Remarks by Bill Gates
Microsoft Corporation
Valencia Community College
March 26,1998
Orlando, Florida

MODERATOR: Ladies and gentlemen, please welcome the president of Valencia Community College, Dr. Paul Giannini.

(Applause)

DR. GIANINI: Good morning. On behalf of the Valencia faculty, staff, students and our colleagues at Seminole Community College, I welcome you to a discussion with Bill Gates, chairman and CEO of Microsoft. The colleges are proud to host this event, to share an opportunity for interaction with the world's foremost leader in innovation and business development with members of our district's board of trustees, our elected officials, our business partners and students.

Although time does not permit introductions, we appreciate your support and your participation today.

Just as Microsoft impacts our collective futures with dreams and innovations, community colleges impact student lives by preparing them to fulfill their dreams and to meet the employment requirements of business and industry. We recognize that technology is our partner in this process. Valencia and Seminole are proud to have received Microsoft's approval to participate in its authorized academic training program. Another Valencia technology partnership has been established with Microsoft. Valencia was awarded one of only five national grants for mentoring other community colleges in information technology.

We recognize that at least 80 percent of the jobs in today's market place require computer literacy. As stewards of our taxpayer dollars, we acknowledge the wisdom of our Florida legislators in implementing the performance-based funding, tying college funding to student outcomes, to learning, not to just time in the classroom.

The challenge to prepare students to communicate effectively, think creatively, and to become productive citizens with technological competencies is not just a central Florida issue. It is a national one, as well.

Several years ago, I had the pleasure of sitting on the AACC board of directors that hired Dr. David Pierce. He assumed this leadership role with an exemplary record and continues to make outstanding contributions to all of our colleges. He is to represent community colleges throughout the country as the president of the American Association of Community Colleges, Dr. David Pierce.

(Applause)

DR. PIERCE: Thank you.

I'd like to add my compliments to these two fine, wonderful institutions for combining their efforts today to make this possible. It could not be done by two finer institutions than Seminole and Valencia.

Recently, when "Time" magazine celebrated its 75th anniversary, it asked a number of people from the arts, from science, and from government to reflect on their heroes. The also asked people from business, one person, and I doubt that you would be surprised to know that it was today's speaker, Bill Gates.

It is truly my pleasure to introduce an individual whose name is synonymous with the digital age. As chairman and CEO of Microsoft, Bill Gates has watched in just a couple of decades his vision of a computer in every home and on every desk move from pipe dream to probability.

Today, there are 240 million personal computers around the world. A large majority of those run Microsoft software. As the world becomes smaller and as people become connected together in new and exciting ways, when any kid can get a computer and a modem and then get access to richer libraries than any teacher might ever have expected, we have the genius, drive, the energy, and the dedication of Bill Gates to thank for that.

This year, Microsoft has announced a $7 million program to fund innovative, high-tech training programs at community colleges around the country. The AACC is proud to be Microsoft's partner in that effort, and I'm very pleased to be here at Valencia Community College today, the recipient of one of the mentoring grants to ensure that the resources of this institution, particularly the incredible work of the center for high-tech training for individuals with disabilities, can be applied and shared with other colleges, so the opportunities of the digital age can be shared with people more broadly.

Visionary, innovator, business leader, philanthropist -- those are powerful words to describe a person who is a college drop-out and who hasn't yet hit his mid 40s.

Please welcome a great friend of community colleges, the chairman and CEO of

Microsoft Corporation, Bill Gates. (Applause)

MR. GATES: Thank you.(Applause)

Well, I'm excited to be here this morning and have a chance to show to you some of the amazing things going on in the world of technology and talk about how those are going to change the job market and create opportunities for all of us.

Now, we talk about this as the information age or digital age, the idea being that we'll be able to communicate in new ways. And the chief tool in this age is the personal computer. Over 20 years ago, Gordon Moore, chairman of Intel, talked about the miraculous speed that microprocessor chips would be able to improve. This became known as Moore's law, and it says that every two years, the power of the chip will more than double.

What that means is that in the last 20 years alone, the price of computing has come down by a factor of a million and there are great benefits going on in new product creation. If this had been the case in the airline industry, today we could buy a 747 for the price of a pizza -- (laughter) -- and while I'm sure that'd be handy for all of us -- (laughter) -- that's really what has happened in computing. Computers used to be a tool that only very large organizations could think about using on a centralized basis.

Now, a computer is personal in the same way that the tools of the industrial age magnified our muscle power, these tools are there to magnify our brain power.

The specific advances that have taken place are pretty breathtaking. In fact, I just came from a conference we've had over at the convention center, where we meet on a yearly basis with the PC hardware industry. These are the people like Compaq or like Intel, who build all the elements that go into the PC. And even all those people that compete with each other, we work together

on standards to drive the PC platform forward, whether it's graphics capabilities or plugging in new peripherals, making that easy, which we call plug-and-play, and the rate of improvement is driven by the structure of the industry. It is the most open industry there's ever been -- very different from the computer industry that came before.

Recent advances include things like the very fast chip, 300 megahertz chip, or a better screen. This is really fundamental. We need to get very low cost flat panel displays in order to achieve our full potential.

If you want to switch away from reading on paper to reading off a screen, we've got to have more resolution and you have to be able to carry it around, and in the next five years, I feel certain this will happen.

We have seen certain types of documents move from paper to the screen, things like the encyclopedia are now -- by far the majority of those are sold as CDs that you work off the computer screen. In fact, print encyclopedia sales have gone down quite a bit.

The next set of paper documents to go away will be paper forms. Anything that you fill out, there's no reason to be doing that on paper. It should be done on the screen, where you don't fill out redundant information, you can get more input on what you're doing, and you have the total accuracy, because it immediately goes into the system.

Other advances include amazing storage capacity. It used to be we thought of the storage in these devices as just storing programs and the documents we would type. But now we've got so much capacity that we're able to store high-resolution photos, and in the future we'll be able to store lots of audio as well as motion video. And we will use all that wonderful capacity very well.

We continue to benefit by sharing things with the consumer electronics industry. The first example of that was the CD, compact disc, which is built into virtually every PC today. With in the next few years, we'll move up from the CD to the DVD, which increases the size of what's vailable there by a factor of 10. Again, that gets us up to the motion video capabilities, particularly as we have a DVD that you can read and write the information. You'll be able to edit your own motion video clips and send them around to your friends.

A final area is how we connect these computers together. This Internet has exploded as the set of standards we're going to use to connect all the world's computers. But the wonderful thing, because there was always a question of what the standards would be -- would they be different in different countries or different between companies -- and now it's clear that won't happen.

Connecting businesses up was sort of easy, because where businesses are located, you can run lots of this optic fiber that has unbelievable capacity for sending information. The most difficult part of connecting up are the homes, where it still is too expensive to go and run all the optic fiber. We have to try and take advantage of what we already have there, either the cable system, which is co-axial cable, or the phone wires, which are twisted pair copper. And there are new technologies -- cable modems for the co-ax and a thing called DSL. for the copper wires -- that are promising to be able to give us very high-speed data exchange. So it's not just the slow Internet that you get by dialing up, but it's a very high-speed capability.

So these improvements that have come so rapidly in the last 20 years, for the next 20 years, there will be no slowing down. The price of computing will again drop by a factor of a million, and every scenario you can think of in having the computer as a tool will be able to move on, which leads to what we call the potential of a Web lifestyle. The word "Web" is interchangeable with

Internet. It's really -- although they were distinct initially, now they really mean the same thing.

What do I mean by a Web lifestyle? I mean that you'll use it many, many times a day without thinking about it. And I could stay to you, to be able to live in a phone lifestyle. Now, it sounds strange to say that, because we just take it for granted. Of course we use the phone when we want to call our friends and we use our car when we want to get around places. It's just part of the way things are done.

The Web will be in that same category. If you want to get the latest sports scores, of course that's where you go. If you want to book a cheap airline ticket, if you want to find a new book that came out, search and see what other people are thinking about it. If you want to learn about a medical advance, what's going on with a certain disease, the Web will be the thing you reach out to, and you can find people who have a common interest. You can chat with them. You'll be able to buy products there. You'll be able to play multi-player games, connecting up to people all over the world, and so part of it is the breadth of us that this is going to get.

There's no one thing that will draw people in. You won't be drawn in just to do your taxes electronically or just to do your banking or just to get the news. If all of those things got together in the same way as the phone -- you don't use it just to call a few people. It connects up everywhere. The Web you do the same way. Everyone will have electronic mail. We'll do electronic mail all the time and rely on it.

And we can already see this beginning. The levels of investment here are really high and it's starting out in the business world so that it'll move out so that everybody even at home is connected up.

Now, the PC as it improves is going to get smaller. The machines will be a much higher part of the mix than they are today, but we'll also see some new form factors. We came out a year ago with a thing called a hand-held PC that you see in the upper left there. That's got a nice color

screen. People like HP, Sharp, and Compaq are making those. And they don't have the full power of the PC, but they're cheaper and easy to carry around. You can look at your mail, your address book, your schedule, and they make it easy to exchange information so you don't have to give a lot of commands to make sure it's up to date on this smaller device.

A new form factor is going to be the palm PC. Here we drop the keyboard and we let you actually write on the screen with a little pen you can see that's touch sensitive, so you can select options where you can do handwriting and update it into the computer.

Another new form will be a computer in your car. This is there to help tell you about traffic or let you get news information or call somebody up just by saying their name. This is the first time we've used speech input as the standard way of driving the computer, and this will be available as an option for cars by the end of the year and then built in as a standard option probably within three to four years.

A final new form factor is the idea of attaching a box with electronics to your TV set and then allowing the TV set to be interactive, to let it connect you up to the Web, and the product here is called Web TV. That's proving to be very popular -- a nice, simple interface, very low cost, and yet drawing people in so that they're on the Web and can get all that information.

Now, one of the things that we need to do a lot better is to make it simple to install most of these devices. A lot of commands today -- it's quite complicated. In fact, we made a little video that shows some of the experiences people are having getting these things set up. Let's go ahead and take a look at what this is like today.

(Videotape plays)

(Applause)

MR. GATES: There's a lot of work still to be done to make all those pieces come together.

We're going out and really looking at where the complexity comes in -- upgrading, learning new products, exploring to find information, understanding where the files are, how they work. Simple things like going through all the error messages we have and thinking through how we could guide the person in a better way or even eliminate that error condition coming up.

Now, this one is one of my favorites. It says: The DHCP client cannot obtain an IP address. If you want to see DHCP messages in the future, choose Yes. Otherwise, choose No.

Well, that yes or no thing, people understand that part, but what does DHCP -- (laughter) -- and, you know, you're sure going to miss these messages if you don't get them in the future. And so it's a perfect example of something that software has got to do a lot better.

We can do this totally by getting rid of commands. Today you know different interfaces for browsing the Web, browsing your mail, browsing your files, browsing the help. All those things are different commands. The way you search, the names you use, the way you organize things are all very complex. If we can get one interface for this, then we can have it be a powerful interface that applies all the different types of information, and you won't have to think about moving things from one area to the other, all the different capabilities.

And we're taking a big step towards that with the next release of Windows, where we do get rid of help and build it into a browser, and we do make file browsing use the browser. The next stage is to collapse electronic mail in, and that's in the next big round.

So less commands, less formats, and the computer will be easier to master.

Now, when organizations think about this, they don't just think about individual usage, but they think how can the company as a whole gets a competitive advantage by using these systems? Today they're buying PCs and networking them together. Virtually everyone who is a knowledge worker or desk-type worker is getting PC technology. And yet companies have not really stepped back and thought through where this could help them out.

For example, things like paper forms inside the company -- they should just get rid of them. At Microsoft, I asked for all the paper forms to be dropped, and I was pretty startled that we'd accumulated over a thousand different forms. And I said, "Nope, no more of these," and within a few months, we were off and running with a pure screen-based system.

Things like payroll options, where you would have had to all up the department and get different forms and fill them out, now you just type payroll in when you're at your computer screen and you see full descriptions, and it's a lot easier and a lot more efficient.

Other things you can do better on using this approach include things like sales budgeting, sales analysis. My view is that as soon as a number's printed on a piece of paper, you can't really work with it. If it's on the computer screen, say a sales number, you can point and say, "Break it down by time period or product or salesperson," and really understand what's going on, and then take your view of that data and mail it off to other people so you can collaborate on what changes you might want to make.

For the electronic approach, it requires top management to really think it through, particularly in today's environment, where you've got fast changes in the economy and competitive conditions, you've got to be able to react to unplanned events -- get all the information about an issue in one place, get people who are in different locations discussing that and even very rapidly coming up with a decision that gives you a competitive advantage.

Now, Microsoft's role here is a central role in providing some of the key software building blocks. The reason there's a PC industry where people can select different types of hardware is because Windows hides all the differences in that hardware, and we've spent hundreds of millions every year to go out and help people to write software on top of Windows.

Now, the volume of Windows has meant that that's very attractive. The software industry is 10 times as large today as it was before Microsoft came along and built these high-volume platforms.

Our other key products are our Office and Back Office products, and we're doing a lot of investment on the Web to try out new sites, things like a car-buying site called Car Point, or a travel reservation site called Expedia.

Many of the things we do span different products, and there's really four key initiatives that we're driving. In 1996, it was the Internet. That was our top priority, and we've come a long ways into building Internet support into our products. Today I'd say it's simplicity and cost of ownership. We can think of that as either one or two initiatives -- they're very closely related to each other -- making it so that say you want to upgrade to a new PC, how do you get all your files from that PC over to the new PC?

Well, it's very difficult today. Very simple scenario, we can make that easy, and in our next releases, we do.

Finally, we've got scalability, making sure that PCs aren't just low end, that they can take on even the most demanding things that a big bank or any other organization would want, and we're very close to fulfilling that goal, and the improvements are very rapid.

One of the interesting things about the technology business is how broadly it touches the economy. When you think of somebody like a car manufacturer, you think, "Well, that's not high technology." Well, in fact, it really is. The way that they do car design today requires using computer technology, and that makes all the difference for them, the way that they look at customer demand and manage all their factory operations, including communicating with their

suppliers -- it's very much using high technology. So we do a lot for the manufacturing part of the economy. Using these tools will make the difference in their success.

Even areas like farming, looking out and seeing what the futures prices are and getting advice through the Internet is going to become necessary for farmers who want to be as efficient as possible, and so jobs of all types will require a comfort and familiarity with these tools. In fact, there's a shortage today of trained workers in the IT industry. When you have a shortage, it's kind of hard to measure. There's no doubt there's a pretty substantial shortage, and this is where over 80 percent of new jobs will be created, and so it's a great thing to come up with a way of closing the skills gap that's out there.

One of the ways to do this, of course, is to have computers as part of the curriculum, even for kids at a very young age. Another way is to have computers available in libraries -- libraries played a central role as society decided everybody should have books and have a chance to read great books, and that was a fantastic success. People almost take it for granted today, but it has an incredible ongoing importance, not only for books but now for technology accessibility for everybody, as well.

A key place to start is for people who are graduating from high school and moving on to the community colleges. These young people are thinking about different jobs that they might want to go after that involve computer skills. We've been working with community colleges in particular because of their central role here.

Microsoft picked community colleges as our top priority for outreach about a year ago, and at the time, I knew that community colleges were very important, but I've been even more impressed as I've learned a lot about the breadth and depth of what goes on and how responsive these institutions have become to the various community needs. They're very pervasive in the United States. Ninety percent of the population is near a community college, and I think they're going to play the major role in training the work force for this next century.

Now, we have a number of programs -- I won't go into them in much depth. As we've started these partnerships with community colleges, the key thing has been to say to them that we've got software, we've got the ability to provide some grants. How can we help you?

And one of the things that came out of that is an academic authorized training program. Like everything else, we've shortened it down to the initials, because we're big on acronyms, so this is our AATP program, and it's very straightforward. It provides technology, helps develop curriculum, helps provide loans for certification, and we've got good participation here --

Seminole and 600 other schools are involved in that.

The Skills 2000 part is really helping provide a matching capability using technology so employers can indicate what they'd like to see and then make sure that those are the things that are getting done.

We're working in all our community college activities through the American Association of Community Colleges. The programs we've already announced are about seven million dollars in high-tech funding, and we're particularly targeting areas where we can help make the difference in having technology be available.

Now, we don't have a master plan for exactly how this works, because in each community the funds will be used in different ways. One of the great programs to come out of this is a mentor approach, which is something Valencia is one of five that we've really implemented this with. It's where these colleges can spread best practices. Here one great example of that is the high-tech training for individuals with disabilities. I was able to go through and meet some of the students and see the things going on there.

I have to say it's very motivational to be involved in an industry where you can create tools that help provide great opportunities for everybody, including people with disabilities. There's a lot of special software work we do for them. There's a lot more that can be done, but we've come a long way with that software, and I was glad to see that it's actually -- people are taking advantage of that. So there are great careers that are going to come out of that. That's really the good that we have by being involved.

Now, the computer is going to be getting a lot better over the years. You can think, "What are we going to do with a computer that's 10 times faster or a hundred times faster, not to mention a million times faster?" What are we going to do with it that's very, very inexpensive? How are we going to navigate that world of information? How can we make it so people of all ages enjoy working with it?

Well, probably the answer is to make the interface far more natural than it is today. Today's computers, you have to use the keyboard. That's the only way of getting information in to them. We need to supplement that by being able to talk to the computer and by having it support handwriting recognition. In fact, I really believe that the tablet computer will be the popular form

factor once we get all the pieces to come together -- software, hardware, including the recognition capability.

So when our grandchildren are asking us, you know, what were computers like 20 years ago, we won't be able to say what they did, because, you know, they didn't see, they didn't speak, they didn't listen, they were just kind of these weird things that you had to learn a lot of complex things to work with, but that computer 20 years from now will have evolved in a compatible way out of today's PC, and so software built into Windows will add in these capabilities of seeing, listening, and learning.

In fact, I brought another short little video -- not quite as fun as the last one -- but this is one where we've got some of our researchers talking about what they're doing to improve the computer interface, so let's go ahead and take a quick look at that.

(Videotape plays)

(Applause)

MR. GATES: Because of opportunities to make such dramatic breakthroughs that we're constantly increasing our R&D spending. In this year, we'll spend about 2.6 billion dollars, and that's up about a factor of 10 since 1990. So it's a real indication of our belief in the future, radical improvements which are still to come.

So what are the opportunities, looking at today? Well, the PC and getting people to feel comfortable with it, think of it as a helpful tool, that's a very important mission. It just gets more important as time goes forward. There's a big payoff in terms of the jobs that are out there. These are good jobs, fun jobs, jobs that pay well, jobs that I think are enviable jobs -- certainly if you look around our campus, I think people are having a lot of fun working in these areas.

Community colleges are absolutely essential to how the skills gap and getting this broad awareness, how that's going to take place. I'm sure there's a lot we're going to learn about strengthening those partnerships as we move forward in the years ahead, and for Microsoft as a company, getting feedback about simplicity and where we should focus, that's really what guides us. You know, we've got so many neat ideas about where we could go that we're really picking priorities and making sure we're staying in touch. That requires the input that computers are so great providing to us.

So it's a very exciting time, and we look forward to continuing our work together.

Thank you. (Applause)

So now we've got time for some questions from people. I'd like to ask Dr. Ann Magee, who's the president of Seminole Community College, to come on up and help moderate the question and answer time. (Applause)

DR. McGee: This is going to be the interactive part, where you're going to get to go to one of the two microphones on either side of the room, and I'll ask Bill if he'd join me over here. Let's be very casual. If you'll notice, all the educators are in suits. Bill is dressed down, obviously.

As you move to the microphone, I just want to say that over the last 10 years, you and Microsoft have given $270 million primarily to education and technology. Thank you. (Applause)

And it's kind of a lead-off question. In the road ahead, you talked about education being the best investment, and obviously you've done that over the years, but you talked about the bright future for teachers, and I know we've got a lot of teachers in the audience here, since you're on a community college campus. Maybe you'd just like to elaborate about technology and that bright future you see for teachers.

MR. GATES: Well, one of the concerns that I have is that in some ways when technology comes along, people have suggested that it plays off against the role with the teacher, and that's not the case at all. The teacher has got to teach this as a tool, the kind of motivation, group activities we want to have. But only the teacher can make that come together and really inspire the kids.

And so I think as society gets richer, as there's more resources to go around, we are going to dedicate more to education, and that means, hopefully, smaller class sizes as well as having the technology in place there.

There are some amazing things that teachers are doing when they get access to the resources. The most dramatic are things like a laptop program, where some schools actually get a laptop computer for every student and therefore the kids are able to use it at home, so they don't have to wait in line and worry that they won't understand it during the period they have using that lab

computer.

So there's a lot to be learned by the role of teachers to help define this and then be able to share ideas using the Internet. One of the neatest things about this technology is that best practices can be shared better because you can find other teachers who are doing similar things, see what material they're using and bring that down to use it yourself. If you improve it, you can put it back up on the network and you get a community of teachers who are driving towards the idea of having really put technology into use in a way that ends up helping out.

So, you know, teachers have got to make it happen, and it's great to see some of them really taking leadership there.

DR. McGee: Okay. Do you want to start over here with the first question, if you would,

please?

Q -- (inaudible) -- question. The first part of it is that how can we the people as your greatest fans help get the feds off your back -- (laughter and applause) -- the second part of that question, Bill, is -- I'm John Webb, CEO of System One Technical, and we were fortunate enough this year in the Inc. 500 to be compared to Microsoft.

I am in the staffing industry, and I agree totally with what you're doing with community colleges. What can the staffing industry do to help provide incremental skills training to get us where we need to go in the next 10 years?

MR. GATES: When you say "staffing," that's -- you help people find positions?

Q: Yes. We put people out primarily on contract consulting assignments around the country --

MR. GATES: Oh, sure.

Q: And they do a lot of work in Windows NT and other areas, very Microsoft oriented. And one of the things that we see is that there's a void between what the colleges can provide and what industry needs, and I was curious of your view of what we can do more of to provide that incremental training.

MR. GATES: Okay. Great. In terms of the government, you know, it's an interesting topic -- (laughter) -- the key issue that's being discussed is whether we're allowed to continue to integrate new functionality into the operating system. Something like a browser was separate from the operating system -- like every feature, graphics or fonts or memory management -- we started off with it being something that -- it's not mainstream, and so it sells separately.

But then as the power of the PC comes up, as developers want to take advantage of it, you want to integrate it in so you get it with the operating system, and that's been the history of operating systems.

Here for the first time, we actually have the Department of Justice questioning our ability to put in the new features, in particular Internet support. And so we're going to be doing a lot of education. People ask why did we choose to put Internet support in, why did developers want that, why did end users want that, and once we're getting that message out there, then we'll go around and implore people to say, "Hey, this is a good thing. Shouldn't that be allowed?"

I hope this doesn't become a big political thing where we have to ask you to people to write to their congressperson or things like that, but there are events that people like Ralph Nader organize. There are, you know, some people who really think this freedom is worth preserving can go in and speak and others who think it's not worth preserving may be there as well.

So there are ways of being supportive and -- but I also think we have to get the message out there about what the issue is. Today for people, it's just too complex to understand what is at stake here, and so we're going to take the steps to make that very, very clear.

In terms of the -- this skills gap, I do hope that over time the Internet becomes a place where we can start to see more explicitly what the demands are and people can respond to that. I mean, right now, you have to say, "What are all the part-time jobs that are available? What are all the full-time jobs that are available? What sort of contractors would people like to have come in?"

You don't see that in one place, so it's a poorly mediated market, and I actually think by going out onto the Internet and putting out what you've got available or the demands you're seeing, then we'll start to get that information back into the community colleges, and I think we'll be impressed

at how responsive they'll be.

I mean, it's a simple equation. If they can teach somebody in a way that gets them a job, they're going to do it, particularly if they have the resources and the equipment, and for these jobs, you know, you certainly have to have state-of-the-art personal computers, and that's putting a strain on the budget, so we have to be supportive politically to make sure those resources are put there.

But I'd say there is good progress year by year, and events like this are raising the visibility of the need and the opportunity.

Q: Thank you.

DR. McGee: Business support for community colleges is critical. I'll just put that plug in there on behalf of Paul and myself.

Let's go over here to this side of the room, if you would, please.

Q: Yes. Mr. Gates, I appreciate your coming here to Valencia Community College. I teach a class online, and it's a very interesting and a very dynamic way of doing instruction, and I know that technology is constantly improving. What at Microsoft are you doing and your people are doing to improve online education so that distance education can be available to almost

anybody?

MR. GATES: Well, the ability to essentially do tele-learning by having video hookups across the Internet, there's a real opportunity there. Some states have actually built up their own fiber optic networks to make sure you can connect up to different classes and even participate by asking questions and almost being right there in the classroom. It's not equivalent, and it won't be -- in the foreseeable future, it'll always be better to have people in one place, where you can get a little bit more of a sense of what people are thinking or doing.

But where distance doesn't allow for that, the network can hook things in and even allow the class lectures to be saved, so that if they're not available at the same time, they can call those up and using Natural or some other technical approach, get those things across the Internet.

So wide availability of the course presentations, wide availability of courses and tutorial information and I think there are some real breakthroughs that can be made in using these tools for education. I think we're just now getting them out there for smart educators to start to think creatively about how this works.

It does require the high bandwidth to get the video, so that's not everywhere, but it will be everywhere, so now's the time to really think hard about how to use it in the best way.

Q: Thank you.

DR. McGee: Let's go back on the other side.

Q: Thank you. My name is Al Zone. I teach economics here at Valencia. I have two tough questions for you. As a young entrepreneur, I want to know which work force skill helped you the most in starting Microsoft and, as a CEO, I'd like to know which work force skills you look for mostly in your prospective employees.

MR. GATES: Great. Well, I think I was very lucky to have parents who encouraged me to read quite a bit. I think having the desire to learn new things and a fair degree of confidence that you can learn new things is pretty fundamental.

Certainly when Microsoft got started, we were leaving school, we were hiring our friends, we were negotiating contracts -- lots of things that seemed fairly complicated. But our enthusiasm about what we were doing and our confidence really allowed us to it without thinking twice. I mean, we weren't afraid or anything, we just were doing it.

We loved writing software, and the idea that we could even bring in our friends and make money doing it was kind of just a dream come true. And as we look through other people to come into the company, we've been pretty clear that we like to get people who share our vision for what can be done with computers, people who are quite energetic, really willing to learn new things.

We don't care that much about the specific skills, because in the world of computers, there's always new things coming along, so a basic sort of energy and intelligence for learning new things is really what we try and draw in, and we ask people about projects that they've worked on and get them to describe, you know, what did you like about the project? What did you think

about the project? And you can really get a sense, did they think about just their piece or did they understand it overall? To the degree the project didn't have the impact they expected, you know, were they realistic about that? And how would they see doing it again?

And just as you talk through that with somebody, you get a sense of their, you know, interest in creating a complete model of what's going on in the world and so, you know, energy and interest in learning new things I think are two things we look for in all our hires.

Q: Thank you, sir.

DR. McGee: Let's go back over to this side.

Q: Mr. Gates, I'm -- my name is Carol Janz, and I work on Valencia's west campus. I'm very much aware of computers in the classroom. I see them every day.

I'm more amazed at the fact that my grandchildren are operating computers on a regular basis as young as kindergarten and first and second grade. Some of what they know is probably more advanced than what I know.

But what I'd like to know, in your projection with the cost of computers coming down, what year do you think they'll be about $500 so every home could actually purchase one?

MR. GATES: Well, there's two cost components to be considered today. One is the cost of the hardware, where you actually can get a very reasonable machine for under a thousand dollars today, and that would come down to 800 dollars or even $600 in the next three or four years.

Now, if you add back in getting a printer and all the software you want, it's still going to be, you know, getting close to a thousand dollars.

The other component of cost is that if you want to hook up to the Internet, then there's a monthly connection fee that you have to pay, and now some people choose to get a PC and not connect up to the Internet, which is fine, but you do give up some of the neat new things that are possible for the computer, and so that $20 a month is on top of actually buying the hardware.

We do have this Web TV that is very inexpensive. It's actually $99 for the less expensive program and $199 for the so-called Plus, but then you still have to pay those connection fees.

All of these prices will come down, but I think in terms of the connection fees, it will be a while before those come down dramatically and, you know, five (hundred dollars), $600, that's realistic within say a three- or four- year time frame for the PC itself.

Q: Thank you.

DR. McGee: As a follow-up question, I'd like to ask you, if you were six years old and in first grade now, looking into your crystal ball and using your vision, what is life going to be like when you're in high school and college and beyond, if you're in first grade now?

MR. GATES: Well, those kids are very lucky, because they'll grow up with a expectation that information is available, that, you know, if a relative of theirs has a certain disease, they just go on to the Internet, learn about it, find out what's going on, how they can help. If they're curious about, you know, the federal budget, they can dive in and get the information. (Laughter) Maybe they're not curious about that. Maybe they're curious about other things.

You know, if they read about a court case, they can literally go in and see the depositions and the filings -- anything that they want to learn, they'll say, "Hey, I can find out about this. I can find other kids who are interested and I can chat about these things," and so they're -- I think there is a potential that they'll be able to realize more of it almost better than the most privileged student would have had in the past.

Where, you know, reading the encyclopedia used to be pretty tedious, completely alphabetic. Why I did it -- (laughter) -- but, you know, it kind of jumbled together all the different chronologies and topics and things like that. Here, when you have Encarta or some other encyclopedia, you can have it quiz you in a particular area to see what you understand, what you don't understand, go back and look at those things, and so it's all kind of fun to use.

So I think they'll just grow up, you know, thinking of electronic mail, thinking of the Internet as a given and then be very creative about how they move into the work force, they help the companies they get involved with wanting to do all that.

Most big changes, there were many generations that turned over, basically, before the technology was mainstreamed, so, you know, if you were born when the plane was invented, you didn't have to think of it as mainstream. Maybe your children or grandchildren did.

Here computers is happening so fast, it's really within the span of a generation, and so, you know, we want everybody to get involved and we do see older people who are heavy users, so we don't want to just say, "Oh, only kids are good at this. No one else is good at it." They are better, we have to admit, but it's mainly because they're willing to take the time to try out and be confused for a little while, whereas adults are very hesitant to look foolish and try it out.

And so I do encourage people, you know, give it four or five hours to learn how to use mail and browse the Internet, and I think you'll find somebody who can show that to you in terms of topics you care about, you'll find that it's very worthwhile quite rapidly.

DR. McGee: Thank you. Let's go back over to this side of the room.

Q: Mr. Gates, my name is Silvio Mandani. I'm a graphics student here at Valencia. My question to you is this: What plans, if any, does Microsoft have to develop tools for the desktop publishing industry?

MR. GATES: Well, desktop publishing, there's a broad set of applications there. We actually have the highest volume, a desktop publishing package called Microsoft Publisher, and it's really very capable. We've got capabilities that match what the very high-end packages would have had only a few years ago.

At the very high end, the dominant packages are, of course, Adobe and Quark have between them, I think, about 90 percent market share of the high end. We have the majority market share of the low end, and low end, as I say, includes some pretty incredible capabilities.

We're not planning to go up into the high-end area. We work very closely with Adobe and with Quark on their packages. They're doing a better and better job of taking advantage of Windows in the work that they do.

We are doing some high-end drawing software, and so you will see us as a competitor in that category, where we haven't been before, but that won't be out for, oh, probably another year before we get that into the market place.

DR. McGee: This is going to be our last question, so let's go to this side.

Q: My name is Cheryl Barker, and I'm a student over here at Valencia's East Campus. I just wanted to know how far do you think you're going to be able to with total communication over the Internet? Are you going to have audio and visual communication? And, if so, how soon and how expensive is it going to be?

MR. GATES: Great. The answer is, yes, we're going all the way in the sense that the Internet should be able to replace all the other communications networks, so that if you want to get a video, whether it's a movie or a lecture, the Internet will give you that. If you want to download a music album and organize it according to your own personal tastes, you should be able to do that. If you want to do a long-distance phone call and share things on the screen, where you're editing documents together and talking to somebody at the same time, that should be possible.

The actual long-distance connections are not a problem, because they're using fiber and the amount of data we can send over those fibers is so amazing. The hard part is the part -- the last mile that connects you into the backbone of the Internet.

Now on campuses like in this location, you will be able to get these very high-speed connections. But as you get out to small businesses or to home, that's going to be very tough, and so I think it'll be many years before it's cheap enough that you'll have those video connections.

We are working with the cable companies and the phone companies to provide this, and in some neighborhoods, the cable companies already provide this capability to have video on demand -- watching movies, connecting up to the Internet at high speed.

So I think it's safe to say that for business in the next five years, that'll all come through, and residences, with a little bit of luck, within 10 years will make it available.

DR. McGee: In "The Road Ahead," Bill talks about the fact that eventually there'll be less concern with diplomas and more concern with life-long learning, and I would submit to you on behalf of our community colleges, the community colleges are there and they very much thank you for your support and thank you for being here today.

Give him a round of applause.(Applause)