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 So, there is no doubt that Microsoft is one of the companies that changes the history with a lot of technological innovation in the last 30 years. For people like us, it seems like a very strong giant, unbreakable, and so and so forth. Everybody’s concern now is the global crisis, how the world will be after the global crisis, and so and so forth.

For sure this is the worst economic crisis that I have known, being 27 years in the industry, 25 years with Microsoft. I think many economists, and I am not an economist, will tell you you have to go back to 1929 to find some equivalence. I think what characterizes this crisis is really an unprecedented level of debts. Basically all across the world, these different levels, people, businesses, have been basically borrowing a lot, a lot of money, and creating this magical effect of leverage, a financial lever, where you invest one and you ask for ten more, basically. So, I think what is going on in terms of the economy today is an economic reset, and for an economic reset to happen, you need, number 1 to decrease the level of debts, which is starting to happen with the financial community around the world, with the banking evolution, and number 2, you need to get the consumer confidence up in a big way, and number 3, I think and we believe you need to innovate, and that is what Microsoft is going to do. Indeed in the last fiscal year, as we went through the crisis, and we have not been immune to the crisis as a company either, we decided to basically keep the line and keep investing more in R&D. This year we will be investing more than $9 billion in R&D in terms of new technologies.

You have an impressive number of over 90,000 employees worldwide, and it is obvious that Microsoft is not protected for the crisis. You were forced to let some people go. I think this is the most important measure that you did. we heard yesterday that a few hundred, of course it’s a very small percentage if you look at the total number of employees. But all the companies have to be very careful in this period and take very unfriendly, sometimes, measures. You said that the secret for the future is to invest more in research and development, and to predict very precisely what will happen. And what is this research saying? How long will it be, this crisis, in your view?

I will not take the risk of making a projection, like many economists. What I see in the world, as I travel in Asia, in Europe, in the Americas, I see some more optimism, a little bit more optimism. But still, deeply, when you talk to many different industries, retail, telcos, financial services, etc, construction, there’s a lot still to be done to come back to growth.

This is not a very good moment but I saw today in your presentation some very interesting figures from a study, and I will ask your permission to read some figures from this study, made by IDC, because it’s very interesting that even if we have problems, we see some good signs in the future, especially in the IT sector, and how this sector can actually help the whole economy to go forward and to go back to growth. So, according to the IDC study, IT expenses will reach $2.2 billion in Romania in 2009. And since the end of 2008, until the end of 2013, IT expenses in Romania will grow by seven percent per year, while GDP growth will be only 2.7 per year. IT related activities generate fees to the state budget of over $400 million in 2009, which means that for the next four years, those activities will generate to the state budget almost $700 million net taxes and fees. So, the IT industry, and Microsoft is a very important player in this sector, will contribute for the economy to go back to normal. This growth of the IT market, of the workforce in the IT industry and IT specialists employed in companies that use IT infrastructure will grow to 21,000 additional jobs over the next four years from now, when we have 4,000 jobs. So, in this context, what is the real impact of IT, software, and the Microsoft ecosystem on the Romanian economy, and if you can give us some thoughts about the region. Of course, it’s easier for you to see the big picture.

When you come to Romania, there was the same study looking at the impact in terms of the economy of our own ecosystem. Microsoft is providing the key building blocks: Windows 7, Windows Server 2008, SQL Server, all of our products to build solutions. And the solutions are developed by local software developers, Romanian companies, developers, consulting, all of them actually have a multiplier effect of 6.5, meaning for every RON that Microsoft builds for customers in Romania, there’s an additional 6.5 times more revenues created by local Romanian companies, small and large ones. So that’s the very good news in terms of the ecosystem. When you take the big picture, globally, very important actually information from the study from IDC, between now and 2013, there will be a growth of 3.3 percent of IT span, when the worldwide economy on average is supposed to grow by one point. Some countries will still go down, others will grow faster, like China, and many countries in the middle. So IT is going to grow three times faster than the rest of the economy. In terms of jobs creation, there will be 5.8 mln jobs created by IT and more than 40 percent of that are related to Microsoft technologies. So one of the key messages as I am here today in Romania and talking with many partners and customers is investing in the skills to get to know some of the great new technologies, to help the customer save money by cutting costs, but also innovating at the same time, is what we call a new efficiency, is very relevant and it’s a very good opportunity.

What is your perspective about the importance of Romania on this map? How does Microsoft Romania evolve? What do you think is good for the people to know about Microsoft Romania’s future plans?

Microsoft has been in Romania for many years, and it has been for many years one of our best subsidiaries in terms of growth, in terms of development, I think for a couple of reasons: the team has done a great job, with a fantastic community, there are a lot of engineering talents in Romania, and we have so much at Microsoft coming from Romania too.

Some of them are in the U.S. now.

Yes, some in the U.S. and some here.

We have actually an entity that we bought as an acquisition which is in an operation of Ciao, which is in the country.

At Timisoara.

Right, which is in the online shopping world. We have also the Global Support Centre in Romania, covering many of our European countries here in Romania. So we actually have a pretty large presence in Romania. And I know the country has been hit very severely by the economic crisis but again, based on the technology abilities of the countries, I think there is a lot that can happen, not just locally, but a lot of software companies can actually export their products and services in terms of off-shoring capabilities to many other countries. And this is where the country differentiates itself.


We had some laughs a few years ago when Bill Gates came here and our President said something like: “Ok, piracy is a good thing for Romania, because it helped young people to understand the Windows systems”, and so on. It was very funny, but, apart from that, this is a serious matter about people that are trying to avoid to pay the system, and so on and so forth. I’m sure that this is a very important thing and it is a thing that is on your agenda. So, about the general market and what we can do to educate more the market, to understand the importance of not using piracy and break the systems.

First of all, if you look at the PC market in Romania, which went down last year, I mean last 12 months because of the crisis, is roughly 650,000 PCs being sold per year. Hopefully it will go back up again in the future. Given the economy as well of the country, where we see a lot of people in the rural areas, a few one of the main challenges of the information society in Romania is to provide access to all the people in the remote areas, using broadband access and using the Web to do many things, not just from the consumer perspective, from the citizen’s perspective, from an IT perspective as well. So, we definitely see Romania as a place to keep growing, and are very much looking forward to future. Piracy, coming back to your second question, is actually somewhat getting better, meaning the piracy rate is decreasing in Romania, which is good news. It is still very high, 66 percent of software users in the business community, not even to talk about consumers, are being pirated. Where are you in the ranking? Certainly Romania has made a lot of progress compared to countries like China, which is up in the 90 percent plus, but if you look at Western Europe, you will find the countries are more in the 30-45 percent range, of course some of the best in class. And I think this is something where the government, the business community, not just Microsoft, have to work on together. Because IT in the media business, in the farmer business, in many other industries, is core to developing value. The work we have to do as a company is to make software more affordable. And I think that is something we have done more and more, providing some unique conditions for university education in Romania, providing also some unique programs for charity and NGOs in Romania, providing some very unique partnerships to companies and PC manufacturers. There is a lot of different ways to have actually access to more affordable versions of the Microsoft products.

You are here because we just saw your presentation about the new products of Microsoft, and this is the second part of our interview, more focused on the companies and the business part of things. Because you launched Widows 7, you launched Windows Server R2 and Exchange 2010. Your company said about Windows 7 that it is the best operation system ever. What are the arguments for that? What does this new version of Windows bring new and revolutionary, and if you can make some comments, what’s better if you look at Windows Vista, for example, which was considered not such a big success. You learnt something from the mistakes, maybe, from the Windows Vista? And this is the best operation system? Is it true? Or am I wrong?

Yes, it is! I’ve been in the company for 25 years. I’ve used and seen all of the Windows versions since the very first one in 1985, so I have some perspective on Windows at a personal level too. Number one, this is the product that can run on older machines. We’ve never done that before. Meaning that some of the PCs you’ve brought, one year ago, two years ago, can run Windows 7 and it’s going to be faster than Windows XP.

So, no new machine.

You can see it run on older machines. Which is fantastic. It’s good news. It’s very good news. Number two, it’s incredibly fast. In my job I travel all the time, so what I have to do, I’m landing from a plane and going to another place, I’m making my PC to go to sleep, “sleep” function, I click, in a few seconds it goes to sleep, and then I boot it up again, in a few second it’s up and running. Very fast. Number three, it’s very secure. Actually, it’s something we have done a good job, and Vista, to be honest, was the most secure on the market. We’ve been keeping increasing the security level. Number four, it makes your everyday tasks and work much easier. The user interface is fantastic. You basically hover across multiple windows by transparency effect, we call it the aero face, you can see where the information is. You can snap to windows and basically split the screen in two halves, to compare information. You can use, if you have a large screen, the multitouch, the touch capability, so you have an interface where, with your fingers, you can open information windows and interact with your PCs. So the interface is incredibly fantastic. And from an IT perspective, this is an environment where many businesses are going to save up to $190 per PC, when they deploy Windows 7 in their business.

So, some of the questions that are coming from our audience, because we are addressing companies and business audiences too, is regarding the concern, regarding the prices. Because some of them are saying: “Ok, but we just bought licenses for Windows XP, or for Windows Vista, and now, what will happen? We want this new fantastic Windows 7 operating system, but how much should we pay? Should we pay again? There are some facilities? What can you tell us about it?

So the way people, users, consumers and businesses, can buy Windows is multiple. Number one, most of the people, might buy new PCs and the great news you never had such a variety of PCs, more than 250 different types of PCs, from the lowest cost, I mean, I’ve seen in many countries in the world, PCs at $250, as an example, with Windows 7 on it, up to the most expensive gaming machine, people love 3D, real time games, “hard gamers” we call them, which can cost much more money. So you’ve got this variety of devices and you buy Windows with the PC. Number two, you can buy an upgrade, so you can upgrade your older machine, because it’s going to run faster from XP, Vista, to Windows 7. So there is actually, all across the world, in Europe, an upgrade package available here in Romania, the low-cost, for people to do it. And then, number three, for many enterprise companies, who have what we call a volume licensing agreement with Microsoft they can actually access the newest updates of Windows through this licensing part.

So just a few words about R2 and Exchange 2010. What’s new, what’s important for the people from the IT industry to know about it?

We also announced two very important pieces of technology, Windows Server 2008 R2 and Exchange 2010. Windows Server is a fantastic server product to complement Windows 7. As an example, you can actually have direct access to your network without using VPN (Virtual Private Network), saving a lot of money and cost. Number two, you can use virtualisation, which is a free piece of technology we’ve included in Windows Server to save a lot of hardware servers in cost in your company. Exchange 2010 is the cornerstone of our unified communication solution. What is it? It’s actually the way you can access not just to messaging, but to message coming through your voice mail, translated into speech, into your email. You can also have access to your email on your mobile device, the Windows phone, or you can have access on a Web browser. In all of that, complying with all the regulation that you can have in any country in the world, in terms of protecting access to confidential information and security, all combined together, provide what we call the new efficiency for companies, not only to cut cost, but also to innovate in their business and be more productive.

Tell us a few words about the hot topic of launching Bing, the very strong step that Microsoft did with the alliance with Yahoo of launching Bing and if this is war with Google. This is a search engine that is not competing directly with Google? What’s your strategy in this very interesting topic?

Microsoft has been for a number of years and for many, many years to come a key provider of technology in the online business. Search, and Bing is a new version of our search engine, which is all about providing an alternative to consumers in search, because many people are looking for a choice, and you don’t have that choice today. The good news is Bing is providing some very innovative features such as responding to your questions. Often the questions on the Search don’t get direct response. People have to click and search again and go through many links to find a right response. So we have defined some categories, like “shopping,” we were talking about shopping and Ciao is an example where you’re going to ask for a product and you’re going to get the response and where you can buy it as a consumer. That’s a response to a question. And that’s a decision you can make.

So it’s more customised search solution. We discussed a little bit about Ciao because Ciao is important for Romania, even if not too many people know that Ciao have a development centre here in Timisoara. The investments in online made by Microsoft are covering very different markets, like content, with MSN.com, instant messaging, email, gaming, even if it’s not purely online, streaming in C write, and so on and so forth. I don’t know if there is something that Microsoft doesn’t do online, but what’s your view about online businesses and what’s the future for Microsoft in online? You will focus on something, you will prepare new launches? What’s your view about it?

Well, as a company, we talk about enabling the three screens for people. And the screens are: the small one, your mobile phone, the mid-sized one is your PC, could be a netbook or a PC, and the large one can be a TV set, or can be maybe a very, very large, large screen on a wall for an office. It can be a dedicated screen, the large screen.

What’s your view on the three screens? Do you think that at some point the three screens will merge in one single screen?

No.

Do you think it will remain separate, because Microsoft seems like a company that is working very very much with the computer screen, but I know you have developed technologies for TV too, for mobile, and so on and so forth. Do you think the three screens will remain the three screens?

Absolutely! We believe there are different needs for people to actually access technology. On the little screen, Microsoft had been developing Windows Mobile, we’ve been selling 50 million Windows Mobile devices in the last couple of years. We are really one of the top three contenders in the smartphone market with Windows phone, which we just announced. So just to step back, coming back to your question, the online investment of Microsoft is both the online properties, like MSN, Hotmail, Messenger, Windows Live, where we have more than half of billion people in the world using these services every day. Number two, Bing, which is a very, I think, important piece of innovation, where we start gaining market share in the U.S., while making some expanding investment on local rivals in different countries in the world to come. And number three we have built an online advertising platform as well, so that we can work with advertisers, advertising agencies, to provide a very effective way to measure their investment using the online media to be more effective in their marketing.

So, one is, apart from Microsoft, because you are a very important person in the Microsoft management, but apart from Microsoft, name some projects, some things, some companies maybe that you admire, you think they are interesting. Could be online projects or products or anything. I’m very curious, because you have everything in Microsoft, if there are products on the market that you see and say: “Ok, this is nice, could be a Microsoft’s product,” or one you personally like.

Talking about very different kind of references. In my day-to-day life, I’m someone drinking quite a lot of coffee. The convenience of having, and I don’t know if I can name a brand here, as you asked me the right question, espresso machines, to get coffee in a few seconds. I like that. And I know that this company is investing in more technology to make that more environmentally friendly, if that is not the case. In a very different perspective, some of the new developments happening in the automotive industry, in terms of electricity vehicles, in terms of a new way of actually consuming much less CO2. There are some very fascinating projects. I got to meet recently this company called Better Place, which is building an end to a platform to basically provide a very new way of using a car, which will be a service. You basically subscribe to a car, you go to a garage, it will recharge your electric battery, but more importantly in the car you’re going to have software, knowing your driving behaviour, knowing how much you have consumed, how much you need, and managing all the network users to get you the best price and also get you in the car you most favourite services, could be music, could be something else, as a consumer, shopping. I think there’s going to be a revolution in terms of the transportation industry coming.

I was hoping for something more spectacular, like you are using in secret an iPhone or something, but this is good. And my last question: Microsoft not only invests in operating systems, in very sharp and clear projects, and so on and so forth. I noticed that you sometimes invest in R&D and in why not, dreams. Very high-end technological innovation, projects like Surface, and other things like this. You discussed earlier about xbox technologies of controlling with movements, not with joysticks, and so on. How will Microsoft look like in 10 years or 5 years, maybe it’s too much 10 years, even if we are counting now 35 years of Microsoft very present in the market and as I mentioned at the beginning actually you changed the history of the technology.

I will name two things. One which is happening already today, which will have a profound transformation of all the IT and all of the economy, is what we call software as a service, where we can provide actually your applications, could be Exchange, could be Sharepoint, could be consumer services as well, on the three screens. It’s available today, we’ve actually announced that in Romania two days ago, we’re called Business Productivity Online Services, where businesses don’t need anymore in their companies hardware, servers and IT people, they can actually get access to that by clicking in the Web and getting that as a service every month. The second one is really about this natural user interface. I was talking about Windows 7, which is the beginning of that, where you can touch the screen and open and play with the documents. But actually with Natal, which is the code project name of this piece of technology coming with xbox 360 you will be moving with your body, with no device, to kick a ball if you are playing tennis, or drive a car, and the key thing is this kind of interface will go to the business community in the next years too. Meaning, in your interaction with your PC, which it’s not necessarily just going to be a small screen, think about a large screen, which will be much cheaper in a few years. Like in the movie Minority Report with Tom Cruise, you’re going to be able to do that. The technologies are available today, to much high priced today, but coming at lower price. You’re going to be in a world where with your fingers open the information, launch a video, access and open up a channel, video conferences with you in Romania will be somewhere in the world. And recognizing you, saying: “How are you doing this morning? You seem to smile, you’re in a good shape. What can I do for you?” It’s coming. It will have an incredible impact on people’s lives and business productivity. Microsoft is innovating through this billions of dollars in R&D by providing some of the unique experiences for the years to come.

So the future is tomorrow, let’s say, not very far.

Yes, the future is starting today.

And the economic crisis will be somewhere in the back, very far away, and we will forget about it very soon.

Absolutely.

Mr. Jean-Philippe Courtois, I thank you very much for joining us today, and I hope to see you soon in Romania, to discuss about very interesting projects and products that Microsoft does here. Thank you very much.