In addition, we’ll offer new security capabilities, improved management products, and new development tools. By bridging the gap between business processes and business practices, Microsoft Dynamics products position us to meet the fast-growing demand for better business process management systems. We recently entered the high-performance computing business. And we have new offerings and initiatives in industries such as life sciences and manufacturing. 

 

Entering new markets:    We are excited by a number of important new opportunities that lie before us. With Xbox 360 and Xbox Live®, our online gaming and entertainment service, we are redefining how people create, deliver, and experience entertainment. We are also poised to see our long-term investment in Internet television begin to bear fruit as leading broadband service providers around the world prepare to deploy IPTV Edition, our digital television technology. Meanwhile, the number of customers using the Windows Mobile® and Windows embedded platforms is growing rapidly. 

 

Leading the Software Services Transformation 

 

Internet-based services are transforming the way people create, deploy, manage, and use information technology. We are deeply committed to playing a leadership role through our efforts to create the services platform for the next generation of applications, communications, and commerce. Across the company, software services are at the core of all of our development efforts. 

 

In 2006, we introduced Windows Live, which includes a wide range of personal Internet services and software, and Office Live, which provides small businesses with affordable Internet-based business services hosted by Microsoft. We rolled out new search services, including beta releases of Windows Live Search and Windows Live Academic Search. We introduced new and enhanced services for computer safety and computer maintenance (Windows Live SafetyCenter and Windows Live OneCare), communications (Windows Live Mail and Windows Live Messenger), and entertainment (Xbox Live). We also created Live Labs, an applied research program that targets Internet products and services. 

 

Because software services offer strong opportunities for growth, we will continue to refine and improve adCenter, our advertising engine for Windows Live, MSN®, and other Microsoft online services. We will roll out new service-based solutions, such as Microsoft Dynamics CRM Live, which we announced in July 2006. We will also continue to build out our services infrastructure, providing new tools to help partners and businesses create and host services, and adding new data centers to meet growing consumer demand for services. 

 

Investing in Our Employees and Our Communities 

 

The cornerstone of our success has always been our ability to attract and retain the most talented employees from around the world. In May, we announced important changes to help us ensure that Microsoft continues to be one of the world’s best places to work. These changes will enable us to better reward and retain top talent, while providing a workplace that is positive, inclusive, and collaborative. 

 

We also continue to work to