Microsoft 2002 Annual Report Download - page 8

Trustworthy Computing
In January 2002, we outlined for employees what we believe is the highest priority for the
company and for our industry over the next decade: building a computing environment for
customers that is as reliable as the electricity that lights our homes. As a first step in achieving
higher levels of reliability, security, privacy, and business integrity, Microsoft made many changes
in our operational and business practices. Thousands of our engineers received special training in
writing secure software. And we conducted intensive security analyses of every line of source
code for Windows and other products.
These efforts are starting to show results. Security updates of Microsoft Outlook, for instance,
were followed by a dramatic drop in the number of e-mail virus incidents. But given the complexity
of computing and the fast pace of technological change, achieving truly Trustworthy Computing
will take many years.
An Agile Business System
To streamline internal decision making, enhance entrepreneurship within Microsoft’s key
businesses, and increase collaboration across groups, we instituted a number of changes to
internal business systems. One of the most significant changes was giving the leaders of our key
businesses the tools, resources, and responsibility for making the important decisions around
product development, sales, marketing, and financial performance.
Business Integrity
During the past year, a number of major corporations were rocked by financial scandals that
damaged shareholder wealth and confidence. At Microsoft, we take our responsibilities to
shareholders, customers, partners, and employees very seriously. We aim to be open and candid
about the condition of our business and the risks we face. We seek to properly assess assets so
they are never overvalued, and we look hard for any costs or liabilities that should be reflected in
our financial results. Consistent with the values of honesty and integrity that we strive to live by,
we have long disclosed complete details of the diluting effect of employee stock options on
Microsoft’s earnings.
Stock options are an important way that Microsoft attracts and encourages great employees. For
the two of us, the vast majority of our individual net worth is invested in stock ownership of the
business. Since Microsoft went public in 1986, we have never taken stock options, and we never
will. We hope this provides further assurance that our personal interests are directly aligned with
the long-term interests of all shareholders.
Finally, on a personal level, we feel incredibly privileged to play a role in bringing to life the
technologies that will enable people and businesses to realize their full potential. Thank you for
your support.
Bill Gates
Chairman and Chief Software Architect
Steven A. Ballmer
Chief Executive Officer