Transcript of keynote remarks by Bill Gates, Chairman, Microsoft Corporation
Information Technology Association of Canada
National Arts Centre
February 20, 2007
JEFFREY DALE: Good morning. Great crowd. Welcome to the hottest ticket in Ottawa this morning, here, to see Mr. Bill Gates. Mr. Gates is just arriving now, and we’re just thrilled to have him here, but more importantly, we’re really thrilled about the opportunity to present Mr. Gates here in the National Arts Centre. We wanted to make sure that we had the opportunity to do something not only memorable for Mr. Gates, but also memorable for you, the audience, to see one of the tech icons here live in Ottawa in a setting that I hope that you will remember for a very long time.
When we were looking at doing this event and having it here, the National Arts Centre had actually never held an event like this for breakfast before, especially the full Southam Hall, feeding 2,300 people that are here, and they have done an incredible job to accommodate us here today. There’s a show, actually, this afternoon that they’re going to set up for, and I really want to thank the NAC for all the work that they’ve done in order to make this possible today.
My name is Jeffrey Dale. I’m the President and CEO for the Ottawa Centre for Research and Innovation, more affectionately known as OCRI here in town. You are members; we thank you for coming today. We wanted to make sure that we took this opportunity to highlight Ottawa, not only the technology town that we are, but we also want to highlight the fact that we’re a strong education town, because the strength of our industry is based on the talent of the people that we have, and we want to make sure that we are showcasing not only the talent today, but also the talent that we’re going to have in the future. That’s why the presenting sponsors here, today, are all our post-secondary institutions.
We have kids, students, here today from all of these schools. We have students here today from Carleton University; where are you? Université d’Ottawa? Université de Québec à Outaouais? We also have our colleges. Algonquin College? And, of course, La Cité. So not only do we have the post-secondary institutions here, but I think we have the group that’s going to make the loudest noise, because we have 20 students here from Earl of March High School, and where are you?
Anyway, this is a great opportunity for you to see the tech icon Bill Gates, and we’re hoping that it will have as much influence on your life today as he has had on our lives in the past. This event is not something that we put on alone. I’m joined every year by ITAC in presenting these types of events, and right now I’d like to have us join, on stage, Bernard Courtois from ITAC. Bernard?
BERNARD COURTOIS: Thank you, Jeffrey. Good morning, everyone. An important event for Ottawa, for our industry, and, of course, Microsoft, an important member of ITAC. I want to thank our sponsors here, the Corporate Renaissance Group, Workshift.com, as well as Softchoice, and Softchoice, I know that Dave McDonald, the CEO, is in the room. Dave also happens to be Vice-Chair of ITAC. I also want to recognize some of our public officials in the room, MPs James Bezan, Rod Bruinooge, Laurie Hahn, James Rajotte, who is chair of the industry committee, as well as Senator Donald Oliver. I know there are probably others, but I haven’t been able to meet every one, but I think that’s just part of Ottawa, showing up for this major event. Jeffrey.
JEFFREY DALE: It’s a great opportunity for us. Let me just give you a run-through of what we’re going to do this morning. We’re going to bring Mr. Gates onstage in a couple of minutes. He’s going to speak for about 20 minutes, and the great news is that he wants questions. He wants to hear from you, the audience, and we’re going to reserve about 20 minutes for questions from the audience. We’re going to have hand-held microphones in both aisles and at all three balconies, and if you raise your hand, we will try to get a microphone to you, and I will be calling out the different sections for that. We want to make sure we have an opportunity to get as many questions in as possible, so keep your questions as brief as possible so that we can have as many questions with Mr. Gates. I guess, with Bernard, that, over to you to introduce our guest.
BERNARD COURTOIS: Yes, I guess it won’t be unexpected for me to say Bill Gates doesn’t exactly need an introduction to this audience or indeed any other audience, and you’re here to hear him, not me, so if you want, we’ll just call Bill Gates to come on stage, please.
JEFFREY DALE: Mr. Gates, thank you for coming. This is a technology audience here for you, and we’re very excited to hear what you have to say. Thank you.
BILL GATES: Well, it’s a very exciting time in the world of software and technology. I talk about it as going beyond the digital decade. Why do we use that term? Well, the last 10 years have been pretty incredible. In fact, it’s hard for people to accept that the next 10 years are going to be far more incredible than the last 10. Ten years ago, where were we? Well, we had the Internet just emerging, we had a graphics interface that had been largely been accepted as the way of the interactive machine, and we had a standard for the personal computer, and so we had built the (inaudible) software industry around that personal computer, and that led to incredible innovation in terms of the range and the variety of applications that were built. Before the personal computer came along, the software industry was actually very, very small, and the industry was incredible hardware-centric. (Inaudible).
JEFFREY DALE: Excuse me. I don’t know why that didn’t work, but how about that one?
BILL GATES: These were foundational pieces that we started to build on, and during the 10-year period, the proliferation of great applications was quite phenomenal. After all, the personal computer was very inexpensive. The power was increasing very rapidly, and so people could think of software as something they would write and sell in volume. The more volume you can anticipate, obviously the less expensive you can make the software, and it opens up just a huge range of types of software development.
We set off a phenomenon that’s really changed how we think about many processes in the world. Today, when we think about news, we think about the Internet; we think about the blogs and the search and all the innovative things that are going on out there. When we think about photographs, 10 years ago, we thought about developing film. Today, the dominant way we think about photos is a digital camera brought on to a PC and organized and edited in a very simple way.
Already we can see changes in other areas: video. Video today is still very much a physical media thing, a DVD or a more advanced high-definition optical disk, but in fact that’s switching so that most of your video will come over the Internet. In fact, even TV itself, with some software that we’re doing with a number of pioneering companies, including Bell Canada, TV itself will be delivered over the Internet, and so that the ads that are targeted towards you or the shows that you’re interested in, no matter how obscure they are, will all appear in your guide. You’ll be able to watch those with incredible flexibility.
The telephone network, which traditionally had big PVXs connected up to it, is completely disappearing and simply becoming an application of the Internet, providing not only more quality but greater flexibility as well. Even things like textbooks, we’re finally starting to see the move to those to be digital, to have devices that we can carry around and interact with the information in a far better way than ever before. There’s a number of these trends that are driving it forward to digitize both our activities are work and our activities at home, the way that we schedule, the way that we organize a trip.
Now, this is driven by the incredible advance in the technology. We’ve doubled the number of transistors every two years as Moore’s Law predicted we would. That extra power allows us to create a very realistic experience. Ten years ago, if you thought of a map, you thought of it as either being on paper or something that, if it was on the computer, was just a simple, 2D representation. Today, as you look at things like what we’re doing with Virtual Earth, you think of a map as being a 3D representation of the entire city, where you can have the current traffic flows represented, where you can go and point to a store and go in and see the products that are available there, where you point to the courthouse, and you can go in and find out what trials are going on and, if there’s a video feed, get connected up to that. Even a simple concept like a map is being redefined with all sorts of digital richness to help you find the best route, to find things that might be of interest.
The actual personal computer itself has actually more variety of form factors than ever before. If you look at tablet-type machines, where you use ink for the input—I’ve looked at desktop machines with gigantic displays now, so that all our information can be laid out and presented in a very visual way. If we look at the way we’re connecting up, now that we have the Internet as a given, all the software can call other software across the Internet. We call this service-oriented architecture, and it’s an incredible breakthrough.
All breakthroughs in software are essentially about reusing other software. Whether it’s subroutines, object-oriented programming, commercial package software, all of these ideas come down to “write less lines of code,” essentially by reusing lines of code that have been written. Well, here in this Internet environment, you can do that by not having to copy lines of code to run on your machine but simply calling out to another machine.
We’ve needed a lot of standards to make this possible at the lowest level, TCP/IP, of course, but at the next level up, now that we have that bit-level connectivity, we need ways of expressing semantics of information. That emerged out of some work that Microsoft and some small companies were doing all the way back in 1995. It was a document format, and that led to XML, and now XML is proliferated in a very rich way with things like Schema and Query and a great number of things.
Fortunately, most people don’t have to understand all those standards, but they now allow us to exchange information between machines independent of what software is running on those machines, and so as we’re making this migration away from mainframes, it can be done in an evolutionary way where we connect up through XML data connectors to the data or applications that are still running there and easily move them onto the more modern, the standard Windows-type servers that connect up and run Internet applications, and so you get this great interoperability as you move forward, and so software can think of the Internet as a place that you can make sub-routine calls.
The highest-level standards in this service-oriented architecture are called the WS Standards, and again, there’s many of them. They deal with fairly complex issues having to do with security, transport issues, identity issues, but they are now letting companies come up and offer, both inside their company, Web services, and externally, Web services. You know, a simple example is something like calling out and getting the map information or calling and getting a stock quote or calling and asking, you know, “What’s going on with the delivery? What’s the status of it?” And if you have the right authentication, that connects up. That works in a very simple way.
It’s very important that this digital revolution is proceeding in parallel, the way we work and the things we do at home. In fact, one of the crucibles of the revolution has been the educational sector. The Internet itself really grew up, although it was funded somewhat with Department of Defense money, it was the universities that took it and brought it to critical mass and started to see the opportunity.
There have been, both here in Canada and the United States, a number of start-ups where the work that went on in the university went on to create a very significant company that takes this Internet as a beginning, as a design point, and then provides services around it. The proliferation of these activities is really quite amazing. You can go as far as to say that we’re digitizing the entire economy. What we’re doing now with advertising, where that will be targeted, where we’re matching buyers and sellers in a very rich way, it does make the world, in many good ways, a smaller place. It allows research scientists to find and navigate through information in a fantastic way.
One specific engine that has driven our industry is the processor, and so it’s interesting to note we’re actually going through a big change in the processor, but one that’s actually quite smooth because of the compatibility. Today, AMD and Intel, who offered the primary high-volume processors for servers and desktop machines, offers 64K bit capability with no increment in price. It’s just a standard feature of these processors, and so you can see an adoption curve here where, starting with the server but within four years, even on the desktop and the mobile, you get to virtually 100 percent penetration.
It’s an amazing thing because 64 bits opens up our memory capacity and gets rid of the so-called four-gigabyte barrier and allows for things like in-memory databases, in-memory data-mining-type operations that just wouldn’t have been feasible in the past. Business intelligence is changing dramatically because you don’t have to predefine things. You can do models, but if you just take the data and navigate it, these in-memory approaches let you do some phenomenal things.
We are being asked by the processor industry to use many cores, that is, the individual—the speed of an individual core, a thread, is not going up at the exponential rate that it did over the last 10 years, and so this challenge of asking us to write parallel programs is an interesting one. It’s a thing the software industry has played around with for over 30 years, even longer than I’ve been in the business, and now there are some breakthrough ideas that Microsoft and others have come up to allow people to write these programs and not have them be so difficult and so error-prone. That’s a very necessary advance for the next four or five years because otherwise you won’t be able to take advantage of the richness that we have.
Now, the Internet, the pervasiveness just goes up and up: WiFi in many locations, the cost of broadband going down. Here we’ve got a chart that is just showing the number of broadband subscribers per hundred people. Of course, you have many people in a household, so a higher percentage have access. Here you see Canada in green, which is actually a good bit ahead of the United States there in blue, and the developed countries, so you see, in red, the general trend, of course, being a substantial increase between the connections in the homes and businesses.
What’s done to reach out—a major project that my foundation and Microsoft did together was go to libraries in Canada and help them get connected up so that any kid who could reach a library could get onto the Internet. This pervasiveness means that we can assume this as a tool. Whether it’s for government applications or consumer-type applications, it’s simply there.
There is a next generation of taking the Internet and doing new things with it that we call “live.” This is the idea that we can be more user-centric, so as you move between, say, a PC and another PC, your files, your calendar, your favorites, anything you do, will just show up. Even if it’s a machine you pick up—say it’s a waiting room at a doctor’s office—if you authenticate yourself, your data comes down, we sometimes say, from the cloud, which just means from somewhere up on the Internet, and there it is available to you, and as you leave that machine, you make sure that it’s not left behind. Any machine that connects to the Internet, we can be automatically backing it up, and the cost of doing that is becoming very, very small, and so your information is just there.
Even as you move from the phone to the PC, the idea of what sports you care about, what stocks, your calendars, your notifications, all those things, can roam across devices. Even when you’re watching TV, we can run a ticker down at the bottom of things that are important to you: who’s calling you at your special number, what changes have taken place that might be important to you. In the cars, a little trickier: we need to use things that never distract the driver, so speech-type things or simple visual interfaces, but wherever you go, if you care about the information, it’s available to you in a very user-centric way.
We talk about this as “the live era” where all the devices connect to the Internet, and information databases that are absolutely gigantic, like that 3-D map of the world that I talked about, that’s simply available with a simple Web service call. All the devices participate. You as a user don’t think about the boundaries, the boundaries between different devices. You don’t think about all these different services that are out there. From a company’s point of view, what they’ve created inside the company is incredible information empowerment, not just a top-level portal of financial data, but anywhere in the company where somebody wants to start a project or discussion board, an internal Wiki, but something that has all the protections and auditing trails that you need for business-related information, so it’s really the best of both worlds.
The consumer Web brought in, with products like SharePoint, into an internal company environment, so you have bottoms-up creativity but no discontinuity as you’re taking that bottoms-up creativity and connecting it with sort of tops-down financial systems because the kind of parts and information out of those systems can easily be imported into any of these engines or portals. We just pick a template and go. We don’t have to call IT or think about it, and yet the audit trails and the rights management capabilities built into these things are what’s appropriate now for this very digital environment.
What this means for everyone in the industry is that things are moving very fast. For Microsoft, it means we’re spending a record amount on R&D, now over US$6 billion a year. That’s actually the largest R&D budget of any company in the world. It used to be the pharma-companies had R&D budgets bigger than that, but they cut back those budgets. In our case, it represents optimism about the breakthroughs.
For example, writing secure software—how do you secure a network? The breakthroughs that allow that: automatic isolation, a move away from passwords to smart cards, the ability to, as you write code, to understand what the security boundaries are, and making certain proofs about the way that software works, these things are going to allow us to move full speed ahead despite the challenges of security and privacy that the digital world brings with it.
Obviously for us, the recent availability of the new version of Windows, Vista, the new Office, those are foundational products that a lot of things get built on top of those, but if you look at what’s going on, say, with our communications software, business intelligence, look at the kind of development tool things that are going on to make it easy to write these Internet applications, the rate of release does not slow down as we move forward; it simply gets richer and richer, all the way from the X-Box, which is a video game, up to data centre-type products for information storage.
Customers in the future will have more of a hybrid approach, where certain things that rely on services over the Internet and certain things that run on their own data centre; making it easy to do that is one of the great challenges of the industry. For example, say, there is a problem in your data centre and you want to automatically find computing resources and run, but in a secure way, things across the Internet. That kind of disaster recovery built into the Internet, that should be very feasible. Say that you want to run locally, but you want geo-distributed backup off-site. It costs way too much for an individual company to do multi-location data centers just to get that redundancy. That redundancy should be trivially available through cloud services that people like Microsoft and others will offer.
The whole way that we thought about the data centre is very different. In fact, for companies that are building these large Web services, whether a company like Yahoo! or Google or ourselves, we’re actually building data centers now that literally have millions of servers in the data centre, and when you think about making management and updating automatic, obviously, when you get to that kind of scale, you have to model everything. Those type of modeling breakthroughs that let us have total redundancy, those have great implications for how data centers of all sizes are managed. By pushing up to the limits, and thinking about how these things can be done with very little manual overhead, we’ve managed to come up with modeling approaches that will make a big difference.
There are some big challenges here. The security challenge and making sure people know where the information is available. The privacy challenge, making sure they know how it’s being used, what’s appropriate. Many of the laws that talked about these things did not anticipate the ease of a digital environment and looking things up. To some degree, these are technical issues, to actually perform these things, but there are also political issues that have to be decided. The Internet is, of course, a global entity, and so, some of the challenges of, say, tackling with malware or spam actually are things that require cooperation of governments in different locations and hopefully as much alignment around the standards and the rules and those things as possible.
I look at this next 10 years and say there is not a doubt this will be the most exciting part of the IT industry, whether it is proving programs correct, parallel computing, voice input, vision—you know, cameras on the computer that can see who you are, what you’re doing—all of these things that have been talked about for so long now are coming into the mainstream and coming in with software advances that will let people not just access these services but personalize them and connect them up in the way they want so that as an individual and as in a business, you can see that software is the most empowering tool that there has ever been. So I think we’re all in the right business, and it’ll be exciting to see how these dreams come together. Thank you.
JEFFREY DALE: Mr. Gates, why don’t we have a seat, and we have an opportunity for some questions. Once again, there are people on the aisles with microphones and in the three levels of the balconies with microphones. Raise your hands. We will try to get a microphone to you, and I will be directing the questions to Mr. Gates. I get to go first, actually, since I’m up here. Mr. Gates, we have 1,800 technology companies here in Ottawa making their living off of “What’s Next.” You’ve seen the evolution of the PC. You’ve seen the evolution of the Internet. You’ve captured those. And now, the evolution of the Voice over IP, and we know you’re capturing that market. What would you tell this audience is that next wave? What’s the next big thing that they need to keep their eyes on?
BILL GATES: I think the thing that is being underestimated the most at this point is the impact of what we call (inaudible) interface. Once you move away from the keyboard as your primary way of interacting, and the keyboard doesn’t go away. It just becomes one of many techniques, and you go to things like ink or speech or visual understanding come into that picture, then it’s a very different situation.
Take for example recording a meeting. Today, most meetings, you don’t digitize them and put them up on the Internet because the software is not very good. It’s sort of directing the camera, knowing who is speaking, and mixing in the slides. Now, we have software that does digital analysis that’s going to do that. So, no director. The meeting is there. You can find the part of the meeting that might be interesting to you. A lot of people skip meetings now because they can have just the subset that was valuable to them play back. We can even play it back faster than real time, and so it is an incredible time saver, and that is just visual digitization.
Of course, the cost of storage. We all grew up in an era where if somebody said something like that, we think it would be silly because you think, “Oh my God, the storage cost of all those meetings. That would be something.” Today, that is a few thousand dollars.
In a way, we have to stretch our minds to think about these things because, at least for me, I grew up where scarcity meant something. You know, I was very proud that the first BASIC I wrote ran in a 4k-byte computer. I looked over everyone’s code, basically re-wrote it, because I didn’t like wasting bytes. Now, people come into my office, and they say, “A megabyte here, a megabyte there.” I mean, what does it mean? Five years from now, they’re going to come in and say, “A gigabyte here, a gigabyte there?” I mean, what’s possible has really changed because of the drop in costs.
JEFFREY DALE: Thank you. You have someone back there with a question.
QUESTION: Good morning, Bill. Thank you for sharing your insights with us. I’m General Manager for Graphics Products at Corel, headquartered here in Ottawa. In fact, I brought one of our latest products here to give to you so that you can have access to decent graphics products anyway. My question to you though is just if you could share your insight into how you see Vista rolling out amongst consumers, small businesses, government accounts, enterprise, and how you expect that to compare to previous versions, previous operating systems, like XP?
BILL GATES: Yes, the way Vista works is that, although we’ve put many billions of dollars of work into the operating system to provide built-in functionality, better platform capability, better security, we actually price the various forms of Windows to the hardware manufacturers exactly the same as we did with the previous version. That’s always been true of Windows, so the Windows Home Version for Vista is the same royalty to them as the previous one; likewise for Pro and all that. What they’re able to do is, because the new system takes advantage of their hardware capabilities, they just immediately go and put it onto all of their machines.
Now, for some businesses who buy machines, they may ask, “No, we haven’t made the switch yet, so please put XP on that machine,” and so they’ll literally downgrade the machine because they have that licensing flexibility. They can switch it back and forth because to us it doesn’t matter, at least on a financial side, what it is, but we’re encouraging them to move to that new capability.
You also have lots of people who run the Upgrade Advisor, which is up there on the Web. You bring it down onto your machine, try it out. One amazing thing about this is that for all the different drivers and applications where they need some small change, those things are being accumulated, so whenever you’ll check, if you run the Upgrade Advisor tomorrow, it’ll have more things that it will understand how to do than it had, let’s say, a week ago. There’s this whole process in place where, by just using the Internet, automatic discovery, it’s dramatically different than, say, the last big upgrade cycle.
We had quite a surge when Vista was launched of people coming in both to buy the upgraded software and to buy new PCs. Now, we actually hadn’t expected that, so there is the question, “Was that a month-long phenomena?” “Is that going to be six months or a year-long phenomena?” But that actually would make the transition faster than we would have expected. Typically, with the factors we have here, it is about a two-year period before you get the majority of the entire installed base on the new operating system. The people who moved tend to be the ones who are in the market to buy new software, so in terms of peripherals or software updates and applications, over 80 percent of the commerce will be related to Vista within 18 months of the launch of Vista.
Here with Vista, we gave people a pretty long ramp. For example, the beta, we had 5 million people were in the beta of this product. People think back to Windows 95, and they say, “Hey, that was a big launch,” but we didn’t sell 5 million copies in the first four months, so here our beta is larger than what we sold out, you know, in all that frenzy of the first four months. Why? Well, the industry is a lot bigger, and the impact, and range of things you do with a personal computer.
Back then, I’d come to conferences and talk about, “Hey, the printer drivers are working work, today. The fonts, you should see the new, pretty fonts we have.” I loved those things. We weren’t talking about, you know, bulletin-board communities that drive-innovation; we weren’t talking about, “Hey, it’s time to get rid of your PBX” or the way people can digitalize information that we have here today. Very different, but basically a two-year cycle is what you should have in mind.
QUESTION: Hi, Mr. Gates. I’m an engineering grad student at Carleton University. My research area is health-technology management in the developing world. I saw some of your foundation’s work in West Africa this summer, and my question concerns the health-technology planning process at your foundation. Is there a team of people working on the planning, the infrastructure, and human resource support for technologies? Is that done by a team at the foundation or is that more localize on the ground? Thanks.
BILL GATES: Yes, the health issue is one I get to see both from a software point of view, with the work Microsoft does in that area, and we have actually a special group because health care is such a huge thing, that looks at how software breakthroughs can really help in healthcare, and then of course, my foundation, the primary focus is of global health and the very tough diseases that, because they’re not so present in the rich world, have received very little investment, and so the foundation is focused on that.
The foundation, of course, is about, you know, looks at saving lives. That’s the key goal, and we see that technology can help a lot in that. For example, things like getting rid of paperwork; in developing countries, people lose their paperwork; it is never right, so what you want to do is simply go in and do a, say, a fingerprint scan, and see what has gone on with this patient. Things like fingerprint scanning, GPS locators, or the use of cellphone networks promise to revolutionize information flow, even in areas where, 10 years ago, that wouldn’t have been possible.
Information is very, very important where we have epidemics. We’re trying to trial new drugs and see how those things can possibly work. Actually, one of the big things that I’m going to get to spend a lot of time on, after mid-2008 when Ray Ozzie steps up to be chief architect at Microsoft, is that I’ll really be looking at this boundary of health and technology, as well as the boundary between education and technology. That’s where I’ll get a lot more time, and that’ll, you know, will help Microsoft some of those areas, but a lot of it will be focused on how the Foundation drives forward.
We have technology groups, both in our global health and what we call global development, that are looking at where technology can help us. There is so much more that we could do to drive innovative new projects. We have things like Grand Challenges where we challenge people. Hey, what could be done? In the IT area, we need to do more of that, to really say, “What IT advances would help in these poor country health systems?”
QUESTION: I’m a developer in the local region. We write Web software that sends out e-mails. What advances are going to be needed to make e-mail a reliable platform, and what I mean reliable: attachments arrive, embedded content within e-mail isn’t blocked. I’m just looking for your thoughts on that.
BILL GATES: Well, there is a key thing that is growing up on the Internet having to do with so-called trust and identity, and actually, even in the last few months, there’s been some good advances in that where we’ve taken what was kind of a bottoms-up blogging type approach called Open ID and a more rich but kind of a tops-down approach, which was the WS Security approach, and shown how we can bring those together, and so you have a standard. The other thing was very simple to implement, but there was an attack that—it was called man in the middle—that it was subject to. Ours was a bit more complicated but not subject to that, so we showed how you could get the best of both worlds. We and others will actually offer those services.
As soon as you get these trust relationships where you say, “Yes, this employer says this person is this employee,” or this bank says, “This person is this person,” or this country says, “This is this person.” Or, if it is a privacy-related thing, the government simply says “This person is over 19 or under 18.” Once you get these trust infrastructures in place, then it can help e-mail a lot because today, when we get e-mail, we don’t know if it is really from who it says it is from, and the spam people pretend to be reasonable senders. We have a thing called Sender ID that is on about 40 percent of e-mail now. We need to get that up closer to 90 percent.
We have a notion of reputation of mail senders. Right now, it is a single-level reputation system where if we ever see spam coming from an IP address, it gets a bad reputation. If it is just a consumer machine that’s probably part of a bot network, it actually gets throttled to zero in terms of being able to send SMTP out of that address. Well, as you get these trust networks, then a business association can say, “I know, even though this is a small mail sender, this really is a trustworthy business,” and so you get this idea that reputation can let you say, okay, this mail should be passed through, and only the mail that comes from non-reputation locations is subject to all this filtering.
In terms of e-mail, one of the things that has helped drive it forward is that the variety of e-mail clients has actually dropped a fair bit. The world of business Outlook and very few other mail clients are a very high percentage of what is used. Those have the browsing, html capabilities built in. I would say a few years from now, we’ll have this trust infrastructure, and that should help us deal with the spam problem. Now those spam guys are out there trying to send billions and billions of e-mail into the inboxes. The amount we filter out has gone up, but they’re continuing to push that, so technology should make it so that people feel good about what comes in on their e-mail. We’re also seeing that now on these social networks: spam is showing up there. Instant messaging: it is showing up there. Everywhere there is communication, it is showing up. At first, the people don’t expect it will, so that they don’t have the barriers in place that we’ve developed in mail over quite a period of time.
JEFFREY DALE: As a business association, I can tell you that we’re very interested in developing that trust relationship because we also get tagged with the fact that we send out a lot of information out to our members. Let’s go to the mezzanine level and whoever has the microphone there.
QUESTION: Thank you. I’m the senior manager at Dell Canada. My question centers around growth. With the advent of all this great technology coming down the pipe, where do you see your company 10, 20 years from now? It is a little bit of a prediction into the crystal ball, but that would be helpful to know that. Also, what was the last stock you bought, because I could really use some help.
BILL GATES: I’m not an expert stock picker. I own some of my friend’s—Warren Buffet’s company, Berkshire Hathaway—I’m not saying it is a for-sure thing, but that is a stock that has done well over time.
JEFFREY DALE: It’s hard to come up with the, what, $50,000 per share, though.
BILL GATES: The B shares are about $3,000, so not quite as bad.
JEFFREY DALE: A bargain.
BILL GATES: The software industry is the change agent for the next several decades. Now, you can say there is another change agent, which is how the biological pharma, biotech industries take the information about genetics and expression and use that for medical breakthroughs or other things that are both exciting and also have some scary elements to them. The whole world only has two change agents.
Microsoft is lucky enough to be pretty much at the centre of what will happen in software: vision, speech, the unbelievably large databases and how you navigate through and visualize those things, making it so that when your kid grows up, all your memories about them, they’re easy to organize and find and deal with. Trust type things that we’ve been talking about here, so you say, “When I’m in my governmental role, everything I do is recorded and authenticated.” There are some amazing things that software can do, so I think, going back to the very start of the company, the idea of betting on software, that strategy hasn’t changed and won’t have to change.
It’s hard to predict what revenue that will generate. Will it mean more advertising revenue? Less licensing revenue? That’s not the important part. Software is doing fundamental things. If the platform really is key, there will be some form of monetizing that. There are some people who think of that as growth. I think of the breakthroughs in usage: things like people with physical handicaps, blind people using it, kids who are curious about something, who, in the past, the encyclopedia was not an exciting way to learn something, now based on what they’re interested in, they can find information, find somebody else who has got that common thing. Any dimension you look at, the depth of the software, the empowerment, and some means that it works out that these large R&D investments pay off, I think there will be substantial growth.
We don’t forecast out 10 years. We do these three-year forecasts, and then we always look back and see how much they’ve changed. In a three-year timeframe, we do fairly well because both what we’re going to get done in three years and what our competitors are likely to get done is pretty good. Anything beyond that isn’t that helpful to us. It is just a matter of saying okay, is software the right place to be? Yes. Is there enough challenge? Do we need to go outside of software to meet our growth needs? No. Let’s just stay focused on the thing we’ve done from the start.
JEFFREY DALE: Mr. Gates, unfortunately, we’re running out of time, and I know you have a very busy schedule today. One thing before you go is that not only are we a tech town, we’re also a hockey town. We’re pretty proud of our team. Here to make a special presentation to you is Cyril Leeder, Chief Operating Officer of the Ottawa Senators Hockey Club, and our own mayor, Larry O’Brien.
LARRY O’BRIEN: Good morning, Mr. Gates. This city takes its technology, its politics, and its sports very seriously, and we are delighted that you came to Ottawa and you honored us with this presentation this morning. It is interesting to note, Mr. Gates, that when you started Microsoft in 1976, the entire number of people who could work in that industry in Ottawa wouldn’t have filled this building. It’s gone from about 2,000 to about 50,000 in that time. That’s not all we do. They’re even silly enough to have elected a technology person as mayor. More importantly, we take our sports seriously as well. Cyril?
CYRIL LEEDER: I think we’ve all come to know Mr. Gates through the ubiquitous business products that he has brought to us, and certainly Microsoft has revolutionized the way we do business, but I really think that the legacy, in a way, that Mr. Gates and his wife, Melinda, will be remembered is the work that they’re doing philanthropically through their foundation for global health and learning.
At the Ottawa Senators, we certainly pride ourselves on the work we do here in our community, but it is my pleasure, on behalf of the Senators, OCRI, and everybody here in Ottawa to present you with a small token of appreciation for making the world a better place to live, and we got Ballmer a jersey last year, number 30, because it was a 30th anniversary, and I have to tell you, his was harder to get because it was a special order to get one that would fit him, so yours is easier, and I know that this year, Vista ’07 is a big year, so we got you a Gates 07.
BILL GATES: That’s great.
JEFFREY DALE: Ladies and gentlemen, Bill Gates. Thank you for coming. It has been a pleasure to host you here today. Have a safe drive. Bonne journée.