Remarks by Bill Gates, Chairman and CEO, Microsoft Corporation
COMDEX Fall 1998
Los Vegas, Nevada
November 16, 1998

GATES: Good evening. As you know, I'm simply the first of nine keynotes. In fact, at this Comdex you need a web search engine just to figure out which keynote you ought to go to.

My last year has been really exciting.

(Laughter.)

GATES: It's been full of a lot of neat events, and you might not even remember all of them. So, I've put together a short video that captures some of these things that have gone on. Let's take a look.

(Video shown.)

GATES: Well, fortunately, everything you saw either has had or will have a happy ending. In fact, the bug that caused that blue screen got fixed that very night, and the person who helped me with that demo is still working for Microsoft.

(Laughter.)

GATES: One of the things you'll be reminded about tonight is my optimism for the information age and what is coming. The power and performance of the PC continues to multiply. Comdex is a testament to the way that companies of all sizes -- many thousands of companies -- are contributing to these improvements. PCs are going beyond the desktop and becoming personal companions, giving people vast new capabilities.

We are enhancing people's lives, connecting them together from Maine to mainland China. Today, with a single click, you can visit an incredible museum or enter the world's biggest shopping mall. But as we tap into the power of all this technology, we must also accept responsibility for some of the pitfalls of this age as well. As computers become more powerful, we must keep them simple. If we open up the Internet to new uses, we must maintain the privacy of our users. Tonight, along with my optimism and some views on these rapid improvements, I'm going to talk about how the industry can meet these challenges. So, let's look first at the incredible performance coming on the PC.

Well, Moore's Law predicted long ago exponential improvement, and whenever you talk to people about this, the people who work on chips often say, well, in about five years, we’ll hit some limitations. But during the last 20 years, that's stayed constant. And so today people are saying that those limitations are still out there well in front of us. Clock speeds are going up, memory buses are improving, and we're moving up to 64-bit architecture, both with the Intel Merced and the Compaq Alpha. This is a fantastic advance, requires a lot of work on the part of the software industry, and it really opens up new horizons.

It's not just the performance of a single processor, though, that will come together in the PC. An individual PC which today typically has one to four processors, will soon have between one and 64 processors, all working at full performance. Finally, you'll be able to create a system out of many PCS by clustering them together in clusters of 64 or even more of those very high-end PCs.

So, we get the multiplicative effect of all those things coming together. What this means is that the PC will go far beyond what any systems have been able to do in the past. In order to deliver on this, there are a lot of key elements that are being designed into the software, and new concepts that weren't there before. An innate understanding of clustering, being able to set up and administer those clusters very easily, so you can simply add in a new PC and you get the extra reliability and performance.

Transactions are another key concept. When applications use transactions, it means that they've divided their work up so that you can always go back to a logical point. This is critical for ultra-reliability because it means that if a system fails, another system can take over simply by stopping the transaction, aborting that transaction as incomplete, and have a clean place to do the work without any difficulty.

We also need to bring in rich systems management, the ability to think of many systems working together as one logical system, so that somebody writing these components doesn't even really have to think about where they're going to run. And the directory that enables us to distribute software and define policies will be at the center of this vision. So clearly the software has to become richer in order to pass into that world of incredible performance.

What we're going to see is that the PC model will prove itself once again. The PC model was really won on the desktop. I don't think you'd get much debate about that. The specialization that each company has had, whether it's in chips or software, or the various applications, have all come together to create an R&D tool that great exceeds any other investment in the computer industry that's literally billions and billions and growing at an incredible rate. So, we'll be able to go buy the other systems and meet the needs of the most demanding application that the Internet will require.

A great example of a company that's adopting the PC model is SGI. SGI has had fantastic expertise in graphics and high-performance computing. And so, we're very, very happy that they've chosen to take all of that expertise and build it on top of the PC. In order to give us a sneak peek of some of the ways that they're doing that, I'd like to ask Tom Furlong, who is the senior vice president at Silicon Graphics, to come on out and give us a look.

(Applause.)

GATES: Hi, Tom.

FURLONG: Hi, Bill. Great to be here.

We want to give you a sneak peek at Silicon Graphics’ new Visual Workstation. I think you're going to be pretty impressed. We've been working on this stuff for a long time with yourself and with Intel, and now we finally can give you a look at the power it has and the great things it can do. And I think you're not going to be able to believe your eyes. What you see is, on the first demonstration, is a model of a 3D workstation that's sort of floating in space. We've put a chrome texture on it, so it's reflecting around the different images of a restaurant that it's in.

And then we've got our flat panel display. Now, going into that flat panel display, what you see is a video stream. It's you and I mapped onto that flat panel display. And for most companies, a demo like this really taxes the system. It would be, you know, the final grand finale, piece de resistance. For us it's our screen saver.

(Applause.)

FURLONG: Let's look what happens when you take that 3D powerhouse and you put it to work on 2D or on video. What you can see is a very large PhotoShop image, four megabytes here. Well, let's blow it up to full screen. On this display, our new Silicon Graphics 1600SL view.

(Applause.)

GATES: That's an incredible LCD. I've never seen one like that before.

FURLONG: Well, it's really state-of-the-art, 1600-by-1024 pixels, full color, runs at 30 frames per second, allows you to do video. It's just a real powerhouse.

It's also got an all-digital interface, so a picture in memory gets to a pixel on the screen, and never gets converted to analog. The net result of that is, you get color calibration made really easy. So, what you see is what you print in color, and that's what you print on film. I'm expecting those transitions to show up in PowerPoint transition library next?

GATES: You bet, we'll do it.

(Applause.)

FURLONG: So, here what you see is the incredible power of video. This machine operates best enough that video is just a series of 2D frames that are all put together. So, we can take the same capabilities and apply then that way. So, Bill, you want one of these machines in your office?

(Applause.)

GATES: I'd love one. Give us a sense of what kind of price range these will be?

FURLONG: Well, the price point for the features used to be about $100,000. But, as you say, the PC model really tries to bring this capability together. We're going to be able to bring this capability out for under $4,000.

GATES: Amazing.

(Applause.)

FURLONG: Let's take a look at what a designer would do. A designer currently renders models in 3d, but renders in 2D. So, let's look at the 50 bad ideas we had about how to design our product, and then we'll show up with the good ones.

(Video shown.)

FURLONG: What you see here is the power of real interactive 3D graphics. That's a marble floor. There's a picture on the display. Those are lights flying around. This is not a movie. This is realistic 3D graphics. Now, what we're doing is, we're able to take and change the light source, and we've mapped our video screen on top of that, and our video screen is being reflected in the floor, and it's upside down, just like it's supposed to be. So, this is the realism that allows somebody to design something and see it well before it's ever been produced. It's an incredible feat. And only -- up until now, only the people who have designed the most complicated things have been able to make use of it. But by bringing this capability to NT, we'll be able to expand that market broadly.

GATES: It's amazing to see that all running on a PC. How quickly will you be able to get this on the market?

FURLONG: Well, we're going to announce it just after the first of the year, and we'll be shipping in January.

GATES: Incredible.

(Applause.)

FURLONG: So, we're in that phase right now where we're able to take a look at what a designer has done. We're looking out for bugs, though, still. But there's one bug in the system that we really want to make sure that we highlight, and that's the new Beetle from Volkswagen. The new Beetle was designed entirely on Silicon Graphics machines. And people were able to build complex models like this, and with a handicam take a picture of the street they wanted to see in that environment, and drive it down that street. You can see our video stream being mapped onto the images there.

It's technology like this that have caused automobile companies around the world to figure out that you can take more than a year off of the transition going from the design studio to the driveway by utilizing all-electronic capabilities.

So, let's pull it all together. What we've got here is, we've got a 3D cube spinning in space. We've got two of those four megabyte Photoshop images on there rotating in real-time. We have two Quick Time movies, which are running directly off of the disk and coming onto the system. And we've got the live video feed. It's performance like this that we're able to bring to the PC platform, and bring onto the NT operating system. And what we'd like to think of it as, we're bringing Silicon Graphics magic to mainstream markets.

GATES: Well, it's great to see the best of your work and the best of ours coming together. I can't wait for that to ship. Thanks a lot for coming and showing it to us.

(Applause.)

GATES: Another amazing thing that's happening to the PC is it's coming out in different form factors. In fact, it's kind of hard to say where the dividing line stands between the personal companion and the PC. I use the term PC to refer to the primary device of the knowledge worker, what you use to create most of your documents. But, there's no doubt that customers want other form factors as well, things that are lighter and smaller, or even that integrate in with your TV set, or your car.

What we're seeing here is a variety of devices that run Windows CE. They're the palm- sized devices, including ones from Phillips, Casio, and a number of other companies. We’ve also got the larger units, which we call the handheld pro machines. The packaging here is fantastic -- because these machines don't have a disk, they can be made very, very thin and very light. In fact, this one, which is from Sharp and Vadem, you can pull down so it's just like a tablet, and then open it back up and use it more like a normal PC as well. Also here we have the Clarion product, which is goes into the car, as well as some of the e-book type products, which will be moving to Windows CE in their next generation.

So we can see a great deal of new capability here that's going to allow you to keep all of your information in digital form. You won't have the impedance problem of having some things in paper, and some things that are on your computer. You can go back and forth and have all that digital information with you, no matter what you're doing, whether you're at a meeting or traveling around.

So far, this has been a huge challenge. How do we get the world to be fully digital? The vision of being fully digital goes back a long, long time. In fact, it was 1945 when Vanabar Bush talked about his Memex machine. I see a little picture of that up there. His vision was a little more mechanical than how it finally was delivered. But what he talked about in terms of capabilities is what we're really building today. Science fiction writers, even before that, talked about electronic books, reading everything on the screen, creating things on the screen -- a paperless approach altogether. At Xerox Park this concept was referred to as the dynabook, which is the concept that Alan Kay had.

Now, in the 1980s, there was an effort to get lots of reading material onto the screen: the thesaurus in 1981; the first encyclopedia in 1986; reference books under the name Bookshelf in 1987; and then even a dedicated device for reading, the Data Discman in 1991. In some categories, the success has been phenomenal. Just look at the comparison of print encyclopedia sales to CD-based sales (chart is displayed). One has gone down fairly dramatically as the other has gone up in the same fashion. The CD is less expensive, it's more up to date, it's got audio, video, it can quiz you, it can connect you up to the Internet where the latest information is stored and updated. So despite the drawbacks of the electronic device, in this category the balance of benefits have weighed very heavily, and electronic has won out.

One thing that has been necessary to spur on electronic reading is to have a standard, an e-book standard. And in the last few months a number of companies have come together -- great publishers and a lot of technology companies -- and took Internet standards and looked at what extensions were needed for a book in terms of structure, style, as well as the protection that the publishers are concerned with as well. So we not have that standard as a solid foundation. We won't have fragmentation as people are taking this material and making it electronic. And they'll make it electronic so that it plays on an incredible variety of devices, starting with the PC itself.

But, we have to be realistic about the current technology. Are people really going to read long documents off of their screen? Even I don't read magazines off of the screen. Some of the trade journals, I read on the screen, but then when I want to go into the in-depth articles, I prefer the paper edition. For typical magazines, where I want to sit and read for an hour, I just wouldn't use the screen at all. So on the screen today, electronic mail, browsing, and electronic forms, those clearly belong there. But, the longer documents, periodicals and books, we just don't have the screen and font quality that match the printed page. And it was a real question that I had in terms of the future.

So about six months ago one of our developers sent me mail saying, what was the key challenge, what could he work on. It was Bill Hill. And I said to him, help us tackle the idea of readability. Let me know what we need to do to make this a reality, and don't pull your punches, really tell me when is the hardware and software going to come together? And even though it was only six months ago, they've actually made a breakthrough in this, and so I've asked Bill Hill to come out and show us tonight what he's done, and how readability is going to get dramatically better.

Hi, Bill.

HILL: Hi, Bill. It's good to be here.

Well, then the key issue for electronic books, as you said for long documents, is readability. Wouldn't it be great if reading from the screen could be as comfortable as reading a book? But the problem is that it isn’t that easy today. And one of the major reasons for that is type technology and the way that we display fonts. There are a lot of problems with existing devices. And, you know, in most cases, we're kind of looking, thinking that the hardware was going to solve it. And what we wanted to do was look and see whether there were any solutions in software. So maybe we could take a look over here, I'll show some of the problems, and then show you the solution we've come up with.

Okay. This is a typical piece of text, it's in a font called Gil Sans. It's a beautiful font when printed out, but on the screen it looks awful. It's in italics, and those are particularly difficult to display on the screen. Let me show you what I mean. I'll take this zoom in tool, and we'll go and look at a word over here. There's the word life, this is the best that we can do with standard font display technology. The thing about reading is it's basically word recognition. And typefaces have evolved over a couple of thousand years -- it's a very sophisticated technology. And it allows us to recognize words very quickly, and with almost no effort. But, on the computer, that's not the case. If somebody presented this word life to you at this size, you wouldn't even know what it was. It's a deciphering job.

So lots of people have turned attention to how can we make these things display better? And one of the techniques that they've developed is anti-aliasing, the removing of the "jaggies" with techniques like gray scaling. The problem is that we really need to be able to read at fairly small type sizes, 9 point, 10 point, 11 point, and 12 point. And if you look at what happens when you use anti-aliasing at those sizes it really is no solution. So this is anti-aliased text. Now, in most cases even the unanti-aliased text probably looks reasonably good on these large monitors. It's very difficult to display at these sizes. But, let me show you what gray scaling actually does. There's the same word, life. It's even more of a deciphering job.

See, the problem is that the pixel, the individual dot on a computer screen is far too coarse, we don't have the resolution. So it's basically like somebody asks us to paint a picture of the Mona Lisa, and they hand us a paint roller. The problem is that with gray scaling we still have the same size paint roller, all that happens is they give us a few buckets of gray paint, and we have smear around the edges and try to remove the "jaggies," but it doesn't really work. It's the same size paint roller. The effect of this on small text sizes like this, that you want to read, is that the text is blurred. And it's actually like trying to read the book wearing somebody else's eyeglass prescription. You can't do it. And it causes eyestrain, which will be wearing over a long period of time.

So what we did was we started looking at this to see what we could do in software, and what happened really was something that happens very rarely in your life. You get a group of people together, and they all have different pieces of the puzzle, and then magic happens. We did some experiments, we had an idea and we did some experiments. And the very first piece of text we saw just stunned us. We couldn't believe what we were seeing.

GATES: This is a technique where you take a Color LCD, and you do your magic to make it look better on the Color LCD?

HILL: Yes, and the great thing about it is it works with existing LCD devices, and basically what we do, the technique we use, triples the resolution of an existing LCD screen in software.

GATES: Sounds good.

HILL: I want to show you a piece of text, a before and after piece of text. Now, this is being displayed, actually, on a device of not terribly high resolution. This is a Windows CE handheld PC. And the resolution is 640 by 240. But, you can see here on the screen the before and after. If you look at the L's, for example on the left, you'll see they're jagged. They're much smoother on the right. Another interesting thing is you see the difference between 12-point type and 13-point type. Have you ever noticed when you increase the size of the type on your office documents, you get to a certain point and you think you've turned them bold?

GATES: Yes, it goes from one to two pixels.

HILL: Yes that’s what's happening. The pixel is the smallest unit that we have. If you look on the right, you'll see there's a very gradual transition in sizes, and that's the result of the increased resolution that we've been able to find, basically taking the paint roller and cut it size by a third, cut it size to one-third. So then you take this technology and you start to apply it to things like electronic books and documents. Here's a copy of a -- of your book, Bill. I thought you could do with a plug.

GATES: It must be tricky to let people see how we're getting this extra resolution, where we're doing it through a projector. You know, it's like showing high resolution TV on a normal TV.

HILL: Yes, we struggled a lot trying to show this, because really this is a technology that's designed for reading small type at normal reading distances, of a couple of feet. It's difficult to show on these large overhead projectors. We have a number of machines on a special section of the Microsoft booth, which you should go and see.

Here's another example of an electronic book. If you look at these italics here, you know, these are much finer than anything that you could do -- but it's not just books. As the fact is that if we introduce this technology into the operating system --

GATES: Which we will.

HILL: Which we will, okay.

(Applause.)

HILL: When we introduce this technology into the operating system, then all applications that use it will get to take advantage of it. That' means Office documents, email, Internet content, everything. The beauty of this is that the work we've done uses the same true type font rasterizer that ships in every version of Windows, it ships in NT, it ships in Windows 95, and Windows 98, and it ships in Windows CE. When we change this piece of technology, every application that uses the operating system will get the benefit.

So that's basically a magic switch. And we've increased the resolution of your existing hardware by 300 percent. We're pretty stunned by it.

(Applause.)

GATES: Well, that's fantastic. I think it's actually going to increase the move towards LCDs because, you know, since we can do this on LCDs, and I really think it's going to usher in the vision that all of us share about electronic books.

HILL: We're seeing a lot of LCDs appear in the market, Silicon Graphics LCD is beautiful. We're operating on that. And other companies like Toshiba have introduced their top LCDs. The price will come back dramatically as a result of their adoption, and we're hoping that this technology will help to drive that adoption.

GATES: Well that’s an incredible piece of work, Bill. Thanks so much.

HILL: Thanks, Bill.

GATES: Well, part of what makes my job fun is having people like Bill come in and say, they've got a new break through, and taking a look at it. And about once or twice a month something like that one comes along. But that one is, I think, more dramatic than most.

With all my enthusiasm about this technology, I decided to get some calibration. So I asked someone I know to go out on the street and talk to people about technology, find out how are they responding to the Internet, are they seeing the same opportunity that I do. So, let's go ahead and look at that.

(Video shown.)

GATES: Well, it's clear we're going to have a lot of fun with this new technology. But one of the pitfalls is, we're going to have to make it simpler. Now, the types of tasks people want to accomplish with personal computers has increased and evolved over the years. So, simplicity really is the moving target. There were years where simplicity meant hiding the difference between extended memory and enhanced memory, or making it so you could find a printer driver for your printer, or making it so that you could somehow connect up to the network and not have to add too many different pieces of software to make it all work. As we ushered in the era of the graphical user interface, things like moving data between applications, running multiple applications at the same time, or having rich fonts, all became common place. With mobile computing now, you can undock and dock, and have different hardware profiles. And with the Internet now, issues like setting up your IP address are no longer as much of a problem as they were in the past.

But there's no doubt that we have to find breakthroughs that are going to reduce the number commands, that are going to make error situations easy to diagnose, and really tap the power of the machine to be very helpful. A good illustration of this is that I was navigating my file system the other day, and I found some really exciting files out there. These are their file names. I sent mail around, and I said to people, okay, it's the quiz, the classic Microsoft quiz. Who can answer where these files came from? And, in fact, no one got them all right. Here are the answers, if you want to know. I'm sure someone out there knew all those things. But that has got to be one of the most opaque things there's ever been. People shouldn't have to see the files that make up an application. They should just see the application and the version that's there, and never have to look underneath that.

Another thing to consider is that we have these commands spread all over the system. You have search commands in almost every utility. You've got it for mail, for people, computers, files, for the Internet. And yet it appears in a fairly different way in each case. Now, we are starting to pull all of this together. Unification is one of the great techniques that will help to provide simplicity, bringing together all the different stores, and the way you navigate/program against those into a rich store. That holds a lot of promise. The products that we've been working on for the last couple of years really do reflect that we've made this a priority. We have a long way to go, but already we can see some things that are pretty exciting. Install on demand, menus that adapt and just show the commands that you like to use, not the ones that everybody else uses.

In Microsoft SQL Server there are features like not having to administer the indexes, or the space management, or having the common product from top to bottom so you don't have to think about the differences there, or perhaps most importantly, the use of natural language. Natural language, whether it's typing in sentences, or speech recognition is destined to play a very central role in the operating system and the applications in the future. Well, let's take a look at a couple of these products that are coming out in the very near future. In order to show us a fun scenario with the simplicity, I've asked Andrew Dixon and Adam Blum to come out and show us how it works.

BLUM: Hi, Bill.

GATES: Welcome.

DIXON: Hi, Bill.

(Applause.)

DIXON: Well, Bill, a great way to highlight some of those simplicity innovations you were talking about in Office 2000 and SQL Server 7 is really just to take you through how we use these tools to get regular tasks done. Now, many of us here in this room will start our business day in email. And here we are in Outlook 2000, and it looks like, Bill, you've sent me one of your many personal note pieces of mail here.

Actually, let's take a look and open this up and it doesn't have to be a personal note this time, but it looks like you want to host a fun day in Las Vegas for some of your international partners. And it looks like you want to do some fun things like play blackjack, and see some great attractions, and eat at the fast and least expensive buffet, and you'd like us to go ahead and put together an invitation for you.

Well, I think we can help you out, Bill. In fact, you've had the foresight to include some contact information for the people you want to invite. And the great news here is that since Outlook 2000 supports the V-card standard, it makes it really easy to exchange that contact information right over the Internet, and makes it even easy for me to add that to my own personal contacts.

Well, you know, we're all pretty busy here at Comdex; so I think it probably makes sense to go ahead and book everybody's time here. And why don't we just send one of those meeting requests, you know, those ones that kind of state the date meeting request, and of course we'll go ahead and add you, and some of the other people from within Microsoft. But, you know, why don't we go ahead and choose those contacts, too. And we can go ahead and send them an email message, and invite them to this event. And not only can I invite them, but right over the Internet because we support the I-calendar standard, I can even see their free and busy times right here. This is something we've always wanted to do, and not it's simple.

All right. So, let's select a block of time, which conveniently exists across the board there, and go ahead and send them an invitation.

All right. Well, this is great, but you know I don't think we're quite finished. I think you had something else in your email that we should take a look at here. I think actually you wanted us not only to get a good invitation together, but you wanted us to go and get a list of the best casinos in town for what we want to do. And you've even pointed us out to a website that's going to help us do that. So, like any good employee, I'm going to delegate this part of the work out to somebody else. And, if it goes well, of course, I'll try and take full credit for it. So, let's send that off to our good friend Adam Blum to help with that.

GATES: All right, Adam.

BLUM: Okay. Well, thanks Andrew.

It looks like I've got some new mail from Andrew here, and I'll take a look at that. And what I've got here is, he's actually pointed me to a website, and I can actually see this in the preview pane. It's the website of Argo Casinos. And I'll actually drag that to the Outlook navigator bar, and I'll click on that. And what I'll do is actually bring up a website that has all the hotels in the world from the Expedia hotel database, and most of the casinos in the world.

GATES: So this website is actually using SQL Server to let you navigate through all the information?

BLUM: Correct. It's a SQL Server 7-based website. It was built with English query, which means we have the ability to find information with plain English questions which is going to be much simpler for us to use, and it's also going to provide a lot of power of searching without learning a lot of complex forms or requiring a lot of complex development by the programmer.

So, let's look at what's on this website. We've got a left pane here where we've got a text box. We can see some sample questions. And in the right pane it actually tells me I can ask any questions about casinos, or their buffets, attractions, shows, games, proximity to airports and major sites, and that would be incredibly complex to allow if you search by a form. With English, it's not really a problem.

So, let's go ahead and give it a shot. Which casinos are near the Las Vegas Convention Center? Which have blackjack with four decks or less? And that's a good way to make sure that you have good odds when you play. And, in fact, it comes back with a list, but it's probably a little bit too long. It's about 15 rows. And what it actually does is, it repeats our question, it restates the question to make it really unambiguous, just what it's answering, and very often that's important, and most excitingly, and this is the essence of English query, it takes the question and generates SQL statements, and a fairly complex one at that. That would have been difficult to program, and certainly difficult for the user to think of.

GATES: We can see that SQL statement right there, and it’s a doozy.

BLUM: Yes, it's intense. It saying, distance less than three, and have blackjack and has less than four decks. So, I'm just glad we didn't have to code that.

Okay, so now we've got about 15 rows. And, of course, we probably want a bit smaller list. That's probably way too many to choose from. Let's go ahead and ask some follow-up questions. Follow-up questions is something that you and I would do in a conversation that's just kind of obvious, but typically there hasn't been a way in searching websites or searching databases to really whittle down --

GATES: Refine.

BLUM: -- really refine that search. So, let's go ahead and say, which of those have poker. I've heard you have an affinity for that game. Which of those have poker and buffets, right, because that's part of our --

GATES: That's important.

BLUM: Great. We'll go ahead and ask that. And it will come back with, now, it will be in the restatement that it's really including all of those original criteria, plus the new criteria. Now, the SQL statement is getting really complex. But we've narrowed it down to 12 rows. That's probably still not enough. So, let's narrow it down further, maybe ask things about the hotel, what amenities they have. So, how about which of those have babysitting. So, we'll ask that, and now we're including that criterion as well, and now we're down to about seven hotels. That's probably hotels and casinos, which is probably a reasonable set.

Now, one of the things in the email said, you know, was that we wanted good attractions. So, let's just verify that we are going to get some interesting attractions along the way in the itinerary. Let's go ahead and show their attractions, and now we can see all the casinos and their attractions, all the casinos according to that criteria, and their attractions, and we can see, for example, the Bellagio has that new $300 art collection, and where the SQL 7.0 Launch will be there tomorrow.

I think this is a good short list to hand off to Andrew and let him finish up that itinerary.

DIXON: Thanks. All right, Adam.

(Applause.)

DIXON: Well, that's great, Adam, doing all the work and making me look good, as we'll see later on. That's good news.

Well, you know, while Adam was doing that, Bill, I've just been jamming on putting together a great invitation for you. And before I show it to you, I've got some unfinished business I need to take care of.

Do you ever do this, you kind of downloaded a lot of files to your hard drive and it's getting kind of full, so you look through your hard drive for files that you can delete without causing any problems? Well, like you, I fancy myself a bit of a technologist, and I know what can get deleted. How's this one, windward.exe, doesn't look important to me. Let's drag that to our recycle bin. All right. Let's go ahead and empty the recycle bin, just for good measure. All right, great.

Now, let's get back into work and keep going with that invitation. Now, this is truly a case where ignorance is bliss, because instead of getting those big old error messages that come up saying, you know, unable to find this file, or missing or corrupt file, Office 2000 is smart enough to know what to do when something goes wrong. In this case, it's gone out, gotten the right files, put them back where they're supposed to be, and it just runs. This capability -- let it out.

(Applause.)

DIXON: This capability is called self-repairing applications, or also known as, wasn't that broken just a minute ago, feature, and it's going to prevent a lot of headaches from the home user right up to the corporate user, who will no longer have to pick up the help desk phone to make a copy support call.

All right, so here we are in the invitation. And if I do say so myself, it's already looking pretty good. I've got a nice banner, nice areas for your host information, and so on. But, I don't know about you guys, but I'm a firm believer in copying other people's work and shamelessly pasting it into my own document. And that's why I especially love the collect and paste capability in Office 2000. That allows me to copy up to 12 different items at once, and then paste them in any order that I'd like.

Let's go to your email, Bill, and you know I kind of liked your title here, I’ll give you some points for creativity. Let's go ahead and copy that. And now let's go in, and I think your assistant put together an itinerary here in this Word document, so let's go in and get that, because I saw a table that I can probably take credit for here. So, let's collect that table and copy that as well. And notice that we have this new clipboard that comes up that allows us to track all the things that we've copied.

(Applause.)

GATES: That's a lot simpler.

DIXON: That's making it a lot easier. All right. So, now just to kind of put a nice touch on this invitation, I thought it would be kind of fun to include a picture of our host. Well, Bill, I mean, no offense, this is a great picture, but this is all about a casino tour, after all, so I think you need to be a little bit more in dress. I think you need to be able to kind of sport something that's a little more appropriate. So, using PhotoDraw 2000, which will come with the Office Premium Edition, it's really easy now to kind add an overlay of a suit that I think is just perfect.

GATES: I recognize that.

DIXON: You know what they say, the clothes make the man. I especially like the necklace here. That's a really nice set.

All right. So, this is great, let's copy that as well. And let's get back to our invitation. And now I can past those things in any order. So, let's go ahead and paste the theme. That's looking pretty good. Let's paste the now dapper looking host. All right. That's looking pretty good. And let's get that table in there as well. We can even use the drag and drop table feature in Office 2000, making it really simple to put the table where we want, and have the text automatically wrap.

(Applause.)

DIXON: All right. Well, we're almost done. We've added the content in but, you know what, I've kind of changed my mind on this theme. It was pretty good, but I don't quite like that word "tour." I think we need to go and find a replacement word for that. And so, I'm going to go out and see if I can find the Word Thesaurus. I've never really used that before.

Well, first of all, when I go up to the menus, the first thing I notice is that they're much shorter. And this goes back to the personal menus and tool bars that you mentioned earlier on. They actually adapt to the way you work, and over time become simpler as they optimize to you. Now, just because they're shorter doesn't mean we've taken anything away. It's really easy to expand those menus and get access to absolutely everything. And Office is even smart enough about knowing when to expand those menus.

Have you ever done this before? You're just kind of in a sugar-induced comatose, hanging out at a menu looking for something? Well, automatically we're going to expand and give you the tools that you need.

(Applause.)

DIXON: All right. Here's the one I'm looking for. The 24-language thesaurus, and when the thesaurus comes up, here's a replacement word, excursion. Well, that one screams Vegas, so let's go ahead and replace that word.

GATES: And now that you used the thesaurus, it will put that on your short menus.

BLUM: That's right. And when I go back up to my tools menu, language has been visually promoted to be closest at hand, because that's the tool that I use the most.

GATES: Great.

BLUM: All right. Well, we're getting there, Bill. I think that this is really looking pretty good. But, one thing I wanted to do was I thought it would be kind of fun to translate this theme into the various different languages of our international guests. So for our German guests (speaks in German) all right. Well, that's looking pretty good. Now, for our French guests, (speaks in French) well, that's looking pretty good, too. What about for our Japanese guests, there's going to be some of those, as well, (speaks in Japanese), all right. Well, this is looking pretty nice, you know. And I think it's pretty amazing -- you know, it's pretty amazing that we were able to type these languages right inside of Word, but Word was also automatically smart enough to detect the language I was typing and give me the right proofing tools. So for German, (speaks German) is capitalized. For French -- for French -- well, let's go to Japanese. For Japanese, even the Japanese text --

GATES: You know, I'm glad you fixed that.

BLUM: I saw you looking at me wondering if I misspelled that. All right. This is looking great. Let's go ahead and apply a theme here. Office 2000 now shares themes with FrontPage, making it really easy to soup the document up and make it look just the way you want. With the click of a button I can go ahead and apply a background, change the heading styles, change the bullets into picture bullets, really dress this document up. I think we're ready to go. Let's publish this document to our events website, so everybody can see it.

You know, publishing to the web used to be something that web masters did, because quite frankly, it just wasn't simple enough to do. Take a look at how easy it is now, with Office 2000. Now, in his new save as dialogue box, I can publish to anyplace, personal folders, desktop, or how about this, web folders. Now, I can publish to any website that I have access to. And literally, with the click of a button, I can publish to the web just as easily as I save to my hard drive.

All right.

DIXON: Well, Bill, we're almost there. We have put together a killer invitation. But, you know, in your email you asked for something else, you asked for the short list of casinos to go to. And Adam did some great work using a SQL Server English query to go and get that information. Now, watch how I'm going to take credit for all the work that's been. You know the document we just published using Word, why don't we open that document up inside of Access. Now, it seems incredible, because all the Office applications can save in open HTML, that's now something that we can do. And the great news here is that once I've got this document open in Access, Access can connect directly to SQL Server, making it super easy for me to be able to add some of the information from that great SQL database.

So here we are, this is the HTML document I've loaded. Notice first of all, it really looks pretty good. And down here at the bottom I've already kind of taken the liberty of adding some of the fields, the casino name, theme, buffet name, I know that was important and the all important buffet cost. Let's put some finishing touches by grabbing a couple of more fields here. I thought it will be a nice touch to include an image of the casino down here, and maybe we can stretch that out a little bit, so it's nice and big and everybody can see it. And let's add the all important casino rating. I knew that you would be interested in that field, so let's drag that down here as well, and make this super big so that you can see it. And now I'll make use of the WYSIWYG font menu, which allows me to choose the font and see what it's going to look like before I apply it. Make this super big and I'm ready to go.

Now, Bill, I could choose to publish this directly to our events web site, just like I did in Word, or in a more targeted way with the click of a button, I could actually email this directly to you, right from within Access, because all the office applications now have the ability to email directly from within the application. So let's go ahead and address this to you. And I'm going to CC myself, so I can preview it. And I think you're going to be pretty happy with the results here. Why don't we go and see the results. Let's jump out to Outlook again, I looks like I've got a new email message. And let's open that up. And here we are, an email. You know what, it looks pretty good, right up front. I've got kind of a nice heading. All the styles were maintained. Even the international text, and here's the information I attached. And we are connected live to a database, so I can actually scroll through all of the records right here in email.

(Applause.)

GATES: Right there in email, that's an active web document?

DIXON: That's correct.

GATES: Well, it was pretty amazing how you put that all together. I'll be excited when we get this on the market. Thanks.

DIXON: Thanks a lot, Bill.

(Applause.)

GATES: Well, the power of Office moving to retain enough simplicity so that people can tap into that, is just one of the pitfalls that I spoke about earlier.

The other was probably an even tougher issue, which is privacy. It's one that's not been talked about a lot, because the solutions are fairly complex, and there are a lot of different constituencies involved. Even the term itself refers to a number of different issues, protecting your own information, protecting children, not being flooded by spam mail, making sure that people can't break into information, as well as all of the issues about encryption export. Finally just the idea of transactions, where somebody grab my credit card and use my money if I'm not careful.

Now, one of the challenges here is that it's not as simple as saying that to solve privacy we should just block all information flow. In fact, a lot of this information that people are worried about, even before the Internet and the PC came along, it was being collected, it was on large computers, but it just wasn't as visible to people, nor was it as easy for a broad set of people to access.

But, in order to make the information work in the right ways, we're going to have to define roles for different entities. What should a school be able to look up when they want to hire a teacher, or any other employer? What should your doctor be able to get from your records, or an insurance company? Under what circumstances can a phone company look at the numbers you dial and use that as marketing information? So clearly this idea of defining roles and determining what can be accomplished by different people is a fairly hard step. But, it's a necessary and important step, rather than just saying everything should be blocked.

Now, there are some key principals fortunately, the principal of giving customers control, making the information auditable by the customer. And there's a group called the Online Privacy Alliance, which includes all the technology companies coming together to see how we can get out in front of this, and do it right on behalf of customers. We've got some key standards that have been put together in W3C. And there are even some compliance organizations, like TRUSTe or BBB Online, which will come in and do an audit to make sure that sites are doing the right thing.

So there are actionable things today that will allow privacy not to become the thing that holds us back. One of the key areas that I think is a big weak link today is the use of the password. When you have your password you typically pick something that's easy to guess, or you write it down, or you use the same password on insecure web sites that you use on sites that are very important to you. And so I'm sure there's a lot of problems that are going to come about because of that one weak link.

What's the solution here? Well, it's to have a better form of identification, either a biometrics approach, like voice print, or finger print, or the smart card. And this is an area where Europe is actually moving dramatically faster than the United States. Already they've had many, many millions of smart cards issued. And over time we'll see the smart card reader in the PC keyboard -- probably you will use the same card you use for physical access to your company. That card identification together with a PIN number is a great substitute for the password, as are whatever advances we will continue to see in the biometrics area. So that's one area where I think we're not doing enough. And I think we need very, very inexpensive -- inexpensive smart cards, in order to tackle these issues.

The PC is not standing still in any way. The graphics keep getting better, but the number of things that we're going to be using the PC for will also expand. It will help us manage music. Today there is a relatively significant phenomenon of people downloading music in digital form, and the MP3 format. The music industry is quite concerned that the right mechanisms be put into place to protect their intellectual property. But, I think that is absolutely a solvable problem. And there's a huge benefit when you can organize music any way you want, carry around almost any number of songs on a very small chip, and take it with you wherever you go. So it's a wonderful application that the PC can help with.

Connecting up to your phone system, letting you come in and have voice synthesis so you can dial into your PC, get your email, get your voice mail mixed in. This integration with the telephone activity inside a company, with a common network that can share customer information as calls are transferred, is another area of rapid innovation. Digital photography is something the PC is just growing into performance-wise. The cameras are coming down in price. We need to do the right software, get some new things built into the system and not only for still photography but for videos as well. With the capacities of these hard disks that we are now seeing, where even two-gigabytes is now a very small hard disk, it's not unreasonable to think of PCs and personal companions being able to record very long, high quality video for us.

We're making the PC more effective by having it talk to other devices, and soon things like home control will finally come back into vogue, because the right chips and the right standards are falling into place, and the PC will be at the center of that. One form of control that's kind of fun is these new animatronic toys that can operate on their own, but when you use software on the PC, or even video tapes in some cases, the toy receives a wireless message, and it's able to engage in a very rich play activity for kids of quite a range of ages. And those have proven to be very popular.

Another cool thing is how we're adding new peripherals. Connecting up to everything in the living room, and giving you more realistic devices to work with. One fun example of this that really shows off the graphics as well is something called Motocross Madness. The only way to understand this is to hear about it from Rusty Crank himself. So I'm very excited that he's here, in person, to tell us about Motocross Madness.

(Applause.)

CRANK: Doing a fine job, my man. Nice work in Celebrity Death Match. I didn't know you were that tough. That's some good stuff.

Rusty Crank, super cross super stud, all right. Here to tell you about a new PC controller called the Sidewinder Freestyle Pro, that I actually helped design for the Supercross tour. All right. I see a lot of you out there buying that, but I always say, super cross super studs, we do three things. One, we get big air off big jumps, okay, that's a given. Two, we love to hit on biker magazine babes, all right. We get our free time. And then three, we love to design state of the art PC game controllers that utilize sophisticated, solid state motion sensor technology. Yes, no really, we do, it's pretty fun.

Now, in the story of that technology, the greatest game possibly of all time, is Motocross Madness. Now, the first thing you're going see come up on the screen is a video clip of me and some of my buddies just getting fat on motorcycles. Now, for those of you out there a little modern day slang impaired, fat basically means totally bitchin', all right. So try to stick with me throughout the demo here. Okay.

We've got a number of different racing options that we can choose from. All right. Natural race, this is your classic outdoor motocross. Supercross, the big event in the big city, it's like the King Dome up in Seattle. This guy comes on the radio and says, "Sunday, Sunday, Sunday, we'll sell you the whole seat, but you'll only need the edge." Yes, you've heard him, you've heard him. Baja, this is wave point racing down in Baja, Mexico. Muy grande, muy bien. All right.

And Stunt Quarry, this is really where Rusty became a legend. Just me and a bunch of other bikers, a ton of rocks, getting freaky on motorbikes, all right. Now, we're going to be able to choose from a number of different quarries. We'll stick with Arizona Exploration. We can choose our bicycle, and customize our bike, here go through -- whoever just said we look like Power Rangers is going to get their butt kicked after the show. We do not appreciate that.

Let's go through -- there's Crank right there. All right. We've got to pick a bike, and we're going to get in the game. So the first thing I want you to see is, look how I designed this. Look how it fits in the hands. It's kind of like two stacks of hundred dollar chips that I won from a bunch of suckers playing poker last night. Now, for those of you that haven't gambled yet, I recommend you get your geek butt out of the convention center for a couple of hours and check out a thing they call The Strip, okay.

Sorry man, I get a little emotional with this stuff.

All right, here we go. I turn to the right, it turns to the right, I turn to the left, it turns to the left. That is what it's all about. Now, I'm going to drop in. Look at the awesome 3D graphics clear down to the shadow on the right hand of that -- excuse me for a second while I get some big air. Oh yes. I've got a number of different view points I can choose from. I can go bird's eye, give you a better view of the terrain, or I can go down to first person, which is a pretty intense experience. All right. I know what you all came to see -- separate physics models between the bike and the biker -- it's the only reason I crashed there. Okay.

Rusty Crank getting fat off the big chunks. So hang on for a second. I'm going to cruise over to a little place I like to call Rusty's happy land. There we go. I see a little warm up. There we go. It's right over here. Here's comes the coffee. I think you see it.

So, what do you think, Big G, Mac Nash, Heel Clicker, Superman? We'll figure it out in the air. All right. Here we go, Rusty Crank, Supercross Superstud.

Rusty couldn't pull off the jump. I say, let's see what Big G can do on the cycle, what do you think?

(Applause.)

CRANK: OK. You stick to the Powerpoint presentations, I'll do the game demos.

(Applause.)

CRANK: All right. Microsoft took Rusty Crank out to dinner last night in appreciation for everything I've done for them, obviously. And they're like, Rusty, we know you're Supercross Superstud, but we want you to demo our new Flight Simulator product. I've got a reputation to uphold, right? What kind of stunt can you do in Flight Simulator? Vegas control tower, this is Rusty Crank, I'm flying with one hand.

(Laughter.)

CRANK: How lame is that? But then they told me the thing is going to revolutionize flight simulators for studs like me -- they put guns on the planes. All right. Here we go, Combat Flight Simulator combines the realness of the flight simulator product, with intense World War II aerial combat action. We are right on the bogey right ahead of us. Oh, oh, there he goes.

I'm sorry, did Rusty Crank just shoot down the first plane he saw? I think he did. When Rusty is in the sky, you fly you die. That's the little song I sing after I -- never mind.

But to tell you about realism, let me prove it, all right. Eight different aircraft that you can choose from, and we're talking realism down to the flaps on the wings. Look at that, and the patented Rusty Crank victory roll.

Now I also told you this was built on the Flight Simulator product, so what that means, all these people that are building their own scenery, they're building their own aircraft, they can take them and put them inside the game, okay. So you could dogfight over your house in Redmond, or what Rusty likes to do is modify his aircraft. The number I can choose from, Rusty Crank Lear Jet. It looks like you're paying me a little more for this gaming gig than you thought, huh, Billy Boy?

No Lear Jet would be complete without a couple of rockets. So, we're going to add some rockets, one click, run schemes, Flying Temple of Pain is ready. And we're in a Lear Jet in the middle of World War II. If you don't believe me, there's the Lear Jet, a little custom Rusty paint job. And last, but not least, and the rocket's red glare, the bombs bursting -- all right. Vegas, you have been fat. Bill, you are the man. I am Rusty Crank, and I am out of here.

(Applause.)

GATES: I'm sure that Lear Jet would have come in handy in World War II.

(Laughter.)

GATES: Well, looking down the road, there's a lot of promise for this new PC power. ClearType is just one example of a software advance, which will bring new capabilities to working and learning. I believe there's no conflict between realizing this amazing potential and meeting the challenges of the information age. We can make computers that are more powerful and yet simple enough to respond to plain English commands. We can connect millions, even billions of people together, and yet maintain their privacy. I have no doubt that the best is yet to come.

Thank you.

(Applause and end of event.)