One-on-One with Bill Gates

REDMOND, Wash., Feb. 16, 2005 — -- Microsoft Corp. has for decades been on the cutting-edge of technological innovation. Company co-founder and chairman Bill Gates spoke to Peter Jennings today at the corporation's headquarters.

Gates talked at length about Microsoft's effort to upgrade security in the computer industry, his foundation's charitable work and his goals for the company.

Following is a transcript of the interview:

PETER JENNINGS: There are several stories in the newspapers this morning all about the speech you made in San Francisco about the state of security in the industry. How much of a challenge is security these days?

BILL GATES: Security is, I would say, our top priority because for all the exciting things you will be able to do with computers -- organizing your lives, staying in touch with people, being creative -- if we don't solve these security problems, then people will hold back. Businesses will be afraid to put their critical information on it because it will be exposed. People won't use their credit cards quite as much and buy things, and so it's really the thing we got to get right so that people don't think about it. So that it's just happening without their having to learn a lot of terminology and see a lot of user interface. We're making good progress on it.

JENNINGS: Microsoft is nonetheless accused of not getting it right and being slow to get it right.

GATES: Well, the whole industry has a challenge here. Because of Microsoft's central role, that means it's a big challenge that Microsoft has to step up to. Over the last year, people have been more and more complimentary of how we have made progress. We're focused on it, but a few years ago, people were being tough on us and I think there was a lot of validity to that.

JENNINGS: Microsoft is the biggest target.

GATES: We're responsible for the creation of the PC industry. The whole idea of compatible machines and lots of software -- that's something we brought to computing. And so it's a responsibility for us to make sure that things like security don't get in the way of that dream. You know, its individual empowerment, information at your fingertips -- we need to drive that forward.

JENNINGS: And if people continue to undermine Microsoft or the general technology in general, how seriously does it inhibit its future?

GATES: Oh, I think there are a lot of people who would be buying and selling online today that go up there and they get the information, but then when it comes time to type in their credit card they think twice because they're not sure about how that might get out and what that might mean for them. So I don't think it has caused us to go down in any way, but there is a lot more people who would be using it once we get all these concerns taken care of.

JENNINGS: You notice that ChoicePoint in California found that 30 some odd thousand, perhaps a hundred thousand, of their employees found that their identities got raided in their huge system. How worried does that make you?

GATES: Well, certainly there has been a lot of information in computers for decades -- your charge card information, your telephone call data. It's partly because people have personal computers, they realize all that information is out there and the people that have those databases need to secure them. They need to administer them properly because people expect their privacy to be preserved.

JENNINGS: I read an article coming up here on Firefox (Web browser) and its perceived ability to do this better than you. Is that fair?

GATES: Well, there's competition in every place that we're in. The browser space that we are in we have about 90 percent. Sure Firefox has come along and the press love the idea of that. Our commitment is to keep our browser that competes with Firefox to be the best browser -- best in security, best in features. In fact, we just announced that we'll have a new version of the browser so we're innovating very rapidly there and it's our commitment to have the best.

JENNINGS: Are you going to have to push your browser faster because of competition?

GATES: Well, competition is always a fantastic thing, and the computer industry?

JENNINGS: I knew you were going to say that (laughs).

GATES: (smiles) ... is intensely competitive. Whether it's Google or Apple or free software, we've got some fantastic competitors and it keeps us on our toes.

JENNINGS: And you say it keeps you on your toes, you have such a huge portion of the market -- in all elements of technology. Is the tendency in the shop sometimes to think that we just can't be beaten?

GATES: No, in fact that's one thing I like about the Microsoft culture -- is that we wake up every day thinking about companies like Wang or Digital Equipment, or Compaq, that were huge companies that did very well and they literally have disappeared. Got bought up, you know went into a direction that was a dead end for them. So we have that lesson and we are always saying to ourself -- we have to innovate. We got to come up with that breakthrough. In fact, the way software works -- so long as you are using your existing software -- you don't pay us anything at all. So we're only paid for breakthroughs. We have to make a new version of Windows or Office that you think is worth going out and buying.

JENNINGS: Why do so many people seem to think that open sourcing is so essential?

GATES: Well certainly there is always going to be free software, and there will be commercial software. We represent one company that has commercial software and can stand behind it in terms of support and compatibility. But we have always believed that free software space will be there and will be complimentary.

JENNINGS: Everybody I talked to seems to, particularly if they are young, seems to think that open sourcing is important and that among the reasons it is important is that it enables them to run more secure systems. Is that true from your point of view?

GATES: Actually no, but that is the kind of competition that we have. Is that they will innovate in that space, we will innovate in our space. And in fact, we do a lot of work to make sure that these things can inter-operate so that a company can have a mix of Microsoft products, Unix products, Mainframe products, and then each time they do a project they can look and say - is the Microsoft solution best? Is the other solution best? And so there will just be a lot of choices there, no one approach is going to replace the other.

JENNINGS: You sound quite sanguine about this. Is this a public position that is essential to take?

GATES: No, I have always loved the competitive forces in this business. You know I certainly have meetings where I spur people on by saying, "Hey, we can do better than this. How come we are not out ahead on that?" That what keeps my job one of the most interesting in the world.

JENNINGS: What does it mean to be the Chief Software Architect?

GATES: Well it means that there are a lot of business issues and concerns and you know final decision making that the CEO Steve Ballmer gets to worry about, and I get to worry about the technical strategy. What are we doing with the products? And so five years ago, when I was still CEO, the percentage of time I got with the engineers was going down. It had gotten down to almost less than a third of my time. And now I get to focus the vast majority of my time on exactly those software design issues.

JENNINGS: Can you tell me two things that you have changed your mind about in the last year about, in the last year, about technology?

GATES: Well let's see. There are some things that we are always thinking about. For example, when will speech recognition be good enough for everybody to use that? And we have made a lot more progress this year on that. I think we will surprise people a bit on how well we will do on our speech recognition. Also the idea of how the phone and the PC are coming together. Where you will be able to see the calls that you missed, or even when your phone rings see immediately who that is that's calling, or control how that is forwarded, or even set it up so that the screen is part of your interaction. We are seeing that as increasingly important and are putting a lot of research into that.

JENNINGS: And are there a couple of things about technology in the last couple of years that you have simply said -- don't need to go there, don't want to go there or can't go there?

GATES: Anywhere that we can have software work for somebody and make them more productive, help them stay in touch. We're going to write software for them. So we do software for watches, for phones, for TV sets, for cars. And some of these take a long time to catch on. In fact it's just this last year our software for cable systems, for TV watching, has really gotten a lot of customers and we have working on that for over 10 years.