I noticed Ray's keynote transcript was available on the press site. I've included the full transcript in original format further down, but here is a version that I formatted so it's easier to follow and starts directly with the three principles Ray outlined. I also highlighted in bold some of what I thought were key elements of each section.

 

Three core principles that we're using to drive the re-conceptualization of our software so as to embrace this world of services that we live in.

  1. The web as a hub of our social experiences, our social mesh, technology experiences, and device mesh

The first of these three principles certainly isn't going to be a surprise to anybody in this room, and it's simply that we need to think of the Web as a hub, the hub of our social experiences, our social mesh, the hub of our technology experiences, our device mesh. Related to the social mesh, we believe that the interpersonal nature of the Web will ultimately impact everything we do, including the personal aspect of the PC. In scenarios ranging from productivity to media and entertainment, all applications -- ours and yours -- will incorporate the group-forming aspect of the Web: linking, sharing, ranking, tagging on the Web will become as familiar to all of us as file, edit, and view on the PC.

Related to the device mesh, this first principle also recognizes that we're living in a world where the number and diversity of devices is on the rise. From phones and PCs to smart TVs, DVRs, media centers, game consoles, digital picture frames, pocket media players, digital cameras and camcorders, recently, home servers, car entertainment and navigation systems -- the list just goes on and on and on and it grows every CES. Until we believe that the quaint concept that we've kind of grown up with of one PC, of my computer, will give way to the notion of a personal collection of connected devices brought together by the Web. At the principle level, we believe that the Web will be used across all our offerings as a hub to simplify your life in managing and using a world of devices.

  1. Our second principle is focused really more on business and in providing the power of choice as the enterprise moves to embrace the cloud.

So our first principle spoke to the fundamental changes impacting the individual, the social mesh, the device mesh. Our second principle is focused really more on business and in providing the power of choice as the enterprise moves to embrace the cloud. Most major enterprises are, today, in the early stages of what will be a very, very significant transition from the use of dedicated application servers to the use of virtualization and commodity hardware for consolidating apps on computing grids and storage grids within their data center. This trend will accelerate as apps are progressively refactored, horizontally refactored to make use of this new virtualization-powered utility computing model. A model that will span from the enterprise data center, and ultimately, into the cloud.

This utility computing model will reshape enterprise infrastructures such as e-mail, communications, content management, databases. And it will also, as a result, reshape enterprise applications and solutions. All our software will be significantly refactored to provide a level of symmetry between enterprise-based software, partner-hosted services, and services in the cloud.

The power of server-service symmetry, the power of choice will enable IT to best leverage the skills of its key personnel and it will provide tremendous flexibility in developing, migrating, operating, and managing systems that are distributed and federated between the enterprise data center and the Internet cloud.

  1. We need to embrace a world of small pieces loosely joined, that is a fabric of software and service componentry that spans from the cloud at one extreme to a world of devices at the other.

So that's the second principle: the power of choice in the enterprise. As part of that principle, I mentioned the need to rethink and refactor applications for this new world, which really brings me to my third principle which -- well, to coin David Weinberger, it stresses that for developers, we need to embrace a world of small pieces loosely joined, that is a fabric of software and service componentry that spans from the cloud at one extreme to a world of devices at the other.

As you developers in this audience are well aware, application design patterns at both the front-end and the backend are transitioning from being tightly coupled systems with program components being closely interlocked with one another, like the pieces in a puzzle, toward being loosely federated -- or loosely coupled compositions and loose federations of cooperating systems.

As you've heard me say repeatedly, before I joined Microsoft, most recently when I announced the interoperability principles that will guide Microsoft's work, in today's world of loosely coupled systems, transparency, standards, and interoperability are key. At the front end, lightweight technologies have become ubiquitous, RSS and atom feeds are used as lightweight cues and channels between services across the web.

Declarative languages such as XAML are enabling us to rapidly repurpose and recombine UI components into new concepts and new apps. Many of those new apps are now needing to extend beyond the browser or beyond the PC. Users are beginning to expect rich, integrated experiences that are seamlessly delivered across the Web, the PC, and the phone -- their entire mesh of devices. Not just Web apps that are ported to a PC or a phone, but instead actually take advantage of the unique strength of each platform. This new multi-device UI environment now requires a host of new front-end development skills.

At the backend, new skills are also required as developers are finding the need to embrace new programming models, new design patterns such as map reduce, models that are more appropriate for the cloud. This cloud-based environment consists of vast arrays of commodity computers with storage and software being spread across just hundreds of thousands of computers, very, very broadly for reasons of performance and scale and redundancy.

Over the next five years, the way we write code on the back end, the way we deploy it across a grid, the way we debug it remotely, the way we maintain it and service it will be fundamentally transformed by our progressive shift to this utility computing model in the cloud.

So those are really the three principles, the principles that we're using to reshape all our offerings for individuals, for businesses, and for developers and designers. And so how are our products going to be impacted by these principles? Let me just get concrete. What I'm going to do is talk for a few minutes about specific offerings in five major groupings, services scenarios that span the full breadth of our business: connected devices, connected entertainment, connected productivity, connected business, and connected development.

 

How Microsoft products impacted by the above principles

So those are really the three principles, the principles that we're using to reshape all our offerings for individuals, for businesses, and for developers and designers. And so how are our products going to be impacted by these principles? Let me just get concrete. What I'm going to do is talk for a few minutes about specific offerings in five major groupings, services scenarios that span the full breadth of our business: connected devices, connected entertainment, connected productivity, connected business, and connected development.

Connected Devices

First, connected devices: If you recall, my first principle talked about the fact that each one of us finds ourselves juggling the management of more and more PCs and other devices in our homes and in our lives. What's particularly fascinating to me is that, increasingly, many of these devices are becoming Internet-connected and Internet-aware at birth.

This gives us the unique opportunity to use the magic of software to bring them all together into your own personal device mesh with the Web as a hub. Just imagine, if you will, that unified device management will enable your devices to report into a common service for status, for help, to report their location.

Just imagine the possibilities enabled by centralized configuration and personalization and remote control of all your devices from just about anywhere. Just imagine the convenience of unified data management, the transparent synchronization of files, folders, documents, and media. The bi-directional synchronization of arbitrary feeds of all kinds across your devices and the Web, a kind of universal file synch.

Just imagine the possibilities of unified application management across the device mesh, centralized, Web-based deployment of device-based applications. Imagine an app platform that's cognizant of all of your devices. Now, as it so happens, we've had a team at Microsoft working on this specific scenario for some time now, starting with the PC and focused on the question of how we might make life so much easier for individuals if we just brought together all your PCs into a seamless mesh, for users, for developers, using the Web as a hub.

Before you know it, you in this audience are going to have the option of being the first to try out an early technology preview of this simple but incredibly useful new software and service. As this product emerges just over the horizon, I think you'll find it to be quite intriguing and key in delivering upon a compelling vision of a personal device mesh and of connected devices.

Connected Entertainment

The second scenario we're working on at Microsoft revolves around the notion of connected entertainment. Building upon this same vision of the device mesh, it's our aspiration that individuals will only need to license their media once, to organize their subscriptions and collections once, and to use any of their devices to access and enjoy their media, whether on the Web, on the go, in the living room, on the desktop.

And building upon something else I talked about earlier, our vision of the social mesh, we envision each individual having a media-centric or gaming-centric Web presence through which they can express their tastes, interests and affinities. Through which they can interact with others by linking and sharing and ranking and tagging and messaging and notification.

As many of you are already well aware, this vision is being realized today through our progressive enhancements to Xbox live for gaming, through Zune.net and the Zune social for media. Moving forward, more and more and more of our media and entertainment services across Xbox, Zune, and MSN, and across experiences such as Microsoft TV, Media Room, and Media Center will be progressively transformed by this connected entertainment vision.

Connected Productivity

The third scenario that we're working on is focused on the concept of connected productivity. For Microsoft, productivity at its core means Office for the PC, Office Mobile for the phone, and Office Live for the Web. Through all three of these offerings, we'll deliver productivity experiences that allow individuals to seamlessly enjoy the benefits of the rich dynamic editing of the PC; the mobility, note-taking and capture capabilities of the phone; and the work-anywhere ubiquity of the Internet all connected into a seamless experience using the Web more or less as an experience hub.

Office Live will extend PC-based Office scenarios into the social mesh, expanding the classic notion of personal productivity into the realm of the interpersonal, again, through social mechanisms such as the linking, sharing, and tagging of documents. We've begun to realize this vision with Office Live Workspace, which went into broad, public beta just yesterday. I very much look forward to giving you more specifics of where Office Live is going, and of its central role as the hub of our connected productivity strategy as we meet again over the course of 2008.

Above all, this entire strategy is focused on serving the individual, the individual's productivity needs. But we're also bringing it to market in the form of SharePoint and Exchange and Office Communication Server, delivering connected productivity scenarios to individuals within the enterprise.

Connected Business

The fourth scenario that I talked about that we're working on is focused on just that, the enterprise, in the form of something that I refer to as "connected business." Over the past few years, services for business have caught on in the realm of CRM and CRM-derived rapid solution platforms. Small companies in particular are now enjoying many of the capabilities that, in the past, were only available to enterprises, and we're tremendously excited by the reception for both Dynamics CRM Live and Office Live Small Business, services currently in use by more than half a million small businesses worldwide.

So the greatest impact that services will have on business will most likely not come from these rapid solution environments, as valuable as they are, but rather, it's going to come from the inevitable shift toward utility computing within the enterprise.

As I said earlier when discussing the three principles, we believe in providing enterprises with the power of choice as they move to embrace utility computing in their data centers, and ultimately utility computing in the cloud. In the past year, we've made great strides in realizing our vision in this area. At the lowest level, at the operating environment, our vision of utility computing within the data center is being realized today through Windows Server 2008 and Hyper-V and through System Center products including Virtual Machine Manager.

Over the course of 2008, I look forward to sharing more specifics related to how these platform-level investments will help our enterprise customers and all developers embrace utility computing in the cloud. Much higher in the stack at the level of what we call finished services all the way up at the top, our online business services just released into open beta this past Monday give organizations the choice of running Exchange, SharePoint or Office Communication Server as on-premises servers, or as services in the cloud. IT's option. At the level of building-block services, services from which those online business services are constructed, last June we introduced BizTalk Services, which are building block services for app integration that include identity and relay and work flow.

Right here at MIX, we're introducing for the first time what will be another one of our key building block services: the beta of our SQL Server Data Services. I encourage you to attend Nigel Ellis's session being held tomorrow to get a taste for these services, which are high-scale database services that will bring the benefits of SQL Server for developers into the cloud.

Connected Development

And that leads me to my fifth and final scenario which revolves around the notion of connected development. Earlier, I spoke about the increase in need for platforms and tools that spans symmetrically on the back end from the data center into the cloud and spans seamlessly on the front end from the browser to the PC to the phone. We're realizing this connected development vision through our .NET family of runtimes, including .NET Framework and Silverlight and supported by Expressions Studio for designers and Visual Studio for developers.

The vision is being realized today, literally today, through a lot of what you're going to hear Scott Guthrie talk about in just a moment, and I'll leave it to Scott to really expand much further on the connected development scenarios and to talk about the specifics of our plans and offerings.

You know, today I've spend some time framing the big picture of our all-up services strategy, that Microsoft views the Web through the lens of innovation in content, commerce, and community, and that we're investing in search and ads to foster a healthy and highly competitive advertising ecosystem on the Web. I've also mapped out how the Internet has fundamentally transformed our software and services across the board, and you're going to see this come to light more and more and more over the course of 2008.

Last year, I came here to introduce you to Silverlight. I told you about its potential to change the game for media, video, and rich Internet applications on the Web. This year, you'll see that we're delivering on that potential. With a better understanding of our strategies, of our platform and tools, with a little bit of an understanding about our upcoming offerings and how they fit into the big picture, I hope you'll find that coming to MIX and coming to Vegas was a worthwhile experience.

I know today that you have many amazing technology choices available to you. But I'd like you to be on us, because together I think we can create extraordinary experiences that combine the power of the Internet with the magic of software across a world of devices.

Sidenote: In the beginning of Ray's full transcript (below), he mentioned ScreenTonic. ScreenTonic is a mobile advertising company Microsoft acquired in May of 2007

  • Full Press Release here
    • Snippet:"REDMOND, Wash. — May 3, 2007 — Microsoft Corp. today announced it has agreed to acquire ScreenTonic SA, a Europe-based mobile advertising pioneer, in a move that combines the breadth of Microsoft® Digital Advertising Solutions offerings with the mobile expertise and industry relationships of ScreenTonic to help advertisers reach a global audience of mobile users. ScreenTonic’s mobile solutions provide advertisers with a complete range of ad formats, from display to text, as well as ad management and reporting capabilities, while serving the needs of mobile operators and independent publishers equally. ScreenTonic will continue to operate out of its current headquarters in Paris. Financial details of the acquisition were not disclosed."

 

Here's the original full transcript you can access directly on the Microsoft Press Pass site

RAY OZZIE: (Applause.) Thank you. Thank you. Good morning. Welcome to MIX. Welcome to Las Vegas. Terrific to be here. It's been quite a year. On the flight down here from Redmond I was thinking about the broad range of products that we've shipped since we were here at the Venetian about a year ago. It was May of last year, the tools including Expression Studio V1, Visual Studio 2008. Languages -- you know, IronRuby, IronPython, which I love. Runtimes such as Silverlight 1.0 and .NET framework 3.5

We've made a number of strategic investments since that time, investments in mobility, in services, of course in advertising. Some of the smaller size such as Screen Tonic, some much larger such as aQuantive.

And then there's Yahoo. Although I can't talk much about our proposed offer to buy Yahoo, I can say it's already added some interesting twists to what promises to be a really, really exciting year ahead. We've got a lot on tap. Over the course of the next nine months, and progressively into the future, many of the software and services products that we've been developing for quite some time now will finally come to life. In fact, some of those investments will come alive this week, and you'll see them in a few minutes, including Internet Explorer 8 and Silverlight 2, both of which I'm tremendously excited about.

As I look at the year ahead, I see MIX as the first of a number of key launch milestones. Kind of on a path, with a series of events culminating at PDC (Professional Developers Conference) this October, a path that will bring many of the key elements of our software plus services strategy from incubation to life.

You know, Microsoft has many products, many products, many services, we've made many announcements related to these things over the course of this past year. And it's occurred to me that without being able to see the big picture as each one of these products is introduced, it might seem to you to be just a little bit random. So I thought I'd spend some time this morning just framing the big picture, to put things into context, including some of the things that you'll see coming over the course of 2008.

There are really two distinct and important aspects of our all-up services strategy, both of them are critical to our success. The first is about the things that we do to deeply embrace advertising, which is the economic engine that powers the Web. The second is about how the Internet is reshaping and transforming Microsoft's existing products and services across the board in all the markets that we serve.

In terms of advertising, it's innovation in the experiences on the Web that provide the fuel for our ad-based economic engine. Even early on in the Web, it was content, commerce, and community properties that served as the key sources, the key drivers of user engagement.

Over time, content and commerce have been transformed by community innovations. As we link, tag, dig, and discuss things across the Web, together we've created a highly engaging world of social media and social commerce on the Net. And the reverse is all true: community on the Web and communications properties have been transformed by content. Social networks mashed together, photos and videos and music along with blogs, messaging, and other forms of group interaction.

This dramatic software-based innovation in content, commerce, and community, this innovative kind of recombination of the DNA of the Web has resulted in greater and greater and greater user engagement. And it's exactly this innovation-driven growth in user engagement that's turned advertising into such an incredible economic force in our industry.

With online advertising projected to grow from $40 billion today to $80 billion over the next three years, advertising is going to continue to be the primary way that we and you monetize services and apps of all kinds of the Web. And so in terms of strategically what is Microsoft's role in advertising on the Web, the answer is, in short, to do our part and to use the resources that we have to ensure that there's a vibrant advertising ecosystem on the Web based on a highly competitive ad platform that's attractive to advertisers, publishers, and developers alike.

In order to ensure the health of that ad platform, we're significantly investing in search and also in content, commerce, and community innovation. All of this works to attract and grow a highly engaged, well-targetable audience for advertisers. And if you wondered why we're so interested in Yahoo, its creative people and its interesting properties, I hope this makes it a little bit clearer.

That's how we view our role on the Web with respect to advertising, but in terms of our overall services strategy, how is the Web impacting Microsoft? How is the Internet reshaping and transforming Microsoft's existing products and services across all our markets?

Before laying out what we're doing in each of our major product areas, I think it'll probably help if you understand the three core principles that we're using to drive the reconceptualization of our software so as to embrace this world of services that we live in.

The first of these three principles certainly isn't going to be a surprise to anybody in this room, and it's simply that we need to think of the Web as a hub, the hub of our social experiences, our social mesh, the hub of our technology experiences, our device mesh. Related to the social mesh, we believe that the interpersonal nature of the Web will ultimately impact everything we do, including the personal aspect of the PC. In scenarios ranging from productivity to media and entertainment, all applications -- ours and yours -- will incorporate the group-forming aspect of the Web: linking, sharing, ranking, tagging on the Web will become as familiar to all of us as file, edit, and view on the PC.

Related to the device mesh, this first principle also recognizes that we're living in a world where the number and diversity of devices is on the rise. From phones and PCs to smart TVs, DVRs, media centers, game consoles, digital picture frames, pocket media players, digital cameras and camcorders, recently, home servers, car entertainment and navigation systems -- the list just goes on and on and on and it grows every CES. Until we believe that the quaint concept that we've kind of grown up with of one PC, of my computer, will give way to the notion of a personal collection of connected devices brought together by the Web. At the principle level, we believe that the Web will be used across all our offerings as a hub to simplify your life in managing and using a world of devices.

So our first principle spoke to the fundamental changes impacting the individual, the social mesh, the device mesh. Our second principle is focused really more on business and in providing the power of choice as the enterprise moves to embrace the cloud. Most major enterprises are, today, in the early stages of what will be a very, very significant transition from the use of dedicated application servers to the use of virtualization and commodity hardware for consolidating apps on computing grids and storage grids within their data center. This trend will accelerate as apps are progressively refactored, horizontally refactored to make use of this new virtualization-powered utility computing model. A model that will span from the enterprise data center, and ultimately, into the cloud.

This utility computing model will reshape enterprise infrastructures such as e-mail, communications, content management, databases. And it will also, as a result, reshape enterprise applications and solutions. All our software will be significantly refactored to provide a level of symmetry between enterprise-based software, partner-hosted services, and services in the cloud.

The power of server-service symmetry, the power of choice will enable IT to best leverage the skills of its key personnel and it will provide tremendous flexibility in developing, migrating, operating, and managing systems that are distributed and federated between the enterprise data center and the Internet cloud.

So that's the second principle: the power of choice in the enterprise. As part of that principle, I mentioned the need to rethink and refactor applications for this new world, which really brings me to my third principle which -- well, to coin David Weinberger, it stresses that for developers, we need to embrace a world of small pieces loosely joined, that is a fabric of software and service componentry that spans from the cloud at one extreme to a world of devices at the other.

As you developers in this audience are well aware, application design patterns at both the front-end and the backend are transitioning from being tightly coupled systems with program components being closely interlocked with one another, like the pieces in a puzzle, toward being loosely federated -- or loosely coupled compositions and loose federations of cooperating systems.

As you've heard me say repeatedly, before I joined Microsoft, most recently when I announced the interoperability principles that will guide Microsoft's work, in today's world of loosely coupled systems, transparency, standards, and interoperability are key. At the front end, lightweight technologies have become ubiquitous, RSS and atom feeds are used as lightweight cues and channels between services across the web.

Declarative languages such as XAML are enabling us to rapidly repurpose and recombine UI components into new concepts and new apps. Many of those new apps are now needing to extend beyond the browser or beyond the PC. Users are beginning to expect rich, integrated experiences that are seamlessly delivered across the Web, the PC, and the phone -- their entire mesh of devices. Not just Web apps that are ported to a PC or a phone, but instead actually take advantage of the unique strength of each platform. This new multi-device UI environment now requires a host of new front-end development skills.

At the backend, new skills are also required as developers are finding the need to embrace new programming models, new design patterns such as map reduce, models that are more appropriate for the cloud. This cloud-based environment consists of vast arrays of commodity computers with storage and software being spread across just hundreds of thousands of computers, very, very broadly for reasons of performance and scale and redundancy.

Over the next five years, the way we write code on the back end, the way we deploy it across a grid, the way we debug it remotely, the way we maintain it and service it will be fundamentally transformed by our progressive shift to this utility computing model in the cloud.

So those are really the three principles, the principles that we're using to reshape all our offerings for individuals, for businesses, and for developers and designers. And so how are our products going to be impacted by these principles? Let me just get concrete. What I'm going to do is talk for a few minutes about specific offerings in five major groupings, services scenarios that span the full breadth of our business: connected devices, connected entertainment, connected productivity, connected business, and connected development.

Connected Devices

First, connected devices: If you recall, my first principle talked about the fact that each one of us finds ourselves juggling the management of more and more PCs and other devices in our homes and in our lives. What's particularly fascinating to me is that, increasingly, many of these devices are becoming Internet-connected and Internet-aware at birth.

This gives us the unique opportunity to use the magic of software to bring them all together into your own personal device mesh with the Web as a hub. Just imagine, if you will, that unified device management will enable your devices to report into a common service for status, for help, to report their location.

Just imagine the possibilities enabled by centralized configuration and personalization and remote control of all your devices from just about anywhere. Just imagine the convenience of unified data management, the transparent synchronization of files, folders, documents, and media. The bi-directional synchronization of arbitrary feeds of all kinds across your devices and the Web, a kind of universal file synch.

Just imagine the possibilities of unified application management across the device mesh, centralized, Web-based deployment of device-based applications. Imagine an app platform that's cognizant of all of your devices. Now, as it so happens, we've had a team at Microsoft working on this specific scenario for some time now, starting with the PC and focused on the question of how we might make life so much easier for individuals if we just brought together all your PCs into a seamless mesh, for users, for developers, using the Web as a hub.

Before you know it, you in this audience are going to have the option of being the first to try out an early technology preview of this simple but incredibly useful new software and service. As this product emerges just over the horizon, I think you'll find it to be quite intriguing and key in delivering upon a compelling vision of a personal device mesh and of connected devices.

Connected Entertainment

The second scenario we're working on at Microsoft revolves around the notion of connected entertainment. Building upon this same vision of the device mesh, it's our aspiration that individuals will only need to license their media once, to organize their subscriptions and collections once, and to use any of their devices to access and enjoy their media, whether on the Web, on the go, in the living room, on the desktop.

And building upon something else I talked about earlier, our vision of the social mesh, we envision each individual having a media-centric or gaming-centric Web presence through which they can express their tastes, interests and affinities. Through which they can interact with others by linking and sharing and ranking and tagging and messaging and notification.

As many of you are already well aware, this vision is being realized today through our progressive enhancements to Xbox live for gaming, through Zune.net and the Zune social for media. Moving forward, more and more and more of our media and entertainment services across Xbox, Zune, and MSN, and across experiences such as Microsoft TV, Media Room, and Media Center will be progressively transformed by this connected entertainment vision.

Connected Productivity

The third scenario that we're working on is focused on the concept of connected productivity. For Microsoft, productivity at its core means Office for the PC, Office Mobile for the phone, and Office Live for the Web. Through all three of these offerings, we'll deliver productivity experiences that allow individuals to seamlessly enjoy the benefits of the rich dynamic editing of the PC; the mobility, note-taking and capture capabilities of the phone; and the work-anywhere ubiquity of the Internet all connected into a seamless experience using the Web more or less as an experience hub.

Office Live will extend PC-based Office scenarios into the social mesh, expanding the classic notion of personal productivity into the realm of the interpersonal, again, through social mechanisms such as the linking, sharing, and tagging of documents. We've begun to realize this vision with Office Live Workspace, which went into broad, public beta just yesterday. I very much look forward to giving you more specifics of where Office Live is going, and of its central role as the hub of our connected productivity strategy as we meet again over the course of 2008.

Above all, this entire strategy is focused on serving the individual, the individual's productivity needs. But we're also bringing it to market in the form of SharePoint and Exchange and Office Communication Server, delivering connected productivity scenarios to individuals within the enterprise.

Connected Business

The fourth scenario that I talked about that we're working on is focused on just that, the enterprise, in the form of something that I refer to as "connected business." Over the past few years, services for business have caught on in the realm of CRM and CRM-derived rapid solution platforms. Small companies in particular are now enjoying many of the capabilities that, in the past, were only available to enterprises, and we're tremendously excited by the reception for both Dynamics CRM Live and Office Live Small Business, services currently in use by more than half a million small businesses worldwide.

So the greatest impact that services will have on business will most likely not come from these rapid solution environments, as valuable as they are, but rather, it's going to come from the inevitable shift toward utility computing within the enterprise.

As I said earlier when discussing the three principles, we believe in providing enterprises with the power of choice as they move to embrace utility computing in their data centers, and ultimately utility computing in the cloud. In the past year, we've made great strides in realizing our vision in this area. At the lowest level, at the operating environment, our vision of utility computing within the data center is being realized today through Windows Server 2008 and Hyper-V and through System Center products including Virtual Machine Manager.

Over the course of 2008, I look forward to sharing more specifics related to how these platform-level investments will help our enterprise customers and all developers embrace utility computing in the cloud. Much higher in the stack at the level of what we call finished services all the way up at the top, our online business services just released into open beta this past Monday give organizations the choice of running Exchange, SharePoint or Office Communication Server as on-premises servers, or as services in the cloud. IT's option. At the level of building-block services, services from which those online business services are constructed, last June we introduced BizTalk Services, which are building block services for app integration that include identity and relay and work flow.

Right here at MIX, we're introducing for the first time what will be another one of our key building block services: the beta of our SQL Server Data Services. I encourage you to attend Nigel Ellis's session being held tomorrow to get a taste for these services, which are high-scale database services that will bring the benefits of SQL Server for developers into the cloud.

Connected Development

And that leads me to my fifth and final scenario which revolves around the notion of connected development. Earlier, I spoke about the increase in need for platforms and tools that spans symmetrically on the back end from the data center into the cloud and spans seamlessly on the front end from the browser to the PC to the phone. We're realizing this connected development vision through our .NET family of runtimes, including .NET Framework and Silverlight and supported by Expressions Studio for designers and Visual Studio for developers.

The vision is being realized today, literally today, through a lot of what you're going to hear Scott Guthrie talk about in just a moment, and I'll leave it to Scott to really expand much further on the connected development scenarios and to talk about the specifics of our plans and offerings.

You know, today I've spend some time framing the big picture of our all-up services strategy, that Microsoft views the Web through the lens of innovation in content, commerce, and community, and that we're investing in search and ads to foster a healthy and highly competitive advertising ecosystem on the Web. I've also mapped out how the Internet has fundamentally transformed our software and services across the board, and you're going to see this come to light more and more and more over the course of 2008.

Last year, I came here to introduce you to Silverlight. I told you about its potential to change the game for media, video, and rich Internet applications on the Web. This year, you'll see that we're delivering on that potential. With a better understanding of our strategies, of our platform and tools, with a little bit of an understanding about our upcoming offerings and how they fit into the big picture, I hope you'll find that coming to MIX and coming to Vegas was a worthwhile experience.

I know today that you have many amazing technology choices available to you. But I'd like you to be on us, because together I think we can create extraordinary experiences that combine the power of the Internet with the magic of software across a world of devices.

So now I'd like to bring up Scott Guthrie, corporate vice president in our developer division for some amazing demos. The guy is really an amazing demo'er, and for some great surprises. Thank you very much. Scott? (Applause.)