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Gates: Convergence is for real

Microsoft's chairman says digital pieces are finally falling into place to realize one of the tech industry's longest-sought grails.

Folks have been talking about the coming convergence between PCs and consumer electronics for years. But that was the easy part.

The hard call was to figure out exactly how the pieces would fall into place. Although the debate goes on, one person who thinks that the technology industry is on the cusp of realizing one of its longest-sought grails is Bill Gates.

Gates, who took the stage Wednesday night to deliver the opening key note at the Consumer Electronics Show in Las Vegas, is convinced that recent technology advances have paved the way toward real convergence. CNET caught up with Microsoft's co-founder and chairman to find out what's behind his optimism.

Q: How close do you think the technology industry as a whole is toward achieving an era of real convergence?
A: Convergence doesn't happen until you have everything in a digital form that the consumer can easily use on all the different devices. So, if we look at the three types of media of greatest importance--we look at photos, we look at music and we look at video--the move toward giving people digital flexibility on them is pretty incredible on every one of them. It's been discussed for a long, long time. And now, it's really happening.

Is it the trend in television from analog to digital? Is it the expansion of wireless? Or is it just the accumulation of technologies over the years?
I think that you have to look at photos as a realm that's made incredible progress because of the cameras and the printers and the software that runs on the PC that lets you organize those photos, touch them up, mail them around--things like Photo Story, with which you can do a set of photos with pan and zoom and voice over.

That's a real thing that pushes people toward the PC as being the central integrating device. Then, you have music, for which downloading--both licensed and unlicensed--has been in huge, huge numbers. That has the PC being the place where you have all your different songs available, and yet, you want to project that out into different speakers, which often means wireless or into a portable device format. You're seeing a lot of those. And video's just starting.

For the consumer, they're saying, "Well I have a lot of sources of video and photos and music, and so I'm going to organize all of this on the PC and then be able to project that onto any of the screens in my home and speakers in my home."

Many of my assumptions--I'd say a high percentage--are overly ambitious.
And that's why we looked at the PC and said, "There's one thing missing: You have to sit down at the keyboard to work with it." We said, "You need a remote control interface at a distance, and you need to be able to project on to different screens."

The industry's been talking about ease of use, but frankly, the equipment and the software still make regular folks break their teeth trying to get them to work together. In your Comdex presentation, you talked about "seamless computing" and the technology that breaks down barriers between people and their data. But when it comes to consumer electronics, isn't it the case that things are still fairly messy?
Certainly, as we've introduced these new scenarios, ease of use is really what's going to make them explode. That's why, with Media Center, instead of packaging up five different things people have to buy and put together, we just said, "Let's do this one Media Center thing, and let's make it so that you don't buy out on hardware and go buy on software, and you just buy a Media Center PC."

It's fair to say that people want even more ease of use in some issues about digital rights management and the complexity there. Consumers want flexibility, such that they can take any device, and use the standard PC software, and go to any music store, and mix and match what they buy from different music stores with a standard Media Player--and then connect out onto different devices.

In your thinking about how all of this was going to evolve in the last decade, were there any assumptions you made that were overly ambitious--or flat wrong?
Many of my assumptions--I'd say a high percentage--are overly ambitious. I have to wait longer to have them come true. I was working doing the Tablet PC for a decade before it came out. Now, it's gaining traction, but we have lots work to do. I believe that it will be mainstream on every portable PC, but we're a long way from that.

Some of the building blocks have surprised me on how quickly they've come along. Certainly, the pervasiveness of broadband and Wi-Fi, along with the improvement of screens and disks, have helped us a great deal. So, the Media Center concept--we got the timing on that one really right--that's gone super well. That one, I'd say, is an unusual case, in which we weren't too optimistic or too pessimistic, and partnerships really came together.

For any particular consumer, they'll tell you that learning to take their digital photos or take their photos off their phone and organize them and make sure that that's all reliable and fits into the other things--we still have a lot to do as an industry for even for some of the straightforward scenarios.

What are the gating factors that stand in the way of turning this vision into reality?
Well, continual listening to the customers. The hardware advances. There are some issues around digital management--you should be able to go buy any movie and use it on a variety of devices.

I mean, this stuff is becoming real. It was talked about for ages, but now, the pieces are coming together.
We're working very closely with the content creators to try to get digital rights standards that are simple for the consumer and yet honor the rights of the people who own that content. But that's been a big challenge.

In music, things are improved, but as I mentioned, moving things between devices and understanding what your rights are to do that--it's still not everything it should be. So, the partnerships with the content companies will be critical to move all this ahead full-speed.

Thinking about how this is all going to turn out, what do you see as the primary convergence device for the future: television or the PC?
It'll be a personal computer that's connected to the TV. When you think about the TV, you think about the big screen from which many people can sit at a distance and watch movies and shows--it's perfect for that. And yet behind that, in order to navigate your guide or record things on to your hard disk so you can get them when you want or so that you can choose different photos that you want to see from different trips or other things, you want to have the full power of the PC.

So, in homes where people are really practicing a digital lifestyle, there will be a PC driving their TV set. If you want a rich set of video sources and different things, there's no doubt that the PC's strength--the extensibility, the richness, the framework around it--will drive the TV.

Help me understand where Microsoft's thinking is, regarding current and near-term prospects for interactive digital cable. Until now, offerings like video on demand and interactive digital services have promised a lot more than they've delivered. What's your reading of the situation?
The cable infrastructure is being used in two ways today. It's being used for the cable model connected to the PC, which, of course, is massively interactive, and the cable industry's done a great job on that financially. It's been the thing that's really kept the cable industry strong and growing.

On the TV side, they have hardly changed their set-top boxes at all, and with the competition from satellite and the attractiveness of video on demand, they're starting to update the software on their set-top boxes and think about improved set-top boxes, including some with hard disks. And that will be very important for them, because people are being exposed to the satellite offerings, the TiVo offerings, and cable companies want to make sure that they provide all of that.

So, our software, our TV Foundation, actually runs even in the existing set-top boxes and gets as much of these new capabilities out of them as possible as well as running on slightly improved set-top boxes--primarily from Motorola but others as well--that have the disks and those capabilities.

On the TV side, they haven't done much yet, but that's going to change very rapidly, because the pieces are there from us and others, and it's important to them in competing and moving people up to the digital approach.

Will there be any announcements coming out with prospective cable partners this week?

Not at this show. We've got more than enough news here, and we tend to do our cable announcements at cable-dedicated shows.

As you plot out your consumer electronics strategy, does Microsoft need to tread more carefully than it otherwise would because of the antitrust settlement? That is, if you're successful in what you do, it's likely that you can expect to hear more people say, "Okay, here we go again, Microsoft is going to dominate yet another platform."
This is a very competitive area, and we need to keep adding capabilities to Windows in order to keep it strong, in order to give people reason to get the latest hardware and have access to the new scenarios. So I don't see any part of the business that isn't very competitive. The only clear winner in this space is the consumer who is going be able to do some really neat scenarios. I mean, this stuff is becoming real. It was talked about for ages, but now, the pieces are coming together.

Apropos of that, Microsoft has been lobbying consumer electronics companies and studios to adopt the Windows Media format (for compressing high-definition video), but there are those who argue that MPEG-4 is just as good, when it comes to a video format. Is there something wrong with MPEG-4?
Windows Media has a lot of benefits over MPEG-4. We have some quality things, some flexibility things in some of the ways that the licensing's done--the hardware requirements. There's no doubt that there's going to be extensive use of MPEG-4 and extensive use of Windows Media.

Both of those are very important formats, and we're going to make sure that people understand where Windows Media is better, and so they can use that. It's something that we make so widely available, people ought to think of it as a technology to draw on. It doesn't mean that all the devices have to run Windows.

Microsoft just released a new removal tool for the MSBlast worm. Is 2004 going to be any better, in terms of worms and viruses?
The industry, including Microsoft, has made security the top priority.

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We made some incredible progress last year. We got a high percentage of our enterprise customers using Systems Management Server (SMS), which makes it easy for them to update their desktops. That's a very important part of this.

We got a clear message about how to configure systems, telling consumers to use firewalls and turn on the auto-update capabilities, and so things are greatly improved. But then again, the bad guys want to move up to the next level and get the publicity or whatever they're seeking, and so we can't be complacent.

We're going to have to really go a lot further in terms of getting people to audit their firewalls--and to have the software update services both on the consumer side and on the enterprise side. This will continue to be our top priority through 2004, because the bad guys are just going to try to get badder.

Some have suggested that a monoculture environment--such as all-Windows--makes companies more vulnerable to security problems. Your response?
It's actually ironic somebody would say that, because, in fact, the huge investment we can make in auditing the security and having tools against Windows is because of its popularity. If your goal is to have a secure system, you actually want people who, in benign ways, challenge that system.

Otherwise, all you're getting is that you're insecure, but you don't know it, because people are just attacking this low-volume system and that low-volume system. The fact that we have the best minds working on this stuff--and great 24-hour response--you can't do that for multiple systems. So we're here doing state-of-the-art work--even inventing things--that will make these systems less and less vulnerable.