Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
Microsoft CEO Summit 2004
May 20, 2004, Microsoft.com version here
BILL GATES: Well, good morning. It's fun for me every year to kind of give an update on some of the big things that have been happening, because in the world of software technology, the really big impacts are things that require about five years from their inception to where they're really having mainstream impact. And we're in the middle of a number of those right now that are super important and very, very exciting.
As Steve mentioned, we've refined the format. Steve will talk about how he takes business goals and how he happens to use technology to meet some of those goals. I'm sort of proceeding in the other direction, I'm talking about technology advances, and how they can impact business goals that people have.
It has been a fantastic year in terms of some of the key underlying technologies. You know, we look every year at the idea of are we getting extra processing power to allow us to be ambitious. This is the year that the so-called 64-bit processors started to come into the market in a substantial way. Both Intel and AMD are committed actually to providing compatible processors there, and this will be a transition that essentially eliminates memory limits. And it's going to be a very smooth transition, unlike the transition from 8-bit to 16-bit, which was a long time ago, in the early '80s. 16-bit to 32-bit was a bit painful in the late '80s-early '90s. This one, the chips run both the old stuff and the new stuff, so transitioning the software is very, very simple. And it really says the sky is the limit. That is, the amount of memory you can put on these systems, both the server systems and the desktop, will not be holding people back whatsoever. And a lot of these record benchmarks we're seeing are partly because we're getting that additional memory capability. So, full speed ahead in that area.
Networking. I'm sure you are always reading about some of the new approaches, including these wireless approaches. In the short area today, so-called personal area networks, people talk about Bluetooth. That's a very limited bandwidth type data exchange. It's mostly used against the phone. We will, over the next several years, be moving to a new short area network, personal area network, called Ultra Wideband, and it has over 500 times the bandwidth. So even things like where today, you have to connect a computer up to a display, you won't have to have that cable because the data rate is enough that if both sides are enabled with this, the connection takes place in a wireless fashion.
On the wider area, things like a standard called WiMAX that allows wireless to be done over many, many miles that's been invested in very heavily, and should come along and bring connectivity costs down quite dramatically. We still have a dichotomy that businesses are very connected, and consumers are only somewhat connected to broadband networks. In the United States, it's 31 percent of households. A good up tick from a year ago, but still not at the level we can assume that everybody has that. Korea, of course, is up over 70 percent. That's the model that everyone aspires to, and we'll get there for the U.S. over the next five years.
Storage. Again, phenomenal improvement that really have us able to take business data every transaction and do deep analysis, to think about photographic data, movie-type data, and have those things everywhere. Storage is not a limiting factor at all.
The extra peripherals that are connecting up to these systems - a lot of innovation there. In fact, if we think about it in terms of the trend, this was the year that the digital camera passed by the analog camera. That is, more people bought digital cameras in the United States than classic cameras. And the rate of improvement in those cameras is quite phenomenal. In fact, as we put things like that Ultra Wideband into the camera, you won't even have to think about transferring your photos. Whenever you come within range of your PC, your movies, your photos will automatically be put down onto the PC, and then distributed out to whoever you set that up to happen to. So, making it really seamless, where today there's a lot of steps and you have to worry about the storage limitations, even those things will be going away. And the quality, even up at the professional end, is now good enough that everyone says, yes, photography is going to be 100 percent digital given the next five years.
The wireless network we have, called Wi-Fi, the growth in that was more than a factor of two this year. Every portable machine sold had this Wi-Fi capability, and corporations now take it as common sense that you're going to have a wireless network. You can bring your machine into the meeting room and be connected up. People who come and visit your premises have a way of securely being able to go out and connect to the Internet without having improper access to your local network. So, making Wi-Fi standard in hot spots around the world, in the home, in business, that's well on its way.
The challenge in the home is actually to take video and be able to send that around over the wireless network. Video requires more bandwidth than most other things, and so doing that, particularly as we're moving to high definition video, is a challenge. The capacity is there with some of the newer techniques, and setting up the software to make that simple, and yet be able to use that wireless network at the same time for your Internet browsing - and even telephony type connections inside the house - that definitely will be achievable even though we're at the beginning of that.
The move toward high definition displays is worth noting. It's only high-end households today that are experiencing high definition, but the prices of those displays are coming down and down and down. And the wonderful thing about these displays is they are great PC displays. They're great video game displays as well as movie or TV watching type of displays. And those are really driving the economics of LCD advances, plasma advances, and that will even have an effect on the workplace in terms of the typical display size that people have. And it will be very, very inexpensive.
There's a new technology called RFID [Radio Frequency Identification]. You've probably all heard about it. Like all new technologies, it got hyped up a few years ago, overnight. Everything you brought would have one of these tags in it. People are now looking at the practical issues there, bringing those prices down. Definitely, this is a revolutionary technology. It's not something that overnight will be used everywhere, but most businesses will have some application where the ability to track goods and how they're moving about -- not having to scan things to see what's going on. Really understanding that technology and its applications I think is very interesting. It's just a simple little chip that, basically, when it's polled will give a unique ID so you can see down to a very granular level exactly where something is and what it is. We actually in our name badges have an RFID tag, and we'll show a little example of that in use here at the conference.
Devices. Let me just show you a couple of gadgets that are not yet on the markets that are about to be. The phones are, of course, coming more and more with a great color screen, and a camera capability. So taking a photo and making so it just moves up onto your PC, onto your Web site, we're going to make that super, super simple. One of the questions has always been how can you create messages with phones. A lot of people just use the numeric keypad, but for most people that's proven to be inadequate. So, what's happening now is small keyboards are being put in. I'll talk later about speech recognition. We think in the final analysis, you'll have both small keyboards and speech recognition on these devices. The fact that now you can just carry this in your pocket like a normal phone, and yet be able to compose messages is fairly exciting.
There's a lot of different form factor ways to doing it. Here's one where it's a normal phone, a large screen capability, but then you just slide it up and you actually get this small keyboard right there. So, pretty straightforward, use it this way, or have it that way in your pocket, slide it up, and there's the keyboard.
So, clever work to preserve what people like about phones, what they like about the personal digital assistants, and get things like map location capabilities, GPS sensors into these, and allow you to create messages as well. So, you can see the phone is moving up in capabilities, the PC is moving down in size, and you'll even see some overlap as they try and cover everybody's different styles and communications needs.
This is a small PC. It's actually Paul Allen's Vulcan company that's been doing this design. And they and others are really pushing the limit and saying, 'How can you take a full blown Windows PC and get it into a small form factor?' And miniaturization is an amazing thing. This machine has a full hard disk, it runs Windows XP, it runs Microsoft Office, and so having full fidelity and richness is something that will actually fit into the pocket. As we get these data networks to be pervasive, you'll see a lot more of that.
Another trend worth mentioning is what's gone on in the advertising market. I'd say a lot of people would mark this year as the year that Internet advertising is becoming mainstream, that it's not just this weird experiment that people are doing, but it is a part of the mix in any campaign you do to establish the awareness, to drive people to your Web site. You want to be up on the Web, whether it's some of the new ad formats, or buying search keywords. And the growth in Internet advertising was over 20 percent, and not at all fueled just by technology companies buying from each other, which is what we saw in the late '90s. Here, it's really mainstream, Madison Avenue type buyers, and a lot of great experimentation there to make that work and make it attractive to the users, as well. So, full speed advances on the hardware, and lots of new adoption of these that are leading to experiences that would have been impossible before.
Now, we think of the work of Microsoft in building software that runs on these devices as delivering on a dream of seamless computing, where your information is there when you want it, and you don't have information you don't care about. Information is summarized in a meaningful way. All the systems are connected together without your having to do an manual effort, and we achieve a lot of the dreams that we've had for more than a decade, things like digital reading, where the magazine comes to you, you can annotate it, and share those annotations with other people.
So under this umbrella of seamless computing, we have these ambitious goals. To achieve those goals we've spend a substantial amount in R&D -- $6.8 billion -- in R&D. That, if you compare it to other companies, is actually second only to a pharmaceutical company like Pfizer. Within the technology industry, that would be the largest. And actually one of the most focused, as well, since we build just software, and just around the Windows architecture. So, it shows the optimism we have that over this decade we'll achieve some of these dreams.
We have four pillars of these dreams. One is called redefining entertainment, the idea that you can get any show whenever you want, that you can chat with other people while you're watching shows. That video games, through things like Xbox Live, will become a very social experience that goes to every age. And so, that entertainment pillar. We're doing a lot there.
You're going to see over the next two to three years a generation of videogames that you'll think of as the high definition videogames. They'll take advantage of these incredible screens, and the difference between reality and what you're seeing through these games will be narrowed very, very dramatically. But, bringing in things, like talking to your friends, that we've done with Xbox Live -- spectators, contests and all sorts of game genres that are new and have broad appeal, a lot taking place there. TV will be completely different once that's done.
Another pillar is the whole digital lifestyle, the idea that when you create and learn, that your memories can all be recorded so that the photos of your kids, the things that you did, the people you know, all of that is easily accessible. Those two pillars are much more consumer oriented. I'm not going to focus on those two today. Rather, I'm going to focus in on these other two, redefining business productivity and rewiring the economy.
Let me state clearly: these are not things that will happen in one or two years. These are things that over the rest of this decade, through the technical advances that have taken place this last year and will take place in the next couple of years, these things will move into the mainstream, and you'll really see the impact there that we're talking about. Very ambitious things, but if you think about it, over the course of the next six years we'll spend over $40 billion in R&D, so that's $10 billion per pillar. It seems like for $10 billion we ought to be able to achieve those things. At least that's what I tell our programmers.
So what do we mean, redefining business productivity? There are some individual points here which I'm going to go into with particular slides. One thing that I think has been an interesting dilemma, in terms of business productivity, is this issue of centralization versus empowerment. When you think about empowerment, you think, 'Wow, let's let people have the latest software, different PCs, let them update it, and let them organize information and share information in a very ad hoc fashion.' And that's got a great appeal to us, allowing the creativity of those people, getting the latest tools, coming up with insights, and organizing amongst themselves the way they see fit. You'd really like to have that.
Typically though, in the past, many of the IT goals of having uniformity, being able to lock down systems, make sure you have security really well juxtaposed, where you would say, 'No, we don't want you to be able to create bottoms-up Web sites because we don't know what sort of data you're putting on those. We don't want you to have different versions of the software, because we don't know how to isolate that and make sure that's not threatening or interfering with the things we're doing on a centralized basis.' And so, really having software advances that allow you to have the best of both worlds -- that is, let people build the individual Web sites, communicate on an ad hoc basis, and yet have the kind of control you want that information if you decide only a certain group of employees should see it, that it's retained within that group, even if they're e-mailing around, or building Web sites. We've got to have that as well, letting new applications come in that IT doesn't have to spend a lot of time on, but know that they won't cause a problem with the general applications that everybody is working with.
And so, that really takes software advances to give you the best of both. In a sense, we've really swung towards the centralization in the last years, as you'd expect, as these security issues have been a very big thing. What we're showing people now is, even as they solve those issues, the kind of systems they put in place actually can advance the bottoms-up empowerment. And I would say, particularly from Microsoft, that's an important message. Because as we go through and help companies take on productivity goals they have, whether it's for a profession they have -- say, help their sales people be more effective -- or a process, like their review process, wanting to make that more effective, or project management more effective, allowing these bottoms-up communications and organization things is actually very key to that. And so, you have to have the ability to lock down certain things and allow certain freedom as well.
Now, security is important to bring up, not because it drives productivity, but it's been a drain on productivity. And it has really crowded people in terms of saying, 'Well, what are we going to do, what is our liability here, should we even sleep at night knowing that there are malicious people trying to attack these systems?' And they have had some success in propagating these various attacks. What is the key answer to this? Well, the reason we didn't have this historically is that your computer systems, it wasn't that the software was written better or anything like that. They were isolated. Their mainframe is not sitting there with any teenager in the world able to throw arbitrary attacks at it. It was only accessible to a small set of people. And so, as we got Internet connectivity, which is absolutely a great thing, we haven't had the systems in place to make absolutely sure that the right isolation is taking place.
Some companies, by setting up the firewalls the right way, and doing perimeter properly, and actually did have isolation, and so didn't run into these problems. But it was way, way too difficult, and most found that they had at least some places where they didn't have that isolation. So, making that be built into the software so they're easy to set up, really going through a company -- what do they have to do to achieve that? That's been a big top priority for us, because that is the key technique. If there is one thing that is going to change this -- and it will change, I'm very optimistic about this -- it's getting those isolation pieces in place.
There will be a few systems, only a few percentage of systems that of course you don't want to isolate: your Web site, your mail server. And so, for those it is necessary to connect in to the ability to update the software, so when there are critical improvements that need to be made, those can be sent out with very little delay using the Internet as the tool to get the new stuff there well before there might be something that tries to take advantage of that. And we've made a lot of progress working with IT departments to say, 'OK, how can we have that structure in place?'
We've been on a learning curve ourselves, of having to really identify which improvements to software are just new features and very optional, and which ones are the very critical things that need to be put out quickly, and have been very well tested to make sure that when those go into place, they, themselves, don't cause any problems. And that dialogue has been very rich over these last few years. In fact, in these last few months, we've gotten the percentage of customers who are isolated up very, very dramatically. We need to get that to 100 percent. Over the next year we think we can get very, very close to that.
A third piece of this, which will become the weak link, is the authentication and access control. That's just a fancy way of saying if somebody can guess at a password and impersonate someone else, or if you haven't set the access controls on the various information in your company to say who should have the ability to get at it, then no matter what happens on the software quality and isolation front, you've got the vulnerability. And, in fact, there will be a shift -- historically, the visible attacks have been people seeking publicity and trying to propagate these things, in a sense, that's really driven the maturity of the software they've gone after, driven that forward and really gotten some structural changes to take place there that are fantastic. Because it means if somebody is doing a targeted attack, you've got the resiliency to avoid that.
The software that wasn't on that learning curve actually is more vulnerable to these types of targeted attacks. And one place that will be targeted is passwords, if that's what people are relying on for very critical information. We're showing people how to move to smart card and biometrics for very critical things. That's definitely part of the road map that we have in the security dialogue with IT departments.
We also are coupling this message with a message about continuous improvement. What we've been able to do in terms of using the Internet to monitor -- where we have permission to monitor -- where systems are pinging, or if they're slow or they're not working, and then use that feedback to understand what in our software, what in third party software can be improved, that's been a fantastic thing. In fact, today in Microsoft Office, whenever you go to a help topic, it's actually coming back to our servers to deliver up that information. And so, we see which topics people are going to a lot, and we get about 10 percent of the people to give us feedback about whether we solved their problem. And then, every month, we take every topic that didn't get fantastic ratings, and we go in and we understand it, we improve that. And then immediately, as soon as we put that up, everybody who is getting Office help gets the benefit of that improvement. And so, having software be more agile, more up-to-date, getting more transparency into what's going on with it, that's a very big trend.
What we're doing now is we're taking these tools that we've used to track reliability and track satisfaction, and putting them in a form where they can be used by IT departments, so you can have a sense of, 'OK, which of the hardware we have is more or less reliable, where do we have user frustration? If we have a corporate application is it hanging, is it interfering with something else? Is somebody having a compatibility problem?' And you get very rich, centralized data that lets you track those things down.
Very often, if you look at help desk data, you'll see it's a very small percentage of users that have a lot of the problems. Well, that often goes back to something about the way their system is configured. And really gathering that information, getting the live data off of that system, can make such a difference not only in bringing the cost of support down, but also the effectiveness of those people involved. And so, these continuous improvement systems and getting those out into the hands of your people, that's a big goal for us.
We also think it's very important to make it easy to move up to the latest software. We're going to a lot of companies now in pilot programs saying, 'What if you were wanting to get the latest and greatest software every two-and-a-half years, what do you think about in terms of why that's hard for you? How can we make that super easy? If you were going to let the new software come in every time you got new hardware, and have a mix of the old and the new, what is complicated about that, and how can we make that very simple?' And so, that the agility is there without the overhead, without any security risk, or complexity, and yet the improved software is going in. So having that agility is a shared goal we have, and there will be a lot of best practices that come out along that.
Fundamentally, a lot of software is about new ways of people communicating, and you find in various companies the use of e-mail varies very dramatically, but certainly e-mail in general is moving more and more into the mainstream.
E-mail is not without its problems. Certainly, spam is the most visible of those, and we have a very active program now that will make sure that e-mail is authenticated, never appear to come from somebody it doesn't. Because that's a risk not only in just wasting your time, but also can create confusion and even become a form of security risk if mail is fraudulent. And so, getting agreements amongst all the mail people on what we call mail caller ID, we've made a lot of progress on that.
What that means is that mail from people you typically correspond with can be passed into your inbox automatically, and only the e-mail from strangers has to go through a filter to see if it's some piece of spam. And if it is looking like spam, then we can give the strangers trying to contact you ways of proving that they're not a spammer, either by doing something on their software side that spammers would find too expensive or some manual thing that again the spammers could not be able to duplicate.
So spam is another case where there's really quite a lot of progress, and that's something that we ought to be able to reduce to a pretty minor phenomenon.
Likewise, e-mail suffers when you have lots of people collaborating and different attachments that are going back and forth. And the creation of this idea that, whenever you want to work with somebody, you just create a Web site -- called a SharePoint Web site -- that's been very explosive in the last year as we've built that more into Office. Office, even if you have the latest, will make a hint that when you send an e-mailed attachment that, do you really just want to click here and we'll just make a Web site that everybody can go to and see what's going on there?
What happens very quickly when a company adopts that is you get all different templates for these shared Web sites for starting a project, for doing a meeting, for discussing what's going on with a customer. It's phenomenal to see how quickly that takes place. So, the next generation of collaboration really is about bottoms-up creation of Web sites where the IT department doesn't have to get involved. In fact, you can just have a few people administering 50,000 different sites and those sites get staged out and everything in a simple way.
Another new phenomenon that connects into this is one that started outside of the business space, more in the corporate or technical enthusiast space, a thing called blogging. And a standard around that that notifies you that something has changed called RSS.
This is a very interesting thing, because whenever you want to send e-mail you always have to sit there and think who do I copy on this. There might be people who might be interested in it or might feel like if it gets forwarded to them they'll wonder why I didn't put their name on it. But, then again, I don't want to interrupt them or make them think this is some deeply profound thing that I'm saying, but they might want to know. And so, you have a tough time deciding how broadly to send it out.
Then again, if you just put information on a Web site, then people don't know to come visit that Web site, and it's very painful to keep visiting somebody's Web site and it never changes. It's very typical that a lot of the Web sites you go to that are personal in nature just eventually go completely stale and you waste time looking at it.
And so, what blogging and these notifications are about is that you make it very easy to write something that you can think of, like an e-mail, but it goes up onto a Web site. And then people who care about that get a little notification. And so, for example, if you care about dozens of people whenever they write about a certain topic, you can have that notification come into your Inbox and it will be in a different folder and so only when you're interested in browsing about that topic do you go in and follow those, and it doesn't interfere with your normal Inbox.
And so if I do a trip report, say, and put that in a blog format, then all the employees at Microsoft who really want to look at that and who have keywords that connect to it or even people outside, they can find the information.
And so, getting away from the drawbacks of e-mail -- that it's too imposing -- and yet the drawbacks of the Web site -- that you don't know if there's something new and interesting there -- this is about solving that.
The ultimate idea is that you should get the information you want when you want it, and we're progressively getting better and better at that by watching your behavior, ranking things in different ways.
Another big phenomenon is building communities around Web sites, around products. And virtually every company ought to have on their Web site the ability for their customers, their suppliers, various people, to interact and their employees to see the dialogue taking place there and jump in and talk to them and help them.
The idea of these communities making these things fun, how you make sure nobody dominates the community or invades the community, a lot of progress there that make those things important. Built into every one of our products now are connections back to the community, a thing called Office Online, or Visual Studio, our development tools have the developers online, that's called MSDN. And we learn so much about what people are doing or what they want from that and we literally require our employees to engage in those communities so they're up there and visible and getting that direct exposure not through statistics but through particular customer dialogue.
Information visibility. This is one that we often talk about, because our view is what's being done in terms of insight in information is so small compared to what can be done and what should be done -- seeing trends in customers, seeing quality type issues, tracking those, even the most basic things around budgeting, forecasting, sales analysis -- getting it so somebody can take from the back-end systems that have the information in a very complex form necessarily and navigate that and bring that into their ad hoc tools, typically Microsoft Excel, and play around with it and yet still be connected to the updates and not run any issues about is it secure enough that they'll let you get at that information, that's been a big challenge. Steve will talk about a few cases where I think we've really got some best practices here in terms of insight into the information.
I wanted to show you one example of this. This is a new product we call InfoPath that we're using in a number of ways. And so I'd like to ask Jacob Jaffe to come up and show this example of information visibility here at Microsoft. Welcome.
JACOB JAFFE: Thanks. Thanks a lot.
Well, good morning. You know, like many companies, Microsoft has historically struggled to strike the balance between the amount of time that salespeople should spend performing administrative tasks as opposed to actually interacting or being in front of customers.
I'd like to show you today an example of a solution we built using Microsoft Office that enables salespeople a new and innovative way to actually develop and maintain their customer account plans.
Now, this solution is actually being in use today by nearly 6,000 salespeople here at Microsoft and among other benefits is actually projected to be saving each one of them more than one week per year in administration, which means more time to spend with customers.
Now, as I go through this demo, I'm going to play the role of an account executive specifically calling on Kontoso Pharmaceuticals. And I want to update my account plan based on a conversation I had yesterday with the new vice president of marketing, David Jones.
So as we look at my account planning form you can see that some of the information is actually already populated. That's because InfoPath actually enables you to connect the form directly to back-end systems. So any data that's stored in those back-end systems that's relevant for my account plan is automatically populated within my form. I don't have to worry as an end user about learning new or complex systems, and I don't really have to be concerned about where the data actually sits or resides. In fact, it's just a matter of filling in the form.
So as an example, if I want to go ahead and provide a new telephone number for Kontoso, it's just a matter of entering it right into the form. And I can make that entry whether I'm at the customer site, on an airplane or, of course, connected to the Microsoft network.
Now, over on the right-hand side, you see a table of contents, which actually shows all the underlying elements of my account plan. This not only gives me exposure to what all is involved in the process and procedures associated with the account plan -- because it is a formal process, step one, step two, et cetera -- but it also allows me the flexibility to be able to move from one section to another very quickly and easily.
All my information, contrary to how we used to do things, all my information associated with my account plan is now in one place.
So in this particular case, I'm looking at an industry profile, and by the way, if I have any questions in terms of what any of this information means or how to fill in this particular section of the form, I even have the flexibility right here within the task pane to have help and guidance. And as I select that, you actually see that the information or the instructions that are provided here in the task pane are relevant to this specific section of the form. So again, the concept of context-sensitive help as the end users actually completing the form or filling in his or her information.
All right, so let's actually go through the process of completing some of the information. I want to start with the first step of the business process, and that's actually to identify the customer or business issue.
Now, as I switch over to that view of the form, you see that I actually again have some data already populated. That's because I've already been working with the research and development as well as the sales teams.
Now, while this form has a great deal of structure to it, it also has an enormous amount of flexibility. So, you may have been able to see that I was actually able to capture my information in a very rich way, whether that's in table form, bulleted lists, et cetera. In fact, I even have the flexibility to add an entirely new section to the form. And that's what I want to do, to capture the new information that I collected as a result of visiting my customer yesterday, David, who's in the marketing department. So, I'll just identify the new business unit as marketing. And the issue, the business issue that we specifically discussed yesterday, was around collateral costs being too high.
Now, we talked about three specific business objectives that David has, and these are objectives that I'm going to use to feed my account plan, to tie my actions most directly to the customer's own feedback. So he's worried about reducing production costs, he's worried about increasing relevance and he wants to improve accountability.
He also calls this, actually internally, he's referring to this as his marketing excellence initiative, and I'll just track that so that I can tie again my objectives and my plan to his specific initiative.
I'm just going to scroll back up to the top of this particular section of the form, and you actually see that we have built-in navigation. Again, as I mentioned, this is a very structured or formal process in terms of account planning. And I know where I am at all times through this graphic here that tells me first I'm in the pane to initiatives and I'll be moving onto opportunity alignment.
So I'll just click "Next" and move through the process of actually now creating my account plan. I just selected "marketing excellence," which, of course, is the initiative I just entered. I'm going to align to that and now I'm going to really start building out the core part or the core aspect of my business plan. Creating, editing the action plan allows me to tie my specific action back to David's own input. I've got all the context that I need to have a one-to-one relationship between what the customer is saying and the actions I'm about to take.
Now, I talked about this as a very formal process but I also have the flexibility to step out of the formality and be a little less structured. And the example I'll use is to actually collaborate with a colleague using e-mail.
So in this particular case I actually have an organization chart built right within my account plan, again all the relevant information from my account is right here. So this Visio diagram represents the old view, or at least what I currently consider to be the view of the organization, but I want to check with a colleague to make sure it's still relevant.
Because we have Outlook integration I can simply click on the "Send as E-mail" icon, the e-mail header comes up and I can go ahead and e-mail my colleague and ask him to go ahead and verify that that organizational chart is updated and is, in fact, accurate.
Now, in the meantime, all the other information that I just updated is exactly what I want to have reflected in the systems, so I'm going to go ahead and submit. And what will happen is all the data that I just actually entered will automatically populate all those back-end systems as appropriate, just based on those latest entries that I made.
So from this solution, we've actually been able to gather better information about our customers, we've increased the visibility from a sales management perspective in terms of what's going on at our key accounts, and as I mentioned, as an individual salesperson I'm actually saving more than a week in administration each year, which means I get to spend again more time with my customers.
Now, I don't want you to just think that these kinds of benefits are limited to our sales team. In fact, we have lots of other solutions that apply to finance, marketing and HR. In fact, we have solutions that go horizontally, that have relevance to each employee within Microsoft, and a quick example I'll show is how we do time and absence reporting.
Now, what I'm showing actually right now is how we used to do time and absence reporting, because this is a Web form. And a Web form, or a Web page rather, actually means that I have to have connectivity, I need to be online on the network in order to be able to fill it out. And I don't have a terribly rich environment or a lot of flexibility in terms of how I gather that information. Instead, what I now have is a rich, easy to use InfoPath form that I can very quickly come in, whether I'm online or offline, to gather the information that I need.
And if everybody who uses this form were to save just one minute, just one single minute by using this solution, that would translate into an annual savings of $66,000.
So, I hope with these two examples in terms of how we're using this technology within Microsoft you're left with a few ideas in terms of how you can increase productivity and reduce costs within your own companies. Thank you very much. (Applause.)
BILL GATES: Another area that if you're going after productivity, particularly for managers, that you've got to think about is meetings. Taking the time, making them more effective, taking them and allowing people to be more prepared, allowing the information that's created during the meeting to be more accessible to people who weren't there and letting people who are remote engage in that meeting in a very simple way.
Now, this has been a Holy Grail. People have been talking about videoconferencing, desktop videoconferencing. And, in fact, it's only in the last few years that that's really started to catch on. There's things that we're doing like Live Meeting that Steve will talk about, but that's just the beginning of what's possible.
You ought to be able to have a transcript of the meeting, go back, point to a piece of it, search through it and have the slides, the video, the annotations that people make on it, whatever discussion there is around of it, all of those things be a document that people can navigate in a very, very simple way.
And a lot of this has to do with integrating the tools that are disparate tools today. Setting up an audio conference, well, that's gotten to be a bit easier, but that's different than setting up the screen connection and getting the slides all there and making sure people knew that that happened. And so, here there is so much that can be done to improve things.
I wanted to show one of the more futuristic things we're doing, which is the idea that, as you have these very inexpensive cameras, what software can do to add value when those are available in the meeting environment. So here we've got a white board that we might be using in a meeting and it's just sitting there, very simple technology. And I've got pointed at it a camera that's only about a $100 camera. It's connected over the so-called USB connection. It's a very typical camera you get.
Now, if you just think of that in terms of raw information, that here's what the raw video looks like, and it's fairly difficult -- you've got glare, it's kind of dim. You don't want people in a meeting to have to worry about this, and is something being shadowed, or something like that. And, of course, if you just send the video, sometimes the white board is being blocked, it's very hard to analyze the information that's there.
What we do is we have software look at that and understand that it's something unique, that it's a white board. And so, instead of just having this raw video, there's processing that takes place and it's actually seeing the different strokes that are there on that white board.
And so. as those come through, you can analyze those and, of course, when you have a connection, a video connection, you're only needing to send the ones that are actually changing during the meeting. If somebody walks in front of it, actually the software understands that's not part of what's there. If you make a change, it will just send actually the minimal information so just the changes are what goes through.
And so, being able to do that analysis with the camera software is a pretty simple thing, but comes up in a lot of meetings and it will just be built-in to the future versions of Live Meeting that we make available.
All right, let's move on from productivity to the second big goal that I talked about that related to business, called rewiring the economy. And this type of statement for some of you will feel like déjà vu. Didn't people in the late '90s say they were going to rewire the economy, and didn't most of them go out of business? Are you allowed to still say things like this?
And the answer is yes. The difficult work to make this happen has only been taking place now. Just because we got the Internet connectivity, that was just an enabling factor. We didn't have in place the software necessary to find the other person you want to do business with, to verify who they are, to engage in complex running transactions, to eliminate paperwork even in the cases where surprises are taking place. The foundation for that really has been laid over these last two years. And so, you're going to see this accelerate in a pretty dramatic way. We're seeing good showcase examples of this.
It turns out the technology that lets people connect any company together actually lets you connect information within companies in a much better way as well. The fundamental technology is called Web services.
I've been talking about this at the CEO Summit for about three years now as something that really was emerging. This is the first year I can say that a very significant percentage of accounts are starting to build applications around it. I bet about a third of the companies in this room have really exciting apps that are built on this. It's because the tools have gotten a lot better, the standards are now in place.
It is actually one of the best examples of great technical cooperation between companies that are very competitive with each other in general, and in particular, Microsoft and IBM have put their best people on this. And both companies have very deep understanding you might think we would want to be proprietary about. IBM understands long-running transactions, mainframe data access better than anyone. We understand the desktop and XML and information visualization probably better than anyone else. But both of us said that we've got to have a standard here. We can't have this be different between what IBM does, what we do or have anything to do with what operating system or language you develop in. If it's about e-commerce it's got to be out there and usable and, of course, as people build new applications around it, it's beneficial to both IBM and Microsoft. We'll compete to provide the software that does it, yet knowing that for each individual application, even if one is done with IBM's stuff, one's done with ours, that those will work together.
And even when we kicked off this collaboration, there was some skepticism whether it would go to the finish line, and now it really has. All the high level standards have been brought out to partners, shown. Other companies have helped as well. I don't mean to say it's just the two, but those are the two that people were hoping would stick with it and get it to critical mass and now we're really at the finish line this year in terms of even the most complex piece of this. So that's a technical piece that was necessary.
Again, that builds on the Internet connectivity but it's not sufficient. We have to have people now thinking, 'OK, given that we can connect computers to computers, people to people, people to computers, how do we capture the richness of what goes on and use this lower transactional cost, this extra efficiency?'
I think in one of the talks tomorrow there will be some discussion about how the economy, you can think of the path of the economy as seeking lower and lower transaction costs, and that's absolutely right. And rewiring the economy is about moving down that trend in a very rapid way.
But actual business processes are often way more complex than people think at first. You always write down the straightforward case if everything goes well, but then all the different surprises and error conditions, where it's not just software, but humans calling each other, sending e-mail, faxes, the way you involve them is very tricky.
In fact, business processes in companies unfortunately today are often represented by lots of code. Say in a bank, somebody will say, 'Hey, let's write the loan approval application,' and they'll write hundreds of thousands of lines of code. Now, the unfortunate thing about that is if you want to change that process, then that's very expensive, and even understanding where things are in that process, what's going on, that's fairly difficult.
And in a way, it's kind of surprising because the difference between two banks and the way they do things shouldn't require hundreds and hundreds of pages of code to express that. The differences can be described in a fairly succinct way and they should be represented that way, visually, with a very limited amount of code involved.
And so, here the goal is to take these Web services and build on top of those and that's exactly what these are designed for, to let the analysts in your company build explicit business process models, building off of standard templates so you're not building from scratch, and use that as the way to customize and change things rather than what has been done in the past.
An example of just this shows in a tool we're coming out with early next year that goes into beta in a few months, our Visual Studio tool. You can just draw the model, actually you can draw it with ink on a Tablet and we'll recognize it and build it. It's just a diagrammatic thing.
This is an example of a business process that relates to the purchasing operation, and here you can see it's very visual. It shows some of the complexity. It shows when humans get involved to approve things, when the computer is involved. The specifics aren't that important, just that historically that would have been a lot of code, and now it's visual and so you can say 'How many of our transactions waited for more than a day at this step? How many of them had to go back through this step because the customer said there was an error in what we sent to them?' And you can do analysis and you can do changes and improvements right at this level.
A lot of this comes out of sitting down and really studying information workers. For example, we went to purchasing agents and we saw how much they used tablets of papers and sticky notes and we thought, 'Well, why aren't you using software?' and they said the software doesn't capture the richness of what goes on. For example, if I go on vacation and have to have this other person take this over. The software doesn't seem to understand that. This is a particularly good customer and so we're willing to prioritize them differently; the software doesn't capture that.
And so, the idea that you go back and forth between the software and the person, that boundary, what I often called the structured/unstructured boundary, is not handled very well.
This is the display that we built for these purchasing agents that finally got them feeling like, wow, the computer was on their side. On the left we have all the purchase orders this person is dealing with. In the middle we have the history of the flow of this purchase order, everything that happened. And on the right, we have the details of that purchase order and the various actions that can take place.
And so we don't just have the computer think everything always goes in normal order. The person, if they're authorized, can cancel the thing, skip steps, change things, all right in this simple interface. And so, when we showed this to them, and it was a prototype, they were really blown away by the way it would change their jobs.
And so, many jobs are like this today where they're juggling different things and sort of dealing with the fact that the back-end systems don't appreciate the human part and that things often get out of synch, and just the coordination is very difficult.
A lot of what will be happening as we're being more explicit about these things are direct connections, taking out things that created cost or confusion in the middle. So we'll be moving to a lot of self-service: going to a small business and making the appointment right there on the Web site, that's becoming a standard thing. The way you want to interact with professionals, being able to schedule and consult in a way that doesn't require as much face-to-face activity. Even in some cases, straight machine-to-machine exchange of information, I think in the past I've used the example of your phone bill coming in not as a piece of paper but as a Web service command that is easy to analyze and you apply certain thresholds and immediately assign it to the various cost centers and see if something is unusual without one minute of work or anybody touching any paper involved with that. That's the kind of thing that won't be pervasive until many years from now, but we're already starting to see people do those things.
Now, as we make these direct connections, there's this question of, 'Can we make this natural? Can we make it not just the screen but also a voice type interaction?' Another Holy Grail is speech recognition, bringing this into the systems. And the fact is that this year we finally got the quality up and the ease of building these voice Web sites up that we put out our Speech Server product and now say literally everybody who does a Web site should do this.
And so to give you an example of that I'd like to ask Kevin Shaughnessy to come out and talk about where speech is coming in, in a way that I think will be pretty surprising. Welcome.
KEVIN SHAUGHNESSY: Thanks, Bill.
Good morning. Today, Web technologies do provide great benefits for enterprises by providing self-service applications and solutions for customers and employees around the world. For example, this application is a typical Web application, and it's a Web portal for the fictitious Grand Deluxe Hotel. And, using this application, I can go ahead and book a hotel room by quickly searching for a room in, say, Chicago, Illinois. And I'll go ahead and check in tomorrow and that will be for three nights and so with a checkout day of May 24th.
I can see there are three room types available. I'll choose the lower cost economy single room, being the good corporate citizen, and I'll go ahead and log in here as our demo persona Joe Lucas. We'll use his stored profile information to book this room. And we're done, the room's been booked and a confirmation has been sent to Joe's e-mail address.
Now, this is just one example of an automated self-service Web application, and we're all familiar with these types of applications and certainly all of you have already deployed something similar in your companies.
Now, these types of applications have significantly reduced the number of customer phone calls, the expensive and routine phone calls coming into company contact centers, but yet companies still receive millions of phone calls per year with thousands of call center agents still handling routine transactions and common questions.
With Microsoft Speech Server, you can further reduce your costs in the call center by automating these transactions using speech.
Now, an automated speech system typically will deliver a return on investment of over 1,000 percent, with a payback period of between six to nine months. And adding speech to your contact center will allow your customers to now have new options to gain access to the same Web application and information even when they don't have access to the Internet. They can now use one of the other 2.8 billion telephones that are in existence. And this, in turn, will also allow your call center agents to become more productive by allowing them to focus on high-value transactions and high-touch customer service.
So let me demonstrate. What I'd like to do is, a moment ago I booked a room at the hotel. It was an economy single room that I booked for Joe. Now, I'd like to change that to an economy double. We'll go ahead and use the same Web portal but this time speech enabled for access via the telephone.
COMPUTER OPERATOR: Hello and welcome to the Grand Deluxe Hotel. Would you like to check room availability, contact a hotel guest or change an existing reservation?
KEVIN SHAUGHNESSY: I'd like to update my reservation.
COMPUTER OPERATOR: I think you said change an existing reservation. Is that correct?
KEVIN SHAUGHNESSY: Yes.
COMPUTER OPERATOR: To change an existing reservation please key in your preferred guest membership number or just speak your name.
KEVIN SHAUGHNESSY: Joe Lucas.
COMPUTER OPERATOR: Okay, I found a reservation for Joe Lucas. For verification what is your billing zip code?
KEVIN SHAUGHNESSY: 45245.
COMPUTER OPERATOR: Great. Your current reservation is for an economy single for three nights starting tomorrow. What would you like to change?
KEVIN SHAUGHNESSY: I'd like to change to an economy double room, oh, and a hypoallergenic pillow.
COMPUTER OPERATOR: So you'd like to change from an economy single to an economy single with a hypoallergenic pillow for three nights. Is that right?
KEVIN SHAUGHNESSY: No.
COMPUTER OPERATOR: Your current reservation is for an economy single for three nights starting tomorrow. What would you like to change?
KEVIN SHAUGHNESSY: I'd like an economy double room and a hypoallergenic pillow.
COMPUTER OPERATOR: So you'd like to change from an economy single to an economy double with a hypoallergenic pillow for three nights. Is that right?
KEVIN SHAUGHNESSY: Yes.
COMPUTER OPERATOR: Okay, an economy double room is available for three nights starting tomorrow. Would you like to make this change?
KEVIN SHAUGHNESSY: Yes.
COMPUTER OPERATOR: Thank you. Your reservation has been changed and a confirmation has been sent to your e-mail address. Can I help you with anything else?
KEVIN SHAUGHNESSY: No, that will do it.
COMPUTER OPERATOR: Thank you for calling the Grand Deluxe Hotel. Goodbye.
KEVIN SHAUGHNESSY: OK, so that was the same Web application, but now speech enabled for access via the telephone. So I now have an integrated self-service solution that's available to me from the Web as well as via the telephone.
And, just as you can speech enable your existing Web applications and extend their value for access over the phone, you can also take it a step further and add speech to your mobile device solutions. For example, the Grand Deluxe Hotel has given its employees Pocket PCs similar to this one, wirelessly connected to their on-site Intranet. This allows employees to become more productive by giving them access to information and guest services from wherever they are in the hotel using a natural interaction method of voice.
So we can imagine that it's a few days later, and Joe's staying at the hotel and now he wants to change his room yet again, and this time to a suite. I'll go ahead and play the role of a hotel employee. I'll go ahead and access the Web portal via this Pocket PC and then I'll change Joe's room, look up his information first and then I'll change his room simply using speech.
View current guest record for Joe Lucas.
So with a simple voice command up pops Joe's current information. We verify his identity and then we check for available suites.
View all available suites.
Here I can see there are two suites available. I get a closer look at either one simply tapping with the stylus and now to change that room to this suite I can use another simple voice command to do so.
Update current guest room to this one.
I'll go ahead and confirm that I want to make this change and now we can see that Joe's room has been updated to a deluxe suite for the remainder of his stay.
Now, this ability to add speech to Web-based mobile device solutions allows me to create unified and integrated applications that are now available on the Web site, from the telephone and even from mobile devices.
And just as companies like GMAC, Rite-Aid and Talbot's have already implemented these types of integrated solutions using Speech Server, consider how your company might be able to take advantage of these technologies to take that next step and further reduce call center costs potentially by millions of dollars to further increase employee productivity and to further enhance customer satisfaction.
If you have any questions about Speech Server or would like more information, we do have a table that's over in the lobby and please drop by. We'd be happy to assist you. Thank you. (Applause.)
BILL GATES: Thanks, Kevin.
Well, let me just wrap up on these business pillars. The goal of seamless computing here is pretty dramatic. It's to deliver awesome productivity potential, get more value out of the information worker and it's been a tough challenge to actually measure these productivity things. We're most effective in an account where we have shared goals to say, 'OK, we're going after the sales force. Let's give them tools to make them more effective.' Or, 'We need to save a certain amount through IT initiatives to free up dollars to do things like the wireless network or the Tablet pilot,' So, we often have a coupling where we have a cost saving project that is essentially the top priority because that's what creates the dollars to allow for some of those productivity initiatives.
The insights in terms of the rewiring, I think those are probably the most profound. And we do have pioneering customers doing very interesting things there and very excited about the idea of working with you on that.
I know I said I'd focus on the business things but I do have a short video that shows, really illustrates, how we're going to connect together everything in the home and a kind of breakthrough that we've had recently there. So it's kind of in the format of our recent ads, if you've seen those, so let's take a look at that.
BILL GATES: Thank you.