Tablet computing and interactive TV are just two examples where Gates has pushed Microsoft to get involved, though the markets have taken a long time to develop.
"My instincts, if they're wrong, it's usually not about what's right," the Microsoft chairman told CNET News.com during a swing through Silicon Valley on Wednesday. "It's about timing."
In the, Gates speaks about Zune and Office. In the second part, he reveals his favorite feature in Windows Vista, why he'll keep pushing for a new file system, and the role of open-source software.
Q: It's been five years since the last big Windows release. Windows Vista is coming out really soon for businesses, fairly soon for consumers. What's your favorite feature in Vista?
Gates: Well, it is such a broad release that it's hard to pick. (Desktop) may be my favorite. You know, you immediately say to yourself, "Well, how did I live without it? Well, I bought add-ons and things like that." But the integrated user interface makes it quite different than even the add-ons were.
One project you have long championed is the idea of
Gates: Well, you definitely still want a structured look for certain kinds of rich query. And if we're going to bring all these things of e-mail and files and photos, bring it together fully, we need more than just the search indexing. Search indexing takes you further than people expect, I would say. But eventually you'll need more of a database-type look to these things.
And, you know, we're taking our SQL technology and using it in broader ways--that's our fundamental code base for all the rich storage things. I still think that the question is, is it the next major release or the one after that? I think that'll be a big breakthrough when we do it.
Are Ray and Steve on board? Or is that still something you've got to do before 2008?
Gates: Well, Steve--Steve Sinofsky, you mean, or Steve Ballmer?
Gates: Well, Steve knows that my instincts, if they're wrong, it's usually not about what's right, it's about timing. So he knows it's "when," not "if." But he'll rely on the teams to say, in terms of memory size and performance, is it right?
We have really clear criteria, now, for how we would choose. Before you pick the key features for release. Is it ready to be picked for that? So, yeah, I feel quite confident Ray will pick the right time.
And, you know, it's not like I disappear. I'm around even after mid-2008. There's some things that I'm closely associated with, like tablet (PCs) and WinFS, that people will expect me to shepherd. I want to do that.
Is that the big lesson coming out of Longhorn? To have a different process in place, to look at what's doable right now?
Gates: That's one thing. I mean, you learn so much when you do these releases. We had to do breakthroughs in terms of security. We had to do XP SP2, which was, from our point of view, a full release, even though it wasn't an end-user feature release.
But we feel that some of the things we've learned about layering and how you organize the feature teams will let us take this next five-year period and do a lot more than we did in the last five-year period. Do we wish we'd done more in some areas? Absolutely. I feel super-good that in these last eight months, even as we're getting the product done, we actually got organized for that next step forward.
Windows is nearly ubiquitous on computers, but computers aren't ubiquitous in the world. And you guys have been looking for a long time at different ways of bringing computing to more of the world's population. One of the approaches that has been talked about, inside of Microsoft, is the idea of cell phones and using them with nearby screens make them more of a PC-like device, as well as just bringing down the cost of PCs. Is one of those really more of the answer for more of the world?
Gates: Well, you always have a spectrum of capabilities. Today, there's people who buy $3,000 gaming PCs, and it's the most cool product they have in their life. And there's people who buy $200 PCs. So we have an amazing range.
By doing the right thing on the (cell) phones, we can take that down. It's not equivalent to that $3,000 thing, or even the $200 thing. We can take that down, say in the $50, $60 range. It's not a broadband network, but it's a network.
And there's a lot of scenarios that that works for. We can project onto your TV, we can connect up a keyboard. You can have AC power, so that you can maybe clock (the processor) a little higher. We have an incubation team working on that as an entry point. It's not a replacement (for a PC), you know.
We also have a team that works on what we call "shared-use PC," where you go into a library or a cafe and you just bring, on your USB stick, your files. Or you have those in the (server) cloud--the cloud store that we'll make available in the not-too-distant future. So that shared-use model is a very big deal--that's schools, libraries, community centers--a huge thing. And we did that in every library in the United States; we learned a lot from that. We've taken it to many other countries.
The phone thing is a new thing for us. That's not out for a while, but the hardware industry is giving us the chips that can do the projection. And we've talked with some operators--they like the idea of what we're doing there. So there are many ways into this thing.
The PC itself keeps getting cheaper, and the multiuse phone gets it out even (more broadly). Because, as you say, we do want everyone--certainly every kid, as part of their educational experience--to have that kind of access.
The dream for me is to get the tablet computer to be so cheap that it's less than you would have spent on textbooks. Then every kid has a tablet. We're still working hard to make that happen.
Listening to you
Gates: Oh, no, those things are perfectly the same. I mean, when companies compete to do their best, when you have an economy like the U.S., where you've got the infrastructure and the stability, consumers get a good deal.
And people who go into Google every day, they want to be No. 1. Our people go in and do the best they want to do. But the effect of that is that for things that are in demand in those countries, the market selects, and there's very rapid innovation.
The PC space has seen better improvement in performance, better reduction in price than any part of the economy. So it's fun to be in that part of the economy. It's more scary.
If you want a really stable job, our industry is not the place to be because (of) companies like Wang or Digital Equipment--those are two companies I grew up admiring immensely. But you just miss a turn in the road or pick a few of the wrong people, (and) that makes it interesting. It means you come in every day and think, "Hey, I'll save the company for another year if I do something well today."
Those marketplace things work very well for most things. In (The Bill and Melinda Gates Foundation's) global health program, we're dealing with the fact that the people who want the malaria medicine aren't able to spend money on it. There, it takes a lot of cleverness to say, "OK, how do we take the skills that big pharma has, and the skills that the universities have, and bring those together in such a way that we get the smartness that they use in doing market products, but have them focus it on things where we know they couldn't prioritize it otherwise?"
The foundation is pioneering a lot of models like that. We have partners who are doing things in new ways, including people like One World Health, or GlaxoSmithKline on this malaria vaccine partnership, (who) agreed to do things a pretty different way and yet put their best people on the work, so we're super-pleased about that.
With Vista and Office, probably two of the largest examples of commercial software are both coming out; at the same time, Microsoft announced a deal with Novell around open source. Has your thinking evolved? What role do you see open-source development playing, beyond the fact that customers are asking for it?
Gates: Well, there are many issues here. One is that UNIX has had a market share on servers for decades, and there's always been a lot of variety. Under that label--Linux--there's an immense amount of variety. But, in general, Linux is not nearly as high-volume as Windows is on servers. But (it's) significant, so customers want new kinds of interoperability.
We've done fantastic things on interoperability. Here, we're doing virtual machine interoperability. So you can just have a pool of hardware and applications that use Linux, applications that use Windows, and just have the VM manage which one needs more resource, which one is done, which one needs to be restarted.
We're also letting Novell give something that you get in the commercial model, but you rarely get otherwise, which is the indemnification, just like we always do with every copy of Windows. So we're pioneering some things here.
What about the role, though, for open-source software? Has your thinking changed? Is there a value that you see it bringing?
Gates: Well, let's distinguish: let's talk about free software. Free software has always been an important part of the software world, just like commercial software has been.
You know, BSD Unix was free (and) available. Many elements of it were taken by start-ups; they enhanced it. SendMail--they hired people, they created jobs, they paid taxes. So you have this incredibly wonderful thing that if free software works for people, they should use that.
Often, in terms of support and enhancement (and) ongoing relationship, people prefer commercial software, which, thanks to the volume of Windows PCs, is now a very low-price, high-volume type industry, which it wasn't with the mainframe.
People often choose commercial. Those commercial companies pay the taxes, create the jobs. The government takes that and puts it back in the universities, and then there's more free software gets created. So it's this wonderful (virtuous) cycle, and I love that.
Now some people are trying to break that cycle by saying that you can never take things that taxpayer money helped create and use that in a start-up; (and) that if you do, if your code and theirs ever touches, you can never license it.
Anyway, we do tell people to be cautious about that. But free software, we think, is fine. Unix: we interoperate with it, we compete with it. (Regarding) the idea of open collaboration, letting our source code go out on more things and using the Internet as a way of reaching out to developers, there are certainly best practices there--some of which we pioneered, some of which others pioneered--(that) we latched onto and, hopefully, will take to a new level. So it's a huge mix of things.
The only thing you see a disagreement on is that we think people should be careful about which licensing model they use, because it means you're breaking this cycle. Now (Free Software Foundation head Richard) Stallman, he is truly pure; unlike many people who sort of try to act that way, he's pure. In V3 () he's going to really make it clear that there's the world of "can never be (commercialized)"--nobody can ever make money on it, you know, build Web services or things. At least he's pure.
So that's going to be harder to work with?
Gates: Who knows? I don't know. That's his world. The GPL is. The free software world is way, way bigger than that, and that will always be there. That's a noncontroversial thing that we love. We make some of our stuff free, some of our stuff we charge for. It all seems to have worked out so far.
There's obviously one other big product for the holidays in terms of things that you guys make--XBox 360. You did get the year's head start this time. There still seems to be pretty strong critical acclaim and
Gates: I wouldn't change positions with them in a million years. I mean, we know what it's like to be a year late. We feel great about the position that we're in. And, of course, they're going to sell a lot in Japan.
You know, Sony can make 80,000 bricks, and people would buy them. So the real competition--you're going to see the impact of our innovation and all the momentum we have in Christmas 2007. This Christmas, the story is: XBox 360 is going to sell super-well, and they'll sell the rounding error amounts they can make.