my case I want to actually shut down a few of these things, maybe close that down, and let's drill into the sports section of The New York Times. We do a lot of connecting with information using the browser and, of course, RSS has really emerged as a new way to connect to information. It's not just about browsing, but it's also about subscribing to information. So here I am on the sports page, and we've really dramatically improved our RSS support in IE 7.

Before I get to that, I actually wanted to show you one of my favorite features, I want to print out a particular article here. When I print preview, in a few seconds here we're going to take this page and we're automatically going to shrink to fit the page, so you won't get that extra inch cut off every time you print something.

In addition, with a single click of the mouse I can turn my headers and footers off, so I won't get that extra page that often prints at the end of my print job that I never need and I just end up throwing out.

So some enhancements to make that browsing experience far better. I mentioned that we've really increased our RSS support. As I scroll through and read the sports page here, I can actually see at the bottom that The New York Times has a set of RSS feeds that I can subscribe to. Many times when you're browsing a Web page you can't really find the RSS feeds very easily. IE 7 will automatically discover all the feeds on a page for you, boom, we'll populate that drop-down, show you all the feeds that exist, and from here I can just say, you know what, I want to subscribe to the sports feed.

When we drill into that RSS feed, look how nice we're presenting that RSS information to you. It's no longer that ugly XML that you see in IE 6. It's something that's actually much easier to read, much easier to work with. We'll let you search this, filter that down and just show you the NBA stuff. And very quickly I've browsed through, I've subscribed to some RSS information, and Windows Vista has actually built a platform around RSS. When I add this RSS subscription, there's an RSS store built right into Windows Vista, so that software developers like yourselves can build on top of that, rather than having to create your own store for all your RSS feeds. It's a great way to actually build that right into the platform.

Today RSS is mostly used to connect to Web sites, to read blogs, to subscribe to news sites like this, but we really believe that RSS is going to be transformed into more of a platform that also embraces business applications, and let's customers, suppliers, and vendors subscribe to RSS feeds through corporate Web sites. So we see RSS as a great way to publish information not just to end users, but also to customers, and partners, and perhaps employees.

The Microsoft Dynamics CRM team is doing just this with the next version of Microsoft Dynamics CRM version 3.0. What you're seeing here is a Web page that lets you access Microsoft CRM from the Internet, you can almost think of it as Outlook Web access, or Microsoft CRM, this is just running in the browser. You can see it's actually a very rich user interface, but at the top you'll notice an XML feeds button. When I click on this XML feeds button Microsoft CRM will actually show all the different Web feeds, or RSS feeds that it publishes to customers, suppliers.

In this case I'd like to subscribe to the quote feed for this particular product, the Touring 3000 product. I drill into that, and you'll actually see we're taking that RSS information and presenting it in a very nice way. If I drill down into the Touring 3000 quote, sure enough you'll see that MS CRM is taking the richness of that XML and presenting it a very, very rich way. And that's it. I've subscribed to this RSS feed, and now I don't have to run a query every day to see the latest quotes on this product.

In fact, if I minimize this, you'll see that our RSS Web feed gadget has that RSS feed right in there, right there on the side bar. So a very, very quick tour of how Windows Vista tries to bring clarity to your world, and lets you focus on what matters most. Clarity through making it easy to search, and organize information on your PC, establishing a new level of confidence when working with your PC, and making it very easy to connect to the people and information and devices you care most about.

On behalf of the Windows Development Team I want to thank you very much. (Applause.)

"Office 12 Demo"

You thought I was done? I've actually got one more thing that I'm super-excited to present to you. I'm very proud to be here representing not just the Windows Development Team, but also the Office Development Team. Office has been very, very hard at work on the next major release of Office, Office "12". And this is the first time we're actually showing this product in a public forum.

Now, one of the things that we focused on when building Office "12" was to help people get better results faster. If you look at the history of Office it's pretty amazing to see how much capability we've built into Office. When we shipped Word 1.0 the product had about 100 commands in the product. So the menus and toolbars were a fine way to browse the product and learn about all those commands. Word 2003 had over 1,500 commands in it, 35 toolbars. The metaphor has just gotten completely overloaded when it comes to discovering the power of that product.

In fact, in our research when we asked people, what would you like us to do in the next version of Office, nine times out of 10 people will name something that's actually already in the product. They simply don't know it's there. It's just too hard to find it. So a major area of innovation for the development team for Office "12" was to refocus on making a much more innovative UI to help you get better results faster. I'm really proud to show that user interface to you today.

Let's take a quick look, starting out with Microsoft Excel. Here is the brand new user interface for Office "12". You'll notice that even though it is very new, it feels extremely familiar. We know that about 60 to 80 percent of end-user clicks are something that you can now do on the very first tab of Excel and Word and PowerPoint. When you see these buttons you recognize them. Notice as I move through the tabs we're not dropping down any menus, we're just bringing in a new tab, much more graphical, much, much easier to explore the product. It's a really beautiful user interface to see what you can do with the product itself, far more discoverable.

Let's take a look. I'm going to actually open up a file, I'm going to use a keyboard shortcut, and the same keyboard shortcut I've always used, control-O, to bring up the file-open dialogue. Now, this dialog, we're running on Windows Vista, this is the Windows Vista file-open dialog. I'm going to drill into my demo file, and I'm going to get those rich thumbnails right here. Click on them and see the file before I actually open it up. I can add meta data, I can rate it, I can do all those things that Windows Vista allows me to do.

I'm going to open up a spreadsheet, click open, and here's a pretty simple looking spreadsheet that I've got, and now I want to work with it. I'm going to go ahead and select some data, and wouldn't it be nice to format this data. We've got some beautiful quick styles. You notice the super tool tips that we've built in here, which gives you far more information about what the command does, so you don't ever have to go to the help menu to learn more about it. Wouldn't it be nice if we could visualize these cells with what we call a data bar. Very nice. (Applause.)

We'll automatically draw that bar for you within the cell to show you which is the largest number. Similarly you might want to go to that same menu, and I might want to highlight the bottom 10 numbers in this list, or perhaps the bottom four numbers with a yellow fill. Hit Okay. Wouldn't it be nice if we could give you a graphical depiction of your information perhaps using an icon set, red, yellow, green arrows in the direction of the data. A great way to take a look at that.

Maybe we'd like to select a whole table of data right here, and go back to visualizing, and choose a three-color gradient, to see exactly which are the high, low, and medium numbers in this table. So the user interface just makes it very, very easy to get better results faster, and do things I frankly probably didn't know I could ever do before.

Let me switch out to this table here on this other tab, and you'll notice that when I click in the table, up above we see a tab that's specific to tables. I'll click on that, and here's a whole set of table tools. When I click in the sheet, we go back to the sheet tools. When I click in the table, we go back to the table tools.

Another element of the user interface is what we call galleries, and live previews. As I click over something, I'm actually not clicking, I'm literally just hovering, we'll go ahead and show you what that's going to look like in the table below, so you can sort of pick before you click and get exactly the view that you want.

You'll see these galleries and these live previews throughout the product everywhere that you go. From here I can quickly format the first column with that nice graphical button. I can quickly add a total row to my table, and I'm sort of off to the races here, building a table that's much more beautiful than something I've ever done before.

Now in the bottom right-hand corner we put all of the view commands in all the applications. So here's a scroll bar, I can scroll out, I can scroll in, a beautiful way to work with my spreadsheets. I can also do things like collapse this UI to really maximize the space on the screen. If I just click the tools tab again we're going to hide that tab and let you focus just on the data.

Keep your eye on the row headings up above here, B, C, D, E, F and G. Watch what happens as I scroll down. It will automatically pick up the table heading there, and show you the name of that table right in those row headings, something that Excel users absolutely love.

In this case what I'd like to do is switch to a different view command. I'm going to switch from the normal view in Excel, to the page layout view. Now I can really see that this table is going to go on a couple of pages. I can click here and add a header or a footer if I want. In this case, let's change the page layout, there's a tab named page layout. I'd actually like to change the orientation from portrait to landscape, and I can see that I'm not quite there. I still need to do some work. So wouldn't it be nice if I could click on margins and rather than fiddling with each of these individual controls, just choose narrow margins and get things right the way I want them.

So a quick look at the user interface, the new user interface in Office "12", inside Excel, to show you how you can get better results faster, and discover far more of the power inside the product.

How Developers Will Use the Office "12" User Interface

Now, this is great, but what about developers, what can you all do with this new user interface?

Let me switch over to another machine where we have an add-in running from one of our partners. OSI Software has long had an add-in for Excel that actually works quite well in Office "12," without them touching the add-in, it runs perfectly, but they've actually updated the add-in to integrate to the new user interface itself.

OSI Software has built performance monitoring software for utility companies and life sciences companies. So you'll notice that they've added their own tab right here to the Excel tab. I'm going to click on OSI Soft and it's going to bring up their tab. You'll notice they've added their own galleries, so I can get some values around the power and weather in the current conditions here in California. Click on that, we'll go off and hit their server, and bring in some data right here in Excel for me to analyze. I can go to the time frame, drop this down, and you see another beautiful gallery. And rather than looking at today's data, how about yesterday's data from midnight to midnight in three-hour intervals. There's yesterday data.

Now, I swear to you we had planned this demo well before what happened yesterday, and this is actually not the real data, this is sort of canned data for the demo, but you see they're bringing that data right in, and they're automatically using the visualization capabilities that I just showed you in Excel.

I can change the region from the northern region to the southern region to just look at southern California, and when I go to the insert tab, this is an Excel tab, you see that they've integrated commands right inside our existing tab. So not only can they add their own tabs, but, of course, they can add trend analysis that I can click on and just plop that chart right in here.

So this add-in works exactly as is, with the exception of just integrating, hooking it up to the new UI, a great example of what you can do with Office "12" and the applications that you build.

Now let me show you a couple of new ways that the Office "12" UI shows up in the other applications inside of Office, and again we're very much focused on helping you get better results faster.

Let me open up Word, and here you see a Word document, and it's going to look very, very familiar. We've found that you really don't need a lot of training wheels with this new user interface, people are able to get up and running very quickly.

So I'm going to select the entire document with ctrl-A, and I'm just going to do a common task like changing the font. Notice when I hover over the font, we'll show you that live preview in the background. (Applause.) So you can see exactly what this document is going to look like. Changing fonts and font sizes is something people do all the time, but when it comes to Word, wouldn't it be nice if we made it easier to do things like inserting page numbers and footers and headers, and the very common Japanese greeting that you want to insert into that document, we've got that one click from us away.

In this case let me insert a text box and we can pick from a very rich set of galleries here. Let's use a boxed quote that's on the left. So we'll quickly just drop that in, I'll double-click on this to bring up the tools specific to this text box, and I'll just mouse over some of these beautiful styles that we have built right into the application.

You can think about how long it would take you to build something like this in Word in the past, and you can see that every user becomes a power user with this new user interface.

We've got tabs for print layout, for inserting references, for doing mailings, for reviewing your documents. Let me quickly add a couple of comments to the document, maybe one here and one here, and you quickly get a sense for easy it is to get better results faster by having all of the authoring commands right here in this one set of tabs.

Now, we also wanted to take all of the commands to work with the document around the full lifecycle of the document, and put those right on the file menu. So when it comes to saving the document, we make it easy to save it up to a document management server such as SharePoint, we make it easy for you to e-mail it or create a document workspace using SharePoint, and we make it super easy to finalize the document like adding a digital signature, restricting the permissions, or inspecting the document so that you can have confidence that it's the document you want before you send it out.

This will bring up the document inspector. I'm going to go ahead and hit the Inspect button, and now Word will automatically look for comments and revisions, dock information, headers and footers, and hidden text, and quickly say, hey, we've found some. Let me just delete the hidden text, now it's gone in a couple seconds. Let me remove all the comments. Watch these comments; hit Remove, boom, they're gone.

So very quickly I can scrub this document and then route it around with confidence that it's not going to have any of that hidden information that I don't want to have in it; so a great way to get better results faster built right here into the user interface itself.

Let me go ahead and close Word, and let's take a quick look at PowerPoint and how this user interface allows us to get better results faster.

Here we are again, it looks very familiar given the new UI. Wouldn't it be nice if we could take sort of boring slides that are just bulleted slides like this and perhaps convert text to graphics? And just we've built in this incredible gallery of beautiful graphics that we see people trying to use all the time.

I'm going to pick this diagram, hit Okay, and we'll automatically just turn that text into a nice graphic right there. Ooh, I heard some "oohs" right there. (Applause.)

I'm going to change the style using another beautiful gallery, perhaps make it a 3D style, and I might want to refine the color. We've built in all of these, just click on it, and you get exactly what you want. I'm going to bring up the little text box, and I might add something like deploy, and you'll notice that PowerPoint is going to do the right thing for me and go ahead and add that sixth bulleted item for deploy.

And we can take this to again the next level and add animations and do all sorts of things. In this case what I'd like to do is actually change this process diagram to the one that Mackenzie tells us they use all the time. There's a nice arrow with the bullets on it.

I personally love the cycle diagram, so I'm going to go back in here and choose one of these cycle diagrams. And, of course, if I want to work with one of the items inside here, I can just go ahead and choose edit and perhaps pick glow and give this a nice bold glow, click off it -- someone yelled "ship it", thank you -- (laughter) -- try that again, get a nice bold glow, click off it, and you get that beautiful visual effect right there on that item. (Applause.)

You can quickly see how we give you better results faster by just letting you click this through user interface and just discover all of the rich capabilities, many of which were already in the product, but you simply didn't know how to get to them.

Now, for us better results faster isn't just about the UI, it also involves how the client applications are deeply integrated to the server applications, and Steven Sinofsky tomorrow is going to talk a lot more about this, but I wanted to give you a little bit of a sense for some of the things that we're doing to let you get better results faster through deep integration with servers.

So I'm going to close this PowerPoint session down, and you see that I have another document that I'm working on with three different slides.

One of the areas that we want to integrate deeply with next time around is SharePoint. So let me switch over to SharePoint, you can see I've got a SharePoint site off of the next version of SharePoint. You can see that we've added a recycle bin, so if you mistakenly delete a file you can quickly drop in there, undelete it, which is nice. (Applause.)

But in this case what I'd like to do is drill down into the PDC pitch book. The PDC pitch book is just a slide library that we've built in Office "12". Slide libraries are a new library for SharePoint that lets me take my favorite slide deck, save them to a SharePoint site, and will automatically create an item for every single slide in however many slide decks you put up there, and I've got the metadata like when the last time I used this was, ratings, whatever you want. Someone can check out this slide, make changes to it and check it back in.

In this case, I want this slide, I want this slide, and I want this slide. I want to send them to PowerPoint, I want to add them to this presentation, and most importantly, I want to keep the inserted slides updated so when someone makes a change up on that slide library, I'll automatically be notified when I open up this presentation, and I can make sure I always have the latest and greatest slides that someone else has worked on.

So we make it very, very easy for you to get better results faster through that integration with PowerPoint and SharePoint, and there are many, many other examples of that.

The last example that I wanted to show you is actually the work that we've done with Outlook and how do we make it easy to get better results faster when working across boundaries.

So let me switch out to one of the machines again and give you a quick taste of Outlook, and then we'll wrap up.

Here you see the Outlook user interface and one of the first things you'll notice is the new to-do bar on the right hand side. You see I've got my e-mails, I'm reading e-mails, and here's the to-do bar on the right hand side. You can see my next couple of appointments that I need to go to. And then you see tasks integrated right in here. And those tasks actually are assigned to a particular day. So in Outlook 12 we're adding this concept of time and dates for tasks.

Here's an e-mail that says this person wants to work sometime next week together, I'm going to right-click on it, I'm going to say I want to get to it next week; and watch what happens, we automatically add a task here that's due next week. (Applause.)

Now, these tasks can be Outlook tasks, OneNote tasks, Project Server tasks, you name it, we've got the task showing up right here for us, so a great way to work with our information.

If I go ahead and click on this e-mail, you'll see a very common scenario -- I'm going to turn off the to-do bar -- a very common scenario is to have all these attachments. Wouldn't it be nice if I could just preview these attachments right inside of Outlook without having to open them up in a separate window? There are the JPEGs. Here's a PowerPoint document. I click on it, we'll actually play that PowerPoint slideshow right here in the preview pane, so you can really get a sense of what you're looking at in this PowerPoint document; again better results faster right inside of Outlook. (Applause.)

We also let you e-mail InfoPath forms around. So here's an InfoPath form that someone has built, I can just send it in a piece of e-mail. If I have InfoPath on my machine, I can fill it out and hit the send button, and it will go back to the Web Service or the SharePoint site just like that.

Now, if I look at my folder list here on the left hand side, you'll also notice that we're adding RSS reading, the subscriptions right into Outlook. So if I click on this and expand it here, are all the RSS blogs or subscriptions that I have subscribed to, and we'll pick up all of those RSS subscriptions that you subscribe to inside of IE 7.

So from here, I can just use Outlook as my reader, and I can see all of the different things from a partner's blog. And we'll even take this offline, including the link to the actual article. So if you want to synch your machine, go on a plane and actually browse blogs, we'll make that very, very easy here in Outlook 12.

Just like we have search integrated throughout Windows Vista, we also have search integrated throughout Office. So here we are working in the Inbox, and you'll see the Search box right here. I'm going to go ahead and type in sales data and hit Enter, and now because we're in the inbox we're just going to show you your In box e-mail that has sales or data anywhere in it, and, in fact, you can see most of these have them in the subject line, this one actually has it baked into the actual e-mail message.

And it's great to have that context of just the In box, but with a single click I can click here, and now Outlook will actually search across all of Outlook. So now I'm looking at all my e-mail, if I scroll down I'll actually see I can look at my Web blogs here, I'll find calendar entries, I'll find task entries, all of that stuff integrated right here into search. And we're using the exact same indexing technology that Windows Vista does to only have one indexer running on your machine between MSN Search, desktop search and what you have here in Office "12".

Let me wrap up with how we're integrating Outlook not just with Exchange, but also how we're integrating Outlook with SharePoint. So here I am on my SharePoint document library, I have a lot of documents I love to work with, but I hate the fact that I can't take them offline. Wouldn't it be nice if I could just go in here, drill into my sales plan, and perhaps take the action of opening these up and maybe viewing them as an RSS feed, SharePoint supports RSS feeds that you can subscribe to, or perhaps opening them up in Outlook. I'll go ahead and add that to Outlook and on the left hand side here you see that we've actually subscribed to that SharePoint site and here come all of those document entries down onto Outlook for me to have on my PC. When I go on the road, I've got all those documents with me, I can work with all those documents, and it's a very, very easy way to get better results faster.

So in a slightly longer demo than I had hoped to do I hope I gave you a flavor for why we're so excited both about Windows Vista and the platform opportunities it presents to you guys as developers, but also about Office "12" and how this new user interface really helps people get better results faster.

Thank you, guys, very much. (Applause.)

BILL GATES: I think there are several key points to take away from that. The first is the way the user interface is getting richer, notifications and all the different software packages taking advantage of RSS.

A second is the pervasiveness of XML. You'll see a lot in the breakout sessions about how moving data in and out of those Office documents is very different than ever before. In the past, you had to know the user model of the applications, which was fragile from version to version and very complex. Here you just know the XML named range and you can exchange the data without being dependent on the user model of that application.

Vision: Connecting People to the Information They Care About

Well, in late 2006 when these products come out, they will be a wave, and there are many things that go along with that wave. I mentioned the ease of deployments that we're putting together so that companies can roll these out very quickly. We have a lot of foundational things in terms of information sharing, security. We'll make the value proposition of rolling these things out very, very clear.

And we will have the largest marketing activity that we've ever had, really highlighting how people who upgrade their desktops to Windows Vista and Office where appropriate, that that's something phenomenal.

So building on these capabilities, tapping into that marketing support, a lot of which will be focused on third party applications, that's an opportunity.

The vision here is about connecting people to the information they care about. This is where you really drive business value. And the dream in the late '90s of the Internet really revolutionizing e-commerce, those are not fully realized. Today, software doesn't connect all the information up in the ways it should. After all, connecting software from one company to the software in another company is still far too difficult. Connecting up those software-structured systems so that the unstructured exchange and communication that's going on between people, that those are reflected in the structured software, that's way too difficult. Often anything that's complex, you'll have a difference between the people trying to deal with the exception of the problem and how the, say, financial software is modeling that exchange.

And so we have to move to a new level, we have to understand the people that you work with, the roles that they play, and we have to have this workflow layer that is not only helping to coordinate data exchange from software to software within an organization and across organizations, but between people as well.

You're going to hear from Jim a lot about this workflow capability that we're building into the platform. We think that is very important, software to software, people to people, and have these concepts.

This is where service-oriented architecture really comes together, where we can take the actual customer site data we have, the real scenarios they go through, and map it back on to the hardware architecture.

And so the relationship and connections will be modeled in software, the desire to be notified about a change in exception, that will be modeled in software. The role somebody plays within a company so that somebody knowing who to direct something coming from outside to, that will be modeled in the software. This is a necessary element of this service-oriented architecture dream.

So it brings in the idea of, OK, what are the steps we go through to analyze or publish, how do we automate the transactions that are very straightforward but take those that aren't and drive those up and have user awareness.

So this is about connected systems that really bring together these services, not thinking that it's purely on the software side, but knowing that the user's work, the e-mail understanding of what's going on, going to shared sites in SharePoint and seeing what's going on, that that's a very important piece of it.

We couldn't have done this without XML, we couldn't have done it without the standard protocols, but if we stopped there, then we don't have the standards platform understand these concepts. And it is very important that service-oriented architecture be something that business can deploy with a few simple customization steps, without writing code, without it being a complex consulting exercise, there's simply the data structures they fill in about roles, visualization notification and they get the benefit of software working together in this fashion.

A lot of what's going on in here in the platform is integration, and you've seen many examples of this over time: printer drivers, graphics user interface, memory management, things of that nature.

On the client, back almost a decade ago, the idea that multiple applications should work together as one, that the various modules there around Office should be purchased and work in a consistent fashion, that became commonsense. And with its support of graphics interface, with the way it did that integration well, Office became very strong.

Now the next frontier is to look up at the server level and say the way that people get work done, the way they engage in processes, do they have standard ideas about calendars and notification and sharing. Well, the answer is they have not. They have had simply the file server. We've had a little bit of this in SharePoint, but it hasn't been very powerful, and then they've had custom applications. And each one of those custom applications, whether it's expense reporting or purchasing, has had very different ways of interfacing with the system, different ways that you might connect out to a partner or might restrict the information flow.

What we need to do is take that same up-leveling, that same idea of integration, and bring it to that server level. And so we're building this into the Windows Server System platform. I mentioned the workflow capability; obviously in the database that's where we get the richness of the connectors and the business intelligence, the search capabilities being built in, check-in, check-out capabilities being built in, and so that you'll see a huge migration from places where people used file servers in the past to now using Windows Server System. It is a much higher level of semantic, a much richer way for people to interact. There will still be things in terms of the hardest-core performance of specialization where file servers will be there, but overwhelmingly department level file servers will move to be what we called SharePoint now the Windows Server System capability, sometimes enhanced with the SharePoint add-on that takes those to a new level.

This is how we can deal with the paradox that people want their server systems to be simpler, while at the same time asking for more out of them. We need to have the standard thing that was the file server in the past to have these capabilities.

And this means that a lot of those custom applications instead of starting at the sort of bare Windows Server ASP .NET level, they'll actually take these Windows Server System capabilities and even the user interface richness around those and leverage off of that.

So in the future, as a business user, as you move around to do expense reporting, sales analysis, you'll find that those same capabilities, same rich integration of how you connect up, how you define roles, how you do workflow things around that.

So the server is also a point of great innovation, client in terms of rich integration and user interface, and the server as well, and that kind of balanced message is a key one to take out of this PDC.

So in conclusion, this is a great event. Many of you have come here not just because of the presentations, the opportunity to talk with each other, the opportunity to tell the Microsoft folks here what you like, what you don't like; that is really exciting for us. We have literally hundreds and hundreds of the key developers here, and those sessions are going to be as hard-core as ever, with the chance for you to still very much shape what comes out in this wave.

It is a big wave, it's about software meeting the more advanced needs of users, it really lets us talk about the dream that some people think of in terms of that early '90s hype that would happen overnight. These are some of those same dreams, but now reframed in a way that they're a reality, that the software foundation that was necessary for e-commerce and e-government at the ultimate level, the foundation pieces have been laid, with years and years and billions and billions of dollars of R&D investment, and standards that have emerged throughout the industry, now we have that capability. And so we'll have the big wave out in 2006 and then the software applications will get better and better.

So we want to make sure you're ready for the wave, know what we're doing there. Software is absolutely the exciting change agent, so we're all in the best industry in the world at the most exciting time.

So thank you all for coming to PDC 2005. (Applause.)