Innovation @ the speed of thought

In his keynote address to the Comdex computer trade show, Microsoft's Bill Gates unveiled an ambitious plan for innovation and demonstrated why one company remains the undisputed flag-bearer for the entire technology industry. Assureconsulting.com brings you excerpts from the speech…

Decade of Personal Computing

Bill Gates

Last year, I talked about the Digital Decade, and this is the idea that between the year 2000 and 2009, all these scenarios, that are just at their beginning, will become commonplace. That is, that the advances in chips and connectivity, and the devices themselves will make so many things common sense to be done in digital form, whether it's sending a phone bill to a company, whether it's analysing sales results or taking notes, organising your music, sharing your family memories with other people. During the course of this decade, there's a lot of hard work to be done to build the foundation for that. Deep architecture, new tools, many of these requiring literally tens of billions of dollars to be spent, and collaboration across literally thousands of companies. And I say that this is the task that we're all engaged in.

During the course of the Digital Decade, we'll think about personal computing in a different way. It's not just sitting in front of that desktop PC. That's very important, but that's just a piece of what we'll do. After all, the magic of the chip that brings intelligence and the magic of software are now spreading out to all different devices. Those devices are connecting up in very flexible ways. And so, small devices, whether they're pocket-sized, or wrist-sized, tablet-sized, wallet-sized, all of these things will come together. The TV experience will be a deeply changed digital experience. Even in the car, when you're interested in information, or being notified, that will be deeply digital. The way we think about phone conversations, how we set them up, find somebody, how we share information during that phone call, all of that will be completely reshaped during this Digital Decade.

We can say that the idea of personal computing is far broader than ever before, broader in new experiences, broader in ways that systems connect automatically, and broader in greater productivity. Last year had a lot of highs and a lot of lows in it. A tumultuous year, a tough year, a year to test the people with the long-term commitments, a year to test which innovations really meet the demanding requirements that customers have in this kind of environment, a requirement that new advances deliver in both the dimension of improved cost, and the dimension of improved capability.

And when you think about the developments over this past year, there were some things that I think were a big surprise on the positive side. The continued improvements in price and performance. You know, Moore's Law is still hard at work. For the next decade, the things that allowed the chip to improve so rapidly still are there benefiting consumers. It makes it a very competitive business, because all of that extra capability improves price/performance. Not only is Moore's Law active, but even faster exponential improvement in optic fiber data capacity, or storage capacity, where disks have moved from a megabyte, to 10 gigabytes, to the end of the decade a terabyte will be the typical storage on a personal computer device, portable storage, literally, will be in the tens or hundreds of gigabytes. So, on price and performance, we did super well.

And the arrival of wireless, particularly the 802.11 WI-FI wireless. It's getting to the point where we will be able to take that as granted as part of the home computing experience, part of the office computing experience. Even when you're out in convention centers or airports, or anywhere that business people spend much time, there will be easy, inexpensive connections to get the high-speed capabilities that WI-FI provides. WI-FI has succeeded partly because it's low cost. It doesn't have the per minute charges. Installing WI-FI into the home is now just a bit over $100 of investment, and it's getting easier to secure, easier to set up.

The whole world of hardware has been delivering at a quite phenomenal rate. Look at LCD resolution. You can find that resolution with proper font advances, particularly Clear Type: the idea of readability of the screen has moved forward in a major way. The digital camera: now new camera sales have shifted to where digital is the majority of what's being purchased, and that means that this flexibility of organisingand communicating around photos is beginning to take off. And then I mentioned storage, both the storage in the PC and the portable storage allow us to think about scenarios like entire movie collections or video collections, whether prerecorded or a home video being easy to deal with, easy to share with the low cost storage.

A final two points I think haven't been noticed as much as some of these others. First is the progress that has been made around the Web services architecture. A year ago, there was no industry organisation focused on this. And although there were strong commitments and lots of R&D around it, the idea that there would be a clear profile to bring together all the elements of Web services that still hung in the balance. It was unclear. And so, this year the creation of the Web services Interoperability group was a huge milestone. We've seen virtually every company in the industry join up for that. The protocols being developed there are standard across all platforms. And they represent some of the very best R&D work that the companies involved are doing. Microsoft, IBM, many other companies are jumping in and saying, yes, we'll put our best people on it, because we need Web services to enable so many of the scenarios that will move the industry to the next level, to enable E-commerce. Internet connectivity alone was not enough, we needed that advance. And so Web services, I'd say, is a huge plus of this last year.

Moore's Law is still hard at work. For the next decade, the things that allowed the chip to improve so rapidly still are there benefiting consumers. It makes it a very competitive business, because all of that extra capability improves price/performance. Not only is Moore's Law active, but even faster exponential improvement in optic fiber data capacity, or storage capacity, where disks have moved from a megabyte, to 10 gigabytes.

Server performance, some pretty incredible investments where the Itanium architecture, which has been pioneered by Intel and HP, is making huge progress. Some of the benchmarks there are really quite phenomenal. And the partners are being drawn in to show off what can be done there. The number of processors built into systems, now moving up to 32-way, and next year 64-way; server performance is clear, now that you can buy industry standard Intel-Windows type servers and get performance that in the past you would have had to pay five or ten times as much for. Even the most demanding computer loads are now met by those standards-based servers. And that can simplify things, ease development. It's a milestone that we've waited for, and was just achieved this year.

Now, on the more sober side, there's a number of things that have made this a tough year. The attitude towards capital investment, particularly in IT spending, the overall economic climate -- very challenging -- requires that companies have the strength to see these advances through; some of them that take many, many years of development. The complexity of managing systems: still a black mark in that category. And as you get more servers and more clients, the challenge that this represents is even worse. And management software today is not systematically bringing those costs down the way that they will in the future. And so a lot more work to be done there. Security, digital rights management, privacy, still so much work ahead of us in terms of the policies, and software approaches that will fulfill people's requirements in those areas, which the requirements are actually getting higher and higher, particularly as people are seeing what Web services can deliver.

A final negative is broadband deployment. Here, yes, there's been a growth in the last year, but the price has gone up somewhat, and it is not, in fact, moving as many -- including myself -- would have hoped that it would be. So, I would say a climate that requires the best work of the companies involved.

For Microsoft, we're very fortunate that the long-term commitment we have to R&D is one that our success and financial conservatism allows us to push forward, even increasing the R&D investments being made. Now, there's a responsibility incumbent back on us, being in this role of creating new platforms and driving things forward, to be a very responsible industry leader. Over the last year, we've learned new things about how to do that, sharing more information, reaching out to new partners, being very predictable in the things we're doing. And as more and more advances are coming out of this R&D, we're, in turn, dependent on increased partnerships for people to build solutions that live on this platform. So, very important to us, and something that we are very much rededicated to.

In fact, looking at this last year, I think, reminds all of us that this industry has had its share of surprises, it's share of ups and downs. Those of you here have enjoyed being part of this industry, and what's happened, and I think looking back on some of those things helps give us a guide as to how things will be developed in the years ahead.

One of the big investments for Microsoft, over almost a ten year period, was moving Windows to a single code base. We knew we wanted the power and reliability of that NT code base, and yet getting the compatibility, getting the applications tested, moving the drivers over was quite an extended process. We really reached a key milestone in that just a year ago. It's hard for me to believe it was just a year ago that Windows XP launched. It's been the fastest uptake of any new version of Windows. Virtually all the machines that have shipped in the marketplace in the last year have been based on Windows XP, either the Home Edition or the Professional Edition.

Now, having that single code base has been a big efficiency advance, both for Microsoft and for industry partners, being able to focus device driver work and testing on the single platform has been a big help. For Microsoft, it's meant that we've been able to spawn off in just the course of a year a number of add-ons onto Windows. Media Center, a big advance for us; Tablet PC, requiring the pro version; the smart displays that you'll see more about; and a version of Windows XP that allows people to select the pieces of the technology that they need for embedded applications. So it's been a key element that's allowed the pace of innovation to move even faster.

Home Computing

Today, the home environment is one where the PC is starting to play a stronger and stronger role; 70 percent of US homes have a PC. Over a third of homes have a PC in the living room. And that machine in the living room can be used to control things, to simplify the interface to all these different devices. It can be the point of storage.

There are some things we realised that we're missing there, the ability to interface with the TV at a distance, the ability to get the TV guide up there and work with movie clips. And so, there's a lot we've done around Media Center to really advance computing in the home. Make it so the devices find each other and work together in a better way, making it so that not just bringing work home is part of the activity, or not just school work is part of the activity, but unique applications that are built absolutely for the home. Communication is changing with instant messaging, and the foundation that lays for a whole new wave of advances in real time communication.

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