Elite Newsletters

November 2005

This monthly e-letter is to keep Elite members up to date with Elite activities. If you have news that you would like to share, please email it to Mandy Bauer at: mbauer@hq.bcs.org.uk. Don't forget that Elite’s website contains additional news and more details of Elite and our activities.

Contents:

Hot News! – Bill Gates speaks to Elite members (full transcript below)
Next Elite Meeting: 1st December
News about Elite members
Elite in the Press
Happy Workplace? Best Places to Work in IT Awards – Closing Soon!
Recent Elite activities

• Elite Breakfast Meeting with Bill Gates 27th October.
• Elite visit 22nd September: to Royal Mail Innovation Centre in Rugby

Significant BCS developments -

• Major BCS/EU conference on IT Skills Management and Professionalism
• BCS Awards highlight best UK practice

Elite Affiliations

• Elite: founder member of the Strategic Suppliers Relationships Group (SSRG)

Charity Opportunities for Elite members

• IT4Communities: the infrastructure to help you volunteering your IT skills to charities
• BCS Ability Group
• IT Industry Charity Ball (4th October)
• Byte Night – 29 September 2006

Special Offers for Elite members
Upcoming external IT user-oriented events
What is Elite?
Your Elite Committee – List of Members

Hot News! – Bill Gates meets Elite

Microsoft founder Bill Gates spoke at a specially convened Elite breakfast meeting in London on 27 October. This exclusive event was achieved by the initiative and hard work from our events chairman David Ferguson, working with our Chairman Ben Booth. See transcript of meeting below.

Upcoming Elite Meetings

• 1st December 2005, 5.00pm onwards, BCS HQ, London
  "Delivering benefits to Mission Critical Operations”. Speakers are: Peter Clark, better Projects Director of the Office of Government Commerce, who will discuss the OGC Gateway Review framework; and Michael Stoller, General Manager of Asset Engineering and Frank Wood, Senior Programme Manager, of the National Air Traffic Service (NATS). For bookings see: www.elite.bcs.org/events/index.htm

News about Elite Members

In August Elite members Ian Hillan, Jean Morgan, and Martin Vickery were elected onto the Elite Committee. Since the election two new committee member have been co-opted. They are: David Favre for his expertise in press and public relations and marketing, and Chris Greig, who becomes Elite’s reprentative in the North of England and Scotland. In addition BCS Vice President Rachel Burnett will attend committee meetings as a direct link with the BCS Management Committee.

New committee member Martin Vickery, former Global CIO of Reuters, is to represent Elite on the managing committee of the Strategic Supplier Relationships Group, a consortium of eleven user facing organisations [for the SSRG see below].

Elite in the Press

November: Computer Weekly: Front page picture featuring Elite Chairman Ben Booth with Microsoft Chairman Bill Gates to mark Gates’ visit to Elite to outline his vision for the future. Elite members Douglas Ball, Jean Morgan, David Rippon, David Roberts, David Tidey, and Philip Virgo, and featured in a longer article on page 4 of that issue.

11 October: Computer Weekly: Elite Chairman Ben Booth commented on a report that the rate of growth in IT spending has fallen from over 7% in the second quarter of 2004 to 4.8% in the second quarter this year, “IT is not off doing its own thing,” he is quoted as saying. “If the economy is slowing down, one would expect IT spend to go with that.”

4 October: Computer Weekly: Bill Gates to breakfast with BCS Elite.

Recent Elite activities

1. Elite Breakfast Meeting with Bill Gates. 27 October, in London

To a packed meeting of 94 Elite members (with scores on the waiting list) Microsoft founder,chairman and chief architect Bill Gates outlined his vision of the future of Microsoft and what it might mean for its users. This included the capability, for example, of being able to digitally photograph an expense receipt with your mobile phone, optically recognise the characters and transmit the information directly into your company expenses account for payment [See full transcript at end of this newsletter].

Also at the event BCS chief executive officer David Clarke updated Elite members on current developments at the BCS following its major period of restructuring, emphasising the major IT professionalism initiative which got underway in May. The event was heavily over-subscribed as the venue could only accommodate 94 members..

2. Elite visit to Royal Mail Innovation centre. 22 September, at Rugby

“Embedding Innovation in the Business.” Speaker: David Burden, Group CIO, Royal Mail Group
IT staff are well positioned to kick start and drive innovation across an organisation. That was the view of Royal Mail’s Group CIO and board member David Burden welcoming Elite members to Rugby.

There are two elements to consider when organising for innovation in a business: corporate culture; and the right role for IT.

Instilling the will to innovate is a key factor in marrying the strengths of a very large company with the kind of innovation found in smaller organisations, he said.

“We must reward success, but we must reward failure too,” he said. “That is hard for all organisations.” “We need to give people the space, time financial support and freedom to act,” he added.

Technology has an important role in business innovation, he said. “Technology often enables innovation. IT people are connected across the business so they have the contacts and they know the real problems.”

“IT people are also prepared to take career risks and modest funds can usually be found within an IT department as no-one really understands IT budgets. Most long lasting value is created in skunk works.”

“IT people are also used to dealing with innovative suppliers. Unlike the case in most businesses, they work in an area of fast growing innovation that percolates into in-house IT. “

“Finally,” he said, “The company expects us to be weird therefore we can get away with a lot.”
As a result of all these attributes, IT people are therefore well placed to lead innovation generally in the business, being a source of ideas, a catalyst, and well placed to engage and get those ideas through quickly to the business.

* Following David Burden’s welcome, Elite members then had a chance to try out Royal Mail’s creative process, with the aid of facilitators and the stimulating environment of the Innovation Laboratory. The Laboratory, set up by Elite member Dr Alan Shepherd when he was Royal Mail’s Research Director, and who was on the October visit, is a physical building staffed with facilitators designed to stimulate and encourage ideas in a structured but free flow environment.

Best Places to Work in IT Awards

Do good practices in your IT department make for a happy workforce? If so, consider entering the “Computer Weekly best Places to Work in IT Awards” .Entries close on Friday, 11th November. Most IT departments, when they take stock, actually do more than they initially think to make theirs a good place to work. Elite members are therefore urged to take a quick look at the Awards Entry Form and Guidelines (download these links) and use them as a checklist. Many of us will be doing more than we think - in which case do not hesitate to fill in your entry.

These awards, which are in their third year, are a good way of having your IT department recognised and rewarded. Previous winners have found that being shortlisted for, or winning, an award has not only helped to further boost staff motivation, but it has also raised the IT department's internal and external profile.

The panel of judges includes Elite Committee members Ben Booth, Roger Ellis and John Riley. The Government CIO, Ian Watmore, will be keynote speaker at the Awards ceremony early next year. For more information contact Sharon.Hart@rbi.co.uk, call 020 8652 8036 or visit www.ComputerWeekly.com/Bestplacestowork

Significant BCS Developments

1. BCS/E-Government Unit Conference: IT Skills Management and Professionalism in Public Administration. 27 October, Lancaster House, London

This keynote conference, organised by the BCS and the Cabinet Office’s EGU as part of the UK’s Presidency of the European Union, highlighted moves towards better professionalism within government. Newly inaugurated BCS President Charles Hughes stressed the need for professionalism in IT to improve success and overcome its poor public perception. His message was that profesisonalism is an aspirational standard, rather than a set of minimum requirements. The essential elements, he said, are competence, integrity and desire to contribute to the public good. The BCS is working closely with government, and especially the Government CIO, Ian Watmore to lay the foundations for more robust professsionalism in government IT. The BCS has also set up a Steering Board chaired by past BCS President John Leighfield to co-ordinate IT professionalism activities, and is collaborating with the Chartered Management Institute to get the message heard at board level.

At the conference Government CIO Ian Watmore said that he supports making the SFIA (Skills Framework for the Information Age) common framework of IT skills definitions a de factor standard. The BCS, along with other groups, will shortly launch a new, broader version of the SFIA set of job descriptions and skill levels for all UK IT professionals in both user and supply organisations.

2. BCS IT Professional Awards 2005 Results

The BCS Awards are the most rigorously conducted awards and the most prestigious in the UK. A selection from the many prizewinners this year includes:

Ailsa Beaton (Metropolitan Police) - IT Director of the Year (over 250 employees)
Lee Hendricks (Anite Public Sector Ltd) - IT Director of the Year (over 250 employees)
Beverley Dunn (Post Office Ltd) - Project Manager of the Year
Phil Swallow (The Royal Bank of Scotland Group) - Business Analyst of the Year
Tony Palmer (Yell Ltd) - IT Service Manager of the Year

Business Awards 2005 Winners

Hillarys Blinds Ltd – Sales Advisor Mobilisation
Post Office – Chip & Pin network banking
Rail Settlement Plan – National Reservatons Service
Mothersbliss.com – Business Process Automation

Women in IT Award

Sopra Newell and Budge

For the complete list of winners and medallists see:
www.bcs.org/BCS/Awards/Awards/Professional/2005winners/

Elite Affililations

Elite is founder member of the Strategic Suppliers Relationships Group
(SSRG), a new consortium of ten IT user groups launched at the end of April 2005. The SSRG aims to build better customer/supplier relationships, particularly for those users in a multi-vendor environment, to provide a common interface on generic issues to short-circuit potential problems and help IT suppliers recognise early the evolving needs of users.

It has taken four years of discussion between many user groups to reach this landmark launch which reflects the need for a meaningful collective dialogue with suppliers.

Software licensing, international purchasing and IT service contracts will be among the first issues tackled by the SSRG.

Leading IT companies, including Microsoft, IBM, Oracle, Sun and the IT vendor organisation Intellect, have all given their support at the highest level to the SSRG. Founder members of the SSRG are: The Corporate IT Forum (Tif); IBM Computer Users Association; UK Oracle User Group; BCS Elite Group; Institute for the Management of Information Systems; The Society for IT Management (Socitm); Charities Consortium IT Directors’ Group; Charity IT Resources Alliance; Chartered Institute of Arbitrators; Computer Weekly 500 Club.

Charity Opportunities for Elite Members

IT4Communities

If you or members of your team wish to volunteer professional IT help to deserving charities or your local community in your spare time, then IT4Communities will help you do this effectively and efficiently. Since its launch in 2002 this initiative has provided the infrastructure to bring together over 3,000 IT professional volunteers and over 600 charities and communities seeking IT help. Cumulatively to date, IT4C volunteers have donated over £500,000 of their time to charities.

IT4Communities is backed by the British Computer Society, the Worshipful Company of Information Technologists, Business in the Community, Citizens Online, suppliers’ organisation Intellect, and Computer Weekly. It provides the infrastructural backbone to maximise the effectiveness of all those considering volunteering.

In addition to individual volunteers, IT4Communities is also actively seeking corporate involvement from organisations which may wish to benefit from the team bonding opportunities such charitable volunteering offers their IT workforce. More on: www.IT4Communities.org.uk

BCS Ability Group

Access to IT for disabled people has moved up the management agenda with the introduction of tighter legislation requiring organisations of all sizes to ensure websites and in-house systems can be used by everyone. The latest issue of Ability Magazine, founded by the BCS and distributed via AbilityNet contains valuable insights into what help disabled people need to access systems and how it can be provided at an affordable price. Sponsored by Microsoft, Accenture, Ulif and Ford Motor Company, Ability provides a quarterly update on the technology, services and legal trends in this increasingly important area. Richard Thwaite, IT Director of Ford, is prominent among the many who personally support the magazine. Elite members may receive a complimentary e-book edition of the Magazine, which is also available on subscription. Download Ability as a pdf file on: www.abilitymagazine.org.uk

Summer 2006: IT Industry Charity Ball

Next year’s high spot of the IT social calendar, the Intellect ICT Charity Ball to take place next summer, aims to raise £100,000 for a deserving cause. Rescheduled to early October due to the 7 July London bombing outrage this year’s ICT Ball made an excellent recovery to raise over £50,000 in aid of the Starlight Children’s Foundation for seriously ill children Elite members are particularly welcome – Elite committee members are among those involved: Roger Ellis is chairman of the Ball’s organising committee and John Riley is one of its members. More on: www.ictball.org

Friday 29 September: Byte Night 2006

Elite members can sleep rough overnight near Tower bridge to help the NCH charity keep homeless youngsters off the streets. Sleepers at the event, which this year raised £200,000, will include IT Directors and many senior board members from the largest IT organisations.Sleepers are expected to raise sponsorship of at least £2000. More on: www.bytenight.org.uk

Special Offers for Elite members

1. “Maximising Value Creation from IT” Roadshows

Elite members are invited to regional roadshows organised by the IT Faculty of the Institute of Chartered Accountants in England and Wales to be held as follows:

London (Tuesday 8 November 2.00 – 5.30
Edinburgh (Wednesday 9 November 2.00 – 5.30.

Elite Committee member Chris Tiernan is one of the speakers, along with Paul Williams, Past President of the IT Governance Institute.

For further details see: www.icaew.co.uk/viewer/index.cfm?AUB=TB2I_82126

External IT User Oriented Events in October/November

November

1-2 London
Tackling Organised Crime in Partnership
www.tocpartnership.org/orgcrime2005/website.asp

2 London
Preserving Your Digital Assets
University of London Computer Centre
www.ulcc.ac.uk

3 Wolverhampton
IT Showcase – West Midlands
www.itshowcase.co.uk

3-6 onboard Aurora
City-IT Conference
Finance Directors Forum
Ship-borne conference for IT Directors
www.cityit.co.uk

7-8 Amsterdam
Knowledge, Content & Collaboration Europe 2005
International Conference and expo
www.kcceurope.com

7-9 Brighton
itSMF Annual Conference
Conference for users and suppliers in the managed IT services sector
www.itsmf.com

7-10 London
Data Management and Information Quality Conferences
Four day conference
www.irmuk.co.uk/dm2005

7-11 Cannes
Gartner Symposium ITExpo 2005
Gartner group’s major Annual European Conference
www.gartner.com/2_events/symposium/2005/

9 Birmingham
Procurement & Supply of Safety Related Systems
IEE Seminar
www.iee.org/events/procurement.cfm

9-10 London
Construction Computing 2005
www.constructioncomputing.co.uk

9-10 London
Virtual Communities
International Forum on Virtual Communities
www.infonortics.com/vc/index.html

10 London
Software Procurement Experiences
The Software Reliability & Metrics Club
Email: csr@newcastle.ac.uk

11-12 London
The Outsourcing Project Lifecycle
Society for Computers & Law Annual Conference
www.scl.org

13-17 Las Vegas USA
CA World 2005
www.ca.com/caworld/

15 London
Real Time Club Meeting
www.realtimeclub.org

15 London
Making Collaboration Pay
NCCTP Conference
www.ncctp.net/news_060505.htm

16 London
Information Security Management Conference
www.nccmembership.co.uk

17 London
Websites in the Public Sector
www.kablenet.com/events

17-18 London
Outsourcing Summit
National Outsourcing Association Event
www.marketforce.eu.com/noa

18-19 London
Leaders in London
Business leadership conference
www.leadersinlondon.com

21 London
CMA Focus Day on Cost Saving Strategies
www.thecma.com

23-24 London
Business Process Management & Integration
Butler Group Symposium
www.butlergroup.com/events/bpm/

24 London
IT Security in the Public Sector 2005
www.kablenet.com/events

24 London
“The Art of Incident Response”
ISACA evening event
www.isaca-london.org/events.htm

24-25 Manchester
E-Government Conference
Major UK EU Presidency Event
www.eu2005.gov.uk

28 London
BusinessWeek CIO Roundtable Discussion
www.bwevents.com/forthcomingevents.htm

28-29 London
CBI Interactive Conference 2005
Two day CBI 40th Anniversary Conference
www.cbi.org.uk

28-29 London
European Leadership Forum
BusinessWeek Event
www.bwevents.com/elf

29 Manchester
IT Governance Conference
www.nccmembership.co.uk

29-30 Edinburgh
8th Annual Government Computing Scotland Conference
www.kablenet.com/events

29 Nov- 1 Dec London
Content Management Europe 2005
www.online-information.co.uk

29-30 Amsterdam
Gartner Data Center Summit
www.europe.gartner.com/datacenter

29-30 London
5th Government Exchange
Public Sector IT Conference
www.iqpc.co.uk/

30 Nov – 1 Dec
NextGenServices and Networks conference
www.nextgenservices.co.uk

What is the Elite group?

Elite, an acronym for “Effective Leadership in IT” is a user-oriented British Computer Society group for IT directors and senior IT professionals as individuals. It runs regular user-oriented management focused meetings and provides a forum for members to exchange experience on how IT can be managed to achieve business objectives. Membership is free, with members paying for each event they attend. There are currently over 1400 members.

Your Elite Committee

Officers

Chair - Ben Booth
Vice Chair - David Rippon
Treasurer - Roger Ellis
Secretary - David Tidey
Membership Secretary - Bryan Mills
Meetings Secretary - David Ferguson

Full Committee

Ben Booth, CIO, MORI
John Elsden, Chairman, Allied Powers
Roger Ellis, Managing Director, Black Raven Limited
David Ferguson, Director, Fort Ferguson Associates
Bob Harvey, Director of IS, Barnardo’s
Ian Hillan, Managing Director, Extend Ltd
Howell Huws, Director of IT, Hammersmith Hospital NHS Trust
Andrew Meyer, Programme Manager, O2
Bryan Mills, Chairman, Servicetec International Group Ltd
Jean Morgan, Senior Change Governance Manager, Barclays Bank plc
John Riley, Managing Editor, Computer Weekly
David Rippon, Director of University of London Computer Centre
David Roberts, Chief Executive, The Corporate IT Forum (TIF)
David Tidey, IT Director, The Royal Borough of Chelsea & Kensington
Chris Tiernan, Managing Director, Grosvenor Consultancy Services
Martin Vickery, Director, Marvick Management Ltd

Transcript of Bill Gates Speech to Elite

Microsoft Corporation
BCS Elites Meeting
27 October 2005
The New World of Work

Bill Gates
Chairman and Chief Software Architect, Microsoft Corporation

Preamble
I am excited to have a chance to share with you some of the new developments in technology, and the opportunities they create to do business in a better way. The world of IT is moving faster today than ever before. The difference between doing it properly and not is probably more dramatic than it has ever been in the past.

It is great to be here under the auspices of the British Computer Society (BCS). You may know that I am an honorary member, and very proud of that. Microsoft is very pleased to be working with BCS on their new initiatives, including their focus on professionalism in the IT business. That should be a very important set of steps.

Software Industry Milestones
1975

The PC came along 30 years ago now. In fact, this year, Microsoft is celebrating its 30th anniversary. Thirty years seems like a long time; after all, many of the people entering the profession are under 30 years old. To them, the idea that there was ever a time without a personal computer seems very strange indeed. The machine we have today is very different from the one that made me drop out of school, and made Paul Allen and I start the company. That machine, back in 1975, had 4 Kb of memory. One of the feats that made us successful is that we were able to create a BASIC interpreter that not only ran in 4 Kb, but left you room for your program and your data, all in a very inexpensive machine. That was a kid computer. By today’s standards, it could hardly do anything at all, but that was what got it all going.

Today, it is not uncommon to have a personal computer that has 4 gigabytes of memory, which is a million times as much memory. There is very little in the world that changes by a factor of one million – not car mileage, or food prices. In fact, it is hard to find anything that even changes by a factor of 10. That partly explains why IT has been so revolutionary in reshaping virtually all the activities in which people engage – the way you create, communicate, collaborate, even the way you think about matching buyers and sellers, or organising and partnering companies and thinking about whether or not they can perform activities in different locations.

1985

Every decade or so, we have had an interesting milestone, where we have a new platform on which to build. The original PC was not much used in business, then, in 1981, the IBM PC was shipped. By 1985, that was clearly a standard. MS­DOS had a big breadth of applications. The virtuous cycle that Microsoft had hoped would come together was actually there in full force: with more PCs sold, the volume meant the price could be brought down and more applications could be created. The relevance and the lower price drove the market to a new level. We were very anxious to create a broad software industry that had not existed before the PC came along. Therefore, the variety and the richness of the applications grew and grew in a very big way, and so PC volumes increased dramatically every single year.

1995

Graphics interface

Then we became involved in the whole issue around graphics interface. Many of you lived through that. It was controversial that graphics seemed a bit slower; some of the applications that used it were overdoing it and using too many fonts; and a lot of people were criticising it as perhaps an unnecessary way of doing computing. The development tools that were there initially made it very difficult to write graphical applications. By 1995, when we shipped Windows 95 and Office 95, the power of the hardware, the quality of the development tools, some standards around how you use the graphics interface – in particular, the way we approached menus and window management – had created enough consistency that it became mainstream. From that point forward, people decided to build their applications around graphics interface. A very rich set of applications grew up after 1995.

The internet

Already, in 1995, the seeds of the next controversy, and area of confusion, had been sown. That was the idea of connecting machines together. Over the years, there had been many different protocols, including ISO, Novell and Xerox protocols. There were many different ways of dealing with the lower levels of the communication stack. The mainframe standard, Systems Network Architecture (SNA), was the most pervasive way of allowing machines to exchange bits with each other. Coming out of the academic environment, we had the standards of the internet. Starting in 1995, those came into the commercial world more and more; the price of routers came down; and the speed of optic fibre kept increasing. Eventually, and only recently, we gained a stack of software that made it very clear how to use the internet as a platform, not just by connecting a browser to a website, although that is a very good thing, but something even more profound, which is the ability to have any piece of software, running on any computer, connect up, find and exchange information in a secure, reliable way, with another piece of software, even if they are running in a different operating environment or written in a different language. It is well understood how this ability to exchange information – not just at the low level of the bits, but at a very high level, where you have schema, type and authorisation data – should be done.

2005

The XML protocol

It has taken a full decade to make that happen – to lower the connectivity cost, raise the pervasiveness and to have a data format that could work for this. Extensible Markup Language (XML), which has emerged as the data­format standard, started in the late 1990s when Microsoft, and a few other companies, took a document format, called Service Provisioning Markup Language (SPML), and proposed a rather small generalisation of that for all kinds of data, not just documents. XML was born. The early momentum was fairly limited, but, year by year, standards grew up around it. People saw a real need not just to have uniform tables and documents, but to have lots of rich data, with more of a tree or graph nature that needed to be extensible and describable in a very flexible way. In some ways, it went back to the early history of databases, with the Conference on Data Systems Languages (CODASYL) and CODASYL descriptions. Here, there was more of an abstraction between the type definitions and the access method. It was CODASYL revisited in a much richer and better way.

SQL Server

Today, we can say that XML is broadly accepted. For Microsoft, we have gone through three generations of our products. By 2000, all Microsoft products had an XML conversion capability at the top of the product. The Office, SQL and browser products had done a nice job of supporting those standards. Two or three years ago, we had released versions that had taken XML in a deeper way, offering new capabilities and the ability to declare data in that form. Only now do we have XML literally build into the core of the product. The database – the SQL update, SQL 2005, which comes out in December – literally has XML queries as the standard query method. When we take XML in, we do not put it into another format, it stays as XML inside the database. The level of efficiency we get from that, and the fact that we do not lose any of the rich semantics or flexibility, means that XML has achieved a new level.

MS Office

Likewise, the next major version of Microsoft Office, called Office 12, which will ship in about a year from now, uses XML as the data format for all the Office modules. Word, Excel and PowerPoint simply use XML files. This is a more dramatic advance than might be evident at first, because it means that, when you want to move data in and out of a spreadsheet, for example, or a Word document, instead of having to think about the user interface of the application, instead you only think about XML schema and XML named ranges. Therefore, you can read and write XML data without caring at all about the specific features of that productivity application. Up to now, if you wanted to move data in and out of Office, you essentially had to understand the way that the user interface navigated the structure. That could become fairly version dependent, and fairly complex, as you had to learn new things. Here, in your program, it is just, ‘Write this XML variable; read this XML variable’. The idea of Office as a platform, fitting into a workflow, where you have your code dealing with the XML that you then want passed off to create an email or fill out a form­type definition, becomes extremely straightforward.

Service­orientated architecture

Thus, we have a very strong platform now. It is not just XML, but a set of protocols that embed XML – the web­service protocols; WS-STAR (WS-*) is basically agreed to – and run on the different platforms. This foundation lets us think about software design and components in a new way. The buzzword for this, of course, is service­orientated architecture. For all the talk about it over the years, now it is a reality. If you create a module that does something very important for you, instead of re­implementing that on different machines, you simply use web-service protocols and call that. Likewise, if you want people outside your firm to be able to call it, the ability to secure – verify who they are and that they are calling you in the right way – is all built into that rich foundation. It is no longer the case that you have to write the code yourself. Now we have rich runtimes, certainly in the Windows environment, which mean that you write a lot less code.

Transforming the Landscape
Software

In the home

Software is both driving and responding to these changes. If you think about activities at home, that is where music and photos are now being handled digitally. The whole idea of organising memories, managing calendars, making purchases, even, over the next few years, the way you will think about TV shows – which are out there on the internet and can be found and watched when you want – can be personalised, in many cases, in terms of the information in which you are interested. Software is having a dramatic effect there. Year by year, the adoption goes up very substantially. The price of broadband is coming down; younger people are taking things like instant messaging for granted; and telephony is moving to be run almost entirely over the internet over the next few years. All of these things build up to what we call a ‘digital lifestyle approach’ that, more and more, is embracing software as a means to reach out and deal with information.

In business

Likewise, in business, we have the idea of an increase in global commerce and the speed of product design. We have the idea of designing products in the digital realm. When we think about the economy, and some sectors like manufacturing, we might think that software does not affect them much. In fact, future cars are designed purely in a digital way. You can test the efficiency, mileage or any other issues in a simulated environment before ever doing any physical work at all. That digital design can be shared with suppliers, refined and costed out, all in far more effective a way that would have been possible before. Software modelling, simulations, efficiency and matching of buyers and sellers all have a really dramatic effect. It is a tool of the new economy and it is a driver of the new economy.

Key Developments

64­bit

I mentioned the pace of innovation that has given us one million times as much memory, but it is not just the memory: the size of disks and the bandwidth of the network are up by a factor of over one million. This is not slowing down. Only this year, we made the transition to 64­bit computing. It is the simplest address­based transition we have ever made, because we can run all the 32­bit applications, the chips for both 32­bit and 64­bit cost the same, and so, as you are buying new PCs and servers those are just coming into your environment. At the server level, a high percentage of those will want to go ahead and take advantage of that extra memory capacity for performance and to reduce the number of servers. Even on the desktop, you will start to see that 64­bit benefit coming in for demanding applications. We are getting more processors in the servers and more efficient software. We have now passed the point at which Windows Intel architecture is not only the best­priced performance, but the best absolute performance, in every dimension – whether database, supercomputing or running SAP. All performance – absolute performance – is better on the standard platform than it is on the lower­volume platform systems. The transition, over time, moving from more expensive hardware on to this platform, is happening year by year. These things never fully shift out the installed base, but, even in the case of mainframes, you see, year by year, fewer mainframes and the use of more low-cost hardware as those applications are changed.

Wireless

It is more than just a quantitative change, because the access to software and the internet is far more pervasive. Many of you, I am sure, are putting Wi­Fi networks into your workplace, so that everybody is connected up, even if they take their portable computer into a meeting. That is an investment we think worthwhile. Wi­Fi will be more and more pervasive, with a higher and higher bandwidth, and will even be able to handle video now.

Tablet

Portable machines are becoming lighter and smaller. We see a transition, over the next several years, to having a form factor called the Tablet that lets you use the pen where you can ink and take notes, using it without the keyboard in meeting­type environments, whilst also having the keyboard available. Thinking about that in the education environment, that means that students, in the future, will not have to buy textbooks. Instead, they will have the Tablet connected to the internet. The teacher can customise the material, access the latest information and videos and make it far more interactive.

Phone

The device in the pocket, the phone, is also becoming a software­driven device. That is not just about phone calls, but browsing, schedules, email and notification. Microsoft is involved in this because the software intensity of the phone means that even the advanced work we do will be relevant there. In a few years, with your phone, once you have finished a business lunch, you will simply use the camera and photograph the receipt. It will recognise that visually, see your numbers, see your schedule and automatically propose to file that into your expense-report system. It is a very simple thing. If you are overseas and there is a sign in a foreign language, simply take a picture of it; your camera will send it up to a server, translate it and tell you what that sign says. If you are in a shop, thinking of buying something, take a photo of the bar code; we will come back, tell you what the reviews of that product are and what price you should be able to get. It is a natural extension – a way of gathering information. If you want information, you will be able to talk to your phone. We will use speech recognition to obtain that information.

Digital approaches

A natural interface, whether the inking on the Tablet, or speech or vision with a phone device, is something in which Microsoft has been investing billions over the last decade. Now, with the power of the machines and those software advances, that will become a standard part of the Windows platform. Applications will take advantage of that. We have an accelerated move towards these digital approaches: a digital work style, achieving the most from your workers; a digital lifestyle, using this at home; and the digitisation of the entire economy.

Workplace Trends
Competition

The workplace, like everything, is also more competitive. There is a need to be in touch with information wherever you go: being able to browse information when you visit the customer and work with them; the ability to work with partners in a richer way; to know what customers are thinking; the ability to provide jobs that are interesting and remove some of the elements of drudgery using technology to help. By using software in the right way, if you can make your workforce 10% more effective, that will have dramatic results. There is quite a difference in how people are using software in the right way.

Information Levels

Email

Some people talk about information overload; others talk about information underload. I think we experience both. We love email; we hate email; email is, overwhelmingly, a positive thing, yet it is being used in a way that does not let you control what comes into your inbox – whether that is spam, knowing what your context is, and having some high threshold for whether you should be interrupted by new mail. Software needs to step up to this and understand your relationship to the various people you receive email from, being able to authenticate that it is really from them. Based on what you are doing, it can decide when that email should grab your attention. This includes, in the extreme case of spam, never grabbing your attention at all.

Business projects

We cannot really say we have all the information we need. If we think about sales analysis, this still, too much, has figures printed on a piece of paper. If you look at a number and are surprised, you cannot just point at it and see it expanded by time and product, gaining insight into it. It should be on a screen on a portable or Tablet device. Budgeting processes inside companies are very painful. Jack Welch, in his business book, Winning, talks about what a debilitating process most budgeting activities are and how, really, they should be very different. Software approaches can help a lot. Getting people together to see what is going on in a project, having a shared view of a goal like tracking daily what is happening with quality – it is still too complicated to set up those scorecards and shared sites. That is something that we are very anxious to change.

Information Access

Microsoft Office has revolutionised the idea of what you do individually. PowerPoint and Excel are the standards. We take that for granted. We can enclose those documents, and people know how to use and navigate them. We want to take that to a new level where things that have been very fragmented, as office software was before Office arrived, are unified. The areas that have been split – including document management, content management, workflow, rights management and business intelligence – will all be built into an integrated environment called Office SharePoint. Everyone, in the same way they know Office, will know how to do workflow, restricted rights, how to archive and retrieve things. It is a very high­volume, low­priced approach to taking the fragmentation of a number of categories, which have been lower volume and higher price, and making them available to every worker.

Business Impact

If this is pulled together in the right way, we can take the gap that has existed between the enterprise applications, like SAP and others, and the structure they have, with the less­structured world of Office, and bridge that gap. This SharePoint level gives you a way of pulling data out of the Enterprise Resource Planning (ERP) application and then doing this workflow, rich visualisation. People do not have to learn the individual screens in these applications. You will have many sources of data outside these applications, which can then be incorporated in because the visualisation is taking place through something with which the user is familiar, in particular, Excel or the other Office tools.

Microsoft Platform Investments

We are doing a lot of work on the platform to make a big change from being device centric to being user centric. Today, if you have multiple PCs, you are in charge of updating them each individually and moving files around between them. If you have a phone, although there are ways of synchronising the data, you are still involved in having to do that. When you save a file on your PC, it does not automatically show up everywhere else you would like it. We have to take and change that to make it user centric. If you add a favourite on one machine, it should show up on the others. If you indicate you are interested in certain stocks, you should have that on your phone as well as on your PC. Taking the platform, and thinking about it across all these different devices, in a user­centric way, is something that will be very helpful.

Digital Work Style

For part of this, we will run some of the software in the internet. It will have some of the web services we offer. You have seen us doing this a bit; for example, whenever there is a problem with Windows, we ask for a report, and learn from that. We are doing that now more and more. A service we create can constantly improve and add to the Windows experience. Once we gather these pieces together, work is different.

Digital work style is an environment where, instead of having many phone numbers, people will contact you through one address – probably your email address – and then software knows whether or not to interrupt you, and, if so, what device you are on. The idea of seeing the presence of your workers – you can control who sees it because the system will understand your relationship to other people. The idea of easily creating a website that you use for collaboration as just one click. Today, the way in which that is done is that you often use email, and put in a lot of enclosures. You might have 50 or 100 emails back and forth. In a case like that, it is far better to create a SharePoint site, and have people following the link. Then people who want to follow every little change can do that; people who want to check in once a week can do that. Those templates let you structure the information, whether it is a project, new introduction or quality-tracking process – whatever it is – you could have templates that facilitate that, so it is not just email, but something far richer than that. Once people have these tools, they will take them for granted in usage. Once it comes together, people’s expectations about information empowerment will be much higher. You will have a lot less software pieces, because, just like Office on the desktop reduced the number of moving pieces there, SharePoint sharing does that on the server. People should have a much higher expectation about what they can obtain from software.

Looking Ahead
Research and Development

Microsoft is spending at record levels. The industry, as a whole – although, in 2001 and 2002, a lot of the start­ups were asked to look harder at their business model, and some of the valuations changed – did not slow down in terms of its fundamental investments. Intel’s investments in chips, customers’ investments in internet infrastructure, and all of those things proceeded at pace despite the impact of that post­bubble period. In our case, R&D has increased; it is now the highest R&D of any company in the world. I do not know if that is something to feel good about and think maybe we could do more with less. In fact, we are spending close to $7 billion a year driving development, because of the opportunity we see.

Security

One issue I will touch on briefly, that receives more R&D than anything, is the area of security. Many of the things that I have talked about here assume that your network is extremely reliable, you are able to control where information is available and that people are not able to take malicious software and get that to come in and compromise your information. We have made a lot of advances on that over these last two years, with clear prescriptions and various ways of auditing things. There is still more to be done so that, even in developing your own applications, you have tools that can test that these things have been done in the right way. This will stay our top priority for many years to come, until it is essentially automatic, not only for your infrastructure and the IT activities, but also for the applications that you build.

I hope you have a sense of my optimism about what software can do. It will be exciting to see how all of us can take advantage of this and benefit all the different business organisations. Thank you.

Questions and Answers

Participant

A lot of small users of technology today are incredibly confused by it. They find that there are too many opportunities, and that all the bits do not hang together. We all sense that frustration, with our BlackBerries, Voice over Internet Protocol (VoIP) telephony and great software from you guys. How do you see it all coming together so that it makes life easier, particularly for those in smaller businesses who do not have IT support organisations to turn to?

Bill Gates

A gaining factor for adoption of technology is that people really see a business benefit, and understand that they have enough technical understanding and skill to install the system, get it running and feel like it will be effective for them. The industry needs to be a lot better at this; it is something that would provide dramatically more benefit the better that we can do that. One of the trends for small businesses would be, where you would have had to buy a server in the past, and install that yourself, can now be done on a hosted basis. You would simply buy the clients, then connect over the internet.

With packaging, we have a product called Small Business Server (SBS), which is done incredibly well. Instead of the smaller business having to think like an enterprise and buy all the pieces, they just buy this one package. It has a much simpler installation process, because they do not care so much about the different options that an enterprise environment would require you to surface to the user. Between better packaging, and showing best practices – where you can show small businesses how to get sales force productivity, or that they are able to have their accountants dial in and check their figures, understanding their profitability better – by examples and by simplification, I feel very good about the small-business market. That is a market in which we have redoubled our investment, and our willingness to tailor products to their particular need.

Participant

One of the areas in which we are going to see huge growth is mobile computing. It is getting bigger all the time. One area that obviously seems to have gone ahead is the BlackBerry. It seems to have done very well. I understand you are releasing or have released software that will have a Microsoft bent on that to rival the BlackBerry. That seems to be one area in which they have done very well, making it fairly seamless. Is that something you are emphasising to bring that into the Microsoft family?

Bill Gates

If you take the world at large today, there are about 180 million corporate email boxes under Exchange. Of those, today, those that are on a mobile device, either BlackBerry or anything else, with immediate access to your corporate email, is only 2­3 million. That is partly because, although BlackBerry did a good job, they did it in a way that is both complex and expensive. That is, they ask you to install a separate BlackBerry server in your enterprise. It has a different way of being administered and is actually quite expensive. With the latest version of Exchange, what we have done is said, ‘This is just built into Exchange’. There are no extra servers. We have taken the protocol in Exchange, which is called AirSync, and made that a standard, so Nokia and other people have licensed that. There is a whole generation of phones that include our Windows Mobile software that carriers are releasing. You can connect with that Exchange server, and so the way in which you set up your Exchange security and directory applies. We expect, over the next three years, to have literally tens of millions of corporate email accounts connected to the mobile phone. We are making it no extra cost when you want to do that, and we are making it administratively straightforward.

We have only had the release of Exchange that ensured your mail showed up immediately, the so­called Push feature – something BlackBerry had that we did not have – in the last month or two. It was the SP2 of Exchange 2003. We are only really just now in the market. Some of the handsets, which are practically packaged, will come out early next year. For example, Palm announced a Treo handset that uses Windows Mobile and connects to this, which they will be shipping in January next year.

Participant

Does that affect the home user?

Bill Gates

There are two different things. One is connecting to your corporate email; then there is connecting to another email capability. We have always done a very good job of connecting to Hotmail, which is Microsoft’s branded, free email. Connecting your phone to your Hotmail account is very straightforward. You do not want, as a company, to tell people to do that, as you are basically forcing them to forward all their business information into their Hotmail account. There are two ways to go. One is to tell them to use their corporate account for everything, and to manage the security yourself; the other is to say, ‘Use your personal account for personal, and your corporate account for corporate’. We now, both in Outlook and in our phone software, Mobile Outlook, do a very good job of allowing you to connect to multiple mailboxes at the same time. That is a key scenario for us.

Participant

With the speed of change ahead, the user friendliness of that change, the change for our users to a new version, is often a moment of truth, either for IT professionals or common users. To what extent do you see that the support for this change will rely on the user friendliness of the software systems, per se, or an increased focus on customer support, especially during these moments of change for the user, when they change to new versions and systems?

Bill Gates

The new versions that we have coming out at the end of next year, the new Windows and Office, will have a very rapid upgrade rate for a couple of reasons. One is that a fairly high percentage of our customers have installed the ability to update software just over the network, most of them using our Systems Management Server (SMS) product to do that. The marginal cost of updating – at least the bits – has now become, essentially, nothing. You can monitor and track that. These new versions do not require more hardware, so you do not have the issue where some of your installed base may not be able to run them. Another reason, which you could say is unfortunate but is a fact, is that, because of the security features in these new releases, it makes a lot of sense to upgrade to these new versions. That reason alone will drive a lot of upgrades.

When you think about what is hard with upgrades, there are only really two things. One is compatibility, and how good a job we have done of that testing, so that a customer does not have to repeat that, or that we give them very automated tools, so that they can test how that works for their unique applications. We are getting better at that, but we need to get a lot better at helping them with that qualification process. We would really like to see that our customers – when a new operating system comes out and the new hardware comes in – allow the new operating system to be there. Then, they pick a date that is convenient for them to go back into their installed base. Today, what happens is a lot of the new hardware comes in and is downgraded to the old operating system, because this compatibility issue, about having the new version coexist with the old, makes people concerned, so they choose uniformity. Uniformity has been a great thing, but our view is that, given what we have done with compatibility, having something of a mix between one version and the version after that, should be possible. We are working with customers to see if we are right about that.

The second issue is users becoming used to the new version. However, because we have online training nowadays, with built­in help and things like that, that tends to be fairly straightforward. In Office, we are taking the user interface and making some changes to it. We had a lot of features buried in the old Office. Sometime between now and when we release the new Office, I encourage you to look at what we have done with that user interface. We call it ‘the rib’; it is a pretty big deal.

Participant

You mentioned that Microsoft just celebrated its 30th anniversary. The technology company my partner and I founded just celebrated its first anniversary. What advice would you have for young, technology entrepreneurs going through these next 30 years, other than using Microsoft software?

Bill Gates

The reason the technology business is fun is because it often changes. That means that companies need to reinvent themselves and re­evaluate their strategy. Not every year, but every three or four years, big junctures come along where you have to decide where you think the industry is going. The people who bet early on a new direction are the ones who do the best. We placed bets on graphics interface, when a lot of our competitors did not. Companies that are not well known today – Ashton­Tate, WordPerfect, MicroPro – because they do not exist, were not willing to make that same bet. It was back in 2000 that we made the bet on .NET with XML and web services; now, that one looks smart. You are always having to make these bets.

For a small company, a key thing is deciding what is the very demanding customer with such prestige that, if you keep them happy, they are a good proxy for your other customers. Other customers will know you are doing a good job. They are the first to ask for new things and ask for an extremely high level of quality of delivery. If you have who those most demanding customers are in mind, and are personally – for a company which is small, and that is fun – in touch with whether or not you are meeting those requirements, that is one good milestone. Keeping up with the industry and all the things going on is tough. I go off for a week, every six months, to read, step back, look at the trends and think about what they imply for the overall Microsoft strategy. It is great to be in an industry with this kind of change, but it means you have to step up and constantly be learning.

Closing Remarks
Charles Hughes
President, BCS

Today, in London, it is forecast to be the hottest 27 October ever, beating the record previously set in 1888. I have to say, many thanks to Bill, we have kicked off with a very warm start, at a searing pace, covering a wide range of very hot topics. I would just like to say, Bill, you have given us tremendous insights and the benefit of your wisdom, for which we are very grateful, and also, of course, your enthusiasm and optimism, which rubs off very significantly. We are very proud to have you as a distinguished fellow. We appreciate the endorsement you have given to us for the IT professionalism programme, which is certainly going to make big changes. I would like to ask you all to thank Bill in the normal fashion. Before you do, bear in mind when doing it, that tomorrow also is a very notable red-letter day: Bill is 50. Please do not sing because we would like him to come back.

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