Bill Gates gave a great speech at Davos this week around the concept of Creative Capitalism, an approach where governments, businesses, and non-profits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities. It is an important and exciting way to think about the creative application of business models to help the world's poor. In addition to Bill's speech, there is also a good Wall Street Journal article and interview on the topic that appeared this week.

This is the concept that drove me to switch jobs within Microsoft last summer and join The Unlimited Potential Group, which is, of course, our company's main vehicle for Creative Capitalism. It is the concept behind the work Intel is doing with its World Ahead program. It is the concept behind the work the OLPC is doing with their XO computer. It is the concept behind the work of dozens of other companies around the world who are taking the philanthropic motivations of their Corporate and Social Responsibility (CSR) departments and integrating them with the creativity of their new product development departments in order to create a new, new thing: a systematic approach to applying the strengths of a company to serve the needs of poor people by essentially treating them as a new class of customers who previously happened to fall outside of the traditional market focus of a company. It involves a new approach to product design, research, distribution, partnership, and profit models -- all done in the name of helping a class of people that businesses have traditionally ignored.

A cool thing that Bill did with his speech is that he has given the concept a name. I really like "Creative Capitalism" as a description for the work we are doing.

From my perspective, there are multiple approaches companies can take to get on the Creative Capitalism bandwagon.

• Differential Pricing - This is when a company creates versions of its existing products at a price point that poor people in emerging markets can afford. In Bill's speech, he talked about several examples of drug companies doing this with vaccines. CK Prahalad documents how Lever Brothers and others have successfully done this with consumer goods for the poorest of the poor in India. Microsoft's best example of this is the Microsoft Student Innovation Suite (MSIS), a $3 package of software sold through government programs where the government subsidizes the purchase of laptops for students.
• New Types of Public Private Partnerships (PPP) - This is when governments and businesses transition from a classic buyer-seller relationship in order to partner in creating programs targeting specific social and economic outcomes. These PPPs usually work best in areas where government resources and expertise are achieving limited results. My favorite example of this at Microsoft is Partners in Learning -- a Microsoft program that we just renewed for another 5 years with a $235 million commitment -- that among other things has trained 4 million teachers on how to use technology in the classroom in a manner that emphasizes local collaboration and local impact. Also, Microsoft's Partnerships for Technology Access (PTA) program has worked with governments around the world to create dozens of these PPPs.
• Affinity Campaigns - This is a branding campaign where a company publicly allocates a portion of its profits from a  particular product to a development cause. These campaigns allow consumers in a small way to align their purchase choices with their desire to affect social outcomes. The best example of this, of course, is (RED) the branding campaign created by the singer Bono to help raise money for AIDS vaccines in Africa. Microsoft and Dell announced support for (RED) this week.
• New Products - This is when a company designs new products from the ground up to meet the specific needs of people trapped in the bottom of the social and economic pyramid. This is the most exciting long term aspect of Creative Capitalism and is the main focus of the Unlimited Potential Group. We have software developers working in solution areas like education, low cost computing, and shared access computing. As part of this work, for example, some people on my team are conducting product design focus groups over the next month in Ghana, Morocco, and Peru. I've worked on a lot of products in my 13 year career here at Microsoft, and I can assure you that as a company we never used to do focus groups in places like Ghana. But it is the only way we can do what we do best -- which is develop new types of technology solutions -- in a manner that has the greatest impact on the needs of people that technology companies have previously ignored.

So why are we doing all of this?

From a long-term, pure numbers perspective this approach makes sense for us as a company. There are 6 billion people in the world today, and Microsoft's products are used by about a billion of them. As a company we can grow in the future by either selling more software + services to our existing billion customers, or we can grow by selling software + services to the other 5 billion. If we do the latter, than we have to do so on their terms, not ours. And the fact that our team is now doing focus groups in Ghana is interesting because it turns out that Microsoft sells more in Africa today than it does in either India or China. Most people in our company don't realize this. There is a real business opportunity here, but as I've mentioned before there is an emerging view that this opportunity requires new partnership and distribution models and even new types of products from us in order to sell into these markets in a relevant and sustainable way.

But there is a social aspect to this approach that goes beyond business, and this is an important theme in Bill's speech. People by their very nature like to help other people -- and believe it or not this sentiment is even shared by a lot of people like me who work at a company like Microsoft. There is a place for this personal need to help other people in business, and we can do this in a manner that goes beyond traditional corporate charity or philanthropy. In other words, it is OK to align business interests (the need to grow our company) with social interests (the desire to help people who need help) if it is done in a creative way that achieves measurable outcomes on both fronts, and those measurable outcomes for the company don't always have to be measured by profit numbers on this quarter's income statement. Microsoft has always focused on long-term markets, and why can't we continue to do this in a manner that helps poor people at the same time? Hence "Creative Capitalism."

Of course there are critics of all of these different types of approaches, and their general argument is that it is impossible for companies to serve their own economic interests and the social good at the same time. There is also a more specific criticism focused directly at Microsoft, that this is all simply an effort to circumvent the appeal of free or pirated software so we can gain access to markets in emerging countries. One group this week even likened Microsoft's approach to education as being the equivalent of a tobacco company handing out free cigarettes to children. These critics are missing the point, because this is not about Microsoft or about software licensing models or even about technology. It's about the recognition that people who are in the middle and bottom of the social and economic pyramid are, well, people who might actually have the opportunity to advance in their lives if there are greater choices for products and services that are relevant, accessible, and affordable to them. This realization can create opportunity for companies, but more importantly it can achieve a social good because the creative energies of businesses are now focused on the needs of people who were previously ignored. When software engineers in Redmond and India are focused on meeting the needs of farmers in Ghana, then the world becomes a better place.

And that is the beauty behind the idea of Creative Capitalism.

A team of Microsoft people flew out to Cambridge, Mass. to meet with engineers from the OLPC Foundation yesterday. Here is a photo of my coworkers Bohdan Raciborski (demoing) and John Gunabal (smiling) as we showed some software to Walter Bender, Richard Smith, and Ivan Krstić from OLPC.

I have to say I like these guys. They all seem like smart platform people, which is the type of people I seem to have worked with off and on for about 20 years now. In fact, it turns out that the OLPC's CFO, Chuck Kane, worked with me at Stratus Computer back around 1990.

We had a good discussion and left the meeting feeling positive about the day. We still have a lot of work to do before we make a final decision around our plans for the XO, but all in all it was a good day.

Well, I will be flying out to Cambridge next week for my first meeting with some of the people at the OLPC, and I have to say I am looking forward to it. Some of my UPG co-workers from Microsoft have been meeting with the OLPC team for about a year now, but since I am a relative newcomer to our group, this will be my first trip.

One of the things we will be discussing is the status of our port of Windows XP to the OLPC XO computer. There have been suggestions in the press by Nicholas Negroponte and others that “Windows already runs on the XO.” That’s not really the case yet, and with the attention the OLPC’s “Give One Get One” campaign is getting, along with the strong level of interest we are receiving from some Ministries of Education and NGOs in buying a version of Windows for the XO, we thought it would be useful to provide some clarity on the topic.

For starters, we are hard at work on the project here, and we are using an approach that is a little unusual for Microsoft in that we are managing the entire process of adapting and testing an existing version of Windows for a new PC. Usually the hardware vendor does this. And the Windows port to the XO is by no means done. Between Microsoft employees and third party contractors that we have brought into the effort, we have over 40 engineers working full-time on the port. We started the project around the beginning of the year and think it will be mid-2008 at the earliest before we could have a production-quality release.

Because of this, we have not announced formal plans to support the XO yet, and we will not do so until after we start getting feedback from our first limited field trials starting in January before we make the final call. We do not want to set expectations we subsequently cannot meet, especially when it comes to supporting the children’s machine. For governments in emerging markets evaluating purchases of Windows for the XO, this means that so far we are not announcing an availability date, pricing, or support policies. In fact, you should not yet assume that Windows on the XO is a done deal. We are hopeful that we will have a different story for you within six months.

It also means that if you are in the US and Canada and are participating in the “Give One Get One” program, you need to understand that Microsoft is not currently planning to support a retail consumer release of Windows XP on your XO computer.

Why is this work taking so long?

Flash
First, the XO computer uses flash memory instead of a hard disk drive for storage. This is one of the reasons OLPC can get the production cost of the computer down to $188. This is a relatively new class of machine, and we have to do design work to get Windows and Office to work reliably and with good performance using only 2 GB of storage. The XO actually only comes with 1GB of flash, and we asked the OLPC to add a slot for an internal SD card that will provide the 2 GB of extra memory needed to run our software. (By comparison, an entry level $499 Dell laptop comes with 60 GB of hard disk storage.) The potential payoff for students and schools from this work, of course, is that the tens of thousands of existing educational applications written for Windows can potentially run on the XO. As part of this engineering effort, we have to design a new BIOS – the layer of software that runs between the hardware and an operating system -- to have Windows boot and run off the SD card. For us this is new work and requires a design and processes for supporting the XO’s custom SD interface and for the installation of Windows on the SD card, both at the Quanta factory that manufactures the XO hardware and also in the field.

For much of this XO flash design, we are able to leverage the work we did to get Windows to support the Intel Classmate PC, another computer that uses flash memory for storage. However, the Intel computer comes with 2GB of flash storage, so we did not have to use the SD card approach we are designing for the XO. The Classmate port took us about 9 months, but we started that effort a year and a half ago. A third example of these low cost “Flash PCs” on the market is the ASUS Eee PC, and surprisingly enough getting Windows running on this computer required a significantly shorter amount of time because ASUS used a more standardized approach to its hardware design compared to the XO. In technical terms, ASUS put the flash drive behind the IDE disk controller, making the flash storage "look like" a hard disk drive to Windows.

Microsoft plans to publish some formal design guidelines early next year that will help Flash PC manufacturers benefit from our early work so they can design machines that enable a great Windows experience at as low a cost as possible, and with a minimum of custom design work necessary to get Windows to run on their machines, such as we have encountered with the XO.

Cool New Features
Secondly, as we all know there are many innovative features in the XO computer that set it apart from other designs, and we are working with partners to write the driver software so that Windows can support all of them. This includes drivers for the XO’s wireless networking, camera, graphics processor, audio system, and the various user input devices (game pad, writing pad, touch pad, directional pad, and mouse pad.) There are ten custom drivers in all that we are writing. We also hope to support the XO’s mesh network design, its power-saving “e-book” mode, and its capability for excellent screen visibility in full daylight.

And we have a different support model than OLPC is envisioning: we are not expecting K-6 school children to access the source code and do their own programming in the event they have to fix a problem in the computer. Certainly, we think there is a role for students in the support of school computers -- in fact, as part of our Partners in Learning program we have trained over a million kids in a student helpdesk program (like in this case study from Brazil) -- but we also think that local entrepreneurs and businesses need to play an important role here when you are talking about deployments involving tens of thousands of computers.

We want to support these new XO features without sacrificing compatibility with existing Windows applications, and we want to deliver an out-of-the-box user experience similar to the quality people expect from Windows running on more expensive classes of machines. All of this takes a lot of work.

Fast Moving Partner
Finally, we are doing this engineering work for a moving target. It is literally like designing parts of a car – well, actually a school bus -- while it is running down the highway at a high speed. I am not meaning this as a knock on the OLPC organization, because they are a small group of people doing an amazing amount of innovative design work in a short period of time. But we have only received a handful of machines for most of the last year, and the XO team was doing some hardware design changes as recently as this past August. This affects our schedule.

Much of the technology in the XO is developed using open source technology licenses that make it difficult for engineers employed by commercial software companies like Microsoft to work directly on the project. For this reason, we also had to follow a complicated process to figure out interfaces for many of the XO’s hardware components and to deal with some of the hardware bugs they were reporting in their design process in order to make progress on our port. All of this slows us down, but that’s OK given our overall shared mission here.

We appreciate the support we are getting from the OLPC team, and we know the focus their engineers need to get the XO out the door and into the hands of students. Now that they are finally shipping, our ability to support the XO with a quality release of Windows is accelerating. I also have to say that if our team continues down the path they are on and the system performs as we hope, then that cute little machine with the Wi-Fi ears will run Windows!

What Does This Mean for Users?
The Unlimited Potential Group at Microsoft is developing technology to enable social and economic opportunity for “the next five billion," and one of our key focus areas for doing so is through the transformation of education. As part of this, we are investing in programs and partners around the world to foster innovative schools, innovative teachers, and innovative students. We have a lot going on here, and there is clearly a role for low cost hardware as part of this vision. In fact, there is a good alignment between what OLPC is trying to do and what we are trying to do. And frankly, nothing would please us more than seeing hundreds of thousands of these XO computers that are now starting to be deployed all running Windows given the very high interest that has been expressed in the market for it. We are committed to developing a quality port of Windows XP for the OLPC XO computer, but we still have a lot of work to do to complete the effort.

Well, it seems like the OLPC organization is in the news a lot lately, even more so than usual. Stories that caught my eye over the last  week included a CNN report, a BBC story from Monday, and of course the Wall Street Journal page A1 story that came out this last Saturday.

Microsoft's approach to the OLPC continues to be that we will work with them to see if we can get Windows to run on the XO machine -- there is still a lot of technical work to do, despite what you might hear in the press --  but otherwise we need to remain focused on our Unlimited Potential mission for enabling social and economic opportunity for the next five billion through transforming education, fostering local innovation, and enabling jobs and opportunity. We are applying a great deal of energy across these three areas in pilot projects around the world, and we don't really want to get distracted by the public rhetoric taking place around the OLPC and their XO machine. We are working with partners on a broad spectrum of solutions for education in emerging markets -- and low cost computing is just one of them -- but we also have pilot projects in other areas ranging from rural kiosks to new approaches for subscription computing, new applications for cell phones, new models for Internet cafes/community centers, and new approaches for mobile and remote access to the Internet. We have a lot going on and really need to focus first and foremost on the needs of the communities we are serving. Our mantra in all of this is "Relevance, Access, and Affordability."

The WSJ article was kind of cool in the sense that I was interviewed and referenced in the story, even though I didn't land a direct quote. I've been at Microsoft since 1995, and this was the first time I have appeared on the front page of the Journal. (By the way, my sister Lisa -- who also works here -- was featured in a page one WSJ story last year, for those of you who are keeping tabs on the Utzschneiders.)

Anyway, I've thought a lot about this whole OLPC phenomenon, and the best way for me to summarize my thoughts on the topic is to refer you to two quotes, both from bosses I've had at Microsoft.

The first is from David Vaskevitch, one of Microsoft's CTOs. He was an early mentor of my career here, and at one point I ran a technology incubation team working for him. David always liked to remind me that "the technology industry consistently overestimates what it can accomplish in 2 years, and consistently underestimates what it can accomplish in 10". This is coming from a guy who chose to center his 1996 Professional Developers Conference keynote around the emerging importance of digital photography -- we all thought at the time that he was nuts -- but look at what happened 10 years later. It's now one of the most widely used scenarios on the PC today (and among other things, a staple ingredient for how I create this blog.) And for what it's worth, I used this quote in my interview with the WSJ to summarize our view of what Nicholas Negroponte and the OLPC are doing.

The second quote comes from Doug Burgum, the man who spent 25 years building the Great Plains/MBS business into what ultimately became a billion dollar division for Microsoft before he retired this past summer. Doug had an amazing capacity to inspire a community of channel partners into creating an ecosystem around a shared vision and more importantly a shared set of values. His quote -- it actually originated from Margaret Mead, but Doug liked to use it a lot -- was to "Never doubt that a small, group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has." One of the powerful ideas behind the OLPC is their approach for harnessing the power and excitement of a community to accomplish a shared (and in this case, noble) mission. We know at Microsoft what this can feel like; sometimes people forget that my company has a lot of experience with building  communities organically. There's nothing like the feeling you get when you start a parade!

So my view on the OLPC is that Nicholas, Walter, Mary Lou-- all people I've never met but whom I admire at a distance -- are a group of dangerous dreamers (another Dougism) who are out to change the world and could have a huge impact on education over the course of the next ten years, but not so much in the next two.  I love the boldness of their vision, their focus on serving the needs of poor children, and their desire to do great things.

But I also know the reality of the physics of the IT industry and the difficulty in trying to go from zero to millions of deployed, functioning, supported machines in a matter of months. About the nature of how this industry works, where one group may come up with an idea and then other organizations or individuals build on the idea and come in from seemingly nowhere (hello ASUS!) with a different type of solution to fill a vacuum created by the original vision. (Ask me how I felt after I read the first public draft of the Enterprise Java Beans spec, a document that was "inspired" by work we were doing on COM and MTS in the mid-90's.) And how the implementation of IT visions ultimately comes down to customer choice, because people -- even people who work in government Ministries of Education -- are rational actors who select things that are in their best interest and take into account price, roadmap, TCO, pedagogies, politics, local infrastructure, support, bake-off results, the need for measurable outcomes, you name it ... the whole variety of factors that go into a complex government purchase process.

It takes a village to buy a computer, and it's always harder than you think it will be.

But that's all OK, because the OLPC vision isn't going to go away. There will be a permanent role for low cost, flash-based PCs in national education and technology policies. The XO will survive and evolve, and I bet every laptop vendor on the planet including Dell and HP will have a competing machine within 24 months. A new ecosystem of collaborative, social network-inspired and Internet-enabled education software will emerge. Cell phones will play a bigger role in this space than even Nicholas is publicly acknowledging. And kids and teachers will author a lot of the content.

Dangerous dreamers who assume they will change the world in two years but actually do so in ten, in a manner they never initially anticipated. That's my personal view of what the people at OLPC are trying to do. I love the industrial design, I love the screen, and I love the rabbit ears. I wish the team well. But there are other dangerous dreamers out there, and ultimately it will be the magic of software delivered in a sustainable manner that will be the key to transforming education.

But now I need to go back to work.

Yesterday I attended AMD's 50x15 partner summit in Sunnyvale, California. 50x15 is AMD's equivalent to Microsoft's Unlimited Potential, with the idea that 50% of the world's population can achieve access to the Internet and computers by the year 2015. In attendance were representatives from technology vendors (HP, Cisco, Dell, Nokia, Google, Sun, Microsoft), some NGOs, and even the guy who played Janice Soprano's narcoleptic boyfriend on season three of the show. (More on that later.)

The meeting format was a day-long roundtable with about 50 people in the room. I have to confess after the first couple of speakers I was really worried that it was going to be a bad day. It's not because Tom McCoy or Dan Shine were poor speakers with little to say, it was just the opposite. They were interesting, with heartfelt and inspiring stories about ICT projects AMD had sponsored in emerging markets around the world. Great stories told with flair and LOTS of photos. AMD is doing really cool work.

It's just that AMD's stories are pretty much the exact same stories that Microsoft tells, that Cisco tells, that Nokia tells, that Intel tells, that Qualcomm tells. I was worried that that I was going to sit through a day-long meeting listening to different vendors going through variations of the exact same storytelling approach we (I) use in UPG: sponsor pilot in remote location; go there and take pictures, tell the story, hope it spreads, and potentially accrue some goodwill for your company. Instead of being involved in a coordinated effort of "Doing well by doing good", by seeing for the first time what other vendors in this space are doing, it made me wonder ... are we all engaged in an exercise of "Feeling good by doing good?"

That's why I was worried it was going to be a bad day.

Don't get me wrong, these pilots have huge impact in the communities they serve, and you can see it in the faces of the people we film. Maybe I am too cynical, or maybe I was bummed with the realization that the work we were doing in UPG wasn't necessarily that original or unique.

But what I realized yesterday is that the emphasis on storytelling by vendors masks the two huge problems we need to address if we, as an industry, are going to move beyond stories and drive these programs to scale to achieve the true impact we all hope for:

1. We need to figure out which projects actually work
2. We need a better way for ICT vendors to work together

The first point is quite significant. The ICT4D community doesn't really have a systematic, objective, and agreed-upon way to measure the true outcome of these projects -- whether it's the design approach for a telecenter or a project for rural Internet access or a BOP student computing architecture -- that helps us determine if the project is scalable and sustainable. During the afternoon of the AMD summit there was a panel discussion that called for the creation of an online community to help share ideas around best practices or even ratings of different ICT4D projects, and this would be a good starting point. (We have kicked around the idea inside of Microsoft of starting one of these, send me a note if you are interested or would like to participate.) My gut feel is that ultimately market forces will pick what works, but the market may need some help in at least sharing ideas on what is out there in a consistent and accessible way.

On the second point, I wonder if we need some sort of industry manifesto or consortium to better integrate the efforts of different vendors involved in this space. A starting point might be some voluntary standards on how to document and report on the investment, shape, and outcome of these pilot projects we are all doing. This might be hard given that many of these projects are incubations for future products that will compete in the market (because emerging markets are in the end, well, markets) but if the technology industry can agree upon standards for measuring claims of system performance, we should at least be able to agree upon standards for measuring claims of social performance. The last thing we need is some heavyweight standards type effort that slows down our work or even worse sucks up resources that we could instead be spending in the field, but there are so many vendors engaged in these types of projects that there is clearly an opportunity for synergy. Perhaps this is an area where the Clinton crowd can help.

In the absence of wide-scale and repeatable successes driven by closer levels of cooperation among participants in this space, all we have to rely upon for the time being are stories, and what ultimately made it a great day yesterday was that the quality of stories told at the summit were very, very good. The actor Turk Pipkin (the Sopranos guy) spent an hour going through the Nobelity Project, which centers around a documentary film he created involving interviews with 9 Nobel laureates discussing ideas on how to improve the world. (Attendees got copies of the film, and I may write a review in the next day or two.)  Mathew Chetty (right) from AMD described some of the Learning Labs his company has in place in Africa, and it was great to hear the passion of an African describing ICT successes in Africa. Kristin Petersen, the founder of Inveneo, walked us through some of the projects her company is doing. Inveneo is interesting because they are essentially a non-profit systems integrator that does turnkey communication and computing solutions for NGOs, mostly in Africa. They also have created a skills certification program that will be the sort of thing we will need to sustain these projects from within local communities, especially in rural areas. Joe McCarthy from Nokia did a fly-by of some of the great projects his company is doing. This is clearly an area where I would like to learn more (I also plan to post pointers to the different slide decks people used.) Finally, Kate Stohr from Architecture for Humanity described how her group took a simple idea -- volunteers doing architecture and design work in emerging markets -- and scaled it with minimal overhead to a mass phenomenon with hundreds of thousands of participants. She also had some sample chocolate bars from one of their projects in Ecuador that she handed out to the crowd.

So in the end I'd like to thank Dan Shine and the AMD 50x15 team for organizing a great summit yesterday, because it got me thinking about what we need to do beyond telling stories, creating a systematic way to get the projects to scale without sacrificing the sense of energy and hope that draws so many different types of people into this effort. 

Will Poole and I did a video blog interview with Chris Pirillo last week, and Chris just posted the interview onto YouTube today. It's a fairly long interview, but as you can see from the screen shot, it had over 1,000 views so far today.

Chris is the blogger behind Lockergnome among other things. He lives in the Redmond area and conducted the interview at the Peet's Coffee near Whole Foods there. It was a rainy morning, and you can hear nice violin music in the background.

The great irony, of course, is the fact that there is a Microsoft Dynamics ad served up by Google for when I viewed my own UPG interview on YouTube. This new Dynamics ad campaign is one of the last projects I started on the MBS team before I came over to my new job in Unlimited Potential. It is a cool campaign, you can see it here.

It has been over a week since I returned from my trip to Helsinki, which makes it three out of the last five weeks that I have been on the road outside of the US. While I was in Finland, some of my colleagues in the Unlimited Potential Group were scattered to other parts of the globe. Orlando Ayala and Debby Fry Wilson were in China where they met with partners, helped open a community technology center, and even adopted a panda (as part of a environmental sponsorship program). Michael Rawding --who runs our Partners, Products, and Solutions team -- was in Rwanda, Kenya, and Nigeria. He spoke at the Connect Africa Summit in Kigali and then met with local leaders in the other two countries. National Public Radio in the US ran a piece on the conference. Craig Bruya, who recently joined the UPG team to run strategy for us, was in South Africa meeting with a partner. Will Poole was actually at home last week but leaves Seattle today for a flight to Macau.

So the casual reader of this blog might reach the conclusion that all that these Microsoft people do is jet around the world, attend conferences, and cut ribbons at opening ceremonies for community computing centers. At times I must confess that I feel like a highly paid travel writer.

But there is a method to our madness.

As I mentioned in my opening post, Unlimited Potential is actually a product group that is incubating new technologies targeting the needs of people in the middle and bottom of the economic pyramid. We have sales and technical people in the field who work directly with our partners (including governments and NGOs, by the way) on technology trials and incubations, and we have R&D people in Redmond, India, and China who develop the new technologies and solutions that go into the pilot programs in the field. These two groups work under a single management team to streamline the feedback and decision-making process. 

Our goal is straightforward -- developing technology for the next 5 billion people -- and we are guided by a core set of requirements that have emerged for the middle and bottom of the pyramid (which we call MOP and BOP, by the way): Relevant (the technology needs to be useful to people within the context of their daily life); Accessible (it needs to be delivered to where they live); and Affordable (they -- or someone -- can pay for it.)

It is important to understand that our field trials are testing business models as much as they are testing new products and solutions. In almost every case, these new business models involve working with local partners and entrepreneurs. Traditional software industry licensing models -- and pricing levels, for that matter -- may not work in many of these segments. There is an assumption in some circles that the only alternative to this is a "free" open source model, but open source has its own issues in terms of helping bootstrap local technology economies, which we believe is a requirement for success in this mission. And one of the things we are hearing, especially from our experiences in Africa, is that a straight, aid-based model may not be the best way for countries to improve their economies at a national level. Sustained development requires the creation of local businesses, and helping create opportunity for local businesses is something Microsoft likes to do.

When you hear people talk about "new models where business meets philanthropy", this is what they are talking about.

The actual technologies and solutions we are developing cross a broad spectrum, ranging from policy-level programs like the work we are doing with Telecentre.org to hardcore engineering device-specific software development, including the porting of Windows and Office to the emerging class of low cost flash-memory based PCs that are proving to be popular in education scenarios. And we have developed an internal planning tool we call the "Innovation Lifecycle" that we use to gauge the progress of these business model/new technology pairings as they advance through their incubation trials. Many of these projects will never reach broad scale deployment and adoption, and we are consciously trying to avoid the type of hype cycle that characterizes the way the technology industry (including Microsoft!) typically markets products.

So the point of this post is to let you know that there is a lot more going on in UPG beyond travel. We learn so much when we are on the road, the stories almost seem to write themselves. And these solutions we are developing will not be built in a vacuum, we need to work with partners. But for every exec we have out on the road, we have about 40 people back at home doing (real) work. And that is the only way we are going to achieve the outcomes that we want to achieve, by trying to strike the right balance between listening and working.

Academic Program Managers (APMs) are the people at Microsoft responsible for implementing the Partners in Learning program I wrote about yesterday. We have about a hundred APMs around the world, working with local schools and education ministries on various types of education projects. APMs are the equivalent of the technical evangelists Microsoft has employed for decades (I used to be one), but instead of targeting software developers, these people focus on teachers and students.

I had the chance to hang out with some of our APMs at the education conference in Helsinki I am attending this week, and I have to say they are very interesting people. Some of them are shown here. Vincent (on the left, and from Singapore) used to teach genetics; Suneet (India) used to work in rural computing; Darko (Croatia) was responsible for technology in his country's Ministry of Education; Michelle (Philippines) ran an academic institute, is the mother of 3, and is about to get her PhD as a side project; and Sanda (Romania) used to work in the film industry (and didn't know until today that she was listed in IMDB.)

One of the things the APMS discussed with me is the fact that some of Microsoft's least-known products are used extensively by teachers and students in schools throughout their countries. One example is Photo Story 3, a free download for Windows XP that makes it easy  to combine photos, narration, and music into a multimedia report. Many of the projects demonstrated in the conference yesterday used this tool. Another example is Producer ("teachers love it"), a free download for Office 2003 that helps you make multimedia presentations.

South Africa provides some good examples of how the APMs impact their community. Reza Bardien, our APM there, described several projects where the team in South Africa takes a partnership-based approach with the Education Ministry, industry, and schools to get ITC curricula into the classroom. The idea is to do a pilot in a well-managed way with a series of partners, prove that it works, and then scale it in a manner so it is sustainable and repeatable. This is a multi-year process. One of these examples, involving the training of high school kids for jobs with a local mining company, was recently published as a case study. Reza also operates the "Africa Schools Technology Innovation Centre" (lovingly referred to as the "STIC") in Johannesburg. The STIC involves a consortia of 33 companies and government agencies and opened last April. It's mission is to provide a facility for ITC education research, training, workshops, and collaboration. (The STIC's manager, Angela Schaerer, wants to know when Live Writer will be available on phones. Don't know.)

A common theme across all of the APMs I am meeting here is a sense of passion for what they do combined with a sense of humility about the approach Microsoft needs to take in education. "We cannot come in and make it sound like we have all the answers" they keep telling me. They also understand the comparison I am making between technical evangelism and education advocacy, but in a good humored way are not sure if they agree with it. "We deal with people, not machines!"

Helsinki, October 29, 2007

I am attending the Worldwide Innovative Teachers Forum, a "Celebration/Competition" that Microsoft is holding in Helsinki as part of our Innovative Teachers Network, a grassroots community around the world that promotes and celebrates cool uses of technology in the classroom. It is a component of Partners in Learning, our core program for working with governments and educators to transform education. I wish as a company we could do more to let people know about the work we are doing here, because so much of our discussion on education seems to be about computer systems and not about learning. This show is all about learning.

And this is not, I repeat not, a typical Microsoft event. Sure, we have opening keynotes, in this case from Lauren Woodman and Dave Walddon (both shown at right, Dave is spectral) along with two educators from Finland. But the heart of the event is teachers. There are no customers, no buyers, no trade show vendors, and no salespeople. Just teachers -- about 260 of them from 40 countries -- all coming together to present and discuss 85 examples of innovative best practices. These 85 were the "winners" from about 100,000 submissions of lesson plans and course curricula from teachers worldwide. (Partners in Learning has touched 3.6 million teachers since the program started a few years ago.)

The show has the feel of a science fair, except instead of kids the participants are teachers who developed really interesting learning modules. And there is a competition, we will be announcing final "winners" at a dinner tomorrow night. But it is mainly a celebration of the great teaching demonstrated by all of the projects.

If you walk the show floor, you can see why. (I will try to post a list of all the entrants later this week.) There is a team from Thailand that had a project where the kids  made claymation videos. The teachers had examples of the clay statues in their booth and were showing the videos on a Zune. It looks like something you'd see on television, except it was created by high school kids in Thailand.

A team from northern China had a project where they taught children about puppetry, an ancient art in their region. The children interviewed local puppet craftsman and performers, made a film about it, and then made their own puppets (a couple of examples are shown to the right.)

A teacher from Sweden demonstrated a project on the topic of biodiversity that involved a networked collaboration between her classroom and a classroom in Madagascar. This project had the added benefit of helping children in both countries learn English.

There were two strong entries from South Africa. One of the teachers built an "mLearning" system, complete with quizzes and online homework assignments broadcast to the students' cell phones (all of the 12th grade students in his class had one -- and as I've said before, there is more to our approach for using technology to transform education than simply deploying PCs). The other teacher built a module for his rural students called "Bright Lights, Dustbowl" that had the kids do all sorts of interesting activities ranging from visiting the local "city" to parsing songs by the Police to creating online and radio advertisements for local businesses. He even played some of the radio ads for us.

To me, this conference seems little different from Microsoft's software developer community events I was involved with in the 1990s, except instead of geeks showing off their Visual Basic applications, you have teachers showing off their geography lessons. And just as developers were always a core community for Microsoft in its first 30 years -- we never "sold" to developers, we always had to excite and inspire them to do cool and great things with our tools -- teachers are a core community for Microsoft moving forward. And it is great to participate in a showcase of what inspired teachers can do when they have the right tools.

October 19, 2007

I had a scary thought in Budapest today. What if the digital divide widens before it narrows?

The thought occurred to me on Day 2 of our launch event here. I was attending a meeting of an informal group working on a program called "EUGA", or "EU Grants Advisor." This is an ad hoc consortia of government agencies and tech companies in Hungary coming together to share ideas on how to improve digital literacy in the workforce, in this case through a program to make it easier for SMBs to apply for technical training grants from the EU. Some of the companies present included Microsoft, Intel, HP, Cisco, Nuance, and XAPT (the Microsoft partner who worked on WizzAir, one of my favorite case studies from the Dynamics business).

I was stunned to learn from the companies at the meeting that there was a skills shortage in Hungary, and that they all had job openings they couldn't fill with local talent. This was in a country who's economy is going through a rough patch but in general has a highly literate population.

During the meeting we were going around the table discussing ideas on what to do about some of these issues. At a national level in Hungary, there is a need for new programs to train citizens on basic "digital literacy" concepts like how to use a keyboard and how to navigate with a mouse. The government is considering some aggressive moves like a new initiative to buy 100k laptops for all the teachers in the country; another idea is to fund the deployment of a computer into at least half of the country's classrooms within the next two years.

But then the scary thought dawned on me. In "Top of the Pyramid" communities -- and I do mean communities, because there are rich people in Romania and poor people in Ohio -- we are beginning to graduate the first generation of  students who have spent their entire life using the Internet. For these kids, it is not as much about computer skills as is about a mentality of living in a networked world where everything is connected, tagged, and discoverable. Articles are beginning to appear that describe how this generation doesn't even use email anymore, yet here I am in a conference room discussing ideas on how to train people to type with more than one finger.

So, is there a "technical skills" generation (where people learn how to use a computer) followed by an "Internet mentality" generation (where people grow up with a new mind-set - that everything is connected and tagged - that shapes how they communicate and work?) And does the wide-scale introduction of "Internet-mentality" students into the workforce widen the gap between developed countries and countries struggling with convincing their government on the need to fund programs to train their population on how to use a mouse.

One of the government officials from Hungary definitely picked up on this idea, expressing concern that his country may have an entire generation of citizens left behind. Hungary definitely has its Facebook crowd, but apparently many of these kids are leaving the country because there clearly aren't enough of them to work at the local Cisco and Intel offices.

If so, what impact will this have on relative economic growth among countries and communities? I am not sure if anyone is formally studying the economic impact of relative or generational levels of computer literacy, but I couldn't help but feel I was in a meeting discussing steam engines at a time when others were booking their own jet travel online. The situation could be more urgent than people realize.

October 18, 2007

We held our big press event in Budapest on Thursday and Friday this week. With most Microsoft events, we try to hold on to some important piece of "news" that we unveil at the show in order to make it easier for journalists to write a story. In this case we did indeed have some news, but our main goal this week was to work with journalists to help establish some context on the overall approach we are taking with our Unlimited Potential strategy, with an emphasis on the impact we are making with our partners in specific countries in this region. We'll have to wait a few days to read what the press writes from the event, but I think the team in Europe overall did a good job in putting the launch together.

The keynote speakers were Nenad Pacek from The Economist Intelligence Unit; Steven Frantzen from IDC; and Will Poole and Vahé Torossian from Microsoft. Costas Andropoulos from the EU was also keynoting, but he had to appear via video. Nenad's speech was interesting, because he reinforced the point that government policy does matter in terms of driving economic growth; among other things he observed that Ireland and Greece had the same GDP 20 years ago, and Ireland's today is now twice that of Greece. Why? Steven Frantzen from IDC walked through country data from their recently released survey of IT spending in 82 countries, where they did an analysis of the impact of IT spending on national growth.

Will Poole provided a good overview of our global UPG efforts and included a video of the Romanian family I mentioned yesterday. Will also wrote an update to the UPG executive blog. Vahé (our VP for Central and eastern Europe, shown at right) discussed in more detail some of the specific programs we are doing in the region, and had an excellent guest speaker on the topic of "reverse brain drain": Bodin Dresevic, a former Microsoft development manager in Redmond who returned to his native Serbia to open a new Microsoft Development Center doing software R&D there.

When I joined Microsoft in 1995, I think there were only four places in the world where you could work for Microsoft as a software developer: Redmond plus three small satellite offices: Montreal (SoftImage), Silicon Valley (PowerPoint), and Israel (security and MSMQ).  Now it seems as a company we are aggressively opening dozens of R&D centers wherever we can find pools of talented software developers, which is great for countries like Serbia because it enables them to develop local software economies.

The "official" news from the UPG launch event consisted of the following: (grouped together by focus areas)

Transforming Education

• Family Education PC program in Romania (subject of the video mentioned above)
• IT Academies
• Microsoft Digital Literacy curricula

Fostering Local Innovation

• Microsoft Innovation Centers (including one we opened in Budapest)
• Release LiPs in new CEE languages (subject of a future post, this is a cool program for community-driven local language versions of Windows and Office)
• EU Grants Advisor (EUGA) (making it easier for SMBs to receive EU digital literacy training grants)
• IDEA Center opening in Moscow (here is a video that explains more)
• Expand Microsoft Development Centre Serbia
• Technical Computing Initiative in Russia

Enabling Jobs & Opportunity

• IDC economic impact studies for CEE
• Slovak Telecom Subscription Computing program
• Investment of US$15M in local CEE ICT projects
• 40UP program in Slovakia
• S2B (Student 2 Business) program rollout and impact
• Microsoft Digital Literacy curricula

Most of these involved particular stories relevant to individual countries. I personally did interviews with journalists from Bulgaria, Romania, Ukraine, Macedonia, Greece, Latvia, and Slovakia. They all wanted to learn more about specific initiatives taking place in their countries to improve national competitiveness. So in aggregate what we were talking about today may not seem like "big news" like a major new product announcement, but for the countries involved our UPG programs appeared to be pretty significant.

October 17, 2007

I began the morning in Bucharest today by going for a run and getting terribly and completely lost. I mean 45 minutes of "Do you speak English -- do you know where the Howard Johnson's Hotel is?" lost. The team ended the day having to cross a highway and  walk along the side of the road a ways to get to our car. But in between these two we had a fabulous day, learning a lot about some of the progressive steps Romania is taking to apply ICT in a sensible way to improve education in their country. And as you can see, the weather was way nicer than Moscow.

We started the day (post lost run) in the Microsoft office where we met with people from Romania's Ministry of Education. Included in the meeting was Professor Adrian Petrescu, who is considered sort of the godfather of technical education in his country. Here is a photo of Dr. Petrescu along with Silviu Hotaran, Microsoft's country manager for Romania. Silviu (on the right) was a student of Dr. Petrescu's in the university.

Also attending from the Romanian government was Catalin Grosu and Decebal Popescu. (Yes indeed, there is a person in Romania who looks just like Jack White from the band the White Stripes and is named "Decebal".) Decebal seemed very smart and was passionate about IT curricula. Among other things, he asked about our plans for porting Windows to the OLPC XO device. Will Poole gave a good answer, the shorthand version is "Because the device is exotic and requires so many custom drivers, it's hard. But we are trying."

Before the 1989 revolution here, Dr. Petrescu designed and deployed across the country a microprocessor based system that used a TV set for display, a cassette recorder for storage, and was based on the Sinclair. Needless to say, he has a lot of experience with national PC programs. He also says he is inspired both by BillG's book "Business at the Speed of Thought" and Nicholas Negroponte's evangelism efforts around 1-to-1 computing, namely, that the best educational technology model for a country involves students with their own PCs with roaming access to the Internet. But he also clearly believes that there is no single optimal technology solution to this problem -- this is a theme I am hearing every time I go on the road now --  in this case because kids from wealthier families want machines with more capabilities than the Asus or the OLPC XO, but this class of machine might be ideal for rural students from lower income families. Early results from one of the pilots in Romania indicate that kids get quickly bored if there is limited software on one of these low end laptops.

Apparently Romania's Prime Minister grew up using one of the Sinclair-like machines, has a technical background, and did a side-buy-side demo of the OLPC XO and the Intel ClassMate PC to members of parliament, explaining how each of the machines worked. That would have been fun to watch. Also, Decebal was quite enthusiastic about the Imagine Cup (Romania won it last year!) and was effusive in his praise for the support they received from the local Microsoft team. Finally, we walked them through a slide deck describing our education strategy, and they expressed interest in learning more about Multipoint and about Microsoft's infrastructure optimization model for education. We will definitely follow up.

From there we went to visit Siveco, one of the largest software ISVs in Romania. We met with Florian Ciolacu, Florin Ilia, and a partner account manager (Flora?) who all spent an hour walking us some of the impressive work their company has done in education. Their product is called  AeL, a suite of interactive K-12 learning content consisting of 1,800 interactive modules (called "objects") built on the Microsoft stack. They even referred to it as DHTML, not AJAX. You can find samples of their work on the Innovative Teachers Network, including this self-paced chemistry class. (Apologies, it's in Romanian). Florin says that about half of their classes are translated to English, and about 300 to Russian.

As far as we can tell, Siveco is one of the few technology partners who have successfully implemented a national education program. Over the last 6 years, in partnership with the Romanian Ministry of Education, they have deployed to Romanian schools 76,000 Windows/Office desktop systems and 1,500 servers; their software was used as the basis for training 80,000 teachers and 3 million students. The company is expanding to the CIS countries, Cypress, and the Middle East. They gave me a copy of AeL and I plan to start demoing it on my travels.

After Siveco, we went to visit RTC, a conglomerate of 70 companies that is partnering with us on a family education PC project in Romania called PC@casă. This is an incubation where we partner with an OEM, retailers, and software partners to package up a low cost PC loaded with education software. We met with RTC's leadership team and did a fun interview with a family that purchased one of these systems (the dad Nicolae and his son Alexandru are shown here, mom Camelia was at work). We'll be showing a video we took of this family at our press event in Budapest tomorrow. I will try to get my hands on a copy and post it.

Finally, we had a late lunch with Varujan Pambuccian from the Romanian Parliament. The guy is awesome. He has been an elected member of parliament for 12 years and is the chairman of their IC&T Commission, and he used to design computer systems at the country's Technical Institute (including compilers, and is show here with his fellow former compiler designer Paula Apreutesei, Microsoft's citizenship lead for Romania). We all had a great back an forth discussion, ranging from voucher models for the national "Euro200" PC program to motherboard design to the future of networking in countries in Romania. I loved the fact that a guy who is still hands-on technical (he is working on some patents for TCP/IP extensions) is engaged as an elected official in setting ICT policy for his country.

The meal was in a "classic" local restaurant called Casa Romaneasca where they served us a wonderful platter of meat,  family style, which in turn resulted in "meat comas" hitting us on the plane to Budapest 90 minutes later.  (Last photo courtesy of Will Poole).

More tomorrow from our launch event...

A group of us are in Central and Eastern Europe this week, starting with two days in Moscow. It's snowing.

The highlight of our day yesterday was the official opening of an IDEA Center, a community-based computer center targeting unemployed, seniors, and people with disabilities. IDEA stands for "Information Dissemination and Equal Access" and is sponsored by Microsoft and Project Harmony, an NGO based in the US. There are over 50 of these centers across Russia, and the new Moscow center is essentially the showcase facility where they set curricula and manage the program. It is housed in a pedagogical library that was a mansion before the Russian Revolution.

Kati Fedotova, the director of the project, described how the IDEA Centers focus on digital literacy and community access. Each center offers on a monthly basis 24 hours of basic computer skills classes along with an additional 10 hours of training on career and capacity skills. All of these centers are located in libraries, giving new purpose to old buildings. The Moscow Center has 30 computer stations across 2 training labs and a walk-in room. Overall the centers have formally trained 17,000 people since last year. 

The opening ceremony was apparently a big deal. Over 30 journalists attended, and two news stories ran on local television stations last    night. We started with a meeting on a third floor computer lab where we met with the folks from IDEA along with Ann Martin, the executive director of the NGO. We were joined by leaders of the Russian teaching institute who manage the library and host the program. There is a very good partnership here. Will Poole then did some TV interviews and then there was an official ribbon cutting ceremony with Will, Ann and the leader of the teachers institute. Everyone then went downstairs to a converted ballroom where we held a panel discussion and a press conference. The whole event went about two hours, which included the time required for the translators we used for the Q&A

The ballroom had these cool Soviet-era fluorescent light chandeliers. I had never seen anything like them before.

We have one more meeting with an NGO this morning, and then it's off to Bucharest. And in case you noticed, I bought a camera. 

I just had a chance to read "The Bottom Billion",  a book by by Oxford University economist Paul Collier. He used to work for the World Bank and for the British Government and has created a model for why poor countries remain poor and then describes steps on what "Top of the Pyramid" countries can do about it. It is compelling reading, especially the prescription part.

His model is based on four "traps" that countries fall into that prevent them from growing: Conflict, Natural Resources (too many of them), Landlocked with Bad Neighbors, and Bad Governance. According to his research, 58 countries with a combined population of 980 million fall into one of these categories.

The book has a lot of interesting facts about the traps, for example, the "typical" civil war in Africa costs a country $60 billion in economic growth. He then goes on to assert that trade and aid policy from developed countries should be tuned to the specific trap a country is in. What works for a country emerging from a civil war will not necessarily work for a country with poor access to ocean ports.

CNET ran a nice interview with Will Poole today. It was based on a series of meetings we did down in the Bay Area a few weeks ago. Will is one of the VPs who runs the Unlimited Potential Group here at Microsoft.

The interview includes a video clip of our MultiPoint technology, which is designed to let multiple kids share a computer in a classroom setting for schools that cannot afford a single PC for every student.

He also landed a nice quote that summarizes so much of our approach to doing incubations with local partners around the world:

When I started looking at this about five years ago, I thought that affordability was the biggest challenge. It turns out that affordability is actually the third on the list of issues. The first one turns out to be relevance.

If you want to learn more about what we are doing here in UPG, you should check out the article.