key focus of our innovation is security. Beyond the advances in Windows XP SP2, we are developing advanced technologies that will help isolate computers from Internet attacks and make them more resilient when they are attacked. We are making it easier for customers to keep their systems updated with our latest, most secure software.



We are also developing more secure techniques for authenticating network users and controlling their access. And we have implemented new software-development processes, tools, and training to promote engineering excellence and help ensure that new software is more secure by design.



In addition, we are collaborating with other industry leaders to develop more effective community responses to security threats, and working closely with governments around the world to bring cyber-criminals to justice. Through this broad, multi-pronged approach, our goal is to help bring significant improvements in security, and help preserve the benefits of technology for everyone.



Our innovation is also focused on exciting market opportunities across our businesses, which we believe hold great potential for growth over the next several years.



PC Market Growth.    Today there are 600 million personal computers around the world; by 2010, we estimate the number will grow to one billion. Much of this growth will come from new generations of PCs with enhanced capabilities, such as the Media Center and Tablet PCs that Microsoft has pioneered. We are hard at work on Longhorn—the next generation of Windows—which will lead to exciting new innovations in software, hardware, and services, delivering experiences that should broaden PC adoption and accelerate upgrades.



Server Migration.    Businesses are increasingly migrating their computer networks from UNIX servers to less expensive ones running on PC microprocessors. This trend has helped boost sales of Windows server products; revenue from our server and tools business increased 19 percent last year. During the past year, we have worked hard to communicate with customers about the unique value of the Windows platform compared with Linux and other open-source software. Several independent analysts have reported that Windows offers lower total cost of ownership, stronger security, and more comprehensive indemnification. We are continuing to innovate in servers and tools, particularly in areas such as manageability and security. This fiscal year, SQL Server 2005 will deliver a significantly improved database platform—more reliable, secure, scalable, and manageable. And Visual Studio 2005 aims to reduce complexity and cost for developers and other technology professionals.



Connected Productivity.    Our Information Worker business continues to grow, with a 17 percent increase in revenue during 2004. We believe that Word, Excel, Outlook, and other Office 2003 applications only begin to fulfill the potential of software to help people be more productive. We have expanded the toolset with new technologies and services such as Office SharePoint Portal Server 2003, Windows SharePoint Services, Office Live Meeting, Office Online, Office OneNote 2003, and Office InfoPath 2003. We are