Gates touts ties with Japanese companies

The key to Microsoft's success is its focus on software, Gates says. But it also doesn't hurt to have good partners.

TOKYO--For Bill Gates, the key to business success lies in knowing your strengths and, outside those areas, in building alliances such as those Microsoft is cultivating in Japan.

"The richness of what we have been able to do together with leading Japanese companies really is quite phenomenal," Gates told a news conference here. The Microsoft chairman was in Tokyo to celebrate the 20th anniversary of the company's Japanese subsidiary.

He also used the opportunity to get in a dig at IBM, which Microsoft has identified as a key rival. "IBM once stumbled because the company stretched too far, trying to cover everything from hardware to software," he said.

By contrast, Gates said, Microsoft has focused on software development and at the same time has worked with partners to expand its business--a strategy that's especially important in an age of technology convergence.

"We are specialists in terms of building a platform, and we depend on other specialists for other aspects of the business ecosystem," he said.

In one of its recent steps for closer business ties in Japan, Microsoft announced last year that it would strengthen cooperation with electronics conglomerate Toshiba in the development of PCs and digital electronics. Microsoft and chipmaker Intel support HD DVD technology, a Toshiba-backed standard for next-generation optical disks.

"We have more optimism today about the importance of those (Japanese) partnerships and our willingness to invest in those because these brought opportunities we've never had before," Gates said.

Microsoft also said Friday that it is planning the consumer launch of the Japanese version of Windows Vista in January 2007, along with the release of its English version of the operating system.

Asked about the emergence of Web 2.0 technologies and practices, Gates dismissed the term itself as "too vague." Still, he said, the evolution of services on the Web such as mapping and search is proceeding at a rapid pace.

Gates also reiterated Microsoft's commitment to security, saying that about one-third of the company's $6 billion in annual R&D spending goes toward security and related technology.

Kyoko Fujimoto of CNET Japan reported from Tokyo. The Reuters news agency also contributed to this report.

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