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Originally published January 30, 2007 at 12:00 AM | Page modified January 30, 2007 at 10:20 AM

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Gates savors what could be his last big launch

As Microsoft unleashed a marketing blitz across Manhattan and the world Monday, Chairman Bill Gates talked up the company's two most important...

Seattle Times technology reporter

NEW YORK -- Microsoft unleashed a marketing blitz across Manhattan and the world Monday to announce that its most important products are available to the masses starting today.

In a spacious hotel suite near Grand Central Station, Chairman Bill Gates seemed at ease, and he smiled frequently during an interview with The Seattle Times on Monday. For good reason. At long last, his company's two biggest products -- Windows Vista and Office 2007 -- are done and on the market. Time to party. And get the sales pitch on.

Gates, who did interviews ranging from NBC's "Today" show to "The Daily Show with Jon Stewart" on Comedy Central, discussed the products, of course, but he also talked about what they mean to him personally. An unfinished game of solitaire ran on a Vista PC in a corner of the room.

Here's an edited version of the conversation.

Q: You and this company have covered quite a lot of distance, had a lot of really big product launches over the nearly 32 years at this point. How does what's happening today, the launch of Vista and Office 2007, rank as a milestone for you personally and for the company at large?

Bill Gates: Well, the only other time that we've launched a Windows and Office update together was back in 1995, and the PC industry's five times as big now. You know back then nobody used digital music, or digital photography or thought about editing movies and so the breadth of what you're doing on the Windows PC is dramatically increased.

In fact, if you look at time spent, people spend more time on the Windows PC now than they do watching TV. And that's games, it's instant messaging, it's being creative, doing their homework. And so this is kind of an enabling platform.

It's probably the biggest launch we've ever had. Certainly it's very timely in that people want to organize more things, and yet they want to know what their kids are up to and have control over that. The hardware people, this lets them do things like touch screens and better graphics chips and have that show through the software industry.

Our software partners want to build more applications and the strength of Windows, even though a lot of it's what's built in, way more of it comes from what companies other than Microsoft do on top of it. And so this gives them a chance to take their applications up to a new level.

Because of the breadth of the ecosystem and the amount of use, this'll have more impact than any release we've ever done.

Q: Do you think this is perhaps the last Windows product-launch that you'll personally participate in before the transition to full-time work at the philanthropy in 2008?

Gates: Well, yes, there won't be a major Windows release in the next 18 months, and so I'll be part-time at Microsoft by the time they do that launch. Even after that, I'll be chairman, and [CEO] Steve [Ballmer] will pick a few things for me to focus on and certainly, for the next Windows release, the big choices about that will be made in the next nine months. So [Chief Software Architect] Ray Ozzie, [Chief Research and Strategy Officer] Craig [Mundie] and I will all get to input into [the next] round of Windows and Office.

Steve'll decide just based on what projects I've been in whether I'm key to launches, or whether they want to roll out the old man, or what they want to do with me. In the meantime, I'll try and make a malaria vaccine launch as fun and exciting as a Windows launch, which, uh, that'll take some doing.

Q: What's it like to be so closely identified with a product that so many people use on a daily basis?

Gates: Well it's fun when I get to go out to schools and see kids using it in ways I wouldn't have expected. My daughter is at a school where they use laptop computers and I've always believed in that Tablet [PC] concept. But to sit there and see her inking out her homework -- and, you know, she mails me what are called journal files that shows how she does on the quiz. It's pretty neat to see the technology at work.

And whenever you see people sturggling, too, it reminds you that hey we have a lot more that we can do. This Windows is great, but there'll be lots more to come in terms of the system being smarter and modeling the user and bringing in speech and vision. You know now we need to do parallel computing because these processors are giving us a lot of parallelism.

It's fun to be involved in something that has so much impact. I always tell Windows developers anything they do right affects hundreds of millions of people and anything they do wrong affects hundreds of millions. So it's neat to motivate them and we certainly feel great about how hard they work.

This release ended up being longer than we expected and so it's quite impressive the way they persevered.

Jim Allchin in particular led the thing from start to finish and he actually moves on in the next month or so, so this is our chance to thank him for the incredible work he did. He set a good example that the whole team really lived up to.

Next time we're gonna have a little more agility at the higher layers in doing more releases, and we expect even for the full Windows it'll be probably more like a three-year cycle than it was this time.

Q: Did you write any code?

Gates: No. I mean there may still be some of my old code around, but none of the new code in either Windows Vista or Office was written by me. I was, you know, involved in a lot of discussions about what are we gonna pick and what about this and what do we like. But I didn't develop any, a single line of it.

Q: What's the last product that went out that did have a line of code authored by you in it? Do you recall?

Gates: Oh, yeah. I mean it's in the 1980s. I write programs using our tools and try them out, but in terms of actual code it would have been some of the BASIC and DOS and language stuff all the way back in the '80s.

Q: Do you miss that aspect of it at all?

Gates: Well, there's a certain beauty to being a hands-on, individual contributor, and we have some brilliant people who have chosen that to be their whole career. They're phenomenal in what they do.

I've got the role, or had the role, of looking at all the different pieces and trying to make them fit together and really push on the things that I think are going to be most important in the future. Which, you know, I chose that and it's got a lot of rewards.

I do miss the day when I knew every line of code and nobody could change anything without my agreeing to it, but that only works for a very small company.

Q: What kinds of things are you personally doing with Vista and Office, as a user, that you weren't able to do with their predecessors?

Gates: You just couldn't have that many photos or files without getting lost. And now with Vista, the way you can tag and group and search allows you to just have a lot of information and be able to navigate around with it.

And so I'm really putting in a ton of photos that I just didn't do before, and I'm keeping my documents around and not having to have deep folders. The search lets me get to the information.

Parental control is very timely for me because you know my kids are at an age where controlling how much time, what times my son's on the machine or seeing the activity report of my daughter's things, that's very appropriate. And you know here it's the first operating system to ever have that built in.

We've got a lot of high-definition displays at our house and so this movie maker lets me edit and create HD movies and when we go on trips the idea of taking the film and photos and just burning a DVD to send off to relatives or e-mailing that off and that's something that'll be a benefit to us as well.

I'm a big Tablet user, which, you know that market has grown a lot. It's millions. It's still not mainstream, but there's a ton of tablet improvements in Vista and so we're trying to drive to the point where it's common sense that you don't need textbooks, just every student has that. I think this is a significant step in moving us in that direction.

Q: On the entertainment front, I talked to a lot of people who were thrilled to see the addition of chess and mahjong to the classic games lineup in Vista. Was there any interest in adding bridge, knowing your love of that game, as another option?

Gates: Well, there's some great bridge sites out there like OKBridge and BridgeBase. Unfortunately, I wish bridge was more popular than it is. I'm always promoting it to people, but the Web sites take care of that. So I think what we chose to do will get very heavy use.

Up in Ultimate [the highest-end edition of Windows Vista] we'll even have a hold 'em [poker] game that Ultimate users get, but everybody gets the ones you mentioned.

Q: This is the first operating system to have been developed since your Trustworthy Computing initiative and security is certainly one of its top selling points. What gives you confidence to say this is Microsoft's most secure Windows system ever?

Gates: There's no doubt about that, partly because of the way that Windows Update is set up now to make it so automatic for people to get any improvement that we make. So the way that we're scanning the Internet, and [are] vigilant 24 hours a day, there's just nobody who's doing that and has this kind of update structure. As well, we've done defense in depth, and so we looked back at over 90 percent of the things that were done in the past, even though they might have got through one layer, they never would have had an effect.

It's not like this is the end of our work on security, but this operating system together with the update stuff we do is dramatically more secure than anything we've done or anything out there.

Q: What metrics will you be watching to kind of gauge Vista's performance in security as it goes into broad use in the coming weeks and months?

Gates: Well we'll see the type of vulnerabilities that come up that we need to do updates for. We'll see our ability to get those up on Windows Updates before any users are affected by them. We'll see just how [people] think about it -- you know, the anti-phishing thing avoids them going to the sites where we see that going on.

Security is a hard thing for the press to cover because it's got this very end-user, critical nature, but then it's got kind of this deep technological thing for it.

I think you know now with Vista out we can be really more explicit about the metrics we use and how we look at these things because now we're at the point where we're totally proud of what we've done and we know there's nothing comparable.

Q: How has the relative importance of the Windows franchise changed within Microsoft as the company has continued to expand into so many new areas?

Gates: Well, we would think about computing in this user-centric way. So as a user, you'll move from your phone to your PC to your car to your TV. And some of the things we're doing will take your interests and let you access your schedule or the sports score you care about or what's up with your friends. Those capabilities have to span all those devices and so you know we call some of those things Windows. We don't call Xbox Windows.

That's really Ray Ozzie's Live initiative --to make it user-centric and then use the Internet to move the information onto every one of those devices.

So the Windows PC will continue to have this central role, but the phone, other pocket devices like a GPS map, digital wallet, Zune-type device, software in the car and now, with TV being delivered over the Internet, software in your TV set-top, all of those come into play.

We're a software company and what we're doing with vision and speech will make sense on a lot of different devices.

The full-screen device that you take on a plane -- it works. You take it wherever you go, it works -- that'll be a centerpiece. So the Windows franchise is a huge central thing for us, but you know we're thinking more about solving scenarios so when the Windows PC should be part of that, great, when it should fit onto other form factors like on the TV, we do it there as well.

Q: How has the competitive landscape for Microsoft changed since the last Windows release?

Gates: Five years is a long time in this industry, and I guess five years ago, you know, Sun and Netscape were perfect companies that understood everything and Windows was nothing. And you know in that same extreme way of looking at things, people say, what about Google or what about the latest great work that Apple has done?

So [it's] always very competitive, always someone who's kind of new and done something right and that's great.

We have areas like Tablet or security where we're kind of out on our own leading the way. We have areas like search where somebody else has done good work or like in video games or in media devices. We're just taking our software-centric way of looking at things and seeing where we can actually bring new competition and do neat new things for end users.

About half the stuff we do is green field -- you know, Office innovation, a lot of that's pretty much we're off on our own; Tablet's like that; Media Center has been like that -- and there's another half where there's some tough competitors in there.

So the general framework is the same. You always wonder if the latest batch that came along is better than the ones before and it always feels like they are, but so far, we've always done well.

Q: From the consumer point of view, how would you describe the challenge that Microsoft or really any company today faces in attracting consumers' attention and dollars now vs. 2001 or 1995?

Gates: Well, in 1995 the only way to get Windows was to go buy a physical package. Today we've had over 5 million users, beta users, download these pieces of software and use them on their computers. And so, it'll be interesting to see the mix now that the product's released that are retail package vs. online download. It will still probably favor the online package, and certainly when we buy a new machine a lot of people will get Vista that way.

The industry is dramatically bigger now and more important. We were kind of talking to a small, elite group back in Windows 95 days. Now, you know, the majority of all households have it and you know the idea of how do you use a PC? Well, it's photography, it's music, it's movies.

Days of Windows 95 -- people were just learning what a browser was and none of this other stuff was there. They weren't video conferencing, instant messaging, RSS feeding and all those things are just central things inside Windows Vista.

If you look at the size of the disk or the capability of the screen or the speed of the connections, it's just very, very different. And yet the kind of excitement you have about this thing you use so much is definitely there.

As I said, we passed TV in terms of how much time people spend on the PC. And the PC market unit sales have kept growing.

The demise of the PC has been predicted as many times as the demise of Microsoft. It's phenomenal and we see it as it gets lower cost and more powerful continuing to grow.

Q: The demise of television is also something that's being bandied about lately -- or more specifically, I think you said at Davos [the World Economic Forum] the convergence that's been talked about. I'm curious, is Vista something that's going to help accelerate that? Do you see Vista doing it, or is it more other things that Microsoft is working on?

Gates: The most direct thing we're doing is called IPTV, which we have partners like AT&T in the United States and British Telecom in the U.K., [France] Telecom, Deutsche Telekom, who are rolling that out together with their high-speed networks.

Vista contains a very improved version of Media Center. And so you can record TV shows, you can look at the guide.

But the key is to get away from broadcast as the way you're only getting your video signals and use the Internet so that you can go out and get things that are mostly of interest to you, like your kid's sports game or some lecture and have that right there on the guide. And then as you watch the show you can interact with a game show, an educational show. You can have the news segments of interest be longer and the ones you don't care about be skipped over. So all these TV shows can kind of be reinvented as they're running on a personalized interactive platform, so it's different than broadcast TV.

Q: You've talked about how sometimes people in the developed world fail to recognize some of the inequities and diseases of the developing world. And I wonder if there's any fear that being able to skip over news segments that don't interest us would only give people another means to further distance themselves from some of those problems.

Gates: I don't think so. I think the ability to see what's going on in those other countries and have people from those countries writing about their experiences -- I think that will make the world a smaller place and this distance that's hurt us [will] make that less of a problem.

People really do care. It's just been kind of complicated. How do you get involved, and if you do get involved, how do you make sure that what you're doing makes a difference? The Internet gives us a chance to say, "OK, I'd like to loan money to somebody I meet or somebody of a certain type and then follow up on it, even see pictures of what the result of that is."

So there are still some creativity to be put into this, but I do think people care and I do think we'll let them interact and explore and feel more involved if we're smart about using technology.

Q: Moving back toward some of that competitive landscape we were talking about earlier: How does this operating system address the growing use of software services delivered over the Internet, most notably by companies like Google?

Gates: Google's real success has been their search offering and Internet search is not directly connected to the operating system. Our browser lets you pick any default home page or search provider, so we're working to provide better search. We have some great things on our search that no one else has and we're going to get more and more people to try out and see our innovation there. But you can use Windows Vista with that or not.

We are doing things like where we're going to let you store your files up on the Internet and move them between your machines, so owning multiple Windows machines will be far more convenient. Ray Ozzie is driving our broad Live services activity and over the next couple of years we expect to show a lot of neat things coming out of that.

Some of those will only connect up to Windows Vista, some of them will connect up to older versions of the operating system.

Q: What about a resurgent Apple? Are you concerned at all about computer buyers comparing Vista to OS X, especially now that Macs use Intel processors Apple's OS is kind of right around the corner?

Gates: People have always compared Windows to the Mac and the ability to let others innovate in hardware. To let the broad range of applications people innovate, as well as Windows itself, has been the reason why way over 90 percent of machines run Windows today.

And here we've got something where people can do even more applications and we've seen an incredible variety of all the different hardware vendors coming out. That's not something that a single manufacturer can ever match. That investment that's made in applications just doesn't exist anywhere else.

In Windows itself, things like parental control or the way we've done the search, you know, there's a lot of leading things here. Apple does work. We do work and I think that competition is healthy, but when you look broadly at Windows and why it's been successful, this just makes that even more evident.

Q: You touched on the five-year development timeline. There were also some features, such as the future storage system, that didn't make it into Vista. What happened and more important, what did Microsoft learn in the process of building Vista?

Gates: The new storage system is the only thing that we wanted to get in that we eventually decided was kind of an idea ahead of its time in terms of the size that that would've required.

So, you know, we feel great we've got this done. We look at how we can have some layers of the system be released more often --every couple of years or some even every year. We've made Windows Update a lot better so a lot of things can flow through that.

The base level of the operating system you never want to update more than every three years or so anyway, just for stability and compatibility. And so it's that layering investment that'll pay off for us as we move into the future.

Also, the five years is a little bit misleading in a sense that Windows XP [Service Pack 2] was a gigantic release. We had many releases of the Tablet and the Media Center and the browser and the media player. So we will be more agile, but partly based on the investments that were done during this big cycle. We've already pulled together the teams, a little bit different process that's gonna be very helpful to that.

Q: In what ways do Vista and Office 2007 surpass what you dreamed PCs could do when you set out to build software. And conversely, where does today's technology kind of fall short? What's left to be done?

Gates: The original dreams included things like computers that could see and listen and talk and they were just a lot smarter, and so there's a lot left to be done in the operating system and in the applications.

Office is pretty phenomenal product. And the Office 2007 team really surprised me with how much they were able to do and the impact that this new user interface is having and this Office Live capability that lets you connect up and share. You know, even in Office though there's still a lot more to be done -- to make it so that insight into your sales results are easy to get to, all the processes inside the company are easy to execute and track. The idea of you know seeing the business process visually and editing that and not having to write nearly as much code.

We've got some big frontiers in programming, in natural interface and devices working together. Even wild things like robotics coming in and now being part of the picture, although we're at an early stage on that one.

The bet we made with Microsoft is that software would be important. And every development we've seen is just the increasing importance of software . When you think of consumer electronics now what do you think of? Well, you think of the kind of software interface that's provided and we're gonna do software for cars -- we just had a big announcement with Ford on some stuff we did there. We're doing it for TV sets. We're doing it for phones -- our phone stuff is going up in volume very dramatically, we just keep making that better. And we're going to make all these things work together.

So, you know, software is a key component and that's what, where Microsoft's research should guide us to be able to be a leader.

I've always wanted the perfect machine. We'll probably never get there.

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