Microsoft Financial Analyst Meeting: Craig Mundie, Qi Lu

Rob Enderle

This is the second segment in my look at Microsoft and what it shared at its Financial Analyst Meeting (FAM). In this segment we'll look at Research and On-Line Services.

Craig Mundie: Research


Craig focused on the next-generation user interface, which he argued goes to the core of how people view Microsoft. In a very real sense it is the UI that Microsoft uses to touch the folks who use its products. In many ways the UI is the digital face of Microsoft. He drew a distinction from the Enhanced GUI (Graphical User Interface), on things like Microsoft Surface to the NUI (Natural User Interface) we are moving toward.

The NUI will be location-aware and focused more on gestures and interacting with people more naturally. One of the demonstrations Microsoft has been using is of a robotic receptionist who interacts with folks more like a person than a computer. This possibly could be one of the biggest parts of the industry's path toward AI (Artificial Intelligence). Part of this move will be active and intelligent real-time modeling, not only to represent concepts but to potentially get around language limitations. For instance, a visual display can show what it is talking about, not just say it. A picture is worth a thousand words in any language.


Looking forward, hardware is becoming very variable and can range from cell phones to large PCs. But the next step is room computing, where the computer is built into the room and the walls are used as display surfaces. Technology similar to the NUI will let people use both physical elements and gestures to interact with the digital environment and work without monitors, keyboards or mice. The demo using an interactive digital assistant is kind of scary in a "Forbin Project" kind of way. However, when he seamlessly moved to a video conference I recalled a scene out of the movie "Lost in Space" where a student changed a similar image of a teacher into an ape. There could be a huge market for image enhancement software.


One final cool thing was a projected image on a wall that would change based on where you stood, similar to what would happen if the wall was made of glass and the view was real. This really showcased the need for vastly better projectors.


(You can see a Webcast of all this cool stuff at Microsoft's Press Room.)


In the end, Craig seemed to disagree with the four-screen concept that Microsoft was promoting and instead was promoting his idea -- which I believe is correct -- that in the future anything can be a screen. Infinite screens, if you will. It's nice to see someone so comfortable in their role that they can say what they truly think. Craig clearly did not feel he simply had to repeat the company line.


Qi Lu: On-Line Services


With the focus on the Microsoft/Yahoo deal, a lot of folks were looking forward to listening to the leader of Microsoft's search effort. Qi Lu rightly articulated that the Google brand is very powerful in that when users see results identical to Google under a non-Google brand they value them less. While English was clearly not his native language, he brought across a deep loyalty to Microsoft, a commitment and beleif that his company could compete with Google. With Bing, which was his baby, I think he has showcased a good foundation for his belief in Microsoft's capability.


This guy conveys a lot of heart. He doesn't run a unit, he lives the technology. You don't see this often. This is a Steve Jobs trait, granted one of many, but perhaps the most important if your focus as a customer or investor is on product quality and competitiveness.


They did a series of Bing demonstrations. It is amazing how much better it is if you search for certain things, like sporting events, tweets, deals or flight numbers to get trip information.


He then argued for the Microsoft/Yahoo partnership. His primary point was the fact that a vastly larger number of users typically results in vastly better results. Behavior can be better captured and modeled so that +1 users get the benefits of their predecessors' search activities.


Of all the folks I saw, I think Qi Lu is the most likely to leave Microsoft near term. This isn't because he didn't appear loyal, but because he wasn't being made to look like part of the family with the other executives. He didn't appear to be a member of the old boys' club. This was most noticeable at the Q&A at the end.

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