Innovation @ the speed of thought

Tablet PC

Personal Computing

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.

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 recognised 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 recognise the words and the transitions in that meeting, that's the kind of thing that over the ext few years we can build into products, cheap digital cameras, audio microphones, and meeting software that facilitates the meeting, helps you organise 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 organising 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 revolutionised 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 organise 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 e and show us what's the concept here, and why it's a big deal.

Web Services

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 revolutionise many phpects 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 componentising those in schematised, 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.

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.

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 componentising 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.

Trustworthy Computing

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.

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 optimised 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-sised 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 we're extending personal computing down to devices that really I don't think most people would have expected, and, f 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 realise potential.

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 realise 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 realised 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.

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