Transcript of Ballmer's Executive Memo

Microsoft CEO Steve Ballmer has issued an executive memo explaining the company's new push to deliver software that targets small and midsize businesses. Read on for a transcript of the memo, which coincides with the start of the Microsoft Business Summit in Redmond.

Together, We Build Business

Midsize companies face many of the same demands as large corporations. Globalization has opened up new market opportunities, and to take advantage of them it is essential for businesses to maximize efficiency and collaborate with partners and suppliers around the world. Business success increasingly comes from delivering more personalized, just-in-time service to customers. The regulatory environment requires greater attention to compliance and record-keeping. Yet companies with less than 1,000 employees often struggle to find the resources to tackle these challenges.

At Microsoft, we believe that the key ingredient to sustaining and growing a business is the people behind it. Together with our partners we're creating technology solutions that can amplify people's impact in a way that can drive business success for midsize companies around the world.

This week at the Microsoft Business Summit, we're bringing together hundreds of midsize business leaders to discuss the unique challenges they face and explore how they can harness the power of technology to work efficiently and be more competitive.

Software That Works the Way You Work

You can see the power of software almost anywhere you look. Large companies around the world are using IT to empower and connect their employees, manage global networks of partners and suppliers, and integrate and optimize their core business functions. Powerful productivity software is helping individuals keep in touch and collaborate to turn their ideas into reality. But if you're a midsize company, there's still a lot of potential for software to help you build your business.

Over the past several years, we've looked much deeper into the reality of doing business inside a midsize company. We sent teams of developers and program managers around the world to meet thousands of people in all kinds of business roles. We followed them around the office and tracked business processes as they moved from person to person. We even took pictures of their desks to understand the environment they work in and the way they use their computers.

And we learned an important lesson: Today's business software doesn't look enough like today's businesses.

There is productivity software that helps people communicate and work with documents, and there is business automation software to deal with functions like accounting or supply chain management. But these two kinds of software live in completely different worlds. The productivity software we have today is designed for everyone, but it doesn’t really map to the specific kinds of jobs people have. And the business process software we have is far too complex for midsize companies to customize into tools that work the way their company actually works. What midsize companies need is business software that bridges the gap between these two worlds.

We came back determined to put these people's needs at the center of the way we design and build our business software. Together with our partners, we're creating products and services that are designed for who you are in a company, not just the tasks you perform when you’re there. And we're bringing in new thinking about the core business processes that matter most to midsize companies – functions like sales and marketing, finance, operations, productivity and IT management – that will help business software work the way people really work, no matter where they sit in the company.

Empowered, Connected, Insightful and Adaptive

The companies we visited worked in many different industries, but they shared a few common goals. They want to create breakthrough products and services. They want to offer superior customer service. They want to build high-value connections with their partners and suppliers. And they need to improve operational efficiency and reduce costs.

Behind each of these goals is the person or team that achieves them. Great software can amplify their capabilities and help them work together to deliver real value. The next generation of Microsoft’s platform, products and services for midsize businesses, built on our 30-year heritage of making software innovations more affordable and accessible, will do this by:

Empowering people in their specific job function. We have designed the next generation of our business solutions, which we're calling Dynamics, around 50 of the most common roles in a midsize company. These solutions expose and connect the specific activities, processes and reports people need for real jobs inside a company, whether they're the president, the finance manager, the warehouse worker or the support clerk. And they'll have the familiar look and feel people know from using Microsoft Windows and Microsoft Office today.

Driving business insight. Everyone should have ready access to the information he or she needs to do their job, so we're working to deeply integrate search, reporting and business intelligence in a way that gives people the real-time data and analytics they want. Using technologies like Microsoft SharePoint and the business intelligence capabilities of Microsoft SQL Server 2005, executives can have a rich "dashboard" that gives them visibility into every part of their business, and warehouse workers can use the same kind of up-to-the-second data to make sure all the pallets are where they need to be.

Keeping people connected. No job is an island, and connections between teams don’t stop at the company walls. So we're investing heavily in Web-services innovations that securely connect all these different job functions and enable people and teams to collaborate effectively whether they're in another department or at a partner or supplier. At the same time, workers should be able to work just as effectively whether they're at their desks, at home or on the road. This commitment to keeping people connected touches every part of our company, from Microsoft Windows Mobile to Microsoft Visual Studio, Microsoft SQL Server and the Microsoft .NET platform.

Creating Adaptive Processes. Efficient and flexible business processes are at the core of any successful company, but software has a long way to go before it truly reflects the processes that make a good company tick. Even companies with great ERP or CRM systems still leave much of their process work outside the software, so we're working to implement business processes in software in ways that are easy to understand and simple to adapt to changing business conditions. As a new order flows from sales to finance, billing, production and shipping, people should have simple tools to see what the process looks like – and to dynamically adapt the supporting software if the process needs to change.

Simpler to Get, Simpler to Manage

Growing your IT capabilities isn't easy. In many midsize companies, fewer than five people manage all the IT for the organization – everything from individual desktops to company-wide databases. They don't have the resources to build custom solutions, nor do they have access to armies of consultants to help them integrate their systems.

We believe that Microsoft and our partners offer the best way for midsize companies to overcome these obstacles and gain the rich, empowering IT capabilities larger companies have today.

Building on a solid foundation of integrated technologies, including Windows, Office, SharePoint, SQL Server and a wide range of solutions for vertical businesses, we're making it easier for overworked IT generalists to focus more on delivering business value. On top of a platform that gives businesses a more secure, reliable and well-managed IT infrastructure, we're delivering role-based software that is familiar and easy to use, and is designed to support the ways people really work. And we’re doing it in a way that gives businesses the flexibility to adapt all these systems to an ever-changing business environment – whether they're running on individual PCs, racks of servers or hosted services.

In July, we launched the Windows Server System for Midsize Business promotion that includes Microsoft Windows Server, Microsoft Exchange Server, and Microsoft Operations Manager Workgroup Edition, all under a single umbrella with attractive pricing specific to midsize organizations. Along with the next version of Windows Server, we will launch a new integrated product, code-named "Centro," that brings together Windows Server, next-generation Exchange and security technologies, and a new integrated management experience designed for the IT professional in a midsize business.

Helping midsize companies build their business is about more than just technology. It's about building richer connections with these companies and helping them every step of the way. Along with over 640,000 industry partners around the world, we're providing great support and guidance to midsize companies – moving beyond selling standalone products to helping customers find, implement and support integrated solutions. To better serve the wide range of industries where software can make a difference, we are building up expertise around all kinds of businesses – and putting that knowledge to work to bring customers tools and solutions that meet the needs of their specific industry.

We are launching the Midsize Business Center at www.microsoft.com/midsizebusiness to help businesses map out the IT capabilities they need, find the right local partner to get them running, track and manage their software assets and better support their IT infrastructure. We have also announced Open Value, a licensing program designed specifically for midsize companies that allows for simplified license tracking, more control over the upgrade cycle and improved management of software costs.

You can learn more about Microsoft's vision for this new generation of business software and our plans to deliver these innovations to customers at www.microsoft.com/midsizebusiness/businesssummit.

Steve Ballmer