The very mechanism of capitalism, which is buyers and sellers finding each other and working together, will be revolutionized by the PC connected to the Internet.

　The way that information flows inside a company will change completely, moving away from a very efficient paper-based approach, where you can't really examine the information or share it, and it gets out of date very quickly, to a purely digital approach, done on the screen with very rich tools that will allow people to see patterns and work together in a way that would not have been possible in the past.

　People talk about this as electronic commerce. And they try to measure it by looking at the volume of transactions being done over the Internet. Well, some of the transition from paper-based selling and buying to electronic selling and buying is very trivial. It's simply taking what would have been a paper and moving it into the digital form.

　As long as it's the same buyer and seller who would have done business anyway, all you gain is a little bit more efficiency and a little bit of customer service.

　The really profound case is where buyers and sellers who never would have found each other are matched through this mechanism.

　The Internet combined with the PC is revolutionary because it can do this matching. It works on a global basis. It's a global standard. And it's not only going to change the way that businesses relate to each other, but everything that goes on inside a business.

Three key themes

　Let me introduce three key themes that I think are very important in looking at this coming phenomenon. For businesses themselves, I talk about the nervous system as the way that information flows within the company. Today, this is lots of paper forms that you have to fill out with redundant information. It's lots of printouts that you get on a delayed basis. It's the use of the phone. And in a very limited way, people are starting to move towards electronic mail.

　But the processes inside companies will be changed. They will be changed to be purely digital. All of the interaction with the outside world will be captured digitally from the beginning. And this is why I talk about companies adopting a digital nervous system.

　For the people inside the company, the way they do their work will be quite different. The jobs that were simply transferring information from paper to the computer or answering simple inquiries, those jobs will no longer be necessary because customers will be interacting directly with the screen, able to do their inquiries and enter their requests without having to have a clerk-type job.

　The jobs that continue will be jobs where you are really thinking, really adding value by having a rich set of tools and lots of information, so that you can really help customers with tough problems, or so you can be involved in business decisions or improving products.

　So for workers, this new approach I call the Web Work style. Students who come out of a university where the Internet is being used very heavily, at least in the United States, become agents of change, promoting this idea of the Web Work style.

　These students in their universities have been signing up for their classes on the Internet, not using a paper catalogue. They have been submitting their homework on the Internet. They have been researching the latest information and collaborating with people around the world on the Internet. And as they move out into the business world, they will expect the same modern approach, and so they will be very helpful in driving open-minded companies to adopt these new approaches and gain the competitiveness that that will provide.

　The final term I have that's a theme here is Web Lifestyle. This talks about an individual who is using the Internet many times a day as a natural part of their activities. If they want to get the latest sports statistics, if they want to look at the new cars and find out what people like and what a fair price would be. If they want to plan a trip, if they want to take a photograph of their kids and share it with the grandparents, they turn to the Internet and use it as a tool to help them get that done.

Digital nervous system

　Now these people, once they have adopted this lifestyle or work style, they never go back. If you say to them I want to take away your electronic mail, I want to take away your PC, they simply wouldn't give it up. Of course they know all sorts of ways that it can be improved, and the improvements are coming very very rapidly. But it is something that not only do they continue to use the rest of their life, but they encourage other people to get involved. They promote it because of their excitement and because drawing other people in will allow them to work with them on a digital basis.

　So companies will be distinguished by the creation of these digital nervous systems. And consumers, over the next 10 years, will all be moving to this Web Lifestyle. It will be the best way to buy, the best way to find products and it will influence purchases of all types, even if you don't necessarily buy the car over the Internet, you will still use it as the primary source of information to help you do that in an intelligent way.

　So what are the pieces of this digital nervous system? What does it encompass? Well, it really includes all the information in the company. Not just the back-office data about the billing systems, but for example, for a customer, every contact you've had with that customer -- every phone call, every meeting, every scrap of information that you've been able to gather as an organization and what you are thinking about in terms of what you want to do with that customer.

　So it has the strategic thinking, the planning, the profit analysis, the sales results, all there in a form that is easy to navigate. For example, for the sales data, you can go in and look at the data by any time period in a few seconds. You can break it down if you see something that surprises you. And if you see a view that is of interest, you can mail that along to your colleagues to get them to comment and try and decide exactly what you should do to react to the developments.

　In the digital nervous system, information is available throughout the company. You no longer have meetings whose purpose is to simply sit there and convey information. Those meetings go away, because instead you simply use electronic mail to send around the spreadsheet or the Powerpoint presentation and make that available to everyone.

　Now for a digital nervous system to really work, all of the employees have to be involved. If you have some people who don't read their electronic mail, don't work this way, then the benefits are completely negated. You have to be able to assume that the electronic mail is being read, and that it's incredibly reliable. You have to assume that if you send information out this way, people will get it and read it in a timely fashion.

　And so it does require a substantial change and leadership from the top -- people saying that this is the way the company is going to work and drawing in everybody to have a certain enthusiasm about how this approach will allow the company to achieve its basic mission in a better way.

　Now when I talk about this, you might think that I am talking about a huge investment. You know, ripping out old systems and putting in new systems. In fact, very little of this is required. The fundamental infrastructure here is simply a PC for every knowledge worker, connecting that up to the Internet and using software packages and electronic mail as part of how the business is run.

　So that investment, most companies are putting in most of that money today -- buying PCs for their workers. In order to make this work, they'll have to put a little more into their network and having it have incredible reliability. A little bit more into what's called the directory, that lists all the employees and controls exactly what information they have access to. They need to design that in a way they can use a single directory to control all the information, not just the mail but also files that are being shared or databases that are being shared. So there are some ways they need to use the latest PC technology to make this happen.

　Once a company has this digital nervous system, every new project, every new plan or piece of information will be done on this system. One thing I did at Microsoft was I asked my people to bring me all of the paper forms we used inside the company, because I was surprised to find that some of these forms were confusing, hard to fill out. Filling out information that you had already provided other times. And I was stunned to find that, even as a very technology-focused company, we had hundreds of forms -- forms that related to human-resource management, payroll options, adding head count, reorganizing. And I declared, this was about two years ago, that we would get rid of every one of these forms and replace them with a system that would be better in every way.

　And that's really been a very exciting change. The ability of people to look up the information, to know what the options they have look like, and to do that without having to go and visit someone has made all of the management of information far far better. Even things complicated like employee-review period, where you want to gather everyone's input and you want to see how you are rating people, all of that is being done using a digital approach that has made it much much more effective. So this approach will be very very important.

Internet-connected PC

　But what are some of the principles here? First of all, I can't emphasize enough the importance of the PC connected to the Internet. It really is quite revolutionary. You read about it everyday in terms of new companies being started up and new applications. But people are still underestimating what this means. What it means about, for example, the pricing of products.

　In the world of banking today, there are products that banks make lots of money on and products that they don't make money on. And because you have that one relationship that works out O.K. But on the Internet, you will have people who come in and just specialize without any branch infrastructure and offer the products that are very profitable. And so the whole way the pricing is done, the whole way that you relate to a customer, in most businesses that will never be the same again.

　The focus on empowering the workers, making sure that if you are going to have a knowledge worker, pay them their salary and make the huge investment, that you get the most out of that by giving them the best information tools, the best access to data. That's very very critical.

　In the past, when people talked about having good online information, they referred to it as an executive information system. Well that's a terrible idea, to only have the executives have the information. Because if they are looking at data that surprises them, that seems high or seems low, they call up the people who are directly involved and immediately you have miscommunication because they don't have that same data. The data has to be uniform throughout the company. The system has to allow you to go from the very top-level figures of profits and sales and just click a few times and dive down in and literally get down to individual transactions to see exactly what's going on. Only a system that does that and makes that very very easy really empowers the company in an effective fashion.

　The principle here about the customer being at the center is very very critical. People will expect to be able to come onto the Internet and not only do transactions but look at the history of their work with your company, look at the status of anything that's going on, be able to ask questions and get very quick answers through the Internet.

　The Internet will not just be about the keyboard and the screen. The Internet is now advancing to include voice communications as well. If you go to, say, a bank Web site and you see some information that surprises you, you'll be able to click a button and immediately have a voice conversation with somebody from the bank who can see exactly what you are looking at and be able to be very helpful to you.

　Another key principle is that bad news must travel fast. This is really against human nature. It's typical in a company if a customer is unhappy or you lose a sale, you don't immediately make a big deal out of that. I know that when we first put electronic mail in, I would get a lot of messages about the accounts we were doing well in. People would say, "Hey we just won this account or we just won the other account."

　Well, that's a nice thing. I can send back a piece of mail that congratulates them on their good work. But it did make me wonder every time, well what about the accounts that I'm not getting mail on? Does this mean that we lost every account that I didn't get mail on? You know, I never got that kind of negative mail.

　Well in fact, the most actionable data you get is the bad news. When you get good news, you don't change your plans. You don't say "let's redesign the product, let's shift our priorities." It's only when you have a series of situations where you see that your work may be out of line with what's going on in the marketplace. Maybe a competitor is doing something that's very attractive. Only then can you react in a timely fashion and make sure that you solve the problem before it becomes a very serious problem. And so these digital systems can be designed to be incredibly effective at making sure news of all types, including bad news, is shared in a way that is not threatening to the people involved. And so you can have a corporation that reacts in a positive way to anything new that goes on.

　So building this nervous system, it's not about doubling the IT budget. Rather, it's about a new mind set -- a mind set that thinks through the processes inside the company. You can look at two different companies, each of which have the PCs and connect them to the Internet, and find a radical difference in terms of how much value they get out of those systems. If all people are doing is creating documents and editing those documents, that's a nice thing. It's probably better than simply using paper and pencil. But unless the fundamental information is flowing there, you are underusing the power of what you have available.

　So these building blocks have emerged out of the PC industry. They are very high-volume and very low-cost. The PC has created a revolution in terms of how much competition there is in the industry. It's a revolution because the hardware from different companies is completely compatible. And so you can go out and buy the best machine of every type, whether it's a server or a portable machine, or new machine that happens to have higher performance.

　And yet as you do that, you know all of those systems can work together and run the same software because there is such a strong standard in the way that a PC works. The price of the PC has come down substantially, even as the power has gone up very very dramatically.

　We also see companies finally moving to reduce the amount of special software development they do and use packaged software products as much as possible. We see this not only in electronic mail, but also in the line of business applications. And that's a very important trend because these packaged applications are very rich and specialized for all the different industries that are out there doing a better and better job.

　Now, if you move through the process of building a digital nervous system, there are a lot of questions you can ask that will show you how far along you are. My view is that no company is even close to achieving 100% of the potential of this approach. Microsoft itself has been focused on this for a number of years and I'd say we are probably as far along as most companies are. But even so, we have a lot more that we can do.

　Probably the companies that do the best are new companies that don't have any of the old approaches. Particularly new small companies where all the employees are heavy PC and Internet users and they design the information flow in their company around this from the very very start. One of the very demanding questions to ask is, "How good is your corporate memory?" The question here is, if you've had a project in the past and somebody wrote up how that went, can the employee sit down at a PC and find that document within a minute? If they can do that, they'll probably go to the trouble and benefit from the past experience. If they can't do that, then they probably won't bother to even find out that that information is available. They'll probably in some cases make the same mistakes that were made in that previous project.

　So every company should think of their corporate memory as a major asset, and an asset that can be used far better because all of the information will be in digital form and very easy to retrieve.

Customer feedback

　Another huge advantage of this digital nervous system is the ability to get customer feedback. I can survey customers, send them out a piece of electronic mail where they can fill in a form in just a minute's time and tell me how we're doing. I can send the same type of form out internally and ask a group about their morale or their enthusiasm -- do they understand what our priorities are? And so you can get a very up-to-date sense of where your are meeting people's expectations, internally or externally, simply by using this tool that brings the overhead of that down to a point where everybody feels good about participating in providing the information.

　In the final analysis, one of the most incredible things about a digital nervous system is the way it lets you respond to surprises. Say the exchange rate changes, say the regulatory environment changes, say a competitor does something that catches you by surprise. Using this system properly, you can rally everybody around -- even people in far away locations -- and get them working on a common solution with far more information and far quicker turnaround then you ever could have in the past. And I think the business environment we'll have in the years ahead will be even more demanding in this respect than it has been in the past.

　What is Microsoft's role in this? Well, it's very simple. We are quite a specialized company. We decided when we were founded not to develop chips, not to build systems, not to actually write custom applications.

　We decided that there were some software components that we could specialize in, and by providing them in high volume be able to do that at very low price. And, so the products like Windows, or Office or Back Office are our key contribution. And even looking out five years from now, ten years from now, these will be the key products of Microsoft.

　Now, these products will be changing in some very exciting ways. We're building into these products the support for electronic commerce. We're building into these products the support for sharing video and audio across the network. So, your corporate training will be done in a new way. Your ability to take a speech you give or a presentation, and have all the employees be able to see that whenever it's convenient for them at your locations around the world--all of that will just be standard because they have the rich Windows platform.

　It's probably more interesting to look at what we're doing in terms of the initiatives we have that span all of our different products. First of those is this driving the Internet forward--making it better and better.

　The Internet today is much better than the Internet a year ago or two years ago. It's not standing still. These capabilities--like video and audio, rich security, high-speed connections, wireless connections. All of those things are state-of-the-art problems that Microsoft and other companies are very involved in advancing the Internet standards. We have more people on Internet standards committees than any other company because of the importance this has for us.

　Other key initiatives include scalability. We're gonna make it so that when people take this PC technology, they know that its reliability and high performance actually goes beyond that of the very expensive mainframe systems of the past. So that the current ... of transaction volumes that you'll have over the Internet, which will be much higher than you've ever experienced before--you'll have no difficulty being able to manage that, including running super reliably 24 hours a day.

　We're actually taking the technology of systems like Tandem, which were even more reliable than mainframes, and now building that into the PC. So, that this approach called "clustering" gives us the kind of reliability that in the past stock exchanges or phone networks relied on through the clustering approach. And that will just be standard in the low-cost PC hardware, and so you won't have huge hardware expenditures like you would have had to have in the past.

Simplicity

　Another key initiative for us is simplicity-- getting rid of a lot of the error messages, a lot of the different commands. You know, we hear from our users that managing the software on their PC, managing the information--there's still a lot we can do to make that simpler.

　Particularly as they're doing more and more with their PC, a richer set of things, we need to hide the complexity underneath. And that's why we're increasing our R&D budget so aggressively--it's 'cuz we see lots of incredible improvements that can be made here.

　Finally, there's an initiative to inter-operate with all the existing systems. People do move over time towards this PC Windows approach. But, they want to do it one application at a time, without throwing out what they've got from the past. So, making sure there's rich inter-operation with the mainframes and the UNIX systems--that's something that we've put a lot of effort into, and it's been very important.

　Well, this Web lifestyle is one of the more radical things that I've talked about. I'm seeing that this transforms the way people act as much as say the television or the telephone did. They'll learn over the Internet.

　Say, they have a friend who is sick. They'll look up the information about what that is and find other people they can share ideas with.

　Say, they want to organize. They have, they want to get a group of people to work on some political or charitable activity. They'll go out on the Internet and find other people throughout Japan who might be interested in working with them on that.

　You'll be able to look at video clips--the new sites today, now. People love looking at videos of the, news events. And, the quality of that is improving very dramatically.

　And, a huge percentage of purchases will move onto the Internet. In the United States today, when people are buying and selling stocks--over 40% of that is done now on the Internet. And, it would have been (sic) about zero percent two years ago. So, it shows how rapidly things can change.

　For people who use the PC, the majority of their book buying now has moved over, and it's being done on the Internet. You go up and you can find all the different titles; you can see other readers' comments; you can order and have it sent to you, or sent to the friend that you want to provide it to. And, it's gotten to be very easy, so it's a superior way of buying a number of products.

　One of the things that's incredible about this is the speed of adoption. If we look--and these numbers are from the United States--if we look at TV, and we say how long did it take to get 50 million users; it took 13 years. If we look at radio; it took 38 years. Here with the Internet, it happened in four years--that we went from no, basically, almost no users to over 50 million.

　Now, taking this worldwide, we have a little over 150 million users today. And, that's a significant number--of course, it's not 5 "billion" yet, so we still have a lot of people to connect up, but that's the direction that we're certainly headed in.

　We also see from the traffic that even the existing users are using the Internet far more heavily. The traffic is going up very rapidly. Now, there doesn't need to be any concern here about running out of capacity, because the improvement in optic fiber technology--the backbone that connects the Internet--is going so rapidly--doubling every year--that we'll be able to satisfy even the incredible demands that people are putting on this system.

　In fact, the hard part about connecting people up to the Internet is actually the "last mile" of the connection. For businesses, there'll be lots of people who compete, lots of ways to connect up. But, when you get out to people's homes, that's more difficult, and it'll probably take--even in the United States--before the majority of people have a connection speed that's much higher than simply dialing up over today's phone line.

　However, all the things I'm talking about here can work very well, even over that phone line connection--although a higher speed connection would be preferable.

　So, when we talk about electronic commerce, we're talking about every business being on the Internet. And, when we say "being on the Internet," we don't just mean a Website where you have some statistics about the company. We mean offering every kind of transaction--every kind of information is there on that Website, in fact customized to the particular customer that's coming in.

　In the United States, in a lot of categories, the existing businesses move very slow (sic) to focus on the Internet. Bookselling is a very good example.

Amazon Books

　If the booksellers who were already there in that business had gone onto the Internet, Amazon (Books) would not have had a chance to get so established and build a leading reputation. But because those booksellers waited for several years, Amazon came in. And, now, the market valuation of Amazon is greater than all the other booksellers put together.

　And, Amazon, because they're on the Internet, they're able to branch out into other categories of merchandise. So, they moved from books to video, to music. And, now, they're affiliating with other people who are even offering things like drugstore products that'll be out there on the Internet.

　And, so, they've created a really phenomenal business that's worth tens of billions of dollars in a period of a few years. It just shows, you know, what kind of exciting things are happening here.

　Now, every business should learn a lesson from this and say, "You know, let's not allow a new-style competitor to get out there way ahead of us. Let's go ahead and build the Website and be in the business."

　Building these Websites is not super expensive. In fact, if you want a fairly simple transaction Website, we can help a small business get up and running literally in a few days.

　We have services on the Internet where they just sign up and we host their site for them. If they want to make it a richer site, they get more software tools and make an investment. But, even a very nice Website today costs only hundreds of thousands of dollars.

　For example, there was a clothing store in the United States, the Gap, where they think of themselves as very non-technological. And yet, we came to them and said, "Look, we can do a fantastic Website for 300,000 dollars, the hardware, the software, everything."

　So, they said, "Fine. We'd like you to do that."

　Well, after four months, was (sic) up and running, and the sales were much greater than any store that they had. In fact, they found that there were new types of purchasing taking place there.

　For example, a third of the purchases on their Website were gifts for other people, where you would just type in the address and have it sent to them.

　A third of the purchases were actually buying clothes that were particularly large sizes. And, so this was a set of customers who didn't find it comfortable to go into the actual stores, and they found that the inventory there wasn't providing what they wanted. And so, the Internet, because it was connected to the main warehouse, was a great way for them to buy what they wanted. And so, it was a very exciting additional business for this company, and a much better investment than building a new store.

　And there are stories, an incredible number of stories like that where things have taken off very quickly.

　Well, we're not very far along, as you can see by this chart that shows for different areas of the world what percentage of people are online. In the U.S., it's about 29%. In Japan, taking the most generous definition, it's about 11%. And that number I'm saying today over the next 10 years will go to over 90%.

　You know, whatever business you're in--whether it's insurance or retailing--the consumers will move there in the next decade.

　What will happen even more rapidly is business-to-business transactions. You know, today at Microsoft we use a paperless process for all our purchasing. And, we have a Website internally that--anything you want to buy, whether it's update your PC--you do that electronically.

　And, we only work with suppliers who work on this digital basis. We won't accept a paper invoice or a paper bill.

　Now, for a small supplier we make it very simple. They just come to our Website and click on a form that they fill out and put in the same information that they would have sent us on paper. But, what that does is it guarantees that all our processes are completely digital from top to bottom.

Dramatic change

　Now, in the area of e-commerce, a lot of companies are going to thrive and a lot of companies will find that it changes their economics in a pretty dramatic way. A lot of people who have just been in a middle-man role will find that they have to add value in a new way.

　In fact, over the last year, I've had a lot of business leaders asking me about electronic commerce. "And, how's that gonna, what shape will that take?" I found myself talking about the leadership examples and the good work that was going on so much that I decided to write a new book, which is called, "Business at the Speed of Thought," and will be out in Japanese and English at the end of this month.

　And it really highlights people who have jumped on board the e-commerce and digital nervous system type approaches and shows how that's affecting them.

　It's important when you go out and build a Website that you not just have the Website be there by itself. You really want to integrate it back into your other information systems. Your workers should be able to say, "Which parts of the Website are people visiting? Which kinds of customers are visiting that part?"

　So, they if they want, for example, to have a special on a product, or change the information that a certain type of customer sees, they know exactly what people want to do.

　A good example, here in Japan, of ...a fun Website that we put together is the Japan Travel Bureau. In here, the world's biggest travel agency said, you know, that travel's a case where people want in-depth information; they want it up-to-date. And so, we worked with them, and again here this was built in four months and is already quite a profitable site for the people involved.

　In fact, one of the things I recommend is that in order to get your top managers really to embrace the Internet, they should go out and buy some books and plan some travel and see what it's like. And this is one of the sights that it would definitely be good to take a look at.

　Now, if we look behind this site and see what's being used, it's very straightforward PC technology. The customer uses the PC to connect over the Internet, and then the building block software that's part of Windows, the transaction server, the Internet information server--all of those things, the rich capabilities are used to provide the customized experience.

　Now, in this case, Japan Travel Bureau didn't want to move their primary database off the mainframe. And so, we created a gateway that lets them still maintain their database there, and yet do all their application development in the new world.

　And, we're seeing that more and more, whether it's banks or brokerage or insurance companies--they're, they, they're moving the developers more rapidly than they move the database, and that's because the tools make it very easy to do that.

　Now, inside these systems, there's (sic) a lot of standards that are necessary so the information can flow very easily. There's a new initiative for standardizing business-to-business information that we announced last week called "BizTalk."

　Now, what it does is it takes the concept that's been around for a long time in things like EDI, Electronic Data Exchange, and it generalizes it for far more businesses and it defines in a way that's very real-time, very Internet-oriented using Internet standards.

　And so, this is going to make it easy for buyers and sellers to find each other and match their needs. And now, BizTalk works in any system, and so, inter-operability was part of the design from the very beginning.

　The Internet is so revolutionary that some products that used to be physical products will now be delivered purely in digital form across the Internet. In the future, you won't think about records or CDs. You'll simply have your music in a form that makes it easier for you to move it around, to organize it in the sequence that you would like.

Digital delivery

　Today on college campuses, a lot of kids are already doing this using a music format called MP3. And so, digital delivery is a much, much better approach.

　Likewise software. We're delivering the updates to software and building into Windows--the idea of staying automatically up-to-date so you never have to visit individual PCs, which has been a big part of the cost of ownership.

　Even books, as we get these very high-quality flat screens, will move into a digital form. And so, you'll have electronic books. If we have this conference three or four years from now, most the people here will have a digital tablet, which will allow them to take their notes. Now, that tablet will be a PC; it'll run Microsoft Office, it'll have the rich applications, but it'll be portable and connect up to the wireless network. So, your information will always be up-to-date.

　Today, people are skeptical about this because the readability of the screen has not been as good as paper. And, of course, if you want to read for a long time, the screen will have to be far better than it is today. But, between software and hardware advances, we have no doubt that this'll be taking place in the next 2-4 years.

　So, what's the future here of electronic commerce? Well, all these systems will be inter-operating together. It, businesses of all sizes will be participation. This'll redefine a lot of markets that have been very local to be global markets.

　Even things like finding expert advice in areas like engineering or architecture--you'll be able to go out to the Internet and specify that's what you want. And, it may be a company in Europe or India or any other location that might bid for that business. And, then, you'll collaborate over the Internet, sharing documents, editing documents together, video-conferencing in a way that that will make it as good as if that help was provided by a firm that was very near by.

　This new level of competition is almost kind of scary. But, one thing that we can say for sure is that the big winners will be consumers. And, after all, that's what business is all about--providing better products at better prices, and using these tools to accelerate the innovations that are taking place.

Optimism

　Part of my reason for optimism about all of this is I know that the devices themselves--the PCs and the smaller personal companion devices will be so much easier to work with than they are today. Part of this is building in the speech recognition or handwriting recognition, so you won't have to deal with the keyboard nearly as much as you do today.

　We call this natural interaction, so the PC will look very, very different than it does right now. This'll be a machine that everyone can use. We're making a lot of progress towards this goal.

　For example, in our Japanese Office product, you can actually use the mouse to pen out a character that you don't know the keyboard sequence for. And, when we first put that in, we thought, we wondered if people'd use it. It's proven to be very popular. And so, that's helped us refine our handwriting recognition software that'll be used in that tablet device.

　We have speech synthesis in the encyclopedia. We have special linguistic checking in all of these tools. And so, we're moving year by year towards the full, natural interface.

　Even things like computer vision will be part of Windows, where you'll have a small camera on the device, and it'll be able to recognize who's using it and even see what kind of expression they have. If you look confused, it'll try to be more helpful. If you look unhappy, it'll try and give you the right options to help you out.

　And so, the pervasiveness and the interface will be radically different.

　So, looking ahead, businesses really have to think now about what the digital nervous system means for them. This has to be done at the top of the company, and it has to be something that really looks at all the processes. If the company is serious about this--by making electronic mail a standard, by driving some leadership projects--over a period of 2-3 years, they should be able to fully adopt this approach.

　They should involve their top people in looking at the Web lifestyle, and thinking what that means about their customers. They might want to go to a town where there's a university and the kids are very Internet-centric, and see how their Internet offerings are doing with those customers, who really represent the future of what buyers will be interested in.

　It's important not to underestimate the PC and how radically it'll be improving all of this. It's very exciting to be part of this. We're still very much at the beginning, and we look forward to working with you to make this a reality.

　Thank you.