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---------- Forwarded message ----------
From: Steve Ballmer
Date: Tue, Sep 29, 2009 at 3:10 PM
Subject: The New Efficiency
To: Nikolay Degtyarev

In all the talk about the economy, one term that comes up more and
more frequently is something called "the new normal." I like this
phrase because it speaks to the fact that economic reality has
undergone a fundamental shift over the course of the past 12 months.

So what is the nature of this shift? After years of economic expansion
fueled by unrealistic rates of consumption and unsustainable levels of
private debt, the global economy has reset at a lower baseline level
of activity. Today, people borrow less, save more, and spend with much
greater caution.

This is the new normal and it will be with us for some time to come.
The issue now is how to respond.

I believe the new normal requires a new kind of efficiency built on
technology innovations that enable businesses and organizations to
simultaneously drive cost savings, improve productivity, and speed
innovation.

Because you are a subscriber to Executive Emails from Microsoft, I
want to share my thoughts with you about how information technology
can enable organizations to operate more efficiently, more
effectively, and more strategically as they respond to the new normal
by moving toward the new efficiency.

The New Efficiency: With Less, Do More

In the new normal, one thing is clear: cutting costs is extremely
important. But cost cutting by itself is not a long-term winning
strategy. To build a sustainable competitive advantage, companies must
ultimately do two things- increase productivity and find ways to
deliver new value to customers.

The issue, then, is how can organizations take costs out of their
operations, increase productivity, and expand their capacity for
innovation all at the same time?

For years, we've talked about how information technology enables
companies to do more with less. But during this economic reset, IT
provides business leaders with the answer to a slightly different
question: Can my company with less, do more?

Other trends give this question even greater urgency. Workforces are
more distributed and employees are more mobile. Government regulations
are increasing and compliance requirements are mounting. Data security
is more important to preserve and more difficult to maintain.

At the same time, companies struggle with legacy technology systems
built on incompatible and disconnected applications that limit access
to information and impede collaboration. The complexity of these
systems forces IT departments to focus too much of their time and too
many of their resources on providing basic services and protecting
security.

Today, a new generation of business solutions is transforming IT into
a strategic asset that makes it possible to cut costs without
crippling customer service or constraining workforce creativity and
effectiveness. A new generation of business solutions is eliminating
the barriers between systems and applications, and automating routines
tasks so IT professionals can focus on high-value work that is aligned
to strategic priorities. These technologies can help organizations
reduce risk, improve security, and drive down support costs.

This is IT how achieves the new efficiency with less.

At the same time, these technologies streamline access to information
no matter where it is stored and enable people to work together
securely no matter where they are located. This new generation of
business solutions also provides improved mobile computing
capabilities so people who work in a branch office, at home, or on the
road can be as productive as employees who work at corporate
headquarters.

Most important, a new wave of IT technologies offers advanced tools
that enable employees to transform insights into innovations that
address unmet market opportunities and meet unfulfilled customer
needs.

This powerful combination of greater productivity and improved
capacity for innovation is how IT enables businesses to do more.

Software Solutions for the New Efficiency

This year, Microsoft is introducing a wave of new software created
specifically to enable businesses to tackle their most pressing
challenges and strengthen their ability to deliver innovation to the
marketplace.

It starts with Windows 7, the newest version of our flagship PC
operating system. Windows 7 simplifies tasks and lets people get more
done in less time with fewer clicks. Ready to deploy now, it enhances
corporate data protection and security, and increases control to
improve compliance and reduce risk. Part of our Windows Optimized
Desktop solution that includes Microsoft Desktop Optimization Pack,
Windows 7 streamlines management of PC environments, making it easier
to reduce costs, improve performance, and enable end users to work
anywhere.

These and other enhancements are the result of close collaboration
with millions of customers and thousands of IT professionals who
participated in testing programs and provided suggestions about the
capabilities and improvements they wanted to see. Thanks in large part
to their help, Windows 7 is the best PC operating system we have ever
built.

We've also just released a new version of our server operating system.
Windows Server 2008 R2 is designed to increase the reliability and
flexibility of server infrastructures. It provides a productive server
platform that offers cost-effective virtualization and business
continuity, great power saving capabilities, and a superior experience
for end users.

Later this year, we will also launch Exchange Server 2010. The
cornerstone of Microsoft's unified communications technologies,
Exchange Server 2010 provides a great email and inbox experience that
extends from the PC to the phone to the browser and it helps companies
archive and protect information efficiently. It also enables companies
to reduce costs by delivering a built- in voice mail solution and
providing low-cost storage options.

Achieving the Benefits of the New Efficiency Today

Organizations around the globe are already deploying these solutions
and reaping the benefits.

At Intel, for example, Windows 7 is providing improved performance,
greater application responsiveness, and a better platform for mobile
workers. Ford is taking advantage of Exchange 2010 and Windows 7 to
streamline communications, improve decision making, and boost
productivity. Continental Airlines expects to save more than $1.5
million annually in hardware, software, and operational costs through
the server virtualization capabilities of Windows Server 2008 R2
Hyper-V technology.

At Convergent Computing, an information technology consulting firm
based in California, Windows Server 2008 R2 and Windows 7 will
eliminate the $40,000 in annual spending that was needed to maintain a
virtual private network for the company's 55 employees. In addition,
employees can now access the company's corporate network instantly and
download files 30 to 40 percent faster than before.

Another example is Baker Tilly, a London financial services firm with
more than 2,000 employees and a network of partners in 110 countries.
One of the first businesses to deploy Windows 7 on a company-wide
basis, Baker Tilly expects to save about $160 per PC by reducing
deployment, management, and energy costs. And because Windows 7
improves productivity, it offers the potential to increase billable
time for mobile workers at a rate of nearly $600 per PC. This could
return the equivalent of one-half of one percent of the company's
current gross annual revenue to the bottom line.

Businesses aren't alone in their struggle to respond to the new
normal. Governments must figure out how to deliver more services on
budgets that are sharply constrained by falling revenue. As part of
its response, the city of Miami deployed Windows 7 and expects that it
will save nearly $400,000 a year in reduced security, management, and
energy costs.

Ideal Conditions for an Era of Innovation and Growth

Despite the challenges posed by the global economic reset, I'm
optimistic about the long-term opportunities that lie ahead.

I'm optimistic because there are encouraging signs that growth may
resume in many parts of the world during the course of the next year.

More than that, I'm optimistic because I believe we are entering a
period of technology-driven transformation that will see a surge in
productivity and a flowering of innovation.

The new efficiency will not only help companies respond to today's
economic reality, it will lay the foundation for systems and solutions
that connect people to information, applications, and to other people
in new ways. The result will be a wave of innovative products and
services that will jumpstart economic growth as companies deliver
breakthroughs that solve old problems and serve as the catalyst for
new businesses and even new industries.

This too will be the new normal-economic growth driven not by debt and
consumption, but by rising productivity and new ideas that provide
real value to people throughout their lives. Information technology
will play an important role. I look forward to seeing the progress
that results.

Steve

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