Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
Microsoft Government Leaders Forum Asia 2005
New Delhi, India
December 7, 2005


BILL GATES: Well, thank you. It's fantastic to see the great group attending at this Government Leadership Forum. And I thought I'd focus my remarks on the technology advances that will change even the way we think about computers today. These advances are coming very rapidly. Thirty years ago, of course, there were no personal computers. Microsoft is celebrating its 30th anniversary, and in some ways the vision that we've had is the same as it was 30 years ago, the idea that software would be a key element and that software would run in many different types of devices that would be very low cost and very high volume.

It's probably hard to remember that at that time computers were thought of as something that were really balancing the power in favor of large businesses and central government and not really as favoring individual creativity, individual expression and really allowing for innovative work.

Well, the price reductions that have taken place and the change in the nature of the computers have shifted that very dramatically. Of course, the computer is still a fantastic tool for government, lots of good examples that were discussed here, it's a great tool for large organizations, but, as much as anything, it's a tool for the individual; whether for doing your work or your activities at home, the personal computer with software is really the best tool ever invented to help you communicate, pursue new information and be creative in much better ways.

Only 15 Percent of the Way to a Computer in Every Home in the World

Every several years the power of the personal computer is doubled, and that's why we can say that the machine that we have today is more than a million times as powerful as the personal computer that got Paul Allen and I to start Microsoft 30 years ago. The software has really started to fulfill the dreams we had of the computer being in every home and on every desk. From a numeric point of view, however, it's only in the very rich countries like the United States that we're more than halfway towards achieving that goal. If we take the world at large, we've only achieved about 15 percent of that goal of pervasiveness, and so there is still a lot more to be done.

Fortunately, there's very good progress, and I would say over the next decade things will accelerate, and I want to really highlight some of these changes that are just starting to emerge.

First is to review some of the technology: The microprocessor itself is a very, very key element. The improvement there has not slowed down. Intel, AMD and others have followed that Moore's Law prediction of doubling in power. And it was actually just this year that we first got these machines that are called 64-bit machines. That's a technical capability, but the key point is that the memory size is essentially now unlimited as we move from 32-bit to 64-bit. And yet it's being done without any increase in the equipment, without any difficult incompatibility; in fact, this is the simplest transition we've ever had. Historically, improving the memory capability required changes in the software or extra cost, and this time that did not happen. We'll see that on your server computers will be using that and able to tackle the world's toughest problems.

Historically, you probably thought of personal computers as having the best price performance because of the competitive framework where many companies make personal computers and they're completely compatible with each other, but you didn't think of the personal computer as where you would get the very highest performance. But in the last few years, that too has changed. In fact, just a few weeks ago I keynoted a convention called Supercomputing and talked about how computers based on Microsoft software and the chips that Windows run on were actually providing the highest performance capability in the world for business problems, for scientific problems, for every type of problem there is.

You might ask, if that's the case, why haven't we seen a rapid shift to these low cost computers, and the answer is that because of the software that's been written on traditional machines it will be more than a decade before that transition is largely complete, but year by year the move of applications from the mainframe, from the non-mainstream UNIX-type systems onto the PC server hardware and increasingly onto the software that we build, that will be a general trend.

The wonderful thing there is that as you move to new hardware, the cost of the hardware is often less than the maintenance cost of the hardware it replaces, and so the only thing that's difficult is making sure that you've got the new software system and you can make that transition. The software is also far better, far more flexible, easier to get the information, much better developed tools, but that has to be planned in an orderly way. And so the move towards a very uniform, very high-performance type of computer hardware is a huge benefit that will allow more ambitious applications to be built.

Historically, if you had talked about a database, say, that would have pictures of all the citizens and keep track of all their activities, that would have been a very, very expensive machine; today, for only a few hundred thousand dollars the hardware that's capable of doing that is available.

Shifting Form Factors, Shrinking Prices

So what's the next frontier? Well, certainly we have to tackle the cost of application development, the cost of maintaining these systems, and here, too, the magic of software can come in and make things simpler and make things more automatic.

And so if we think about IT budgets, the idea is to take the portions that go to maintaining existing systems and shift those so they can be invested in new applications.

The form of the computer is changing at the same time. Of course, we've all seen the incredible explosion in mobile phones. These mobile phones are changing from just being voice oriented devices to being very, very software driven. The ability to browse information of all types, to get your e-mail, to organize your schedule, to check any information about the customer you're going to see, all of that is becoming substantially better. And this software centricity actually plays into the strengths that Microsoft has because we can bring these functions to life.

If we think of a cell phone even four years from now, it will have many new capabilities. It will be able to show you a map of your current location, not just a map in the traditional sense, but even a picture of the buildings, show you the routes that you want to go on, virtual reality indicating the current traffic conditions, indicating if there is any of your colleagues who are in the area that you might want to be in touch with, a sense of how long it's going to take you to travel there.

The cell phone, you'll be able to complete transactions because it will be essentially a type of credit card using a new type of wireless approach called NFC that is capable of being built into these phones.

You'll be able to use the camera in some ways that you might not expect. If you have a receipt from a business lunch, you'd take a picture of that, it will be recognized by software and filed in the right expense software. If somebody hands you their business card, just take a photo of it, it will recognize the text and add that to your contact list. If you're in a foreign country and see a sign you'd like to read, just take the picture, the sign would be sent down to software on the Internet, translated and sent back so you can see what the sign is. Even something like purchasing, if you are considering buying a product and want to see the reviews or what the best price is, simply taking a photo of the bar code or the product itself will allow us to recognize it and guide you through that purchasing process, empowering you with extra information.

And so the cell phone will be a very key tool. The photos you take there will automatically show up on your PC, we'll recognize who's who in those photos, help you do that organization in a rich way, and even make them available to the relatives or colleagues that you'd like, with very simple rules.

When people want to call you, instead of thinking about a phone number and which phone number you have at work, at home, they'll simply call you, use your e-mail name to say they want to call you – and software, working on your behalf, will understand what device you have with you, where you are, whether the call from this person is important enough at that time to interrupt you, how much information should be passed to that person about your activity and your schedule, depending on how close your relationship with them is, and all done in a seamless way.

So literally in a year's time we'll look at phone numbers in the same way we look at things like records or film today and realize that those are not the simple way to use the technology.

The PC, of course, is the full-screen device and having the pocket device and the full-screen device, those are very complementary. The full-screen device will be getting smaller. One of the great dreams we have is that every student should have a Tablet PC. In fact, we have some great pilots where that's been going very well. We have work to do; we have to bring the prices down, get more curriculum software done, but we're hard at work on that together with our partners. And eventually the cost of the hardware should be low enough that this is something that even for the cost that you would normally spend on textbooks you'll be able to provide this Tablet PC. And, of course, the course material would be far better than it is on paper, it will be interactive, it will have videos, you can quiz yourself, see the latest thing, the teacher can customize the information, and so it's vastly superior to the way that that works today. So this tablet initiative is something we've been investing in for over a decade and that's very important.

Another big breakthrough is that the way that you receive video, which today is through broadcast, either over the air or over some cable infrastructure, will actually move entirely to the Internet. Why? Because it's able to reuse the same infrastructure that we have for Internet browsing, it's the same Internet infrastructure we'll use for voice calls as well. When you get video onto the Internet, the flexibility is quite phenomenal. For example, if you want to watch a local sports team that would never make it in today's broadcast channel lineup, as long as somebody had a digital camera, that local sports team is there. You can watch it whenever you want; in fact, if it's a game that's fairly slow, you can say to the software, summarize this in, say, 10 minutes, and you'll simply see the highlights, you won't have to sit through the less interesting parts, it's all based on your interests and your time. Likewise, when you watch the news, the sports you care about will be there in depth, the political issues, political areas of importance to you will be covered more thoroughly, and the things that are not of interest will simply be eliminated.

Experiences Redefined

There's a lot of excitement about advertising being done in new and better ways. Today, advertising is incredibly inefficient. If you see a product you're interested in, you can't get more information and find out where it's available. Most ads are presented to people who aren't the target audience, and so in these new form factors, as magazines, newspapers, TV shows are moving onto the Internet, the advertising will be targeted, and the person who wants to sell an expensive sports car will go after the people who might be interested in that, the people who want to sell products to men or women will understand exactly who that viewer is and so it's targeted. If that person wants to know more about the product, they can do that right away, they don't have any problem that they'll miss something in that TV show.

In fact, the creativity to redefine that video experience is something that we're just now beginning. This IPTV or Internet TV is rolling out to millions of customers in the United States, but this is something that will rapidly be a worldwide phenomenon and provide a new generation of video type capabilities. In fact, I was meeting with some entrepreneurs today here in India who want to be leaders in moving this out and showing that the economics work very well in a country like India, and not just in the United States.

A recent product introduction from Microsoft is a videogame and in some ways even though it's about entertainment and playing around, it really illustrates a change in how consumers are working and doing things.

You're all aware that photographs are being done digitally more and more, that film sales are now in a dramatic decline. You're aware that people buy music or hopefully buying it digitally and getting the capabilities there, and so that's far more flexible than what we have today. I've said that video is moving there as well. Well, interactive entertainment, which has mostly been for men who are younger, it's changing as well; it's becoming something that is very sociable, connected up to the broadband. We pioneered this with our original Xbox product that did very well, got us into a No. 2 position, but what was most interesting is what we called Xbox Live, connecting up to the Internet and talking to your friends while playing the games.

In this next generation that we just are bringing out, it's far more powerful than that, because you can not only talk to your friends, you can see your friends, you can have contests, you can be a spectator and watch other people playing, you can talk to your friends even while you're playing, you can connect with them on the PC, you can see what your friends are doing, and you can even download new games, so it's a much richer experience than ever before.

All the products that we've thought of as kind of standalone products are changing to use this service-based approach. Yes, the Xbox 360 is a videogame, but more important than that it's about this idea of connecting up to the network and the value is the network, the community, the breadth of rich things that will be made available in that environment. And so it's a kind of radical change in how we think about these capabilities.

For small businesses, we'll be making it so that they'll have a choice. Instead of only being able to buy a server and install it in their business, they'll be able to connect up through the Internet to capabilities that we offer that we'll do things like back up their files, provide their electronic mail and avoid them having to have as much expertise on site as they have today. And so using that to draw in businesses, increasing the capability, reducing their costs, we're clearly just at the very beginning of that.

Growing Investment and Competition

Microsoft, I'm sure you've heard, we've increased our R&D pretty dramatically, and likewise there's lots of new companies in our industry doing very exciting stuff. This is because of the software centricity that is taking place here, both for work where you want to be able to have insights into numbers and communicate in better ways and for home where you want digital entertainment and the flexibility that comes with that.

These two are very complementary. The advances in usability and security, driving the broadband investments, all of these help both digital lifestyle and digital workstyle. In fact, when people are at work they'll sometimes be organizing their family's schedule and that is helpful to them; obviously when they're at home a lot of the time they'll be doing their work, making sure they're up to date, getting ready for the work the next day; and when they're mobile it will also be a mix of activities.

The personal computer and the mobile phone have never been a pure product that's always just about your family activity or always just about your work activity, and now using software so that you can switch between those two modes and have the right separation and yet the shared interface, that's one of the advances that we're very committed to.

One of the great dreams of software for many decades has been speech recognition and I believe that we're within a few years of having that be a fairly standard feature. The simple way to think about that is that instead of sending an SMS message with so many key punches, you will speak into your phone, you'll see what it recognizes, and you'll only have to use keystrokes if there is some recognition error to pick an alternative choice that will be simply presented to you, and we'll actually be shipping those capabilities over the next year and getting the market response that the reliability has gotten to the level now that that can be something that we just take for granted.

So immense progress in how the software can connect things together and make the world a much smaller place.

For governments this is a great thing; wherever we have people who are well educated, their opportunities will not be limited by their location. I wrote in "The Road Ahead" that recently had its 10th-year anniversary, it's a book I wrote that hopefully some of you saw, I wrote that we'd switch from having the key question you would ask about somebody's income level be what country do you come from to what educational level do you have, and I think the country we're in today is a great example of that. The salaries for the people who have IT skills in this country have been going up very, very substantially, and that's quite appropriate. In fact, the gap is now quite small and over time given the demand that's in the marketplace I don't think there will be a significant gap there at all.

But every country that's built great universities is reaping the benefit of that. If there's any challenge, it's how do you scale that up, maintain the quality, really drive that forward. The world needs those type of educated workers. I can say that very clearly, speaking for Microsoft's point of view, this is an area that more great software developers will let our industry move at an even faster pace.

Great Opportunities, Great Challenges

Now, I've talked about the great opportunities, you all know there are challenges as well. As we're using the Internet, the reliability now becomes a critical issue, the security to make sure that criminals who move into this digital realm can't take advantage of people, whether it's spam or fake bank accounts, these are going to require a lot of new investments and Microsoft has that as its top priority, and yet also working with you in terms of what the laws should be and the sophistication of law enforcement to make sure this doesn't hold back the potential of this digital revolution.

And that's partly one of the things that a dialogue like we have here, we can get to know each other, share the opportunities, share the concerns, share the great examples of e-government projects that are driving transparency and efficiency into that sector of activities, and so it's that kind of excitement and commitment to the future that I think we all share in getting together here.

So again let me thank you for coming, we really appreciate all the feedback you're giving us on the work we do, and it's our commitment to do even better. Thank you. (Applause.)