Gates outlines his high-speed strategy
After a string of broadband investments including its $5 billion stake in AT&T, Gates outlines Microsoft's high-speed strategy for its software offerings.
His company has thrown cash around at a furious pace in recent weeks, using its financial clout to pry open opportunities for its software technology.
Why? Because Microsoft's long-term strategy depends on the availability of higher-speed connections to the Internet. "A lot of this vision really requires that you're always connected," Gates said at a press conference during this week's CEO Summit.
In a big move, Microsoft took a $5 billion stake in phone giant AT&T to gain access to 2.5 million to 5 million cable set-top boxes that Ma Bell plans to deploy. The software giant also invested $600 million in wireless player Nextel, and will develop a wireless portal for the firm's 3.15 million phone customers.
Then there's the company's recent $30 million investments in both Rhythms NetConnections and NorthPoint Communications, two upstart providers of high-speed digital subscriber line (DSL) technology. Additionally, Microsoft made a $200 million investment late last year in Qwest Communications International.
Not to mention the company's many other bandwidth plays in the past few years. Or the ongoing rumors concerning a possible high-speed deal with British firm Cable & Wireless.
Together, the investments outline Microsoft's strategy to open as a many possibilities for its core business--software--as it can, according to the company.
"One of the things we're all taking as a given is that high-speed communications will be more available," Gates said at the press conference. "It's important for us to have those companies make those investments," he said.
Meanwhile, executives addressed Microsoft's recent moves in the telecommunications world but made it clear that investing is as far as Redmond plans to go. Microsoft, they said, does not want to be a telco.
Gates too dismissed the notion that Microsoft might want to be a direct player in the telecommunications market. "We're just a software company," he said.
He pointed to the "passive way" Microsoft encouraged Comcast, a large cable provider, to build out its network to deliver broadband Net access following Redmond's $1 billion investment.
"Our interests with our investments in telecommunications is in the relationship of software to those areas of bandwidth," added Jeff Raikes, group vice president of sales and support at Microsoft.
Raikes said the company wants to understand how its software can be used in broadband environments. "The investments relate to our goal of facilitating software opportunities," he said.