Mobile Phone Design Review Web Cast
Kevin Dallas: Good morning. Can everybody hear me? My name is Kevin Dallas. I’m Director of Marketing for the mobile phone group. On behalf of Microsoft I’d like to welcome you to our first mobile phones design review. We consider this to be a real essential part of our development process so that we can get feedback from you, our customers. As well as provide you with early information so you can actually go off and start developing products based on our solution. We actually have a number of different types of customers in the audience today. We’ve got mobile operators, handset vendors, system integrators and some analysts, all of which have a very unique perspective on our products and we would encourage you all to give us your feedback on our products in mobile Explorer and Stinger.
Looking at the agenda today, we are going to be covering a number of things with one objective in mind. That is to make sure we will give you the information that you need in terms of our mobility platform, our future phone solution. code name Sterling. You’ll find out more about that in this review. Our smart phone solution, Stinger, and then, on the third day we’ll have one on one meetings where you’ll be able to actually meet with the product group directly and give us private feedback.
So walking though the agenda, on day one we’ll start off with Ben Waldman who will kick of the design review and give you a key note presentation. He will actually outline on the mobility vision and end to end solution. This will be followed by my presentation where I’ll focus in on mobile phones, and talk about our strategy in that area. In the afternoon we’ll spend time getting into detail on our feature phone solution, code name Sterling. Roberta Horra and John Goodacre will actually present that.
On the second day we will go into our next generation smart phone solution, and that is Stinger. Bill Vertile and Lynn Ferrel will conduct that presentation. In the afternoon we thought it would be appropriate to actually walk you through our server and services products. Lee Butler, the Program Manager for the mobile phones team will actually talk around that. Then we will end with a section that is really important for us, which is our development strategy. This development strategy actually covers the end one solution. It’s not focused just on the client.
On the third day, this is your opportunity to actually meet with the product groups to get any remaining questions answered, give us feedback on our products in private. And then, if possible, we would like you all to set up three-way meetings to Microsoft, handset vendors, mobile operators and system integrators.
This third day will be very important for us to get feedback. We, of course, make sure you get your information. I would ask that anybody who isn’t reserved for a clock on that third day, contact Christina Shayez. Christina, raise your hand. There is Christina at the back there. You should contact Christina and reserve a slot for that third day. That is a really important section you need to have.
Moving on to the first item on the agenda, I’d like to invite our Vice President of Mobile Devices Division, Ben Waldman, to the stage. Ben will actually outline our vision for mobility and our end to multiple ends solution. Ben?
Ben Waldman: Good morning. I’d like to begin by thanking all of you for coming here to hear about…to our first design preview will be able to hear about our mobile phone strategy. Or, more accurately I think Microsoft Wireless strategy is which our mobile phone strategy is such an important key and integral part. We thank you for coming here to listen about our strategy. I think this is important to share. We hope to hear many of your thoughts about how we can work together and what you think about our software here going forward.
Over the next two days we hope to show you some products and technologies that we think are significantly more advanced than anything that has ever been demonstrated before publicly. At the same time we hope to hear your feedback, not only on these products and the solutions and software and how they meet your needs, but also to discuss with you the opportunities that we have to all work together, how we can partner together to deliver better solutions to our mutual customers and how we can all help our customers by working together.
I think it’s true that probably until some time towards the end of last year it was pretty rare that you saw the words Microsoft, mobility and strategy used together in the same sentence. I think it is certainly true that we may not have been as vocal as some others in terms of our public actions, our press actions, in terms of talking publicly about what we’ve been working on. The truth is that we’ve been spending quite a bit of time over the last number of years working on our mobility strategy. Studying the mobile space, really trying to make sure we understood the space very well. Because as you know it is so different than what goes on in the PC space. There are so many differences that we have learn about and understand. We’ve spent a lot of time speaking with many of you and many handset manufactures, many operators, many analysts. We’ve also spent a lot of time talking to our enterprise customers and also people in the consumer space to understand their needs. Based on all the discussion we feel we’ve got a pretty good understanding of the wireless market mobility space. We’ve also come up with a strategy. How to be successful in that space and are now beginning to execute on that strategy. It’s that strategy which I would like to discuss with you today over the course of the next hour.
Microsoft is involved in many things. I think we’re all aware of that. One thing I want to be clear is that our activities in the wireless space and the mobility space is not something that’s tangential around the company, but are indeed very core to what the company is working on. Really central to Microsoft’s vision going forward. We believe that success in this space is critical to the company’s success in general in the future.
This year is Microsoft’s 25th anniversary. For the first 24 years of the company’s existence, until some time last year, the company was motivated by the vision of putting a computer on every desk in every home. The reason why that was a vision for the company was because we saw the personal computer was an empowering tool, enabling people to move beyond the mainframe era. Enabling people to do things that they could just never do before in terms of communicating with other people, in terms of accessing information, whether at home or on a network. We are enabling them to do thing that they could never ever do before. That’s a vision that sustained the company through 24 of the 25 years that we’ve been in existence. Last year, for the first time in the company’s history, and I’m making the point here to show what a big change this was for us. We changed what the vision of the company was, or more accurately, not so much changed is as expanded it. We believe that the personal computer will still play an important role in people’s lives given the versatility of the device. But we see increasingly the people are going to be using a wide variety of devices to communicate with each other and access information.
Last year we expanded our vision to be empowering people through great software anytime, any place and on any device. When we think about anytime, any place, on any device, that is specifically talking about our work in the mobility area. So we’ve changed the company vision to talk about the work that we’re doing in this area. I think it’s pretty clear that the work in this area is central to what the company is doing going forward in the future. We certainly intend to be applying many, many resources to be successful in this area, both in terms of the financial resources that we’ll be spending and in terms of the number of people which we’ll be devoting to work in this area as well.
I think we’ve all seen a lot of the statistics that are constantly put up on a slide, in every sort of presentation like this. I’ve made a conscious effort to leave them out this time. But we’ve all seen the number of billions of cell phones being around. Data enabled cell phone being available in 2003 and 2004. People increasingly rely on the web to communicate with each other and of course relying on email. The rise of packet based networks and the success that they’re going to have on communications. We all have a vision, a broad vision, which we have these ideas of how we want the world to work and we see people being able to walk no matter where they are and be able to communicate with each other. They will access information no matter where they are. Location based services creating all these opportunities for people to find them just the right information wherever they are for interacting with others. The electronic commerce opportunities that are going to be opened up on their own, and with location based services. This is a vision that excites a lot of us and it’s something which we are all working towards.
But in order for this vision to become a reality, so much work needs to be done and so much software actually needs to be written. If you think about a relatively simple problem, which is maybe just two people kind of communicating with each other. The situation that we have today is, in many ways, so absurd, so ridiculous. If I want to communicate with you, and I don’t mean any one particular one of you. But if I want to communicate with one person, I can’t simply communicate with that person. I have to think, "Do I want to send them an email? Do I want to call them on the phone? Do I want to send them a fax? Do I want to send them a page? Do I want to send them and SNF?" They really have to focus more on method of communication rather than the person with whom I want to communicate.
On another angle, the person who wants to receive the message, they wind up having to check multiple different places, in many cases. And even if they are privileged to have just one place where they go to access all their information, they wind up receiving that information in the method that I chose to send it, rather than the method they chose to receive it. In many cases that’s just too bad. It’s not what people actually want. If you’re sitting in a meeting, for example, it’s not socially acceptable to get a phone call, and pick it up. You probably want to get a message, but a discreet page is probably okay. Or an SNF message coming through is probably okay during the course of the meeting. On the other hand if the message is coming in from someone in your family, you probably do want to be interrupted with the phone call and in that case it’d be okay. If you’re driving the car, however, and a phone call comes in, my understanding is that in Europe it is illegal to use your mobile phone in your car. This may be another example of they way the European mobile space is ahead of where we are in the United States. But even in the United States where people are allowed to do it, it certainly is not a wise thing to do. I think we’re being web cast so I have to be very clear in stating that Microsoft in no way advocates the use of mobile phones in cars.
So when you get a phone call in the car, you don’t want to be able to have to pick up the phone, you want to have that message read to you in some way. This is a vision we have in unified messaging in some ways helps a lot of this by having only one place to go for your information, but it really doesn’t address the notion that people play different roles during the day and they want to have different preferences during the day. Those preferences may vary ynamically quite a bit.
In order to make this a reality, in order for people to be able to communicate with each other in a simple way and ask people to receive information the way they want to receive it, a lot of software actually has to come together. We have to combine information about a person’s location or the person’s role or the person’s schedule. We have to know what devices the person has and what preferences they have before using those devices. In doing that we really have to have software on the devices, we need to have software on servers that manage those devices and provides the content to users. We also obviously need the content itself that is going to be coming through those servers to those devices. Those are the many different places where we need software to be written and exactly integrated together and work closely together if we’re all to deliver on this vision that we all have of enabling people to do so much more when they’re mobile, whether they’re in the enterprise or whether they’re in the consumer space.
As this chart up here illustrates, this is how at Microsoft we, and many other places as well, we view the opportunities in the mobile space. On your left-hand side you can see that we talk about the sources of content and information. The services and the applications to provide the data the people want to be able to use. In the center, and this is the biggest box and that’s not a coincidence, is the carrier infrastructure. The carrier network. So we have the network infrastructure, as well as the service platform and the applications and features which have been built on that platform which exists and are hosted at the carrier on the server, as part of this equation. On the right-hand side we have devices which are used to access this information. Underlying all of this, of course, is we need a rich tools platform to enable people to develop the applications and services and servers and devices that all need to work together. We see these three areas; content, the servers and the devices as being key part of the value chain in terms of providing and delivering on this vision of mobile work with mobile information.
Where we think that Microsoft has an opportunity to make a big difference here is because we think that Microsoft has something to provide in all three of these areas. In doing so, we think we are unique in the industry and in a unique position. Because we are able to supply things in all three of these areas, things that are not only best of breed, but which also work well with each other to deliver end to end solutions.
If you look at content and data, we see that Microsoft has acted both on the internet and the corporate internet as well. On the internet we see services and information such as MSN, MSNBC, or B central service for small business. Our Web TV service, our MSN mobile service. If you look inside the corporate internet we’re maybe even stronger there. We have information sitting inside of a changed server. Information sitting in front of Sequel servers. Information sitting inside of Office documents. Hundreds of millions of workers around the world today use Microsoft Office to create content. If we can make that content available to people in easier ways, that is certainly a step forward. Over 100,000,000 mailboxes today are managed by Microsoft software. So over 40,000,000 mailboxes today are being managed by chain software. Over 70,000,000 being managed by Hotmail. If we can provide a way of simple scalable, reliable way to access that information, I think that we are definitely delivering value and that’s certainly our intent going forward.
If you look at the carrier network on the server side, over the past year or so we’ve made a number of interesting acquisitions. A little bit over a year ago we acquired a company names Send It in Sweden. Send It has a product called ICSA, Internet Cellular Smart Access, which is a carrier grade email product which is currently being used at about 13 different carriers across Europe an Asia right now. In many cases the product that is being used is another product call the Microsoft Commercial Internet System which provides, again, carrier grade email, but also opportunities to create electronic commerce solutions at a carrier grade level. We also acquired a company in Britain about a year ago called Entopic which does speech synthesis and speech recognition. When we all look at the things that we want to provide to people through devices and phones are getting smarter and servers which are providing more information, we recognize that there will always be a number of clones that are still available which are not smart enough, which are not rich enough to access these services. We see voice as an important enabler to enabling…to enable a wired set of people to access these rich information and services through speech synthesis and speech recognition. These are a number of acquisitions that we’ve done outside of Microsoft, but the bulk of the work that we’ve done, of course, is work that we’ve done in Microsoft itself. The work that we’ve done at Microsoft begins…the foundation of that work begins with Windows 2000. At Microsoft we are a platform company so we focus on building tools and building software which enables other people to create solutions on top of the products that we create and add value on top of the products that we create. So Windows 2000, as you probably know, has been re-architected for scalability and reliability. The ability to manage hundreds of thousands if not actually more than millions of users on a reliable basis. On top of Windows 2000 we have just released a new product called Exchange 2000. Exchange 2000 has been a significant re-architecture and a very, very significant release for us. Perhaps a significant release of Exchange as Windows 2000 has been a significant release of Windows.
Exchange 2000 began by re-architecting Exchange for scalability, reliability and manageability. We integrated a lot of the people from the original Hotmail team, actually, to the Exchange team and used a lot of their experience to help us create systems that will be able to handle millions of users in terms of reducing single points of failure and doing other things for fault tolerance. Another key part of what we’ve done in Exchange 2000 has been to integrate internet protocols deeply inside the entire product. Every piece of information inside the an Exchange store is accessible via an XML schema meaning it’s also accessible via readable URL. So the combination of the Exchange server sitting behind internet information server to create the foundation for building rich collaborative applications.
The third thing that we did inside of Exchange, which was really critical, was integrate what we call any time, anywhere visibility into the product. Throughout the support of video conferencing, for chat, for voice nodes, directly into Exchange. So those are the things we’ve done inside of the Exchange server, sitting on top of Windows 2000.
Our biggest and best, and it’s been a product we’ve been working on for a number of years, which we just introduced last week, that is our mobile information server. What we’re calling mobile information server 2001. Mobile information server is a scalable and reliable carrier enterprise capable platform. Wirelessly enabling existing applications, as well as providing a platform for building rich new data services. With the mobile information server we’ve seemed to solve the problem of end to end security, and at the same time manage a wide variety of devices. Again, this is a server where we’re going to be using not only to develop some rich solutions. The first solution which will be developing on top of the mobile information server will be to exchange information, seamless access to Exchange information, but it’s also a platform that enterprises can use to wirelessly enable their own applications or they can be used inside of the carrier who seeks to host exchange into the development set of rich data services built upon Exchange or built upon the mobile information server itself. It’s kind of indicated we will have about another hour where tomorrow we will be talking more on detail about the mobile information server.
The third part of this diagram, we have all the devices we are working on at Microsoft. These span a wide array. On one had we have laptops people are using today. On the bottom we have the TV where people are getting into and accessing information. But I want to spend most of the time talking about our mobile devices. Devices that are optimized for wireless which are going to play such a key role going forward in accessing the information on the left side using the servers that we have in the center of this picture.
We have a huge effort in devices going on at Microsoft. We’ve made a significant number of changes in the way we approach these devices from the way we’ve approached them in the past. Fundamentally when we think about what are the devices that we need to create for people to enable them to access this sort of information, there are a couple of key tenets which we hold dear and which form the foundation for our work in this area.
On the first, there really is no ideal device. It’s funny. Every time I go and talk with a set of people or a set of customers or analysts about what sort of devices should we be building, everyone says, "Well, this is what you should build and it should have this feature and it should work this way." The funny thing is that every single person says something exactly different and they all say it with the same amount of vehemence. We are very, very passionate because these things are so personal. I think that the conclusion to be drawn from that is pretty clear. That there really is no one ideal device. People are going to want to use different devices based on what their needs are, what they want to accomplish. There will be geographical differences. There will probably be some cultural differences as well which inform on what sorts of devices people are going to want to use in the future.
Just as important, though, is I think user experience needs to be optimized for each device. I think Microsoft has learned the hard way at this point through some bad experience in the past that really you can’t take one user interface that is applicable on one device and put it on another device. For example, no one is really interested in having the Windows user interface taken and shrunk down and stuck on top of a PDA. Some suggested to me that maybe Bill Gates was, but even beyond that I think that it was probably a joke when that person said that. At least I hope it was a joke. Because what we understand now at Microsoft is that we really have to create an experience optimized for the PDA form factor and making the user experience tailored for that rather than just taking the Windows experience and putting that on the PDA. I think we have the same lesson ahead of us going forward as we seek to create smart phones. I think it’s a mistake to take a PDA user interface and try to squeeze that onto a phone. I think that we really need to have the user experience optimized for a phone.
Today, in order to use a phone you don’t have to use a stylus. I don’t think you should have to use a stylus to use a phone going forward either. People today can use a phone just by using the one hand. I think that if we do our work right, and we work us our user interfaces correctly we are able to make that same experience, not saying one had an experience to enable people to access a richer sort of information rather than forcing them to learn a new way just to use their phone going forward in the future.
Another thing I think we’ve learned is our internet standards are the key to acceptance. I think that we’re a very strong supporter in internet standards with XML, HTML and a lot of the efforts that we have not only in this area but throughout the company are going to be based on the support for internet standards and we intend to play a large role in the standards bodies in terms of support for these standards and helping to evolve them forward to meet the needs of the wireless world.
Again, corporate access to email is very important too. That’s one thing we hear from many, many people. In one sense this may be the killer application, at least for business users. Too often people have had to use other solutions of how to put together forwarding email to separate accounts, relying on a separate account. But if people can have seamless access to their own email from their own account, and do that in a pure way is certainly going to be an important step to take going forward.
Lastly, I think a point which comes somewhat out of the previous months, is that we have to focus on solutions and not technology. Really understand what people want people to accomplish with their devices, enabling them to do those things with the software that we create. Technology is never a goal in itself. It is only a means to an end. Every time we come up with a product or a solution we ask…the question we ask ourselves not is it a need or is it a tool, but what is it going to enable people to do? More often we ask the congress question. We ask what are people trying to do? Based on that we are coming up with the technology to enable them to do those things starting from user needs and plotting solutions rather than coming up with technology first in search of a need or search of a solution.
Based on these tenets we have come up with our product strategy for devices. In the wireless space, the wireless device space, we’re going to be focusing on three different form factors that are really designed to meet different needs that people might have. On the one hand, we see people who …I mean, it’s clear I think to everyone, that we’re going to be seeing integrated devices. You’re going to be seeing PDA’s getting voice capabilities. It’s already happening today and you’re going to be…we’ve obviously seen our phone, our voice devices getting data capabilities. So the question is how do you create different categories of devices and what should you focus on to meet customer needs? We’ve split things into three areas here.
First, wireless PDA. For people who are very, very data focused and need to have large screens and easier user input, and who also do voice but where voice is lower priority in the data and see wireless PDA’s continuing to be very important. These devices aren’t optimized for voice, but they certainly do a good job with their…they’re optimized for data.
On the other end of the spectrum we see future phones. The internet enables version of today’s phone. These phones are obviously designed for voice. They are small and they are designed for voice. We are seeing data capabilities emerge on these devices, certainly in Japan and Europe earlier than in the United States, although they finally made it to the United States this year. These devices really aren’t optimized for data. I think as much as we demo reading email on these devices, I think limiting the use of email in that way is going to be pretty limited. We can demo that, we can show that and use it in specific cases, but it’s not going to be a very, very wonderful, rich user experience reading email after email on a screen which is maybe four lines high with text.
Some people may say, "I want the best phone possible and I want the best PDA possible. And I’m going to use both of these devices. I’m going to have the best PDA for data and I’ll have the best phone for voice, the smallest phone possible." Maybe we’ll have them communicate with each other via blue tooth for example which is another standard which we are supporting pretty heavily and which we intent to support in all our products going forward and have two devices. And that’s fine for a certain set of people. We also consider it an opportunity for a set of people who think, "You know what? I want to have just one device that I want to carry in my pocket. And I want to see if I can have the best of both worlds." It is that thinking which has informed our single smart phone efforts where we seek to combine the best of the PDA with the best of the phone and create a device which truly brings the best of both worlds. I’ll certainly be spending a lot of time tomorrow demonstrating that device and showing that device to you, and I’m very, very eager to get your feedback on whether you think we’ve been able to do that, and bring together the best of both worlds or create just another in-between product, which there have been many, certainly, over the course of history.
So we are focusing on these three different device form factors. But across all these form factors there are a couple of common themes. Across all these devices, no matter what their form factor and what they’re optimized for, there are going to be things that are common across all of them. First, it is synchronization to Outlook information. So seamless access to people’s Outlook information, that’s inbox, calendar, contacts, etc. Not for some separate mailbox but access to individual’s own mailbox and have that information provided in a simple and secure way. We also seek to provide secure access to corporate information and web information at the same time from these devices. These devices also have to be easily personalizable, configured over the air in a very easy way, and also all of them will support rich media playback. So, again, whatever these devices are, whatever their form factors are, however they meet user needs, these are going to be some things that are common across all of these devices.
Finally, just the way we approach these things, the way we think about these things is devices exist as part of Microsoft’s overall end to end solution which encompasses content, servers, and devices. Our efforts in devices and our focus on these devices are on these devices being a part of this end to end solution that we are creating.
This is where we think that Microsoft can add unique value because we are providing products in all three of these areas in terms of the services and the content, the services that are offered in the operator network and the work that we’re doing in devices. By working together we think that we can create highly efficient, highly optimized end to end solutions for customers, not only secure, but we’re also providing rich user experiences for people across all these devices. This area we think Microsoft is unique. Many of us in the industry are working on one or more pieces of this. Working on devices, clients and servers. Or working on services and maybe some services to deliver those. But nobody else in the industry is working on all of these three pieces of the puzzle and we think that is certainly where we, as Microsoft, have the ability to add a lot of unique value. The one thing I want to be clear about too is that we have no intent of locking people into all Microsoft solutions. Each one of these pieces will interoperate with the other pieces through industry standards. I just looked some up here. The Wak standards, other standards from the W3C like ITEF we are working on as well. That means that in each one of these, a third of the screen you can put in non-Microsoft products. You can use, say, a Palm device, software server held in the pocket PC. You can use the pocket PC to talk to other servers. You can certainly use content that is not from Microsoft…not Microsoft content. That much should be pretty obvious. But we do think, however, that by providing things in all these three areas we can create optimized solutions and we can create products that work better. That different pieces from different manufacturers certainly will work together and will inter-operate as a result of our basing our work on industry standards. But we think that by having an all Microsoft solution, we can certainly provide a better end user experience and also a more manageable, more reliable solution for operators.
I mentioned earlier that we see the wireless space as very, very different from the PC space where Microsoft has been strong in the past in traditional space. One, we ended up we are doing many different things as a result. I think one of the, probably the biggest change in this area, other than the role of carriers, certainly which is certainly the biggest, is the extent to which we intend to rely on interesting partnerships to be successful in this area. I think in this space, in the wireless space, there are so many stakeholders, so many people who have to do great work in order for our common vision of delivering end solutions to customers to be real. But we all need to work together in order to make this happen. Certainly nobody can be successful alone. We intend and hope to partner very, very closely with carriers, with other companies in the industry with handset manufacturers, with system integrators in order to make this vision a reality.
We spent a lot of time working with carriers so far. A lot of our efforts over the last year, year and a half, have been focused on working with carriers. Not only in terms of our product being a great platform for them to build richer data services, but also because this work that we’re doing in this area is actually is going to be a new business model for Microsoft. More of a shared risk shared reward model. In the past it is traditionally in the software space, we take the software, finish it and say, "Okay, we sold it to you. You’re done. You want to use it with some consultants and tailor it to your enterprise? Okay, well, go ahead and do that, but we’re done. We just sold you the software." We intend to do things very, very differently in the wireless space, particularly with partnering with carriers. We intend to work closely with carriers in terms of understanding their needs and creating custom software for them and creating custom services with carriers and then figuring out how to do the business development and marketing needed for those services. Our revenue model here will not be based on a flat fee. It will be based on a subscriber acquisition license model. So basically if we’re all successful, if we can all create great products and great services that many users want to buy, we will all benefit financially. On the other hand if we’re not successful and don’t create successful products, then Microsoft won’t derive revenue either. Basically we all win together or we all use together.
I think this is definitely a statement of commitment of the belief that we have in our products and our solutions, that we are moving to a model of a shared risk, shared reward model.
There is a big difference, I think, for us in this space, in the wireless space, is the worldwide, the global nature of this business. We have actually product development teams scattered around the world, not only in the United States but here in Britain and Stockholm as well. We are opening, or in the process of opening, four mobility solution centers around the world, one in the United States, one in Europe which is here in Stockholm, one in Japan and one in Hong Kong to service the rest of Asia, where we have a staff which will be working closly with carriers to design and develop and comarket those solutions which I alluded to earlier. We have many deep relationships in place already with many carriers, many of you who are here in this room. I want to put some up here on the slide. If there is anyone who I missed I apologize. I apologize in advance. But we are speaking with many carriers and I think that I’m very glad to see the relationship that we’ve begun to develop because I think there’s certainly a feeling that we can work together and certainly help each other with a lot of the problems that we face and together create solutions which are going to benefit both of us as well as, obviously, benefit our customers.
In addition to working with carriers, we are also working with a number of partners in this industry with joint ventures. We have a venture with Qualcom called Wireless Knowledge where we did some initial work on enabling enterprise access to corporate information such as an exchange of information. Wireless Knowledge will be providing some of the technology which will be previewing in the mobile information server, Global Information Server 2001. Their existing product, Work Style Server, will have an upgrade path to mobile information server going forward. We’re doing a similar joint venture with (inaudible) in Japan called Mobi Magic, where again we’re focused on providing enterprise…access to enterprise data via mobile devices. We have been working very closely with Erickson as well in our joint venture called Erickson Microsoft Mobile Venture. We are working together across a number of areas in our end solution for providing software for infrastructure, mobile information service places a large role and of course on the hand sets, having Microsoft Explorer for on our hand sets going forward and creating an optimized…most highly optimized solution through devices, servers and services.
We are doing a lot of this work in the mobility space. As I mentioned, unique in the mobility space simply because of our work on client servers and services, but also in the device space as well. I talked about our focusing on three different areas in the device space, on the future phone, the smart phone and the PDA. That is pretty unique as well. There is no one else in the industry focusing on all three of these areas. I had the opportunity in the past to speak on a number of panels with a number of other people in this industry and I was on a panel about a month ago with the CEO of Palm and Vice President from phone.com. It was interesting for me to watch some of the interplay there because people were asking, "What’s the right device going to be?" And I would see them going back and forth. One would say, "No, it’s the PDA." "No, it’s the phone." "No, it’s the PDA." "No, it’s the phone." I sat back and thinking, "I don’t care which one wins." Microsoft is going to have software available for all three of these devices. We don’t believe that one is going to win or two are going to win, but perhaps all three are going to win. That’s what we intend to have software in all of these areas.
My work in the mobility area at Microsoft is, in fact, part of a larger vision at the company, what we’re calling our dot net vision at the company where we seek to improve not only the lives and the experience of people in the wireless globe and mobile space, but hope to improve the internet itself. Make the internet itself better.
Earlier I talked about the problems people had in the mainframe era and how we saw the personal computer as an empowering tool which would enable people to do thing they just couldn’t do in the mainframe era. When you look at the internet today, many of the problems that we saw in the mainframe era 20-25 years ago are still present today on the internet. We see information locked up in central servers that have to access via time slice, if you will. But worse than that is the fact that these servers don’t communicate with each other and can’t share information. The end user is the only point of contact between two different servers. When we talked about people being able to combine location based servers and the person’s calendar, how is that going to happen when two web sites today can’t even talk to each other? No automated processes can occur in the back end to enable people to combine these sorts of information and do computing on it in a generic way. That sort of thing just can’t happen today. If you think of the problems that end users face today with a browser a user is pretty much able to look at information that exists on a web server, but it is very, very difficult to edit that information or analyze this information or share that information with other people. If you think about a personalization, for example. Personalization is pretty rudimentary right now on the internet. You wind up having to enter your name and city and state and postal code on many, many different web sites and many of them don’t share that information at all. Then you have to hope that they’re not going to share it with somebody else if they go bankrupt. There is really a whole lot better we can do in that area.
Once you have been introduced to multiple devices, the problems just multiply because these services have no notion that people may have multiple devices. Which ones are on? Even if multiple ones are on, then how do people set the preferences on information that they want to receive? So all this information, all these different problems that exist today on the internet whether you’re mobile or you’re not mobile. What we can do with dot net is address many of these issues.
We begin with using XML as a (inaudible) to be used so that different servers can speak about different types of information and different types of objects in the same way and use XML to speak to each other and claiming that is the way that servers and services can begin to work together with each other. We also intend to create…and based on that we have created a number of servers, our enterprise servers, which can not only interoperate with each other but also serve as building blocks for additional rich data services we build on top of them. We now have a whole set of enterprise servers last week, our new enterprise servers from Microsoft…dot net enterprise servers. These communicate with each other and also serve as a foundation for other people to build rich services on top of these. In addition to these building blocks we also intend to supply a rich set of development tools which will enable people to create these building blocks, and also to integrate these building blocks together. That is what we call our Visual Studio dot net in the dot net compact framework which we will be talking about later in this session as well.
By doing all of these things our goal is to enable servers, services, devices to all work together to create better experiences for all end users, whether they’re developers or they’re using the enterprise or consumers in the consumer space. So that is our goal with dot net, to make the internet itself better for both wired users and wireless users.
I mentioned earlier that we are putting a lot of effort, a lot of resources behind our work in mobility on that Microsoft, more so than ever before. Depending on how you count, we have at least 800 people today already working in our new mobility group. We had a number of distant resources throughout the company working on mobility in a number of different ways. Several months ago we combined these into one group called the Mobility Group so that people can work together in a coherent, concerned manner to deliver on this end to end solution which I’ve talked about earlier. We have about 800 people and we’re making many investments in terms of acquisitions, but also in terms of the products that we’re doing ourselves. All these mobile products and services are existing in one group right now including the servers and services I’ve talked about, MSN Mobile for example. The servers, mobile information server that I alluded to earlier, and also our devices including mobile explorer, our smart phone software and pocket PC software. All working together in one group on that Microsoft right now.
We also have a worldwide presence for the four different mobility solution centers that I mentioned earlier in the U.S., Europe, Asia and Japan, and also in terms of international development resources in the United States, in Cambridge and Stockholm as well. We also have some development going on in Asia.
I mentioned earlier too that we have our mobility solution centers which were designed to help carriers, to work closely with carriers to develop optimal developed solutions which they can go and sell to their customers to build richer data services. What I wanted to do here in a chart was kind of show you the kinds of resources that we have available to the different network operators in each one of these areas. So you can see that we have these four different mobility solutions centers in Europe, America, Japan and Asia. We need to be working with the operator. We have people working with an operator on business development, on marketing, product development, and also on sales and support. We will have roughly three to seven people per operator working in each of these areas in our post partnerships with operators. that is certainly something different than we’ve done in the past.
For running this organization, we obviously wanted to have the right person doing that. We thought of who the right person was to run this organization. We looked for somebody who would have deep industry experience, and also a lot of experience working with different groups across multiple continents to create multiple solutions. I’d like to introduce that person to you today. I’d like to introduce our new Vice President of Sales and Marketing for Mobility, Juha Christensen, formerly Executive Vice President of (inaudible) of course as many of you know. So, Juha?
Juha Christensen: I’m not going to really say a lot here today. I’m only two days into the job here, so I’m still in the sort of dazed and confused stage where I’m learning all the aliases, all the new axioms that are specific to Microsoft. But I just wanted to come up here and welcome you. It’s nice to see that there’s a lot of familiar faces here among the, I’d say about 200 people here in the room. I look very much forward to continuing to work with a lot of you. A lot of you will know that I have been in (inaudible) a bit surprised about me actually moving on to this next opportunity. But what I believe that we’re going to see here…technologies throughout the wireless value chain because it will be a lot of technologies that will enable you both as carriers, as handset manufacturers and as service providers in the consumer services and enterprise services space. One thing that I have been able to start with here in the last couple of weeks actually to start looking at here for the next couple of weeks. My first step here is that I’m actually going around traveling and seeing a lot of you out both in the Far East, here in Europe and also in Americas. I have an excellent team that is already in place that I’m going to be building on to so we are going to be initiating a very, very substantial recruitment drive in order to fill out the organization throughout these four regions. The intention is that each of those functions very much as its own startup with a sort of CEO in place in each of those areas. Obviously this is very important because these regions have to be very autonomous in order to work closely with carriers, with enterprise system integrators with half the manufacture on creating nice end to end proposition. I will also be working on a continued branding effort in order to make sure that we position our brand portfolio correctly against your brand portfolio so we meet the total of the sum greater, together. One very important aspect, I think, of the work that I’ll be doing until about Christmas time, is to try and work more on how we leverage the impressive arsenal of dot net technologies and server products that were announced last week by Steve Ballmer, how we leverage those together with your assets in creating end to end solutions as well. So I won’t say a lot more here today. I will be back talking at conferences and panels in due course. For the next week I’ll be mainly doing a lot of listening and a lot of investigation and trying to find out how we can serve you best. Thank you very much.
Ben Waldman:Needless to say, we’re very, very excited to have had Juha join us at Microsoft and we’re very much looking forward to building a great organization and working with many of you very, very closely, even more closely in the future.
To just to summarize what I tried to discuss over the last hour. First I talked about how what we’re doing in this space is so core to what Microsoft is doing in the future. At the level, certainly the level of investments which we’re making in this technology. We consider what we’re doing here core to Microsoft’s future and we’re willing to invest in that to reflect that both in financial investment and people resources.
We think that we’re unique in the industry for providing an end to end solution, end to end encompassing services, servers and devices. Even in the device space itself, by a focus on a spectrum of offerings, future phones, smart phones and PDA. We think we are doing something unique in the industry in order for meeting people’s needs.
Finally, now here’s the most important point. The success will require cross industry partnerships. I think that by all of us working together we really can create many solutions that are far better than if we were working alone.
We are here to show you our technology over the next day or two, but just as important to listen to what your needs are, to hear your ideas for how we can work together more closely in the future. The reason that we’re doing this technology, the reason that we do this software is to enable you to deliver great solutions and to create great products. We see our work as enabling technology, as enabling products. In order for us to consider ourselves successful, we have to have had created the products which you need and which you want and to enable you to deliver on the visions which you have for your customers and the solutions which you want to deliver to them. So I encourage you to be frank in your feedback to us and let us know what you’d like us to do and how you think we can work together. I hope that we can build on these next three days and create a great foundation for working very closely with each other going forward. Thank you very much.
Kevin Dallas: Thank you, Ben. Thank you, Juha. So now we will take a 20 minute break. After that I will go into the product strategy for the mobile phones part of our end to end solution. Thank you.