INTERVIEW:
Question 1
How will the computer influence the times we are living in?
Answer
This is certainly a very exciting time not only in the computer business but in the whole
world dealing with information. People talk about this as the information age and I think
it's becoming clear now that the PC together with Windows, low cost communications, and
Internet standards form the core of what will be not only a new way of doing business but
a new way of learning and even entertaining ourselves over the years to come.
Question 2
How do you see the PC market developing ?
Answer
Over the last year the PC sold over 50 million units and over the next 5 years it is
expected to go well to over 100 million units. It is phenomenal in an industry this large
to see substantial growth like that. Part of the explanation is what we call the PC
success loop. The more machines that get sold, the more attractive it is to new software
developers to invest in building applications. Now, the word application means many
things, because publishing pages on the Internet, coming up with a CD-ROM, moving anything
into electronic form that works on the PC belongs in that category. The more PCs, the more
attractive that is. But conversely, the more of that that gets done, the more attractive
the PC is as a tool, so both in business and on more and more desktops the PC is becoming
increasingly popular. This incredible volume is leading to very rapid innovation and rapid
price reductions. The industry structure that has grown up around the PC is very
different. It is very competitive. Customers have a choice of who to buy hardware from,
with 100s of different manufacturers. They can buy the fastest machine, the cheapest
machine, the largest machine, and every machine they buy can be from someone different and
it has no effect on the hardware strategy or the access to the very best in hardware
add-ons and the latest that the software industry is creating. The pace of the dance is,
if anything, going to be faster in the next decade than it was in the last decade. Just
looking at one level of this - the microprocessor itself - it is the miracle technology
that made it all happen. This is the reason that 20 years ago I dropped out of Harvard
University and together with Paul Allen formed Microsoft, believing that there was a role
for great software in the use of computers as an individual tool.
Question 3
Will the power of the PC continue to increase at the same rate?
Answer
Last year only about 20 % of computers were Pentium-based and the average speed was 75
megahertz. This year over 60 % will be Pentium-based and the average speed will be much
greater than 100 megahertz. And this year for the first time we will see machines based on
the next generation, the P6, and by doing multiprocessor P6 machines with Windows NT, we
get performance that not only goes beyond the most powerful minicomputer of all time, it
even covers almost all the space that the mainframe covered in the past. Anybody doing new
applications will find the tools, the best performance will come from the industry that
grew up around the microprocessor. Intel is not the only company doing great work here.
Our commitment is that no matter what happens in chips, we're going to support it with
Windows and so the CD that we ship Windows NT on includes a mixed version, an alpha
version, a power PC version, and we will add to that any architecture that gains in
popularity.
Question 4
The hardware will have to keep up.
Answer
The hardware is also advancing. Write-once CD-drives are becoming very inexpensive. This
is the media for allowing companies even in low volume to distribute information on these
large disks. The graphic subsystem is improving and there is a step forward that we are
working with some hardware people that will actually go beyond a $200,000 silicon graphics
type machine, but do it in a PC with no increase in cost. So MPEG 2 video for high quality
movies, video conferencing, advance 3-D graphics and animation will become standard in the
PC the same way it that sound and CD have over the last few years. The software industry
is also very competitive. The prices are coming down, the power of the products is
improving, a lot of neat, new integration that makes it easier to get at the power that
many of these products have always had
Question 5
Microsoft dominates the software industry. What is your strategy for the future?
Answer
The key theme really here for me today is this idea of the PC as a communications tool. If
there is anything that marks a boundary between the last 20 years and the next 20 years,
it is the arrival of the PC in that world. And it means that in the same way we worked
with chip companies and systems companies in the past, now we'll be working with
telecommunication companies. Like in the past, we won't get involved in those industries,
we won't own any wires or frequencies, but rather we'll work in partnership to get them to
invest in the infrastructure that will allow communications to be almost free in the same
way that the price of computing is so low cost today. The infrastructure we have got is
very different from a decade ago. Companies are far more specialised and working within
broad industry standards rather than standards that only apply to one kind of hardware.
The three middle layers you're all very familiar with - microprocessor companies, system
companies, and software companies.
Question 6
Transmission speed on the networks determines the use of PCs as a communication tool. How
will transmission speeds develop?
Answer
There are really three generations of communications capability for wide area networks.
There is today's phone lines; we call that narrow band. We'll see one more major
improvement as we go up to 28,800 modems that support simultaneous voice data. A very
major improvement. It makes not only text but still image delivery - which you see so much
on the Internet - have a very good speed, and being able to bring the voice into that
allows for a rich level of co-operation. That is today's infrastructure. The next step for
the wide area is mid-band. That is primarily ISDN but also the PC cable modem. We are
working with phone companies around the world to bring the price of ISDN down so that
they'll get millions of PCs connected up. ISDN makes still picture transmission across the
Internet excellent and for the first time it brings in the ability to provide motion
video, although at just an adequate level. The final step, which will take some time
before it arrives to every screen on the planet, is broad band. That is a level of speed
where motion video is excellent and so you can watch movies. That requires 10 megabytes of
transmission and it won't happen as quickly as some visionaries said that it would, but I
think within a decade we will see that in large numbers. The challenge there is to develop
the applications so that not only do we want to hook up the PCs but also TV screens and
reach out to a lot of homes, and so we are investing very heavily in that.
Question 7
What role will service providers play in the computer industry?
Answer
Going back, the top layer in this structure are solution providers. The intense
competition for the building blocks, whether it is the hardware or the software, makes
them very inexpensive, but it still doesn't answer the question of how does an individual
company get a business benefit out of these. All of these companies, and there are lots of
large ones and small ones, that are coming in to help with that, we call solution
providers. They are the ones who can take the unique circumstance of every business and
the existing systems and figure out how to apply the innovative technology in a way that
really makes a competitive difference.
Question 8
Windows 95 is finally on sale. What is the difference between Windows 95 and Windows NT?
Answer
Windows is one of those building blocks. Whenever we think about Windows it is important
to remember it's a family strategy. We have NT on the high end with a rich power and
Windows 95 is the high-volume product. Windows 95 is off to a great start, far better than
we would have expected. Perhaps even more importantly for this group is the momentum that
is building towards Windows NT. Operating systems take a long time to move from
introduction to high market share. By 1990 it was obvious to us that Windows would
permeate the desktop. And I would say we're in exactly that same situation today with
Windows NT in terms of pioneering customers, great tools, powerful applications from SAT
to all of the state of the art client-server work, NT is gathering momentum. It was
designed to be a superset of uniques, a superset of netware for networking in a superset
of Windows. By starting from scratch we were able to bring those three things together. So
it is rather amazing to us that one of the big questions we're getting now from customers
is when should they use Windows 95 and when should they use Windows NT. There are some
fairly clear answers there. Only people who need the unique features of Windows NT should
apply that, but for lots of customers that is starting to make sense even though the high
volume platform will be Windows 95. With Windows we covering a wide range of needs from
consumers to the desktop to the enterprise. That is why the two products are necessary.
And it will be a long time before a single product can meet all of these needs. Certainly
at a minimum the typical machine would have to be 16 to 24 megabytes. And with the price
of memory somewhat plateaued; that is at least several years in front of us.
Question 9
Can you talk a little about client-server architecture?
Answer
The term client-server is a term that has been used a lot in the industry, but to be
frank, the adoption has been slower than most people predicted. Part of the reason is that
developing these applications is very hard. A few things are easy: if you want to do just
a front end to a relational data base, there are some excellent tools for that; that works
very well, but if you want to write code on both sides, code on the server for business,
and code on the desktop for the presentation, getting those two things to work together,
being able to debug them and get the performance right, maybe move one piece from the
server down to the client or vice versa to be flexible, that has been very, very hard. We
believe that by having the same applications and interface, the same security model, the
same directory model on the desktop and server that we can accelerate the movement to
client-server. That is why we believe that the success that we are seeing for Windows 95
helps with NT. Now in NT we are building a set of services that today people think of as
separate just like they used to think of Word and Excel and Powerpoint as very separate,
but today over 80 % of our sales there is in the integrated offering of Office. We have
announced Back Office as the integration of these pieces. What this means is that instead
of thinking of electronic mail and how to administer that, file sharing and how to
administer that, software distribution and how to administer that, data base and how to do
that, Internet server and security wall and how to deal with that, fax, telephony, you
won't think of those as separate products, because it's too complicated to program, to
manage, to learn, to install - it just isn't possible. We need an integration to create a
business server that has every one of those things at very low cost. That is our
commitment, that is the investment we are making in moving towards Back Office as an
integrated suite.
Question 10
What do you think of the Internet phenomenon?
Answer
The Internet is an amazing and exciting phenomenon which will drive a growth in the usage
of PCs that will fulfil that 100 million unit a year forecast. It is wonderful to see how
many companies are coming out to try and take all the weaknesses of the Internet, and
there are many weakness today, including incredible security problems. If you get mail
that appears to come from me on the Internet, I'm sorry to say that there is a 90 % chance
it is not from me, particularly if it is not a nice piece of mail, then it is certainly
not from me. There are a lot of people out there pretending to be whoever they choose to.
That lack of security, the lack of standards for transactions, the difficulty in finding
your way around, the lack of a business model that justifies people investing large
amounts to publish in this environment, a lot that's missing there, but throughout our
product line we're doing our best to be one of the companies that pushes that forward.
Office is a fine example. We use Word as a publishing tool. And so all the Internet pages
we have we work with Word and use that and you just save an HTML and it's out there and
ready.
Question 11
The Internet was initially a communications network for academics. How will it be used by
business?
Answer
For corporations the first agenda item is to think how they want to move data inside their
company and the PC can facilitate that. I can guarantee that part of that solution
includes having enterprise-wide electronic mail. There is one straightforward answer which
is: unless you're using pervasive electronic mail, you are not at the starting line. Once
you get electronic mail in, at first it's just used for messages, but then eventually
you'll find yourself sending around spreadsheets. Instead of printing out business results
you'll just be mailing around those documents. So you will find yourself moving your paper
forms into electronic equivalents and so streamlining the way that people fill out forms
inside the company. All of those things are exactly what is going to be happening between
you and your customers in the future as they more and more have PCs. They will expect to
be able to reach in and get information about your products, the status, fill out forms,
click a button and have a voice connection or a video connection to somebody who can help
them. That is the wave of the future. The positive thing here is that even though it is a
big investment to move to enterprise electronic mail, that is on the path that companies
will want to go down in any case. If you cross company boundaries today with minor
exceptions like EVI or currency markets most communication is done on paper, face to face,
or over the telephone and that's what will change within the next 10 years. That takes
distribution barriers and largely eliminates them across a wide range of businesses.
Banking is an example that people use; branches will be less important in the future than
they are today. People talk about retailing, where you will be able to get product reviews
and make product orders for anything that's out there. You look at what a travel agent
does, what a real estate agent does. It is hard to think of a business that isn't effected
by these pervasive infrastructures. And so the implications are very broad. I'm painting
is an evolutionary picture. Every year the PC, Windows, communication technology, and the
Internet, are going to get better and better. Even the PC will take on new forms. You'll
have wallet PCs that you carry around; you'll have what we call a kiosk PC in place of
today's public telephone; the portable PC will get smaller and smaller. All of those will
be hooked into a unified network that provides a rich set of applications. Retailers,
financiers, even politicians, and media companies need to think about what this means. The
opportunities I believe are very positive. For example, in education. I envy somebody
growing up being able to reach out and learn subjects of any type because they have access
to this kind of rich network. This will be happening faster than any major change. The
change to the industrial age was almost 100 years. This one, even being conservative, I
think will happen within the next 20 years. So everyone should think of this as something
that will allow them to do business in a new way and is not only a challenge but an
opportunity, and we look forward to working with companies to meet that.
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