partners in innovation 2006 Citizenship Repo r t about this report

Scope Currency In the 2006 Global Citizenship Report, All money figures in this report are in we discuss our key citizenship initiatives and U.S. dollars unless otherwise noted. activities worldwide, highlight some of our more significant accomplishments in fiscal year Terminology 2006, and share our goals for fiscal year 2007. The terms “Global Citizenship” and “Corporate Citizenship,” which are used throughout Reporting Period this report, are interchangeable with This report focuses on Microsoft’s fiscal similar terms such as “Corporate Social year 2006 (which began July 1, 2005, Responsibility” and “Corporate Sustainability.” and ended June 30, 2006). All data is for that period unless otherwise noted. Global Reporting Initiative (GRI) The function of the GRI performance Report Structure indicators is to make it easier to compare This report is organized to reflect the organizational reports on the basis of economic, structure of our Global Citizenship Initiative environmental, and social impacts. In the and related activities, because we want our online portion of this report, we have included stakeholders — employees, customers, partners, references to applicable GRI indicators to assist shareholders, and others—to be able to stakeholders in their review and assessment compare our program goals and objectives of our Global Citizenship Initiative. with our results. The report is a combination of this print volume, which highlights and More information provides an overview of some key issues, and about the GRI performance indicators is a more detailed online publication that we will available at www.globalreporting.org. update annually. In addition, both the print and online components of the report provide key links to more detailed information on Microsoft.com, Microsoft’s corporate Web site. table of contents

Executive Welcome ...... 2

Global Citizenship at Microsoft ...... 3

Security and Internet Safety...... 9

Knowledge Economy...... 19

Responsible Business Practices...... 41

Our Company ...... 54

Looking Ahead ...... 56

Awards ...... 57

“We know that the most significant problems facing our planet cannot be solved without the close cooperation of the private sector. Microsoft is not only a leader in responsible business practices, but also works with us to ensure that other businesses will rise to a similar standard.”

— Rich Leimsider, the Aspen Institute  partners in innovation — Microsoft 2006 Global Citizenship Report

executive welcome

icrosoft’s mission is to enable people Our innovative technology and partnerships and industry on important technology issues and businesses throughout the world are also helping meet some of society’s toughest such as interoperability and security. to realize their full potential. One challenges: assisting law enforcement in the M We are constantly expanding our understanding way we fulfill our mission is by developing fight against online predators with the Child innovative that transforms the Exploitation Tracking System; helping industry of what we must do to be a responsible leader way people work, learn, and communicate. and government to protect individual privacy and a good corporate citizen, and we are Another way is by using our resources and and fight spammers and identity thieves; and always seeking new ways to put partnerships expertise to help expand social and economic enabling people with disabilities to develop and innovation to work to really make a opportunities in communities around the world. job skills and live fuller lives through advanced difference. Our global citizenship efforts tools that make technologies more accessible. represent our mission and values in action, Our company’s greatest strengths are and they underscore how creativity and a our employees’ passion, creativity, and From the beginning, our community investments spirit of innovation can make a difference, not dedication, and our strong partnerships with have been inspired by our employees, and it’s only in the products we create, but in the way thousands of private, public, and community their passion and commitment that continue to we give back to communities worldwide. organizations. Our people and partnerships drive Microsoft’s efforts to help people in need. propel innovation at Microsoft, and they also This is especially true when disaster strikes. Our By working together with our many partners to guide our worldwide citizenship efforts. employees are often on the front lines, giving solve challenging problems, we are optimistic help wherever it’s needed and devising unique that Microsoft can continue to help make A few years ago, we set a goal that, by the end of ways to use technology to aid relief efforts. positive and lasting contributions to society. this decade, we would help bring the benefits of technology to one-quarter of a billion Another important measure of a company’s underserved people worldwide. We recognize commitment to corporate citizenship is the way it that we cannot do this alone. That’s why our two conducts business and works productively with Steven A. Ballmer flagship digital inclusion programs, Partners all its stakeholders. At Microsoft, everything Chairman Chief Executive Officer in Learning and Unlimited Potential, build on we do is guided by corporate values, codes the strength of partnerships with governments, of conduct, and company policies that, for schools, NGOs, and community organizations. example, ensure diversity and fair business Working together, we are bringing valuable practices among vendors and suppliers, provide technology skills to teachers, students, and for good stewardship of the environment in others — more than 135 million people so far, the way we create and package our products, putting us more than halfway to our goal. and support collaboration with governments global citizenship at microsoft p A R t n e r s i n i n n o v at i o n  partners in innovation — Microsoft 2006 Global Citizenship Report

global citizenship at microsoft

t Microsoft, we bring the same spirit they work to bring the benefits of technology The Global Citizenship Initiative of innovation to global citizenship to one-quarter of a billion underserved As a global company, we recognize that Athat we have always applied to our people globally by the end of this decade. every country and community where we do business. Our Global Citizenship Initiative business has its own set of social, economic, combines innovative technology, partnerships, and environmental challenges. With that and programs to create economic, educational, “Technology is an extremely powerful tool, a grand in mind, we strive to nurture a spirit of and social opportunities in local communities enabler of human imagination, innovation, creativity, innovation throughout our company that worldwide, and to help foster a more secure and productivity. Creating innovation with real provides our employees and partners with computing experience for people everywhere. impact, listening carefully to what our customers the tools — and inspiration — to meet those want, and creating amazing products that are challenges and turn them into opportunities. Our mission is to enable people and businesses going to benefit as many other people on the planet throughout the world to realize their full The importance and integral nature of global as possible — that’s really the reason Microsoft potential. For more than 30 years, we have citizenship at Microsoft were underscored exists. Innovation is the lifeblood of our business.” built our company on that principle, providing by Kevin Turner, Microsoft Chief Operating innovative software and services that help — , CEO Microsoft Officer, at an internal meeting with employees: people do more with technology, and creating “Good citizenship is just good business. It’s innovative partnerships that extend those the right thing to do. It’s who we are as a We are proud of our achievements as an benefits to millions of people we never company. It’s our commitment to communities industry leader, a global citizen, and an could have reached by working alone. around the world. It’s really that simple.” active partner to thousands of governments, Innovation is an integral part of our business. It businesses, and community organizations Although our Citizenship programs are characterizes our technology platform, which around the world — but our work is just diverse and tailored to the specific needs of the enhances personal productivity and business beginning. Our success in business has given people and communities they serve, they are performance while supporting accessibility that us the opportunity, and the responsibility, all organized around one of the three central makes it easier for people with all abilities to to use our resources and influence to help themes of our Global Citizenship Initiative: see, hear, and use computers. Innovation also change the world, to make it a better and more defines our partnerships. These partnerships rewarding place for people everywhere. strengthen communities worldwide by We look forward to the challenges — and developing the workforce and helping to build accomplishments—that lie ahead. local software economies. They provide relief in many areas devastated by natural disasters. And global citizenship at microsoft 

Improving Security and Internet Safety Since issuing our first Global Citizenship Report We address the societal challenges of information in 2003, we at Microsoft have continued to and communications technology — such strengthen our internal organizational structure. as security, privacy, and children’s safety Just as important, we also are improving and on the Internet — through innovative extending our external programs to create a technology and partnerships with industry, greater awareness of, and accountability for, the governments, and law enforcement agencies. economic, social, and environmental issues that We also work with our partners to provide affect communities and individuals worldwide. consumer education and expert guidance An Invitation to Our Readers about online safety to help people protect More information We appreciate frank and honest feedback, both positive and negative, because it helps us to improve. their PCs, themselves, and their families. about the Microsoft Global Citizenship We invite you to offer your observations and Initiative and our progress on each of suggestions about this report as well as Microsoft’s Advancing the Knowledge Economy global citizenship activities. Please send your its three central themes is available at comments to [email protected]. We advance the knowledge economy by www.microsoft.com/citizenship. partnering with governments and communities around the world on digital inclusion as well as on innovation that brings valuable technology and skills to more people and stimulates the growth of local economies.

Demonstrating Responsible Business Practices We ensure integrity, transparency, and social accountability in our business practices, whether complying with the laws of the countries where we do business, supporting industry standards, adhering to the highest ethical and environmental practices, or making sure our products interoperate well with those of other companies — including our competitors.  partners in innovation — Microsoft 2006 Global Citizenship Report

a global citizen — examples of programs around the world

Canada: Providing Access and Peru: Removing Barriers for Speakers of curriculum. The new curriculum will be offered free to Training to Technology Native American Language governments, academia, and NGOs, and will be accessible The Community Access Program (CAP) is a Government of In collaboration with three online. In addition, Microsoft announced that it will increase Canada initiative that provides Canadians with affordable Peruvian universities, Microsoft the number of Microsoft IT Academies from 1,900 to more public access to the Internet and the skills they need to use developed the Quechua than 8,000 by 2010, with the goal of providing local access it effectively. Together with Pacific Community Networks Language Pack to make to technology skills training for more than 6 million adults. Association, a nonprofit organization representing 22 Microsoft® Windows® and CAP Networks in British Columbia, Microsoft will be Office products more accessible. Belgium: Helping SMEs Find Funding supporting the creation of an online community focused Released in June 2006, the Quechua Language Pack The European Union Grants on teaching the art and science of game development. is expected to have a significant impact on improving Advisor (EUGA) program is technology access for the approximately 10 million a collaborative effort led by Philadelphia: Building the School of the Future Quechua speakers in South America, who are a Microsoft to help small and Microsoft and the School District of Philadelphia joined traditionally underserved community in the region. medium-sized enterprises (SMEs), forces to create a 750-student high school — opened as well as local and regional in September 2006 — that embodies innovation Brazil: Leading the Way to Innovation governments, better understand and technology. The goal of the partnership is to Microsoft Innovation Centers and use EU funding opportunities. SME owners are create a technology-based educational model that (MICs), found throughout able to find information on the EUGA Web site about can be replicated in communities around the globe. Brazil, are designed to foster what funding is available and which programs they may Learn more about the school at www.microsoft.com/ strong, self-sustaining local be eligible for. More information on this program can education/schooloffuture.mspx. software economies by providing be found at www.microsoft.com/emea/euga/. customers and partners with a New Mexico: Reaching Out to the Community comprehensive set of programs Italy: University Tours In April 2006, Microsoft took part in and services. Based in part on the successes achieved In order to demonstrate Microsoft’s commitment to TechFest at the Gathering of Nations in Brazil, an additional 30 MICs will open in 2006, with innovation, facilitate communication, and strengthen in Albuquerque, New Mexico, the facilities planned in India, Korea, and South Africa. the relationships between Microsoft and university largest Native American Pow Wow students and professors, Microsoft held events at held in North America. Microsoft, in Argentina: Fostering Social Inclusion 11 universities throughout Italy. More than 1,500 partnership with HP, helped bring The Committee for Democracy in Information students and professors have attended an event, which technology to Native American youth Technology (CDI) is a Latin American NGO that fosters included a speech from a Microsoft executive. by providing TechFest with free PCs and monitors. social inclusion and active citizenship by promoting the use of information and communication technology Poland: Delivering Skills Training to the Mexico: Supporting NGOs (ICT) in low-income communities. In Argentina, CDI Unemployed in Rural Areas In fiscal year 2006, Microsoft funding will support the operates 40 community technology centers (CTCs) The Your Chance for Employment Fortaleza program of Fundación Merced. The goal of the and has provided training to more than 2,000 people. program provides ICT skills Fortaleza program is to build the professional capacities of Microsoft’s 2006 Unlimited Potential (UP) grant will training for the unemployed nongovernmental organizations (NGOs) in the Mexico City provide funding for 20 more CTCs and two regional living in rural areas of Poland. metropolitan area by helping them adopt technology to offices to manage existing centers more efficiently. The training is designed to help enhance their productivity, efficiency, and management. increase job opportunities for Portugal: Ensuring Employability for Europe the unemployed, build the skills of those who have jobs In support of its 21st Century Skills for Employability but lack critical ICT skills, and teach entrepreneurial initiative, Microsoft launched a new digital literacy skills for those who want to start small businesses. global citizenship at microsoft 

Russia: Leveraging ICT Curriculum Afghanistan: Supporting Women Japan: Removing the Digital In Russia, a 2006 Unlimited Potential grant will support and the Interim Government Divide Between NPOs Project Harmony — a program supporting 21 select IDEA In Afghanistan, the Interim Authority, the United At the Non-Profit Organization centers designed to provide improved technology access Nations Development Programme (UNDP), and other (NPO) Day held this April and skills training in underserved areas of the country. The organizations are driving the rebuilding of the country’s in Tokyo, a new program program will offer 30 hours of introductory technology social, political, and economic structure after years supporting the elimination training each month by using Microsoft’s UP curriculum. It of instability. Microsoft is donating cash and software of the digital divide between is expected to train more than 8,500 people in one year. to help create 15 CTCs, where as many as 25 percent NPOs was announced. The NPO of the people expected to be served will be female. Partnership Program will provide IT tools and templates Morocco: Developing IT Skills for Adolescents needed for member and financial management, event In February 2006, Microsoft signed a partnership with India: Generating Self-Sustaining Employment operations, and daily work, as well as a digital literacy the Moroccan Secretary of State in charge of Youth and Grameen Sanchar Society (GRASSO) seeks to enable a self- curriculum to help NPO users acquire vital IT skills. the UNDP for the expansion of the Ajialcom project. sufficient rural West Bengal by establishing self-employment This project is setting up 100 new CTCs throughout plans for generating opportunities in the villages. With the Australia: Helping Seniors Participate Morocco to help close the digital divide, and train support of Microsoft, GRASSO will set up 1,500 Community in the Digital Economy and educate young people to use IT. It is expected Information and Services Centers to host for-profit IT The percentage of Australia’s that about 30,000 young people will be trained in IT services and provide free IT skills training over two years population aged 65 and skills over a period of one year through the centers. to more than 67,800 people across rural West Bengal. over is increasing, creating greater demand for accessible Uganda: Aiding Child Refugees China: Encouraging Skills Development technology and training for The United Nations High Commissioner for Refugees Migrant workers in China face seniors. The Australian Seniors recently launched ninemillion.org to bring attention to many challenges and often lack Computer Clubs Association (ASCCA) is working to the plight of the world’s refugee youth. Founded by Right the opportunity to acquire the keep seniors engaged in the Australian economy by to Play, the campaign aims to create a global community skills needed to find better jobs. providing practical IT skills and knowledge training. With dedicated to giving the world’s refugee youth the chance The Beijing Young Entrepreneurs’ 110 Seniors Centers under the Microsoft UP umbrella, to learn and play. Microsoft supports ninemillion.org Association — in cooperation ASCCA will train 16,000 Australian seniors in 2006. through MSN® by hosting and localizing the Web site with Microsoft and government, content in nine languages. More information on the community, and educational institutions — will establish New Zealand: Creating New Tools program can be found at www.ninemillion.org. CTCs in Beijing to provide IT skills training to more than to Preserve Ancient Cultures 1,000 migrant workers. The training will help migrant The Maori language in New Zealand was on the verge South Africa: Promoting Accessibility workers improve their employment skills and better of extinction until a revival in the 1970s and 1980s. QuadPara is a South African organization offering integrate into their community. Despite the revival, it remains an endangered language. quadriplegics, paraplegics, and people with other In late 2005, Microsoft released a Maori Language disabilities a variety of services including helping to Hong Kong: Refurbishing Student PCs Pack for Office 2003 and Windows XP to facilitate the develop skills needed for employment. A Microsoft Despite the affluence of the general population in Hong use of computers by Maori speakers. Microsoft’s work grant in fiscal year 2006 will further the availability of Kong, more than 1 million people live in poverty. The is an important step in preserving and promoting a accessible technology in the QuadPara center, and Hong Kong Council of Social Service is working to vital piece of Maori culture for generations to come. through the use of Microsoft technology, the center’s address this issue and, under the Microsoft Authorized patrons will be able to use assistive devices better. Refurbisher program, plans to donate 20,000 refurbished PCs in 2006 to school-age children living in poverty.  partners in innovation — Microsoft 2006 Global Citizenship Report

security road shows on the information highway

PC security check available to everyone in Germany, Microsoft organized a truck tour through major cities. At each stop, people could consult with IT professionals and perform a full security check on their PCs. To enable security checks for other Germans, Microsoft distributed CDs and videos, provided online and offline checklists, and worked with a network of certified consultants.

In Sweden, the Livstid (Lifetime) Project — a partnership between Microsoft, the Swedish Media Council, and the Swedish National Agency for School Improvement — educated teachers and students about the risks young people may face when they use the Internet. This year, Microsoft took its security to the specific challenges and needs of each And the Get Net Safe Tour — a joint initiative message on the road — from Asia to audience, Microsoft shared its latest security of a dozen business, government, and Europe and across the United States. strategies with more than 3,400 professionals. nonprofit partners — visited 12 major During a security tour through the Philippines, Microsoft CEO Steve Ballmer traveled to Berlin U.S. cities to raise public awareness about Thailand, Malaysia, Indonesia, and Vietnam, for the second summit on security and the computer security and Internet safety. Microsoft discussed common security issues information society in Germany. As part of facing computer users. Tailoring the message a broader commitment to help make a free security and internet safety A m o r e t r u s t w o r t h y e x p e r i e n c e 10 partners in innovation — Microsoft 2006 Global Citizenship Report

security and internet safety

n 2002, Microsoft Chairman Bill Gates Partnerships with Industry, relationships, and use social-network analysis announced a companywide commitment Law Enforcement, and NGOs to identify communities of offenders. to make computing a more trustworthy Microsoft recognizes its responsibility as an I CETS began producing results almost experience for all of our customers by industry leader to help combat global cybercrime. developing software that is more secure and We believe that working to make the Internet immediately. In November 2004, while it reliable — software designed to help people safer for today’s users and future generations was still being tested, CETS created a link protect their privacy and ensure that they and is, quite simply, the right thing to do. We connecting child pornography crimes across their families can have a safer online experience. also realize that no one group can tackle the three continents, which led to the rescue of a challenge of Internet safety. Accordingly, we four-year-old in Toronto, Canada. Since then, Trustworthy computing and online safety are work collaboratively with industry partners, CETS has contributed to several investigations ongoing priorities for us, and we are making government agencies, law enforcement officials, that have crossed police jurisdictions and progress toward those goals through a powerful NGOs, and other influential people and international borders, creating connections combination of technology innovation and organizations to improve safety, privacy, and that have led to the apprehension of more investment, collaboration and leadership on security through enforcement efforts, technology than 40 online offenders and the rescue of key issues through strategic partnerships, tools, and education and awareness campaigns. children in many different countries. and prescriptive education and guidance. CETS was conceived after Sergeant Paul Gillespie, We develop innovative technology to help parents Partnerships to Enhance Children’s Online Safety who was a detective with the Toronto Police monitor and control their children’s Internet use, Microsoft worked Service’s Child Exploitation Section, sent an e- and to help consumers protect their privacy and with Canadian police mail message to Microsoft Chairman Bill Gates in personal data by blocking spam e-mail, phishing and international law 2003, explaining that he and other police officers scams, and malicious software. We collaborate enforcement agencies were fighting a losing battle in their efforts to stop closely with industry, government, academic, to develop the Child child exploitation online. Child predators were and law enforcement partners on strategies to Exploitation Tracking becoming increasingly adept at using technology make computing safer and more trustworthy System (CETS), a unique and innovative software to exploit children while keeping their identities for all users, and to prevent and prosecute tool that helps protect children and reduce hidden, but the police weren’t keeping pace online crime. And we offer customers, teachers, child exploitation online, and increases the in their use of technology to identify, arrest, parents, and children expert guidance and effectiveness of investigators and police agencies. and convict these criminals. Gillespie asked education to help them meet the ever-changing Using CETS, police agencies can manage, search, for help, and Microsoft provided a solution. challenges of security and online safety. analyze, and share huge volumes of information and evidence, cross-reference obscure data security and internet safety 11

To develop CETS, Microsoft worked with Cambodia — Protecting Children from Predators law enforcement agencies around the world, Cambodia has become an international trouble including the Toronto Police Service and the spot for child exploitation and human trafficking, Royal Canadian Mounted Police. Microsoft fueled by foreign pedophiles who prey on poor contributed technical expertise and resources Cambodian children and use the Internet to to develop a system that was designed by produce and disseminate child pornography. law enforcement, for law enforcement. According to the UNICEF report “Children on the Edge: Protecting Children from Sexual The success of CETS as a tool to help Exploitation and Trafficking in East Asia and the Child Safety — Employee Volunteering international law enforcement officials protect Pacific,” as many as one-third of sex workers in “The impact was astonishing — all groups were attentive children has attracted widespread attention. Cambodia are children under 18 years of age. and engaged with the materials. Many had not made the In June 2006, Indonesia adopted CETS after link to strangers …the local PC was excellent and was able to connect my online world to their offline experiences.” sending Indonesian police officers to Toronto In October 2005, Microsoft joined Britain’s to see how CETS was being used in Canada. National Criminal Intelligence Service and “Anyway, thanks for giving me a chance to put Several other countries are considering the National Crime Squad to offer a two-week something back. I have really enjoyed my day and will look to see how else I might get the message deploying CETS, and more countries are seminar to about 150 Cambodian, Thai, across through my school governor network.” expected to adopt the system in the near future. and Indonesian law enforcement officials “My final comment would be just to say that this was and humanitarian workers. The training the BEST and most fulfilling community activity I have included a range of computer skills, from ever undertaken during my eight years at Microsoft.”

“CETS puts together the work of hundreds Internet to network security, as well “I’ve just — five minutes ago — finished three of police agencies in one place. The tool can as how to trace sex offenders online. runs of this presentation to a total of 840 pupils in years 7, 8, and 9 at Philip Morant school in establish links from the different agencies Colchester. The impact was astonishing.” Before the seminar, many of the Cambodian that police wouldn’t necessarily make.” police and prosecutors who received the training “The children did you proud, and I can honestly — Corporal Garry Belair, technology had never used a computer or the Internet. This say it was one of the most rewarding days I have had in the 12 years I have been at Microsoft.” manager with the Royal Canadian has contributed to Cambodia’s difficulties in Mounted Police’s National Child addressing the human trafficking in child sex “The school was enthusiastic; we did all three year groups — as well as a staff session at lunchtime Exploitation Coordination Center workers. The training offered by Microsoft and a parents session. The school will use the and its partners is, we hope, changing that. Know IT All almost immediately; they are doing Internet safety this week in IT.” — Microsoft UK employees at the Getting to Know IT All volunteer event 12 partners in innovation — Microsoft 2006 Global Citizenship Report

“In Cambodia, the Enfance en ligne brought together parent and The conference sponsors developed a parents’ Internet and child family associations, public authorities, and guide to children’s online safety. The National safety are deeply industry representatives. The goals of the Union of Family Associations and other NGOs connected, but they conference were to initiate public discussion distributed 40,000 of these guides, another are connected in a way about child safety in conjunction with the 1,700 were downloaded from the Microsoft.com that may not seem Family Ministry Conference in September site, and 250,000 were shipped with a popular obvious when we talk about protecting our 2005, and to teach parents how to keep family magazine. The sponsors also launched an children online,” said Charles Ray, former their children safe online through smart educational Web site, Décode le Web U.S. Ambassador to Cambodia. “The truth is, online behavior and the use of technology (www.decodeleweb.com), which uses an online many Cambodian children have never used that features built-in parental controls. game to teach children 11–15 years old a computer and may never, in their lives, use how to use the Internet safely. The site, a the Internet … but Cambodian children are Approximately 300 French adaptation of the MSN UK Websafe people attended the abused daily by the pedophiles that use the Crackerz site (www.websafecrackerz.com/), Internet and computers to plan, coordinate, conference, which had 9,000 visitors the first month. and facilitate abuse of children in Cambodia.” featured roundtable discussions and Technology Innovation workshops that Enfance en ligne — Children’s Security and Internet safety are top innovation focused on parental controls for computers, Online Safety in France priorities for Microsoft. We are committed to Microsoft organized Enfance en ligne in mobile phones, and video games. In a postevent delivering software, services, and best practices partnership with the National Union of survey, 93 percent of respondents said they felt that help protect customers’ data, systems, Family Associations (an important NGO that better informed to guide children as a result of and networks. We are investing in technology represents 120 local community organizations the conference. Approximately 20 journalists fundamentals that make our products more and is the French government’s primary attended the event and published 25–30 positive secure, and innovations that provide layered partner on family issues) and Defenseur des news stories that helped to further inform the defenses against cybercrime and many other Enfants (the Children’s Ombudsman Office public about the issues of children’s online threats to security, privacy, and online safety. under the patronage of the Prime Minister). safety and the resources available to families. Enfance en ligne was the first conference on children’s online safety ever held in France. security and internet safety 13

Empowering Parents with Parental Controls and Windows Vista We are building parental controls into many Parental Controls of our most popular products and services, Microsoft is incorporating parental including Windows Vista™, Windows Live™, control tools into products like Windows Live ®, and MSN. These controls help parents and Windows Vista to help families create a protect their children from inappropriate content safer, more secure, and more enjoyable online and unwelcome contacts online. Our parental experience for children. These tools enable control tools also incorporate guidance from parents to control and monitor their children’s recognized experts, including advice about Internet use by creating customized settings Surfing Safely in Latin America age-appropriate content from the American that are appropriate for each child and by In Latin America, Microsoft teamed with the Ricky Martin Foundation to launch Navega Protegido to Academy of Pediatrics in Windows Live reviewing reports on his or her Internet use. promote online safety for children. Martin, two-time and game ratings from independent ratings Grammy Award winner and Goodwill Ambassador to Windows Live Family Safety Settings is a Web- UNICEF, taped three educational videos—each one boards such as the Entertainment Software in English, Spanish, and Portuguese — to provide based service that includes Web content filtering, Rating Board in Xbox and ™. children, teachers, parents, and other adult family activity reporting, and contact management members with the tools and information they need features. These settings apply to online content to protect children from online hazards such as sexual predators and inappropriate content. and services, including other Windows Live “For Microsoft, family-safe computing is essential services such as MSN Messenger and MSN The videos will be distributed over the Internet, to what we do every day. We interact with parents at campaign events, and to millions of children Spaces. Microsoft will make Windows Live and kids across all of our consumer products, throughout Latin America. Two of the videos address Family Safety Settings available at no charge children 7 to 11 years old. The third video addresses because we want them to have a great experience parents, teachers, and other adult mentors. Both and, because it is part of the Windows Live with our technology. We want them to have fun children and adults can find more information Web-based services, users can access settings about Internet safety on the Navega Protegido and we want them to learn, so it is important Web site at www.navegaprotegido.org. and reporting functionality from any PC that we provide the tools and information they connected to the Internet — offering parents Martin, who is well-known for his commitment to need to make intelligent choices and to feel greater flexibility in how they monitor and child welfare, established the Ricky Martin Foundation comfortable with the technology they’re using.” to advocate for children around the world in critical manage their children’s online activity. areas such as social justice, education, and health. — Robert (Robbie) Bach, President, The online safety campaign has attracted support from more than 40 major sponsors such as Visa, Intel, Entertainment and Devices HP, and Citibank as well as many Latin American Division at Microsoft governments and businesses. Microsoft and the foundation hope to expand the campaign globally. 14 partners in innovation — Microsoft 2006 Global Citizenship Report

The parental controls built into Windows Vista Windows Live Search protect their children from inappropriate help provide security and safety functionality Parents can set the SafeSearch feature video game content. The campaign includes to the computer on which it is installed and in Windows Live Search to Moderate a digital literacy curriculum for parents, a provides functionality for the management of (the default setting) to automatically filter out grassroots effort to reach families in their offline activity as well — such as PC games. sexually explicit Web sites and images. For a communities, and a toolkit for retailers. Windows Vista’s new parental controls higher level of protection, parents can increase This initiative is part of Microsoft’s ongoing can help parents feel comfortable that their the SafeSearch setting to Strict, which causes commitment to promote responsible gaming. children are using the Internet safely by: Windows Live Search to filter out sexually explicit text as well as sexually explicit images. Additional information § Limiting when and for how long about Microsoft Xbox 360 Family Settings is their children use the computer. Xbox 360 and Xbox Live available at www.microsoft.com/athome/security/ § Controlling which Web sites their Individual players can use children/xbox_360_family_settings.mspx. children can visit and limiting the Family Safety Settings programs their children can run. in the Xbox 360 game Security by Design console and the Xbox § Restricting access to computer games The Security Development Lifecycle (SDL) is a Live service to customize process designed to train Microsoft developers, (including online games with Xbox Live®) their own settings, and parents can limit the based on title, content, or independent ratings. testers, and program managers to develop games their children play, whom they play code that is more secure, and to test and review Providing detailed reports about § with, the movies they watch, and their online Microsoft products for security. SDL includes their children’s computer usage. and offline experience — even when they are mandatory security checkpoints at each phase away from home. The Family Safety Settings of software development for many of our Additional information for Xbox 360 and Xbox Live support all major products, and a rigorous security review that about Windows Live Family Safety Settings is game ratings systems used in every part of the products subject to SDL must pass before they available at www.microsoft.com/presspass/ world — from the United States to Australia. can be released. The SDL process is continually features/2006/mar06/03-13FamilySafety.mspx. improved and updated with best practices and In addition to building Family Safety Settings new information learned from the Microsoft into the Xbox 360 console, Microsoft Security Response Center, which provides has partnered with elected officials, rapid, targeted security responses whenever nongovernmental agencies, and retailers to software vulnerabilities are discovered. educate consumers about Family Safety Settings and other resources that parents can use to security and internet safety 15

Windows Vista, Microsoft’s next-generation Supporting Legislation operating system, builds on a 30-year legacy As an innovative technology company whose of technical excellence, industry collaboration, products are helping to transform many aspects and customer-focused product development of personal and professional life for millions of to deliver the most secure version of Windows people worldwide, Microsoft has a responsibility ever. Built to be more secure from the ground to work with lawmakers and law enforcement up, Windows Vista introduces important new agencies to develop laws and policies that help features and functionality designed to provide ensure online safety, security, and privacy. layered defenses against malware threats, Helping Law Enforcement Officials intrusions, and data breaches. It provides Because cybercrime crosses jurisdictional and Track Cybercriminals international boundaries, Microsoft is working Microsoft launched the Global Phishing Enforcement corporate and personal data enhanced protection Initiative to expand its ongoing efforts to prevent from hackers, malicious software, and theft. with governments around the world to enact and prosecute Internet fraud worldwide through legislation that prohibits the distribution consumer protection and innovative partnerships with governments, law enforcement agencies, and various One of the most recent security innovations of deceptive e-mail or spyware, protects industries. In fiscal year 2006 alone, Microsoft initiated from Microsoft is Windows Live OneCare, an individual privacy, empowers consumers, and legal action against more than 100 alleged online all-in-one, always-on preserves the health and vitality of legitimate criminals in Europe, the Middle East, and Africa. PC care service that e-commerce. And we’re making progress. The In January 2006, for example, the National Services is like a “pit crew” worldwide proliferation of spam, phishing, to Combat Organized Crime (NSCOC) in Bulgaria arrested eight individuals for allegedly running for PCs. Windows malicious code, and spyware attacks has an international phishing operation that stole Live OneCare spurred numerous legislative bodies to more than $50,000 from MSN users in the United States, Germany, and the United Kingdom. performs a wide adopt laws addressing these cybercrimes. range of maintenance tasks and provides Nicknamed the MBAM (Microsoft Billing Account Management) Gang by investigators, the cybercriminals automatic security updates, antivirus and allegedly contacted MSN customers with e-mail firewall protection, and backup and restore messages that looked as though they were sent by MSN features, so that customers can focus on enjoying customer service representatives. The phishers, who launched attacks in 11 countries, asked MSN users to their online experience without worrying about update personal financial data, and then used the stolen how to keep their PCs running smoothly. information to make purchases or initiate express money transfers. Microsoft assisted the NSCOC by providing investigative and technical support, enabling Bulgarian authorities to identify and arrest MBAM Gang members. 16 partners in innovation — Microsoft 2006 Global Citizenship Report

A Call for Federal Privacy Legislation practices. Smith told the caucus that Microsoft The proposed APEC Privacy Framework in the United States believes it is the right time for federal privacy starts from the principle that the flow of In November 2005, Microsoft Senior Vice legislation because it has become increasingly information between countries is crucial to President and General Counsel Brad Smith clear that a comprehensive approach is needed to trade and economic development. It reflects appeared before the help protect consumers from identity theft and the region’s commitment to balancing U.S. Congressional other misuses of their personal information. privacy protections with the need to avoid Internet Caucus to unnecessary barriers to the flow of data. advocate federal To learn more Based on a common understanding of the privacy legislation. The about Microsoft’s views on privacy legislation, see privacy protections consumers expect, and proposed legislation www.microsoft.com/presspass/features/2005/nov acknowledging the political and cultural would not only coordinate privacy protections 05/11-03Privacy.mspx and www.microsoft.com/press differences between nations in the region, the within the United States, but also harmonize pass/press/2005/nov05/11-03DataPrivacyPR.mspx. APEC Privacy Framework provides guidance and align U.S. protections with those offered and direction to member countries. by countries around the world. Smith said Privacy Legislation Worldwide Microsoft believes that the advantage of this federal privacy legislation should establish Asia-Pacific Economic Cooperation (APEC) is approach is that it enables countries to adopt baseline privacy protections for consumers the premier forum for facilitating economic legislation that effectively protects their citizens’ and also provide organizations with a uniform growth, cooperation, trade, and investment personal information while also maintaining standard on which they can build effective in the Asia-Pacific region. Microsoft has been some level of consistency throughout the region. privacy policies and compliance efforts. a major sponsor of APEC for the past three Legislation based on this framework will make it years and has participated at the Leaders/CEO But the potential of information technology to easier for both local and multinational companies Summit and in a number of APEC committees drive further social and economic advances to efficiently and profitably offer products and and working groups on the issues of privacy, depends on building and maintaining a solid services to any customer in APEC countries. online safety, and security. Microsoft and foundation of trust. Individuals will not take other APEC members have endorsed the full advantage of the Internet or any other APEC Privacy Framework to encourage the commercial medium if they believe their development of appropriate information privacy personal information could be compromised. protection and as a means to ensure the free Effective federal legislation will help provide flow of information in the Asia-Pacific region. consumers with the confidence and knowledge that the legitimate companies they do business with are following an established set of privacy security and internet safety 17

In May 2006, the International Association Many governments and regional organizations of Privacy Professionals (IAPP), the world’s around the world have affirmed their largest association in commitment to privacy laws that do not this field, brought its unnecessarily impede e-commerce and signature privacy international trade. Still, many of the differences networking program between approaches to privacy protection around on a three-city tour the world continue to create friction in the flow of to Sydney, Singapore, data between, and within, nations and regions. and Tokyo. The tour was cosponsored by Microsoft Helps Neutralize Antinny Virus in Japan Microsoft and Ernst & Young, and supported Microsoft works closely with governments, law enforcement agencies, and industry partners around the locally by public- and private-sector companies. “Many privacy-related policy problems arise world to limit the spread of computer viruses and the The IAPP Asia-Pacific Tour attracted more because we live in an increasingly interconnected damage they cause. But the Antinny virus was an unusual case that illustrates the depth of our commitment to than 250 privacy professionals from consumer, world. Communication and collaboration are making computing a safe experience for all users. business, and government organizations. continuously expanding; online commerce and The Antinny virus first appeared in Japan in March banking are growing at a rapid rate; and people are The purpose of the tour was to create a 2004, overloading Web servers at the Association using computers in almost every aspect of their daily of Copyright for Computer Software and forcing the dialogue about the increasingly important lives. As a result, we face increasing challenges in group to shut down its site. The virus spread quickly issue of privacy and data protection between through peer-to-peer connections to thousands maintaining privacy and confidentiality. At Microsoft, of PCs that unknowingly attacked and overloaded a growing and nascent group of Asia-Pacific we are building privacy-enabling technologies into servers at ISPs throughout Japan, threatening to privacy professionals. The tour was timely make the Internet inaccessible to Japanese users. our products that strike a balance between the for Singapore, where data protection collection, transmission, storage, and use of data.” After struggling for a year to neutralize the virus, the legislation is expected to be announced by IT community in Japan asked Microsoft for help. — , Microsoft’s Chief Some people worried that Microsoft might not want the Ministry of Information, Communication, to get involved, since the virus was not affecting and Arts (MICA) in the near future. Research and Strategy Officer users of Windows directly. But Microsoft responded immediately, working with Japanese companies to isolate 30 different strains of the virus and to create a remedy that was added to the company’s Malicious Software Removal Tool for delivery to users.

When the new tool was released, approximately 40 percent of the damage caused by the virus was rapidly eliminated. Within a month, the virus had been removed from more than 200,000 PCs, and before long that number had doubled. 18 partners in innovation — Microsoft 2006 Global Citizenship Report

microsoft and the u.n. partner on children’s online safety

§ Building a legal framework to protect children by broadening each nation’s existing laws to include online safety § Involving many different stakeholders, from parents and teachers to government agencies and law enforcement officials § Working through NGOs at the grassroots level § Increasing public awareness and providing clear guidelines for keeping children safe online

In addition, the U.N. and Microsoft jointly developed a toolkit that can help any country In June 2005, Microsoft took part in the global study on violence against children or organization set up and maintain an Internet United Nations Middle East and North commissioned by the U.N. Secretary General. Safety Program to educate and support children, Africa (MENA) Regional Consultation on parents, teachers, and community leaders. The Violence Against Children. The consultation, Microsoft explained how the Internet is toolkit includes training materials, educational held in Cairo, brought together more than transforming childhood worldwide, making resources, and activities. It was launched at 600 government representatives, NGOs, online safety for children important to all the official presentation of the U.N. Secretary activists, media professionals, and young nations. Microsoft proposed a strategic General’s report on Violence Against Children in people from the region. It was part of a plan of action with four main pillars: October 2006. knowledge economy r e al i z i n G p o t e n t i al 20 partners in innovation — Microsoft 2006 Global Citizenship Report

knowledge economy

n today’s economy, knowledge is the new We’re also working with partners to grow to bring the benefits of technology — and currency, and technology is the tool most the local software economy in thousands technology skills — to one-quarter of a billion Icommonly used to transfer, share, and of communities across more than 100 underserved people worldwide by 2010. apply that knowledge. As a result, technology countries worldwide, and to develop a access and skills have become the keys to workforce of highly skilled people who can Nations everywhere are striving to harness economic viability for a growing number of support and benefit from those businesses. the opportunities and meet the challenges people and communities around the world. of the twenty-first-century knowledge The knowledge economy offers immense economy. They are focused on promoting job Through innovative partnerships with opportunity for people and businesses in all growth and workforce training, encouraging governments, educators, NGOs, and other parts of the world to build better societies the development of local industry, and industry leaders, Microsoft is expanding digital and better lives. As a global technology enhancing their global competitiveness. inclusion. We do this by providing technology leader and responsible global citizen, access and skills training to a wide range of Microsoft is committed to helping countries Governments around the world understand people in different life circumstances — from and communities advance their goals of that addressing these issues today will provide educators and students who teach and learn human and technological development. a solid foundation for growth and prosperity in traditional classroom settings to the tomorrow. And because computer operating systems and applications are the engines unemployed and underemployed, women and Digital Inclusion youth, and people with disabilities who learn At Microsoft, our mission is to help people and that drive the knowledge economy, many of in community technology centers (CTCs). businesses throughout the world realize their these governments’ economic development full potential. We know that if people have strategies center on increasing digital literacy We work closely with NGOs worldwide, the right tools, they can accomplish almost and technology usage among all their citizens. finding ways to help them build their capacity anything. But tools alone won’t enable people and extend their services to more people. Microsoft is working in partnership with to build a better life and reach their dreams. governments and leading companies in the We make sure our products are accessible to They also need the skills to use those tools. United States and around the world to develop people who may have difficulty using standard It is that understanding, along with our innovative solutions to the workforce problems technology because of physical or cognitive experience and success in providing technology we all share. We know that creating economic issues, whether they experience only mild training to millions of people of varying opportunities for nations, communities, and impairments or severe disabilities. And we circumstances and abilities, that has given us businesses worldwide begins by opening provide a platform that enables other companies the confidence to make a bold commitment: doors of opportunity for individuals. to develop innovative devices that make it easier to see, hear, and use a computer. knowledge economy 21

Employability and Workforce Development Meanwhile, the nature of work in the United The readiness of States is changing rapidly. As we move from a American workers manufacturing-based economy to an information- to compete in the based economy, employers are demanding more global economy is skills that revolve around knowledge creation, a growing concern collaboration, communication, and analysis. for Microsoft and many other companies. The United States Information workers now account for 72 percent of the U.S. labor force, and over the is falling behind many other nations in Technology Offers New Hope to Amputees various measures of workforce readiness: next decade, 6 out of every 10 new jobs will be On New Year’s Day 2005, Jonathan Kuniholm, in professional and service-related occupations. a U.S. Marine officer, was wounded in Iraq and lost his right arm below the elbow. § Only 13 percent of U.S. adults are proficient Even jobs as diverse as delivery driver, retail in the knowledge and skills needed to search clerk, and manufacturing supervisor require at Before his Marine reserve unit was called up, Kuniholm 4 was a partner in a startup product design firm and for, comprehend, and use information — a least a basic level of proficiency in computers. working toward a PhD in biomedical engineering at Duke decrease of 2 percentage points since 1992.1 University. He was also a private pilot. On the day he was wounded, he wondered if his flying days were over. § Despite efforts to improve math and 1 National Center for Education Statistics, 2003 National science skills, only 13 percent of U.S. Assessment of Adult Literacy (NAAL), A First Look at the Today, with the help of prosthetic devices and assistive computer technology, Kuniholm is back at work and Literacy of America’s Adults in the 21st Century (2005). adults are proficient in the knowledge in school, and he has regained his pilot’s privileges.

and skills needed to identify and perform 2 Ibid. “Technology is playing an enormous role in computational tasks — the same percentage 3 Committee on Science, Engineering, and Public helping to mitigate the effects of my injury — from 2 of adults who were proficient in 1992. Policy, Rising Above the Gathering Storm: Energizing prostheses that help to simulate the functions of my lost hand and arm to Windows-enabled assistive and Employing America for a Brighter Economic § Only 5 percent of U.S. college undergraduates computer technology that has made it possible Future (National Academies Press, 2006). for me to resume my career,” Kuniholm said. today are pursuing degrees in science or 4 Norman C. Saunders, “Employment Outlook engineering, compared with 42 percent 2004–2014: A Summary of BLS Projections,” Monthly He has shifted the focus of his engineering work of university students in China.3 Labor Review Online (November 2005), p. 6. to creating innovative designs for prosthetic devices that can be shared with amputees and designers in impoverished or war-torn areas such as Bosnia, Iraq, and Sierra Leone — places where there are severe problems but few solutions.

“There are an estimated 650,000 upper-extremity amputees worldwide, most with no access to prosthetic devices,” he said. “I want to help developing regions better serve their amputee populations by providing designs for devices they can build with materials they have on hand.” 22 partners in innovation — Microsoft 2006 Global Citizenship Report

Microsoft has been working to foster workforce “I welcome the creation of the European Alliance Unlimited Potential and Partners in Learning development through IT skills training and other on Skills for Employability. The alliance is a In 2003, we launched programs for the past 10 years. For example, leading example of how innovative business-to- Partners in Learning Microsoft Learning is a group at Microsoft that business collaborations, working with different and Unlimited Potential focuses on developing and delivering IT skills stakeholders, can provide opportunities to the (UP), our two global flagship programs for training and certification solutions. Working European unemployed. Access to skills training, education and digital inclusion. The early with hundreds of commercial training partners content provision, and certification can help success of these two programs inspired us to in the United States, more than 7 million older workers, people with disabilities, and the set our ambitious goal of bringing the benefits American workers have received IT skills young to face the challenges of unemployment of technology to one-quarter of a billion training on Microsoft technologies in classrooms, and the changing workplace, and so contribute to underserved people around the world by 2010. at corporate offices, and over the Web. Europe’s prosperity. I commend this initiative as it represents one of the best practices in this field.” Today, Partners in Learning and Unlimited And our workforce development efforts don’t Potential programs are under way in more stop at the U.S. border. Microsoft is a founding — Vladimir Spidla, EU Commissioner than 100 countries around the world. Through member of the European Alliance on Skills for Employment, Social Affairs, innovative partnerships with governments and for Employability, a public-private initiative to and Equal Opportunities NGOs, we have trained more than 20 million provide 20 million Europeans with access to people through UP, and 24 million teachers and technology, content, certification, and training students through Partners in Learning, reaching There are 18 million people unemployed across in computer technology and other skills by 2010, a total of 135 million people around the world. Europe,5 many of them from disadvantaged enabling the creation of new and better jobs in groups that often have little access to good the European Union. The Employability Alliance Partners in Learning provides students, jobs. The training offered by Microsoft was founded in January 2006 and launched at the educators, and local governments worldwide and its partners is designed to reach many Microsoft Government Leaders Forum in Europe with the resources they need to make technology of those people, including immigrants, with the endorsement of an integral part of classroom learning and young people with low levels of education, European Commission instruction. Partners in Learning programs seniors, and people with disabilities. President José Manuel provide the IT skills training, software, Barroso, a keynote curriculum, and professional development resources that educators need to inspire and speaker at the forum. 5 Eurostat, Unemployment rate total (accessed August 2006). facilitate new ways of teaching and learning. knowledge economy 23

Unlimited Potential is designed to provide training to Ireland’s long-term unemployed. underserved populations with IT education Starting as a one-time course for 25 people in and skills training through community-based 1998, FIT has since grown into an international technology learning centers around the world. role model for how to design and manage a In the three years since the UP program began, community-based employability program. Microsoft has provided cash grants, software donations, and technical support and training FIT began in Ballymun as a Microsoft initiative to some 17,500 community technology centers called Tramlines, but later became an independent organization with board members in more than 100 countries, many of them Australia’s School of the Air Goes High-Tech specifically targeted at workforce development. drawn from many of the leading businesses and The Katherine School of the Air was established government agencies in Ireland. Today, FIT offers in 1966 to educate children at isolated homesteads, remote schools, and indigenous Partners in Learning 19 full-time courses and has spread to other communities in the Australian outback. and Unlimited Potential cities in Ireland, including Dublin and Belfast. For four decades, the Katherine School used a are key components of combination of radio broadcasts and correspondence Of the 5,000 people FIT has trained, 3,000 Microsoft’s worldwide materials to provide distance learning to students employability and are employed in jobs directly related to their scattered across 800,000 sq. km. In March 2006, training, and another 600 are engaged in Microsoft and the Northern Territory Government workforce development unveiled the Interactive Distance Learning (IDL) efforts. Both provide technology skills further education or training. Many graduates service to improve distance education in Australia. are now teaching the subjects they learned training that empower people to transform Today, the program could be renamed the school of PCs into tools that can help them learn, build through FIT, thereby increasing the effective the future. Satellite feeds and laptop computers have reach of the program. And 47 percent of FIT replaced radio headsets and pencils. Teachers and better livelihoods, and improve their lives. students see and speak to each other in real time, graduates are women, an unusually high and use a Web-based white board to collaborate number for technology training programs. on lessons. Students receive learning materials Ireland — Helping the Long-Term Unemployed electronically instead of by mail, and they build strong social networks through interactive communication. Through the Unlimited Potential program, Another UP-supported employability Microsoft provides critical resources for a program in Ireland is the Dublin Inner City IDL is based on Conference XP, a special technology number of employability and workforce Partnership (DICP). Working with DICP, developed by Asia and adapted development efforts in Ireland. for local conditions by M&S Consultants, an Microsoft is helping to equip computer Australian company from the Northern Territory. rooms in four Dublin inner-city community Fastrack to IT (FIT) is a workforce development After its debut at the Katherine School, the IDL program that provides technology and job skills centers to increase IT access and training for service was implemented at the Alice Springs communities in their own neighborhoods. School of the Air and the Northern Territory Open Education Centre. Eventually, the IDL service will be available to approximately 110 remote homesteads, 90 remote schools, four remote training centers, and a number of urban and regional schools. 24 partners in innovation — Microsoft 2006 Global Citizenship Report

Microsoft donated 110 refurbished PCs to Because many of the migrating Chinese are More than half of these projects are designed to equip the four DICP centers, along with a uneducated and lack basic skills, they end up in help young people, who represent a majority of full range of software for the PCs, Unlimited low-paying urban jobs. According to the Progress the population in Africa. Another third are aimed Potential curriculum to support training Strategy report, if the migrant workers remain at training women, and the rest are focused on efforts, and access to employee volunteers disenfranchised they could end up undermining training refugees, children, and underserved who wish to donate their time to work with “the sustainable and stable development of the communities. To further serve disadvantaged the centers. Microsoft also committed a total national economy.” To help prevent this outcome, youth, women, and refugees in African cash investment of nearly €100,000 to cover the Chinese government is aiming to provide 30 communities, Microsoft equipment installation, technical support, IT million migrant workers with vocational training is localizing the UP skills training, and the purchase of peripheral by 2010 — and Microsoft is committed to helping training curricula for the hardware such as printers and scanners. China achieve that goal. Arabic and Portuguese languages as well as The Xicheng CTC, located in the Xicheng District China — Extending Economic Benefits English and French. Library in Beijing, opened in June 2004 with to Migrant Workers One of the greatest 40 workstations. Through Unlimited Potential, At the Microsoft Government Leaders Forum economic migrations Microsoft provided the computers, software, and Africa 2006, Microsoft Chairman Bill Gates in history is happening additional funding. The Xicheng CTC was the announced that Microsoft is collaborating with global and local organizations — such in China. Although 60 first CTC in China, and the program has since percent of the Chinese been expanded to include four new rural CTCs as the United Nations World Tourism population lives in rural agricultural areas, and five new urban CTCs. Organization (UNWTO), the United Nations the country’s rapid economic growth has left Industrial Development Organization those areas largely untouched, according to a Africa — Offering Hope to Disadvantaged (UNIDO), and the New Partnership for Africa’s Development (NEPAD) — to help African report by Progress Strategy, a market research Women and Youth in 43 Countries and consulting firm. The average annual Through Unlimited Potential, Microsoft governments create sustainable economic income of people living and working in China’s has collaborated with NGOs and IGOs, as growth by providing ICT training to more cities is more than three times that of those in well as local partners, to provide resources than 45 million people in Africa by 2010. rural areas. As a result, more than 10 million to more than 1,000 CTCs in 43 African people each year leave the country to seek countries. Microsoft has invested more than better economic opportunities in the cities. $7.5 million in cash and software to help train and empower thousands of Africans. knowledge economy 25

India — Making Technology Part of Learning Teachers who have taken the course say that India is a perfect example of the need for digital both they and their students benefited from inclusion. Although there are thriving technology the program. The teachers gained more sectors throughout the country, state-funded confidence and left the Microsoft IT Academy schools in poorer areas have no computers and eager to share their new skills. Energized by the most teachers have little or no ICT training. training, teachers are motivated, which, in turn, motivates students and improves attendance. Project Shiksha, launched by Microsoft Chairman Bill Gates in 2002, is a Partners in Central America — Certification telecentre.org Learning–sponsored IT Academy program for Competitiveness Many people around the world lack easy access to designed to provide computer literacy potentially life-changing information. Telecentres — public Working with Microsoft Partners in Learning, spaces equipped with computers, the Internet, and other for more than 80,000 teachers and 3.5 many countries in the Caribbean and Central technologies — equip users with the resources needed to million students throughout India over tackle a wide array of social issues, from computer-based America (CCA) region are starting Peer Coaching job training and health education to democracy building. a five-year period. Microsoft has made a Programs, which will become a fundamental part $20 million investment in the project. To help strengthen the effectiveness of telecentres of professional development plans for public- worldwide, Microsoft, the International Development Teachers travel to school teachers. Peer Coaching allows public Research Center, and the Swiss Agency for Development schools to have at least two teachers working as and Cooperation developed telecentre.org, an initiative for an designed to strengthen the capacity of community- intensive 12-day course “coaches” for the rest of the teachers in that school. based telecentres to better serve their local needs. At The program includes 10 sessions in 12 months, its core, telecentre.org is built around collaboration in basic IT skills that and partnership — connecting telecentres, networks, includes instruction and during that time all coaches are expected innovators, and social investors. to guide other teachers to discover how they on how to use the The focus of the telecentre.org program is to provide can help students achieve academic success by Internet, e-mail, and popular software products social investments and services at the national and making technology part of the learning process. regional level to grassroots telecentre networks. These such as Windows XP and , networks give telecentre managers the training, PowerPoint®, Paint, and Excel®. The teachers business planning, marketing, and technology also learn how to integrate technology into they need to succeed. Through online information- sharing services, they also help local telecentre users their lesson plans and classroom instruction. learn and innovate together, making technology more useful for the communities they serve.

In November 2005, the first round of social investments was launched, offering financial support for telecentre networks in India, Sri Lanka, Uganda, Mozambique, South Africa, Chile, and other areas across the Americas. 26 partners in innovation — Microsoft 2006 Global Citizenship Report

To become more Asia-Pacific — Technology Training “Microsoft is the first company to approach us with competitive, several to Stop Human Trafficking a vision of empowering OFWs (Overseas Filipino CCA countries have Throughout the Asia-Pacific region, low-income Workers) through technology, and we are very started extensive villagers frequently migrate from rural to happy that we are able to sustain this partnership.” certification programs. urban areas in search of greater economic — Mr. Marianito D. Roque, Administrator, Partners in Learning, opportunities and a better life. Once away from Overseas Workers Welfare in cooperation with local partners, makes it their home communities, however, their lack Administration, Philippine Department easy for CCA countries to certify teachers and of skills and job prospects often puts them at of Labor and Employment students. Using Partners in Learning resources, risk of falling victim to human trafficking. in 2006 Costa Rica plans to certify 10,000 In June 2006, Microsoft people, El Salvador 22,500, and Panama and Microsoft will support more than 130 new announced six the Dominican Republic more than 5,000. community technology centers to provide the Unlimited Potential benefits of technology to those most at risk. In El Salvador, the first country in Central (UP) grants, together In addition to financial support, Microsoft is America to implement the Free Trade valued at more providing software Agreement with the United States, the Ministry than $1 million, to and the Unlimited of Education plans to make the Partners help combat human trafficking in the region. Potential curriculum, in Learning curriculum an official part of With the grants, NGOs in Cambodia, India, which is available secondary education, and to make certification Indonesia, the Philippines, Singapore, and in 10 languages that a requirement for high school graduation — a Thailand will deliver IT skills training to enhance are used in Asia. move that will lead to more than 60,000 the employment prospects and economic students being certified each year starting in conditions of people most vulnerable to human 2007. In January 2006, 27 teachers in Panama traffickers, and those who have already been completed Master Teachers Office XP training victimized. Through outreach efforts and and were certified, and they will now share their subgrants, the network will provide resources skills and knowledge with other teachers. This to more than 40 NGOs, including several in first class of 27 was the start of an ambitious Sri Lanka, Bangladesh, Nepal, and Vietnam. project to certify 750 public-school teachers as Specialists or Masters. knowledge economy 27

Accessibility Before technology can empower people with Microsoft has been a leader in accessible disabilities, or anyone else, they have to know technology design and development since how to use it. Microsoft has created innovative 1988. We develop software and tools that partnerships and programs throughout the make it easier for people to see, hear, and world to provide the training and technology use their personal computers, and we that people with disabilities need to transform never stop working to make Windows an their lives and realize their potential. outstanding platform that other companies can use to develop accessible technologies. Innovative Accessibility in Windows Vista Opening Doors in Latvia Windows Vista, the newest version of the On February 6, 2006, the Open Door center was Originally, accessible technology was viewed founded in Riga, Latvia, to provide ICT training for operating system, includes people with disabilities and others in the community exclusively as a tool to assist people with several new accessibility innovations. to help broaden their employment, educational, and disabilities, and that is still one of its most communication opportunities. Four months later, on June 6, the Open Door Center graduated its first important functions. Today, however, the A new Ease of Access center helps class of students, who became instructors in the demand for accessible technology is expanding, computer users identify, locate, and program to help train others in the community. as more people with mild or moderate turn on the built-in accessibility A joint project of Microsoft Latvia and APEIRONS, a impairments realize all of the ways accessible settings and programs in Windows Vista. Latvian organization for people with disabilities, technology can help them adjust their computers Also, by answering a few simple questions Open Door is supported by a Microsoft Unlimited Potential grant, along with donations of Microsoft to make them easier and more comfortable to use. about their experience performing routine software and curriculum materials. The center tasks, such as difficulty seeing faces on a has a computer classroom with workstations for Although the benefits of accessible technology IT instruction, and it also offers computer and TV or hearing conversation in a crowded Internet access to people in the community. are not limited to people who experience room, users can receive a personalized physical or cognitive difficulties, addressing recommendation for accessibility settings that the needs of people with a wide range of may improve their computing experience. abilities gives us deeper insights into the challenges all consumers face as they interact Windows Vista also includes new technologies, with technology. As a result, Microsoft is able such as state-of-the-art Speech Recognition to create software that is more functional for and Magnification, which can assist everyone while continuing to address the users with a wide range of abilities. unique needs of people with disabilities. 28 partners in innovation — Microsoft 2006 Global Citizenship Report

With Windows Speech Recognition, users can for software developers. Microsoft Accessibility ECDL Barrier-free Access is tailored to meet dictate documents and Resource Centers throughout the United States the unique challenges faced by people with e-mail messages, fill are available to help people with disabilities find visual, hearing, mobility, and cognitive out forms on the Web using voice commands, the accessibility settings and assistive technology disabilities. It allows them to work with and manage their PC and applications by products that are right for them. These low- or assistive technologies — Braille displays saying what they see. Speech Recognition is no-cost centers offer consultation and training. or keyboard and mouse alternatives such designed to improve as people use it, adapting as on-screen keyboards or hands-free mice to their speaking style and vocabulary. ECDL Barrier-free Access Project for people who are paralyzed — although The European Computer Driving Licence (ECDL) the standards of certification are the same Magnifier makes a portion of the screen from is an internationally recognized computer skills as for everyone else. The possible benefits 2 to 16 times larger to improve the readability certification program with about 2.5 million of ECDL Barrier-free Access include: of text for people with low vision. Instead of participants in more than 90 countries. Because Improved employment prospects for people stretching an image to enlarge it, which often of a lack of dedicated resources, however, people § creates jagged edges and other distortions, with disabilities had with disabilities who earn the ECDL certificate. Windows Vista enables users to enlarge buttons, difficulty attaining the § Reduced unemployment among icons, and other graphics to the size they find certificate and were people with disabilities, and less easiest to see with no loss of image quality. facing significant dependency on state benefits. disadvantages in A new accessibility and automated testing § Employer access to a larger model in Windows Vista, called Microsoft the job market. pool of skilled workers. UI Automation (“UI” refers to user interface), To address this problem, Microsoft Austria and § Local economic benefits derived reduces development costs not only for accessible the Integrated Study Institute of the University from greater productivity. and assistive technology (AT) developers, but of Linz worked with representatives from the also for application developers who make their public and private sectors to establish a new software compatible with AT products such pan-European initiative called the European as screen readers for people who are blind. Computer Driving Licence for People with Microsoft UI Automation also improves product Disabilities (ECDL-PD), better known as quality by providing increased testing support the ECDL Barrier-free Access project. and a new way of doing automated UI testing knowledge economy 29

Helping People with Disabilities Job Training in Kazakhstan in Latin America The Namys Foundation is an organization in Partnership in Opportunities for Employment Kazakhstan for people with disabilities and through Technology in the Americas (POETA) those who support them in their everyday lives. is the latest program to emerge from the Working together, the Namys Foundation and partnership between Microsoft and the Microsoft Kazakhstan used Unlimited Potential Organization of American States, which cash, software, and curriculum to open a CTC to began in 2001. POETA provides technology provide ICT training to people with disabilities job training and job placement assistance at and others in the community. During the first Partnership for Technology Access centers located throughout Latin America to year, more than 130 people received computer The Microsoft Partnership for Technology Access (PTA) program is an innovative initiative that draws on the young people and adults with disabilities. skills training at the center. According to the expertise of governments, technology organizations, foundation, nearly 70 percent of those trained and financial institutions to make PCs more affordable. At some centers, the program also serves had disabilities, and 43 percent of the trainees Despite a high level of literacy and education, there other vulnerable populations, such as at-risk with disabilities used their new skills to find jobs is widespread poverty in Egypt. A majority of youth, women, and people from indigenous immediately after completing their training. Egypt’s 77 million people are considered “working cultures. POETA is poor,” with average monthly incomes of about $100. Few have any credit history, which puts working with more purchasing a home PC beyond their means. than 10,000 people “All the telecentre.org partners have extensive The PC in Every Home initiative, a PTA program, has with disabilities and experience of working in developing countries, enabled Egyptians with no credit history to purchase others in 29 centers PCs with low monthly payments. More than 250,000 but we know that we can achieve much more by PCs have been sold, and more than 1 million Egyptians that span 11 countries: collaborating and sharing information than by have gained digital skills and the chance for a better life. Argentina, Colombia, the Dominican Republic, working independently. Microsoft’s expertise in Similar PTA programs have been established in Ecuador, El Salvador, Guatemala, Honduras, providing training materials and in introducing the Philippines and Nigeria. Konek ka diyan! is a Mexico, Panama, Peru, and Venezuela. PC-purchase program that gives 9 million overseas technology outside traditional office environments Filipino workers and their families the chance to own will play a particularly important part.” computers. The Computers for All Nigerians Initiative offers low-interest PC loans to government employees — Mark Surman, Managing Director, who use their paychecks as collateral. Over the next two years, the program will expand to include International Development students, microenterprise owners, and pensioners. Research Centre (IDRC) According to The Economist, five of every six people on the planet have no access to institutional credit. With its private- and public-sector partners worldwide, Microsoft is working to eliminate that barrier to digital inclusion. 30 partners in innovation — Microsoft 2006 Global Citizenship Report

Local Software Economy including job creation, company formation, France — Initiative for the Economic Innovation and collaboration have always been local IT spending, and tax revenues. For Development of ISVs and Startups hallmarks of Microsoft and the commercial example, the IT industries in Australia, India, In October 2005, Microsoft launched the software industry as a whole, a trillion-dollar Indonesia, Korea, Malaysia, New Zealand, the Initiative for the Economic Development of ISVs market that helps to create and sustain Philippines, Singapore, Thailand, and Vietnam and Startups (the French acronym is IDEES) to local software economies worldwide. will generate an aggregate of more than 1 enable promising young companies in France million new jobs between 2004 and 2009, and to emerge and grow more quickly. Microsoft Microsoft’s success depends on its extensive account for the creation of more than 19,000 spent four months identifying and recruiting 25 partnerships with nearly 700,000 businesses new IT companies. Over the same period, the companies to participate in IDEES, looking for worldwide—including independent software IT industry will drive $11.3 billion in new businesses that offered innovative products with vendors, system integrators, resellers, and tax revenues and contribute almost $350 talented R&D and management teams that could hardware manufacturers. Local software billion to regional gross domestic product. bring value to Microsoft customers and partners. economies and the Microsoft partner network create jobs, generate tax revenue Software is a significant contributor to To assist the IDEES startups and independent for governments, offer skills and workforce this growth. Currently, 38 percent of all IT software vendors (ISVs), Microsoft provides development programs, and make significant employees in these 10 countries are engaged in funding for technical consulting and investments in innovative new technologies. creating, distributing, or servicing software. As marketing, introductions to leading venture further evidence that Microsoft helps to drive capitalists, and direct links to product groups Building opportunities for economic the success of the larger IT ecosystem, IDC and other resources within Microsoft. development through local software economies is estimates that for every dollar of Microsoft an important driver of growth in many countries. revenue in these countries, an average of A good example of the effectiveness of IDEES Evidence increasingly shows that countries $12.29 is generated by other companies selling is Miyowa, a mobile instant messaging and with the best economic growth rates have hardware or software that runs on Microsoft infotainment platform provider that had 15 invested in developing local IT industries and operating systems or in servicing that software. employees and no venture capital funding when deploying IT across all sectors of the economy Microsoft invited it to join IDEES. Microsoft to foster social and economic development. In countries and communities around the world, provided Miyowa with €15,000 for technical Microsoft is forging innovative partnerships consulting, introduced the company to MSN A 2005 global study by IDC, a market research with governments, NGOs, and local businesses executives and IDEES venture capitalists, and firm, shows that IT continues to be a major to create new economic opportunities. presented the young firm to i-mode operators in driver of local and regional economic activity, knowledge economy 31

Holland and Japan. (Developed in Japan, i-mode Services Companies (NASSCOM) — the Indian is a wireless Internet service that is becoming software industry’s chamber of commerce—to increasingly popular in other parts of the world.) train and certify ISVs. The program uses the Microsoft Solutions Framework, a set of proven Miyowa won a competitive contract to operate software development principles, processes, and MSN Messenger services on Bouyges i-mode best practices. This disciplined yet adaptable mobile devices. In 2006, Miyowa will generate development approach provides companies at least €2 million in revenue thanks to the with the information and tools they need MSN deal, and the company closed a similar to deliver high-quality software solutions NGO Days in Asia deal in Holland with another company. On faster, and with fewer people and less risk. In 2006, Microsoft conducted NGO Days in the strength of those contracts, Miyowa was Australia, Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, Sri Lanka, and Thailand able to secure €7 million in venture capital The ISV Quality Certification program guides to help nongovernmental organizations increase and expects to recruit more than 20 new software developers and IT managers through their technology capacity. An innovative hands- on approach, NGO Days offer Microsoft staff people. The company also plans to expand the entire life cycle of a software-engineering the chance to gain a deeper understanding of operations into the United States in 2006. project. It consists of four stages: training, the NGOs in their country and provide NGOs an consultation, assessment, and certification. opportunity to learn more about Microsoft and its community investments, technology, and people. India — Quality Assurance Initiative The Quality Assurance Institute India Ltd. India has become a global leader in information (QAI), the largest software-process consulting Microsoft makes frequent software donations that benefit NGOs; the company also provides technology technology services and support, but the nation’s organization in the Asia-Pacific region, provides training and other resources through its Unlimited commercial software industry — which has the independent certification to validate that proven Potential program. In Asia, Microsoft employees volunteer their time and expertise to help organizations potential to reach $50 billion in revenue by the and accepted methodologies have been used build capacity and improve performance. end of 2008 — has not yet achieved the same level throughout the software design and development NGO Days are tailored to the specific needs of the NGOs of success. The greatest barrier to growth is the process. The goal is to assure customers that they in each country where events are held. The needs are lack of efficient software development processes, are getting high-quality, reliable, and scalable assessed in advance through surveys or input from which are necessary to ensure consistent products. The entire process takes three to cosponsoring organizations that work directly with the NGOs. Some NGO Days focus on NGOs that work in product quality and customer satisfaction. six months. Twenty-four ISVs have completed a particular sector, such as agriculture in Indonesia. the training, and 10 companies are on track to To help the Indian software industry reach Feedback from NGOs attending these events has achieve QAI certification by the end of 2006. been so positive that Microsoft intends to expand its potential, Microsoft has partnered with the program. We are also pursuing follow-up India’s National Association of Software and activities: some offices are working more closely with select NGOs, and others are developing technology applications specifically for the NGOs in their country. 32 partners in innovation — Microsoft 2006 Global Citizenship Report

Argentina — Meeting the Growing and Argentina’s Ministry of Labor agreed to By June 2006, the Microsoft Founder Initiative Demand for IT Workers cosponsor 1,000 additional scholarships in 2006 was supporting 18 initiatives at both the federal In Argentina, a vibrant economy is creating huge and, in partnership with CESSI and local IT and regional levels and had mentorships demand for trained IT workers. Recent research companies, to create and fill 600 more new jobs. for 12 startup companies. The goal is to from IDC indicates that IT spending is projected have 20 mentorships in fiscal year 2007. to increase at an annual rate of more than 20 Germany — Microsoft Founder Initiative percent through 2008 — nearly triple the pace Creating jobs and developing a thriving high- for Latin America as a whole. The increase is tech industry are top economic priorities for “In Bavaria we have been successful in the past years driven not only by local companies that need the German government, yet the number of with our focus on innovation — and we also owe skilled IT professionals, but also by businesses new high-tech companies in Germany has this to the support of companies such as Microsoft.” outside the country that are considering been decreasing steadily since 1995, according — Edmund Stoiber, Bavarian State Prime Minister investing in new opportunities in Argentina. to a German economic research institute.

To address the growing need for skilled IT One goal of the Microsoft Founder Initiative is workers in Argentina, Microsoft joined forces to support the business development of high- Brazil — Microsoft Innovation Centers with the Chamber of Enterprise Software and tech founders and startup companies, enabling To help fuel innovation and the development of IT Services (CESSI), 12 universities, and nearly them to achieve above-average growth and strong, self-sustaining local software industries two dozen software companies and technology create good jobs in Germany. Another goal is in communities worldwide, Microsoft is incubation centers to create +MAS, a training to showcase these companies as examples of partnering with local governments, academic and certification program that provides how technology innovations can become the institutions, industry organizations, and college students and recent graduates with the basis for successful businesses and to encourage software and hardware vendors to expand its skills needed by local software companies. the founding of more high-tech companies. network of Microsoft Innovation Centers (MICs). Today, these centers serve 100 communities + MAS is also designed to help newly trained The Microsoft Founder Initiative operates as worldwide. By the end of 2006, there will be graduates connect with prospective employers. a public-private partnership. Basic support MICs in 125 communities in 50 nations. In Argentina, Bolivia, Chile, Paraguay, and for the startup companies is provided on a Uruguay more than 2,200 students have received regional basis. Microsoft works closely with Microsoft and its partners in each community scholarships for training and certification in regional governments, and many of the startup work together to operate the MICs, which Microsoft .NET technologies, and more than companies receive some funding from public are open to students, professional software 250 were hired into new jobs by local software subsidy banks along with matching funds from developers, IT professionals, entrepreneurs, companies. Building on this success, Microsoft venture capitalists or other private investors. and academic researchers. Each MIC knowledge economy 33

tailors its programs to local needs, but they In India, more than 70 percent of the population all provide similar content and services lives in rural areas with either limited access designed to accelerate technology advances to technology, or no access at all, which, in and stimulate local software economies turn, limits access to government services through skills and professional training, and participation in the knowledge economy. industry partnerships, and innovation. Project Saksham is an initiative launched by Microsoft in partnership with governments in In Brazil, more than 14,000 students, university India to help energize the nation’s rural economy professors, and local software entrepreneurs by creating a sustainable IT infrastructure Microsoft Research: Empowering Academic have used the country’s 20 Microsoft Innovation and an environment for economic growth. Researchers to Change the World Centers to collaborate on new technologies, Besides working to solve complex computer science problems and developing innovative technologies, test software prototypes, participate in For Project Saksham, Microsoft Research (MSR) also finds ways to seminars on emerging technologies, receive Microsoft is partnering inspire and engage the academic community. advanced training, and prepare for jobs in with government As part of the company’s efforts to increase digital Brazil’s fast-growing high-tech sector. Since agencies and NGOs inclusion by expanding global access to technology the Brazilian centers opened in 2002, more and taking advantage and skills training, MSR created a $1.2 million funding opportunity for academic researchers. In than 200 software projects and solutions of resources, funding, October 2005, MSR issued a request for proposal have been developed around the XML open and grants from rural development programs (RFP) to encourage academic research that explores how technologies can help people around the standard and other innovative technologies, to provide microfinancing and to encourage world reach their potential by making computing in collaboration with 72 universities and kiosk-based microenterprises throughout rural more accessible, affordable, and relevant to their cultures, communities, and everyday lives. numerous local governments and businesses. India. Over the next three years, Project Saksham will establish 50,000 such businesses in India, Four months later, Microsoft named the 17 digital inclusion RFP winners from teaching universities in Saksham — Rural Computing in India which will be operated by village entrepreneurs. Argentina, Botswana, Canada, Chile, China, India, the Information and communications technology Netherlands, Pakistan, the United States, and Uruguay. has spurred rapid socioeconomic development 6 2001 Census of India, Office of the Registrar General, Some of the research projects proposed by the in developed countries and in urban areas in http://censusindia.net (accessed August 2006). RFP winners included delivering integrated Internet- developing countries, but many rural areas6 in based healthcare information and services for HIV/AIDS patients in Botswana; exploring whether developing countries have been left behind. WiFi-enabled phones and online chat services can boost cognitive development in Chilean children; and building a prototype of an early warning system for flood control in Honduras. Many of the winning research universities are partnering with NGOs to develop proof-of-concept applications. 34 partners in innovation — Microsoft 2006 Global Citizenship Report

Korea — Software Ecosystem Project content. The two labs will also support the Microsoft has a long history of working with In May 2006, Microsoft expanded its partnership training of 1,000 skilled software architects. NGOs to help them streamline their logistics and with the Korean government by signing a internal processes, improve their performance, Memorandum of Understanding with the and extend their services to more people. Korea IT Industry Promotion Agency (KIPA) to “Together with the Korean government’s Through our involvement in innovative programs implement the Software Ecosystem Project and initiatives to build a stronger software industry, designed to bring the power of technology to accelerate the growth of the Korean IT industry. we expect Microsoft’s contribution and NGOs worldwide, we seek to strengthen, support, commitments will help nurture a more globally and empower the entire NGO community. Under the agreement, Microsoft will invest an competitive software industry for Korea.” additional $30 million in the Korean IT industry, Ensuring Technology Access to bringing its total investment to $60 million — Hyun Jin Ko, President of KIPA Underserved Communities over the next three years. The money will be Technology upgrades and organizational changes used in part to build two new labs — the ISV at many companies routinely add to a worldwide Empowerment Lab and the Web Engineering Helping NGOs Build Capacity surplus of usable PCs, yet only a small number Lab — that will help local companies strengthen and Improve Performance of these used computers are redeployed to serve their ability to compete in the global marketplace Nongovernmental the educational and training needs of people who through ongoing innovation. The two new labs organizations lack access to life-changing technology. Millions will join the existing Innovation enrich millions of of potentially useful PCs are literally going to Lab in the expanded Microsoft Innovation Center. lives worldwide waste, and millions of opportunities to empower and make vital people through technology are being lost. The goal of the ISV Empowerment Lab is contributions to the to nurture 60 Korean ISVs, helping them quality of life in communities everywhere, create new products and technologies. In offering essential services that form a safety addition, Microsoft will help key ISVs gain net in the gap between government programs access to the global market through export and the private sector. Yet despite the critical opportunities. The Web Engineering Lab is services they provide, many NGOs lack the designed to foster collaboration between local skilled staff, up-to-date technology, and companies in Web services and digital other resources that would allow them to operate more efficiently and cost-effectively. knowledge economy 35

The Microsoft Helping NGOs Help Themselves oldest and largest NGO technology assistance Authorized Refurbisher In 2000, Microsoft agencies in the United States. TechSoup.org (MAR) donation helped to establish is a Web site that offers NGOs a one-stop program, operating NPower, a network shop for their technology needs by providing in scores of countries, of independent, free information, resources, and support. facilitates community local nonprofit TechSoup gives NGOs access to donated ICT access and learning by enabling more than organizations and discounted technology products that 530 authorized PC refurbishers worldwide to that help NGOs use technology to operate are provided by TechSoup’s ICT industry install donated Windows operating systems and more efficiently and serve their communities partners. Currently, we are working with Microsoft Works 7.0 on PCs destined for NGOs, more effectively. We started with a five-year CompuMentor to replicate this model worldwide. community centers, and K – 14 schools (including commitment of $25 million in cash and community colleges and vocational schools). software; in 2003, we extended our support Microsoft software donation programs through 2007. Microsoft employees also support represent the primary method for engaging Microsoft provides Windows operating NPower as onsite volunteers and trainers, the broader NGO community, offering systems — approximately 150,000 in fiscal and serve as board members for NPower valued tools to small nonprofits in an open year 2006 alone — to NGOs that refurbish organizations throughout the United States. and accessible manner. In fiscal year 2006, thousands of surplus PCs every year. We Microsoft donated more than $307 million in provide software, certificates of authenticity, “NPower provides a tremendous resource that software worldwide. Through our partnership and end-user license agreements to the MAR enables NGOs to get the expert technology with TechSoup, we are expanding our North program, and the authorized MARs distribute assistance they need when they need it,” said American program to key markets worldwide. those donations to qualified recipients. By Kevin Johnson, Co-President, Platforms & reducing the refurbishers’ costs, the MAR Services Division at Microsoft, who serves on TechSoup not only provides the administration program makes refurbished technology more the national NPower board. “NGOs play a vital required for our donations, but also supports affordable and increases the availability of low- role in society, providing critical services that the NGOs with online content and services cost usable PCs to communities most in need. strengthen communities. Directly or indirectly, to help them effectively implement our we all rely on the work of these essential donations. In addition, TechSoup helps them receive donations of technology tools from More information organizations for the quality of life we enjoy.” other corporate donors (such as Cisco, Adobe, on MAR programs around the world is Microsoft is also a founding partner of TechSoup, and Symantec) to complement our donations available at www.microsoft.com/mar. which is operated by CompuMentor, one of the and provide a holistic technology solution. 36 partners in innovation — Microsoft 2006 Global Citizenship Report

Technology Solutions to Improve Disaster The grant is part of our ongoing effort to meet the challenges of providing disaster relief. Response and Humanitarian Relief provide NGOs with tools that enable them Groove, a Microsoft product that enables flexible Microsoft works closely with a number of to increase their capacity and fulfill their peer-to-peer collaboration, is a good example. major NGOs on relief efforts in many parts missions more effectively. By partnering of the world, either in direct response to with leading nonprofit organizations like A team of Microsoft employees was working natural disasters or as part of ongoing NetHope and ECB, Microsoft is helping to with a group of NGOs to help doctors deliver efforts to address the needs of refugees. create innovative technology solutions that medical care to remote areas of Afghanistan strengthen NGOs and relief agencies worldwide. that had no power, no water systems, and no Microsoft and its employees made significant mobile-phone connections. The local clinic was contributions to relief efforts in response to Earlier, when civil war sent thousands of a two-day drive from the nearest hospital. recent natural disasters, such as the Indian refugees fleeing Kosovo in 1999, many were Ocean tsunami, Hurricane Katrina, and the stripped of their identity papers and became “Before introducing technology into the earthquake in Pakistan. In 2006, to help separated from family members. Hundreds equation, it took between two and six weeks improve humanitarian relief efforts worldwide, of Microsoft employees reached out to help by to coordinate getting the results of tests based Microsoft donated $41 million in software and applying their knowledge of technology and on tissue samples that were taken locally and cash to NetHope and the Interagency Working volunteering their time. The Refugee Field Kit, flown to Pakistan. Doctors had to communicate Group on Emergency Capacity Building (ECB). developed by Microsoft employees, provided back and forth over long distances however displaced people with official identity cards and they could, a process that often took weeks,” NetHope is a membership an easier method for finding missing relatives. said Ray Ozzie, Microsoft’s Chief Software organization that Our employees have continued to refine the Architect. “The goal was to use Groove and includes the chief information officers and/or kit and to work with the United Nations High other technologies in a pilot program to help chief technology officers of 17 global NGOs Commissioner for Refugees to address similar the NGOs reduce the coordination time among engaged in international development. refugee needs in many different countries. doctors from weeks down to two days.” ECB comprises seven of the world’s most active relief agencies, including Catholic As technology evolves, and innovative software Relief Services, Mercy Corps, and Save the products are developed that make businesses and Children. The focus of both NetHope and consumers more mobile and productive, some of ECB is to improve collaboration and capacity these solutions can help NGOs and volunteers in disaster response, including improving the use of information and communications technology to assist in their work. knowledge economy 37 imagine cup: inspiring students to dream

Microsoft Imagine Cup, an annual technology competition for university students, encourages young people to develop software solutions that address real-world problems. The event rewards the students’ innovative work with cash prizes and international recognition.

When Imagine Cup began in 2003, 1,000 students from 25 countries competed for $50,000 in prizes in one invitational division: Software Design. Imagine Cup 2006 drew 65,000 students from more than 100 countries, competing for more than $125,000 in prize money in six invitationals. The competition challenged students to “imagine a world where technology enables us to live healthier lives.”

One of the many innovative entries in the 2006 competition was from a team of Brazilian Software Design — Italy. IT — Austria. Andreas Tomek university students, who combined GPS Team Even .ctor: Giorgio Sardo, Massimo technology with vibrating wrist bands to create Paternoster, Silvia Perrone, and Andrea Sossich Interface Design — Brazil. a mobile map to help blind people navigate. Team Virtual Dreams: Roberto Sonnino and Algorithm — Poland. Piotr Marek Mikulski Eduardo Sonnino The winners were announced in a gala awards ceremony in Delhi, India. First Short Film — Canada. Project Hoshimi (Programming place winners in each invitational were: Team Forest: Sam Chow, Nick Haffie-Emslie, Battle) — France. Team Atomnium: Ryan Marr, and Meg Majewski Manon Gaucher and Flavien Charlon 38 partners in innovation — Microsoft 2006 Global Citizenship Report

innovation days in asia and europe

Microsoft is committed to helping nations Day events in different parts of the world. Two The India Is Innovation event took place in and communities worldwide build vibrant events in fiscal year 2006 — the Microsoft , India, in April 2006, just four months local software economies. As part of that European Research and Innovation Day and after Microsoft Chairman Bill Gates opened commitment, we establish and operate the India Is Innovation summit — illustrate the city’s new Microsoft Innovation Center. regional research centers to support and the strength of our commitment and the The center provides startup companies with inspire technology innovation among local value of our ongoing involvement with local resources, guidance, and end-to-end tools to companies, and we regularly host Innovation economies and industries around the world. help them become commercially successful knowledge economy 39

and transform innovative ideas into intellectual The annual Microsoft European Research and property. The India Is Innovation event built Innovation Day, held this year in Brussels, on that theme by focusing on Indian startup achieved two key goals. First, it served as a companies and how they can design and build showcase for some of the world’s most exciting world-class software products and solutions. next-generation technologies in areas such as mobility, security, and interoperability. More than 150 Indian companies participated Second, it gave European software companies in the event, which brought together and entrepreneurs an opportunity to interact software entrepreneurs, venture capitalists, with leading researchers, academics, and “This agreement [Microsoft’s collaboration with academic incubators, researchers, and policymakers; to get a glimpse of emerging the UNWTO to support tourism in developing industry analysts. Microsoft also provided a countries and on the continent of Africa] is a huge technologies; and to see how innovation leap forward for tourism-driven job creation, export startup showcase, where fledgling software leads to economic growth and job creation. income, and capacity-building for the world’s poorest companies could present their ideas and countries — especially in Africa, where it will be integrated into our programmes to alleviate poverty through proposals to a panel of venture capitalists In his keynote address at the event, Jean-Philippe sustainable tourism. It links Microsoft’s technology in the hope of securing funding. Courtois, President of Microsoft International, and solutions with UNWTO’s central role of advancing said that Microsoft has been conducting R&D the sector as an instrument of development.“ in Europe for nearly a decade because Europe — Francesco Frangialli, Secretary General of United Nations World Tourism Organization (UNWTO) “We hope that initiatives such as these not only create consistently produces “some of the brightest greater respect for intellectual property rights creation thinkers, most dedicated universities, and among Indian companies, but also serve as an most innovative partners in the world. impetus to helping them create intellectual property “In this global age, Europe will need to be not out of great ideas, and realize their true potential.” only a good place to do business, it must be a — Ravi Venkatesan, Chairman, great place to innovate, too,” Courtois said. “The products and ideas coming out of our European research laboratories illustrate that Europe still has great potential and is not only thriving, but is at the forefront of thinking in the IT sector.” 40 partners in innovation — Microsoft 2006 Global Citizenship Report

disaster relief: rapid response and long-term recovery

for real-world problems, and we also apply that knowledge and experience to disaster relief.

In disaster relief, as in business, we work in partnership with others. When Hurricane Katrina hit the Gulf Coast of the United States, Microsoft worked with the American Red Cross to create a “people finder” solution called Katrinasafe.org, now Safe and Well (disastersafe.redcross.org). This Web- based solution reunites families and communities and has registered more than 300,000 Katrina evacuees. It is also being used to help provide relief to victims of the Pakistan-India earthquake.

“Creating a Web site and database like Katrinasafe Like many corporations around the world, What really distinguishes our approach to .org would normally take months, and our teams Microsoft and its employees are generous disaster relief, however, is the use of business put it together in less than four days,” said Gerri with donations when disaster strikes. Our and technology expertise to address some of Elliott, Corporate Vice President, Worldwide employees drive and direct the company’s the critical challenges faced by individuals and Public Sector at Microsoft. “In the first 24 relief efforts and often serve as volunteers communities following a natural disaster. Our hours, more than a thousand people checked on the front lines of disaster relief. business is developing technology solutions the site for information on their loved ones.” responsible business practices m A i n ta i n i n G t h e h i g h e s t s ta n d ar d s 42 partners in innovation — Microsoft 2006 Global Citizenship Report

responsible business practices

s a global corporation, Microsoft has Enabling IP Opportunity over 1.1 million businesses, supporting 11 its decisions tracked and evaluated and Innovation million high-skill, high-wage IT jobs, and by industry analysts. Governments in At Microsoft, adding $1.7 trillion per year to global economic A 7 100 different countries monitor our activities. intellectual property prosperity. And these figures do not even take And millions of other businesses — from (IP) is at the heart of into account the tremendous efficiency and partners to competitors — keep a what we do. Our belief productivity gains that other businesses and close eye on everything we do. in the value of IP and organizations realize by using IT and through the opportunities it the indirect contributions of IT firms. Studies Yet our commitment to integrity, transparency, creates is a clear strategic priority for Microsoft, have shown that for every dollar of revenue and social accountability in our business as indicated by the company’s R&D investment generated by these firms, additional revenue practices goes far beyond meeting the of more than $6.6 billion in fiscal year 2006. is generated upstream and downstream in expectations of professional observers. People IP is a great incentive system that fosters supporting supplier and service industries. care about our business. Microsoft products innovation and provides a framework that are in homes and offices all over the world, promotes business growth and allows innovators Enabling IP opportunity is based on acting where millions of people rely on them for work, to effectively bring their ideas to market. responsibly and ethically, respecting the IP entertainment, and personal fulfillment. Our rights of others, and fostering a climate in which shareholders and employees are invested Enabling IP opportunity confers tremendous IP rights are respected by all. One of the most in our vision and continuing success, and a benefits on society: consumers benefit from fundamental IP rights is the right for those who growing number of people worldwide are being innovation in the form of new products; new create something to decide how it is used. empowered by innovative Microsoft programs business and employment opportunities that bring them the benefits of technology. are created; local economic growth is 7 IDC, Expanding the Frontiers of Our Digital Future: Reducing enabled; productivity gains are achieved; and The foundation for all of the work we do is Software Piracy to Accelerate Global IT Benefits, December governments gain opportunities for increased 2005 (commissioned by the Business Software Alliance). our unwavering commitment to responsible tax revenue. For example, improved IP and ethical business practices — and we incentive systems over the past two decades strive daily to maintain the highest possible have contributed directly to the dramatic standards in every aspect of our business. growth of the IT sector, which consists of responsible business practices 43

In 2006, Microsoft worked with Creative To learn more Commons, a nonprofit organization that about Microsoft’s technology access offers a flexible range of copyright licenses programs, see www.microsoft.com/ for creative works, to develop and release about/legal/intellectualproperty/. a free copyright licensing tool. The new downloadable tool makes it easy for people To learn more who use Microsoft Office applications to embed about the new Creative Commons copyright licensing Creative Commons licensing information tool for Microsoft Office, or for a free download, see

in their work, and thus specify how it can www.microsoft.com/downloads/details.aspx? JBoss and Microsoft: Responding be shared or reused. By working with the FamilyId=113B53DD-1CC0-4FBE-9E1D-B91D07C7 to Customer Demands In September 2005, Microsoft and open source community and Creative Commons, Microsoft 6504&displaylang=en. company JBoss announced plans to explore enhanced enabled a simple method for creators and users interoperability between Microsoft Windows Server and JBoss Enterprise Middleware System (JEMS), and of IP to share and build upon ideas, while to deepen JBoss support for the Windows Server recognizing and respecting the legitimacy of IP. operating system. The goal of the collaboration is to provide improved functionality, better integration, Microsoft takes a similar approach to and lower cost of ownership to customers. patent licensing by respecting the rights “JBoss is experiencing tremendous growth and is a driving of other IP holders and licensing its force of consolidation of the Java space,” said Bill Hilf, Director of Platform Technology Strategy at Microsoft. products’ innovative technologies as needed. “So it makes sense to work with them on interoperability Microsoft also makes a wide range of its and optimizing for the Windows Server platform.”

technology available to customers and the Under the agreement, the two companies are industry, including competitors, through working together to improve the integration of directory services, database software, Web services, numerous IP licensing programs. and systems management tools, which will enable customers using both Java and .NET-based programs to link and manage their systems more easily. While JBoss and Microsoft will continue to compete for software developers with their separate Java and .NET offerings, they are responding to customer and market demands by exploring opportunities to integrate their open source and proprietary software platforms to improve interoperability and ensure an optimized experience for their customers. 44 partners in innovation — Microsoft 2006 Global Citizenship Report

Interoperability — Customer- § Designing our software to be interoperable The Council will include Chief Information focused and by Design “out of the box,” without the need for Officers, Chief Technology Officers, and In today’s heterogeneous IT marketplace, expensive consulting services System Architects from leading corporations interoperability — the ability of diverse IT and governments worldwide. Members § Working with the community, including applications or systems to exchange and use include the European Commission, Société partners and competitors information — is considered by customers Générale, American Express, Siemens AG, to be an increasingly important software § Providing access to technology Toyota Motor Corporation, LexisNexis, Kohl’s feature, ranking almost as high as security and § Implementing and participating Department Stores, Denmark’s Ministry of reliability. Innovative interoperable solutions in industry standards Finance, UNICEF, Brazil’s São Paulo State are valued by customers as they seek to reduce Court of Justice (Tribunal de Justiça do Estado costs and complexity, and increasingly pick Better Understanding Customer Needs de São Paulo–Brazil), Bell Canada, The Boeing and choose the best products from multiple In June 2006, we formed Company, and NATO’s Communications and vendors to meet their IT needs. Whether it is the Interoperability Information Systems Services Agency (NCSA). sharing data between applications written in Customer Executive “As part of our commitment to Trustworthy different programming languages, or trying Council as part of Computing, we design our products with to log on across multiple systems, Microsoft our commitment to interoperability in mind so our customers is committed to delivering innovative listening to customers can connect to other platforms, applications, interoperable solutions that enable technologies better and meeting their needs. The Council will and data easily,” said Bob Muglia, Senior Vice to work together without compromising identify areas for interoperability improvements President of the Server and Tools Business at their distinctive underlying capabilities. in our own products and throughout the software Microsoft, who will host the council meetings. industry. It will focus on interoperability Microsoft takes a very customer-focused “The Interoperability Customer Executive issues that are of primary importance to approach to providing translation tools and Council will help us prioritize areas where we customers, including document archiving and interoperability, and is committed to meeting can achieve greater interoperability through management, heterogeneous management, customer and market needs. Because the best product design, collaborative agreements with directory management and synchronization, way to meet customer interoperability needs other companies, standards, and effective virtualization, and data integration and will depend on many factors and circumstances, licensing of our intellectual property.” exchange. Council members, who are Microsoft Microsoft does this in a range of ways, including: customers, will have direct contact with Microsoft executives and product teams. responsible business practices 45

Partnering with Communities Enabling Interoperability by for Greater Interoperability Providing Access to Technology To serve customers well, competitors In addition to delivering interoperability must also work together. Microsoft is a by design through customer-focused leader in forging strategic partnerships products, community collaboration, and with the community, including competing standards implementation, Microsoft fosters companies and technologies, to provide interoperability by making available a wide customers with increased interoperability. range of its technology to customers and the

industry, including competitors, through: Open XML Translator: Customer-focused In February 2006, for example, Microsoft Interoperability and the open source software company Commercial Licenses Microsoft takes a customer-focused approach to product features such as interoperability, responding to customer SugarCRM announced that they would needs for products and solutions that work well with work together to enhance interoperability Community Licensing. Enables no-cost access those of other companies or the open source community. to technologies that allow others to add-on to our ® between Microsoft Windows Server and A good example is the new Open XML Translator project products or build their own unique solutions. SugarCRM products. SugarCRM provides to create a technical bridge between the Open XML and customer relations management applications OpenDocument (ODF) formats. Microsoft undertook this The Open Specification Promise. Developed project in response to requests from government agencies for companies of all sizes worldwide. with feedback from customers and the open that work with constituents who use the ODF format. Microsoft and SugarCRM are working on a source community, it is a simplified method We are sponsoring the French IT solution provider for sharing technical assets while recognizing Clever Age and several independent software vendors, broad technical collaboration project intended including Aztecsoft in India and Dialogika in Germany, to help their mutual customers obtain the the legitimacy of IP. It further highlights to develop the translators. The tools will be developed Microsoft’s commitment to customers and as open source software projects and housed for maximum benefits from both companies’ development work on Sourceforge, the open source products, including the increased reliability meeting their interoperability needs. software community Web site. and simplified administration available We are making the translator tools available as free, For more information on the Windows® platform. (For another downloadable add-ins for Microsoft Office 2007 and example of a recent Microsoft interoperability on Microsoft’s commitment to meeting several older versions of the Microsoft Office System, which will enable our customers to read and write ODF customer interoperability needs and the partnership, see the JBoss story on page 43.) files easily. Many Microsoft Office products already numerous ways Microsoft meets those needs, include built-in support for dozens of formats, which please visit www.microsoft.com/interop/. allows widespread interoperability.

The new tools also will be licensed as open source software and made broadly available to the industry for use with other individual or commercial projects. These tools will accelerate the creation of innovations based on Open XML and expand customer choice. 46 partners in innovation — Microsoft 2006 Global Citizenship Report

Environmental Sustainability We also continued to create productivity and “Green” and Energy-Efficient Buildings Environmental communication software that contributes to For many years, stewardship is an lowered greenhouse gas emissions by reducing Microsoft has important part of the need for business travel, as well as operating been committed our business. Over systems with features that can decrease PC to constructing the past 30 years, energy use by more than 50 percent. In Windows energy-efficient we have translated Vista™, for example, users can choose any of and eco-friendly our personal beliefs and corporate philosophy three preconfigured power plans that balance buildings at its corporate facilities. But recently into meaningful environmental action. This performance and power consumption in different we took big steps forward at our campuses year, we have furthered our commitment to ways — in effect, creating a custom power in Silicon Valley, California, and Hyderabad, the environment, focusing our efforts on plan tailored precisely to meet their needs. India, and our newest data center under sustainability and continuing innovation. construction in Quincy, Washington. In February 2006, we adopted the Microsoft As of December 31, 2005, we eliminated Environmental Principles, which formalized At an Earth Day celebration in April 2006, PVC (polyvinyl chloride) from all our our ongoing commitment to protect our employees at the Microsoft Silicon Valley packaging. We also have reduced our overall environment and natural resources as well as Campus (SVC) unveiled a new solar panel use of plastic clamshells by 70 percent, and the health and safety of our employees, our power system — the largest in Silicon Valley. continue to explore the use of sustainable customers, and local communities. Every The system has 2,288 solar tiles covering packaging and biodegradable materials. We Microsoft employee shares the responsibility of 31,000 square feet on building roofs across reduced fuel consumption and greenhouse helping the company fulfill these principles. the campus. It generates 480 kilowatts per gas emissions through a variety of strategies, hour at peak capacity — enough to power including employee commuter programs and To learn more nearly 500 homes — and will provide 15 replacing nearly half our fleet of passenger about the Microsoft Environmental Principles, percent of the energy used at SVC. vans with fuel-efficient hybrid cars. see www.microsoft.com/citizenship/ businesspractices/environmentalprinciples.mspx. responsible business practices 47

That same month, Microsoft opened the doors In May 2006, we broke ground on our newest to Building 2 on our new campus in Hyderabad, and largest data center to date. The facility, India. Building 2 is a state-of-the-art structure located in Quincy, Washington, will be powered that incorporates sound environmental design by hydroelectricity from the Columbia River and furniture made by local Indian companies. Basin, a renewable and clean air resource. The building design prioritizes energy efficiency, The east and west ends of the building, where water conservation, and the use of green building the sun is strongest, are made of solid masonry technologies under the Leadership in Energy and to cut down on heat penetration. The building Environmental Design (LEED) rating system. Avian Influenza Readiness is designed to be protected from direct sunlight At Microsoft, the health and safety of our employees more than 70 percent of the time. Double- are top priorities. In answer to worldwide concerns over avian influenza, also known as bird glazed windows allow natural light to enter, “The solution to global warming involves everybody flu, , Senior Vice President, Human but sunshades cut glare and save money on Resources, established a cross-company global doing their part, whether riding a bike to work, team dedicated to raising employee awareness and air conditioning. Lights automatically turn putting solar power on their houses, or buying energy- developing preparedness and response plans. off if offices are unoccupied for more than 10 efficient appliances. Microsoft is really a leader by minutes. Microsoft also built a reservoir that To keep our employees informed, we have compiled choosing clean power that will reduce emissions.” extensive resources on the Microsoft intranet. will capture and recycle some 36,000 cubic There, our employees can learn about avian meters of rainwater to serve the irrigation — Kurt Newick, Sierra Club member influenza and how to stay healthy, keep current on relevant news, and get travel advisories. needs of the 48-acre campus and run energy- and solar advocate efficient, water-cooled air conditioning units. Preparedness and response plans — created with guidance from the World Health Organization (WHO), other health agencies, and local governments — are being developed for all WHO- identified pandemic alerts and for specific regions.

Our pioneering approach to avian influenza preparedness has led to a number of engagements with other companies and government agencies. We have participated in simulations, provided expertise to businesses creating their own plans, and worked with local health departments to develop community plans. 48 partners in innovation — Microsoft 2006 Global Citizenship Report

human rights and the internet

At Microsoft, we recognize that Internet innovation, and economic development. U.S. companies has increased the ability of companies have a valuable role to play in the Accordingly, we are deeply concerned about people worldwide to engage in free expression. realization of human rights, including free issues of individual security, privacy, and Just in the past few years, there have been expression. It is important to our business government control of Internet content. repeated examples of the ways in which that the Internet be fostered and protected as official responses to domestic events have been a worldwide vehicle for reliable information We believe the availability of Internet affected by the availability of information and and communications, personal expression, services provided by Microsoft and other opinions communicated over the Internet. responsible business practices 49

At the same time, we continually review the Explicit Standards for Protecting Content overall value of our services in the countries Access. Microsoft will remove access to blog where we provide them, and the conditions content only when it receives a legally binding created by local government policies and notice from the government indicating that practices. And we are actively engaged the material violates local laws, or if the with concerned parties in developing content violates the service’s terms of use. principles to help guide companies in managing these difficult issues. Maintaining Global Access. Microsoft will remove access to content only in the country Microsoft Government Leadership Forums Our perspective is that we will be served issuing the order. When blog content is blocked Microsoft Government Leadership Forums (GLFs) are best as a company, as an industry, and as a due to restrictions based on local laws, the rest regional events for government, industry, and academia to explore the use of information and communication worldwide community if we can be guided of the world will continue to have access. This technologies (ICT). GLFs provide a medium for government by clear principles and policies that address is a new capability Microsoft is implementing delegates to formulate successful strategies related to connected government, digital learning, employability human rights and free expression not only in the Windows Live Spaces infrastructure. skills, and the transition to the knowledge economy. in the case of blogging, search, e-mail, and other services that exist today, but also Transparent User Notification. When local In fiscal year 2006, GLFs were held on three continents. laws require the company to block access to Bill Gates gave keynotes at each event, focusing on in the variety of technologies that almost technology trends that affect governments and their citizens. certainly will be offered in the years ahead. certain content, Microsoft will ensure that users know why that content was blocked, In , at GLF Asia, Microsoft announced a worldwide network of 90 Microsoft Innovation As an example, in late 2005, the Chinese by notifying them that access has been Centers designed to fuel long-term economic government requested that we remove a limited due to a government restriction. growth in regions where the centers are located. well-known blogging site on MSN Spaces The Honourable José Manuel Barroso, President, written under the pseudonym of “Michael Anti.” For additional information European Commission, was among the speakers at GLF Europe, in Lisbon. Jean-Philippe Courtois, President, The details of that case have been carefully about our views on this issue, please see our Microsoft International, announced the formation of the reviewed, and although we do not think we written testimony to the House International European Alliance on Skills for Employability as part of Microsoft’s 21st Century Skills for Employability initiative. could have changed the Chinese government’s Relations Committee’s Joint Hearing, posted determination to block this particular site, we at www.microsoft.com/presspass/exec/ Microsoft formalized its commitment to the Partnerships for Technology Access initiative (see the PTA story on have since clarified the manner in which we krumholtz/02-15WrittenTestimony.mspx. page 29) during GLF Americas, held in McLean, Virginia. will deal with similar requests in the future by adopting a policy that applies worldwide Fiscal Year 2007 began with GLF Africa, held in Capetown. Bill Gates and former U.S. President Bill Clinton highlighted and is intended to promote three principles: the critical role that ICT and public-private partnerships play in creating a strong, vibrant future for Africa. 50 partners in innovation — Microsoft 2006 Global Citizenship Report

changing the world: microsoft volunteer policy

At Microsoft, we value partnership. Our success more than $2 billion in communities around most of our subsidiaries in Europe, the as a business is built on partnerships and the world. And that doesn’t even count the value Middle East, and Asia — we allow full-time collaboration. By far, our most important and of the time our employees have volunteered. employees to take three to five days of dynamic partnership is with our employees. paid volunteer leave each fiscal year. We encourage our employees to get involved Microsoft employees are smart, passionate people in their communities, and we make it In the United States, each employee’s who want to change the world. Over the past 30 easy for them to volunteer their time. In charitable matching benefit — which matches years, Microsoft and its employees have donated many locations — including Canada and employee donations up to $12,000 every responsible business practices 51

year — includes a match for gifts of time as well In March 2006, Sandra Palmaro, a Microsoft Our employees also combine their efforts to as money. When employees volunteer their Canada employee, took her entire family to make a difference as a team. A small project time in the community, Microsoft donates Tanzania to volunteer at an orphanage. Palmaro team in the Microsoft corporate leadership $17 per hour to the eligible organizations they also volunteers closer to home, working with program spent four months as advisors to serve. It’s a double benefit for the nonprofit the Boys and Girls Clubs of Canada, where the Grameen Technology Center. The center groups that our U.S. employees support. she has chaired the board for three years. is an initiative of Grameen Foundation, a world-renowned microfinance NGO. This In 2005, Microsoft launched Volunteer Sybille Fleischmann is passionate about the team worked on business strategy and a Connection, an online program that enables outdoors and kayaking. This passion led her scalable technology solution to manage Microsoft employees in the United States to to Outdoor Recreation Opportunities, an microlending around the world. register their volunteer preferences, track organization providing education and training to their volunteer activities, and find volunteer encourage outdoor recreation for people who may opportunities that best match their interests, have difficulty accessing these opportunities. skills, and availability. More than 76,000 She is an Adaptive Paddling Instructor and volunteer hours have been reported by U.S. leads kayak tours for paddlers with disabilities. employees so far. Eventually, this system will be rolled out to Microsoft employees worldwide. Employee commitment to the community is evident at all levels of the company. , Most of our employee volunteers donate President, Business Division, and his wife, their time to projects in or near their home Patricia, are the co-chairs of the United Way of communities — talking with children King County 2006 Community Campaign. The about careers in high-tech, advising new couple will be leading the fundraising drive NGOs on business strategy, building homes for the next fiscal year, with the goal of raising for low-income families — but a growing $108 million in order to drive the organization’s number are following their interests abroad key priorities: eliminating homelessness and volunteering in other countries. and preparing all children for school. 52 partners in innovation — Microsoft 2006 Global Citizenship Report

windows principles — a principled approach to product development

Recognizing the important role that the In announcing the Windows Principles, Microsoft Smith said that the Windows Principles will make Windows operating system plays in the General Counsel Brad Smith said, “Our goal is Microsoft’s approach to Windows development global knowledge economy, Microsoft has to be principled, transparent, and accountable clear to customers, partners, and governments created a set of voluntary, self-regulating as we develop new versions of Windows. These around the world. The Windows Principles principles that will help guide the future voluntary principles are intended to provide exceed the provisions of the U.S. Antitrust development of the Windows desktop platform the industry and consumers with the benefits Ruling and will continue to apply after major worldwide, beginning with Windows Vista. of ongoing innovation, while creating and parts of the ruling expire in November 2007. preserving robust opportunities for competition.” responsible business practices 53

The Windows Principles, which consist of 12 of resolving issues during product development tenets, are divided into three categories: and before the release of new products. “We are committed to providing information about Choice for Computer Manufacturers and new technologies to regulators, so we can Customers. Microsoft is committed to designing pursue an open and constructive dialogue Windows, and licensing it on contractual before the launch of these new products. terms, to make it easy to install non-Microsoft Given the global nature of the knowledge programs and to configure Windows-based economy, we recognize the importance of PCs to use non-Microsoft programs instead providing this information on a global basis.” “You, Mr. Bill Gates, are a friend of China, and I’m a of, or in addition to, Windows features. friend of Microsoft.” — Chinese President Hu Smith also stressed that the Windows Opportunity for Developers. Microsoft is Principles are not intended to supplant the “Technology has expanded opportunities of millions of committed to designing and licensing Windows people around the world and — whether expanding continued application of antitrust law or the access to information, education, or healthcare, or (and all the parts of the Windows platform) on important role of government agencies and increasing the collective power of individuals — it terms that create and preserve opportunities courts in applying and enforcing this law. has an important role to play in creating a thriving, for applications developers and Web site competitive Africa. The efforts I’ve seen from Bill Gates and companies like Microsoft, in partnership creators. This encourages the development of To make certain that the Windows Principles with governments, NGOs, and other private-sector more innovative products on the Windows continue to reflect current technological, organizations, are helping Africa in its push to achieve the United Nations Millennium Development Goals.” platform — including products that directly business, and legal developments, Microsoft — Bill Clinton, Former U.S. President compete with Microsoft’s own products. intends to review them at least once every

three years to determine if any new tenets “The Commonwealth is very pleased with Microsoft’s Interoperability for Users. Microsoft should be added or existing ones revised. To progress in creating an open document format. If is committed to meeting customer Microsoft follows through as planned, we are ensure transparency, any changes will be optimistic that Office Open XML will meet our interoperability needs and will do so in ways published on the Microsoft Web site. new standards for acceptable open formats.” that enable customers to control their data — Tom Trimarco, Massachusetts and exchange information with improved Administration and Finance Secretary A complete list security and reliability across diverse and detailed explanation of the Windows Principles computer systems and applications. “In Bavaria we have been successful in the past years are available at www.microsoft.com/presspass/ with our focus on innovation — and we also owe this to the support of companies such as Microsoft.” Smith said it is critical for Microsoft and newsroom/winxp/windowsprinciples.mspx. — Edmund Stoiber, Bavarian State Prime Minister regulators to engage in discussion with a goal 54 partners in innovation — Microsoft 2006 Global Citizenship Report

our company

hen Microsoft was founded in 1975, § Accountability to customers, § Information worker productivity applications even the most visionary among shareholders, partners, and employees § Business solutions us could only begin to imagine for commitments, results, and quality W § Software development tools what computers could become or predict the extent to which they would transform Business Operations § Consulting and product support services our world. Yet, today, software is providing Microsoft does business all around the world. § Training and certification for system exciting opportunities for people everywhere. We have offices in more than 90 countries, integrators and developers which we group into six corporate regions: For more than 30 years, Microsoft has been a § Xbox and Xbox 360 video game consoles global leader in creating innovative software that § North America § Japan and games, PC games, and peripherals enhances nearly every aspect of our personal and § Latin America § Asia Pacific § Online communication and information professional lives. And now we’re working on the § Europe, the Middle § Greater China services through our MSN portals next wave of breakthrough technology solutions. East and Africa and channels around the world

Our Mission We also have operational centers in Dublin, We also research and develop advanced At Microsoft, our mission is to enable people Ireland; Humacao, Puerto Rico; Reno, Nevada; technologies for future software products. and businesses throughout the world to realize and Singapore. The operational centers are Delivering breakthrough innovation and high- their full potential. Everything we do reflects our responsible for licensing, operations and value solutions through our integrated platform mission and the values that make it possible. logistics, and manufacturing, although not is the key to meeting our customers’ ever- every center performs all of these functions. changing needs and ensuring our future growth. Our Values Microsoft generates revenue by As a company, and as individuals, we value: We have laid a solid foundation for long-term developing, manufacturing, licensing, success by making global citizenship an § Integrity and honesty and supporting a wide range of software integral part of our business, consistently § Passion for customers, for our products and services, including: delivering innovative new products, improving partners, and for technology our internal processes, creating opportunity § Operating systems for servers, personal for our partners, and increasing customer § Openness and respectfulness computers (PCs), and intelligent devices satisfaction. We are continuing to build on this Taking on big challenges and § § Server applications for distributed foundation through the work we do every day. seeing them through computing environments § Constructive self-criticism, self- improvement, and personal excellence our company 55

Financial Report Legal Disputes Corporate Governance On July 20, 2006, Microsoft announced In fiscal year 2006, Microsoft continued At Microsoft, we believe strong corporate revenue of $44.28 billion for the fiscal year working to resolve existing legal disputes in an governance is a fundamental component that ended June 30, 2006, an 11 percent effort to clear the way for new opportunities of our business success — and we increase over the previous year. Operating and more innovative products for our operate the company on that basis. income for the fiscal year was $16.47 billion, customers worldwide. At the same time, a or 13 percent over the previous year. In fiscal few ongoing issues evolved significantly. Our Board of Directors establishes the standards year 2006, Microsoft returned more than and policies for corporate governance, ethics, and compliance throughout Microsoft. The $23 billion to shareholders in the form of Additional information Board’s role is to oversee the work of management dividends and share repurchases and invested about Microsoft’s active involvement in legal in conducting the company’s business and to $6.58 billion in research and development. issues, whether specific to Microsoft or more serve the long-term interests of shareholders. generally applicable to the software industry, is The Board believes that taking account of For additional details available at www.microsoft.com/about/legal/. the interests of other stakeholders such as see the 2006 Microsoft Annual Report at employees, customers, partners, suppliers, and www.microsoft.com/msft/ar.mspx. A more detailed explanation the many communities around the world where of Microsoft’s legal issues in fiscal year we do business is an important component of 2006 is available in the Notes section Revenue and Operating Income achieving shareholders’ long-term interests. of the 2006 Microsoft Annual Report at as reported in the 2005 annual report $50,000 www.microsoft.com/msft/ar.mspx. For a list of Board members $45,000 more information about Board responsibilities, $40,000 2006 Revenue by Segment or copies of Board committee charters, see $35,000 as reported in the 2005 annual report www.microsoft.com/about/companyinformation/ $30,000 corporategovernance/default.mspx.

$25,000 $4,256 $13,209 $20,000 $377 $2,298 $15,000 Client $919 $10,000 Server and Tools Information Worker $5,000 Microsoft Business Solutions 0 $11,467 MSN $11,756 Mobile and Embedded Devices 2005 2006 Home and Entertainment

Revenue Operating Income 56 partners in innovation — Microsoft 2006 Global Citizenship Report

looking ahead

lobal citizenship is not a task to Innovation. To improve technology Digital Inclusion. To continue to make be completed — it is a process that access to underserved populations by progress toward our goal of providing Grequires continuous action and developing new products and supporting technology access and skills training to engagement to move it forward and help it the growth of local software economies. a quarter of a billion people by 2010. grow. We are pleased with the progress we have made and the positive changes our citizenship Responsible Business Leadership. To Employee Engagement. To increase work has brought about in communities further the integration of responsible business employee awareness of and involvement in and individual lives worldwide. Those practices into the core elements of our business, each of our global citizenship efforts. achievements are the result of the extraordinary including product development, product We have learned much over the years about our dedication and innovative thinking of life cycle planning, environmental impacts role and responsibility as a global corporate Microsoft employees around the world. assessments, employee accountability, and advocacy of responsible industry policies. citizen, and how we can use our resources and To guide us as our citizenship work influence to create opportunities for more people continues, we have set five goals for Security and Internet Safety. To work worldwide. We don’t have all of the answers. fiscal year 2007 and beyond: collaboratively with partners in industry, No one does. By working in close collaboration nongovernmental organizations, and with our government, NGO, and industry governments worldwide to make computing partners, however, we can continue to improve safer, to improve and enhance the security and refine our approach to global citizenship features of our products, and to increase and make a meaningful difference in the world. consumers’ awareness of how they can protect themselves and their families online. our company 57

awards

ver the course of the fiscal year, Australia Canada Microsoft has been recognized for Longevity Award, Prime Minister’s Awards for Most Respected Corporations (14), Globe & Mail Oits citizenship activities around Excellence in Community Business Partnerships and KPMG report on business the world. This recognition includes awards for business ethics, labor practices, diversity, 2005 CSC Enabling Technology Award, Recognition in Heroes & Builders section accessibility, innovation, corporate citizenship, Australian Computer Society (ACS) and of Canada Day special feature, Maclean’s and Internet safety. A partial list includes: Australian Information Industry Association (AIIA NT) Chile International Recognition Good Corporate Citizenship 2005, Camara Corporate Voices of Courage, Women’s Austria Chileno Americana de Comercio Commission for Refugee Women and Children Best Workplaces in Austria 2006 (19), Die Presse and Great Places to Work Institute Austria Outstanding Support to the Software World’s Most Respected Company (ranking = 1), Industry Award, Grupo de Empresas Financial Times and PricewaterhouseCoopers Trigos Award 2006, Association of Industrialists Chilenas de Software (GECHS) and the Austrian Chamber of Commerce Global Most Admired Companies China 2006 All-Stars (6), Fortune Brazil Best Corporate Citizenship Practice Award Best Companies to Work for in Latin (finalist),21st Century Business Review Argentina America 2005 & 2006, Great Places and 21st Century Business Herald Best Companies to Work for in Latin to Work Institute Latin America America 2005 & 2006, Great Places Trustworthy Platform Award and Trustworthy to Work Institute Latin America Best Employers in Latin America, Personal Security Service Provider Award, Hewitt Associates and América Economía State Council IT Office, Ministry of Best Companies in Argentina 2005 (6), Public Security, and State China National Great Places to Work Institute Argentina Recognition Award for contributing to the Computer Emergency Response Team first job program in the city of Guarulhos, Sadosky Award, Top foreign business supporting Brazilian Ministry of Labor and Oxigênio the local industry in the investment in Argentina, Chamber of Software Businesses and Information Most Admired Companies (top 10), Carta Capital Services (CESSI) Best Government Suppliers (top 10), TI & Governo

Best Companies to Work For (top 10), Você S/A 58 partners in innovation — Microsoft 2006 Global Citizenship Report

Colombia Finland India Best Companies to Work for in Latin 100 Best Workplaces in Europe 2006, IT Ratna of the Millennium, America 2005 & 2006, Great Places Financial Times and the Great Places in recognition of work in the field of localization to Work Institute Latin America to Work Institute Europe and education, Government of Maharashtra

Best Companies in Colombia 2005 (12), Best Workplaces in Finland 2006 (1), WISTEX Award, Great Places to Work Institute Colombia Kauppalehti and Great Places to in recognition of large contributions towards the Work Institute Finland government’s IT literacy program for schools, Recognition for continuous support to Government of Uttaranchal Computers for Education program, First France Lady of Colombia Lina de Uribe and Ministry 100 Best Workplaces in Europe 2006, Ireland of Communications and Education Financial Times and Great Places O2 Ability Award Social Responsibility Award in the Community to Work Institute Europe Support Category (nomination), Portafolio Italy Best Workplaces in France 2006 (3), Great 100 Best Workplaces in Europe 2006, Places to Work Institute France Costa Rica Financial Times and Great Places to Work Institute Europe Contribution to the Community Award for Guatemala Corporate Social Responsibility 2005, Award for Corporate Social Responsibility Best Workplaces in Italy 2006 (1), Costa Rican – American Chamber in the education category, Great Places to Work Institute Italy of Commerce (AMCHAM) Guatemalan-American Chamber of Commerce Most Admired Multinational Company Japan Working in the Region (top 10), MIC Minister’s Award 2006, Estrategia & Negocios Survey Ministry of Internal Affairs and Communications Most-Respected Brand (1), Nikkei Brand Perception Survey our company 59

Mexico Peru Singapore Best Companies to Work for in Latin Best Companies in Peru 2005 (9), Work-Life Excellence Award, America 2005 & 2006, Great Places Great Places to Work Institute Peru Ministry of Manpower to Work Institute Latin America Recognition for Ethics and Values Spain Best Companies in Mexico 2005 (11) & 2006 (13), in the IT Industry, Bitacora Best Workplaces in Spain 2006 (4), Great Places To Work Institute Mexico and Great Places to Work Institute Spain Grupo Editorial Expansión Philippines Anvil Award of Excellence, Public Relations Sweden Ethics and Values in the Industry, Society of the Philippines (PRSP) National Confederation of Industrial 100 Best Workplaces in Europe 2006, Financial Chambers (CONCAMIN) Gold Quill Award of Merit, International Times and Great Places to Work Institute Europe Association of Business Communicators (IABC) Socially Responsible Business Award, Mexican Best Workplaces in Sweden 2006 (1), Center for Philanthropy (CEMEFI) Veckans Affärer and Great Places Poland to Work Institute Sweden Environmentally Friendly Best Practice, The Netherlands Responsible Business Forum 100 Best Workplaces in Europe 2006, United Kingdom Financial Times and Great Places Best Employer 2005, Hewitt Associates 100 Best Workplaces in Europe 2006, Financial to Work Institute Europe Times and Great Places to Work Institute Europe Portugal Best Workplaces in Netherlands 2006 (2), Best Workplaces in the United Kingdom 100 Best Workplaces in Europe 2006, Great Places to Work Institute the Netherlands 2006 (5), Great Places to Work Institute Financial Times and Great Places to Work Institute Europe United Kingdom Business for Age Award, Norway Help the Aged Living Legends Awards 100 Best Workplaces in Europe 2006, Financial Best Workplaces in Portugal 2006 (2), Publico Times and Great Places to Work Institute Europe and Great Places to Work Institute Portugal Best Practice and Business Award for Excellence, Business in the Community Best Workplaces in Norway 2006 (1), Awards, 2006, Financial Times and Great Places to Work Institute Norway Department of Trade and Industry 60 partners in innovation — Microsoft 2006 Global Citizenship Report

United States Ideal Employer (6), Undergraduate Distinguished Online Communications, America’s Most Admired Companies Edition of the 2006 Universum Survey, Society for Technical Communications (STC), 2006 (10), Fortune Universum Communications Puget Sound Chapter (Washington State)

100 Best Companies to Work Ideal Employer for IT Graduates (2), Large Employer of the Year, Governor’s For 2006 (42), Fortune Undergraduate Edition of the 2006 Universum Committee on Disabilities and Survey, Universum Communications Employment (Washington State) 100 Best Companies to Work For with Over 10,000 employees 2005 (12), Fortune Ideal Employer (5), American Diversity 2005 Corporation of the Year, Edition of the 2006 Universum Survey, Charlotte Post Foundation (North Carolina) Circle of Humanitarian Award, Universum Communications American Red Cross 2005 Million-Dollar Circle Award Ideal Employer by Undergraduates (3), (top 5 corporate donor), United Way of the Summit Award for Employee Community American Diversity Edition of the 2006 Central Carolinas (North Carolina) Engagement in the Spirit of America Award Universum Survey, Universum Communications program, United Way of America (UWA) VIP Corporate Award 2005, American Ideal Employer by Hispanic Americans (4), Heart Association (North Carolina) 100 Best Companies 2005, Working Mother American Diversity Edition of the 2006 Universum Survey, Universum Communications Venezuela Best Workplaces for Commuters, UNICEF Counts on You Award for businesses U.S. Environmental Protection Agency and Top Employer of the Year (5), United States Department of Transportation that support UNICEF projects through The Black Collegian Magazine actions and contributions, UNICEF 2005 Corporate Equality Index Top 100 Employers 2005 (14), The Black [gay, lesbian, transgender, bisexual] (1), Collegian Online, Universum Communications Human Rights Campaign America’s Top Organizations for Multicultural Top 50 Employers (1), Business Opportunities 2005 (26), CAREERS & the disABLED DiversityBusiness.com

Ideal Employer (16), Corporation of the Year 2006, American MBA Edition of the 2006 Universum Northwest Minority Council (serving Alaska, Survey, Universum Communications Idaho, Montana, Oregon, and Washington) Microsoft Corporation Microsoft Europe, Middle East & Africa One Microsoft Way Coeur Défense, Tour B – 37e étage Redmond, WA 98052 USA 100, Esplanade du Général de Gaulle Phone: 425.882.8080 92932 Paris La Défense Cédex France www.microsoft.com Phone: 33.1.70.99.10.00 www.microsoft.com/emea Microsoft Asia Pacific 1 Marina Boulevard #22 – 01, Singapore 018989 Microsoft Latin America Phone: 65.6882.8899 6750 North Andrews Avenue, Suite 400 www.microsoft.com/asia Fort Lauderdale, FL 33309 USA Phone: 954.489.4800 Microsoft Greater China www.microsoft.com/latam 19/F, Millennium Tower, 38 Xiaoyun Road Chaoyang, Beijing 100027, P.R. China Microsoft Canada Phone: 86.10.8453.8585 1950 Meadowvale Boulevard www.microsoft.com/china Mississauga, Ontario L5N 8L9 Canada Phone: 905.568.0434 www.microsoft.com/canada Odakyu Southern Tower, 2-2-1 Yoyogi Shibuya-ku, Tokyo 151-8583, Japan Phone: 81.3.4332.5300 www.microsoft.com/japan

This report is printed on New Leaf Opaque 100, White, 80 lb. cover and 80 lb. text, which are made with process-chlorine-free 100% post-consumer waste fiber.

New Leaf Paper is an FSC certified paper broker.

Printed on paper containing 100% post-consumer waste. to access this information online, visit: www.microsoft.com/citizenship © 2006 Microsoft Corporation. All rights reserved. Microsoft, Excel, MSN, PowerPoint, Windows, Windows Live, Windows Server, Windows Vista, Xbox, Xbox 360, and Xbox Live are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners. Part No. 098-106244