Gates Lays Out Technology Challenges

Many functions that are currently done manually will be done in digital form by 2010, he noted. "Theres a lot of hard work to be done to build a foundation for that," he added, noting that many tech initiatives will require "literally tens of billions of dollars to be spent. This is the task were all engaged in."

"Personal computing is not just sitting in front of that desktop PC," Mr. Gates continued. "Thats very important, but thats just a piece of what well do. The magic of the chip and [advances in] software are now spreading out to all kinds of devices, connecting in different ways. All of these will come together."

Mr. Gates pointed out that the idea of personal computing is now "far broader than ever before." Systems can connect automatically, yielding greater productivity, he said.

"Last year, there were a lot of highs and a lot of lows. It was a tumultuous year, a tough year, a year to test the people with long-term commitment, a year to test which innovations really meet the demanding requirements customers have in this kind of environment," said Mr. Gates. He added that it will require new advances "to deliver in both the dimension of improved costs and the dimension of improved capabilities."

Mr. Gates characterized some technology developments as "a big surprise on the positive side," pointing to what he said is continued improvement in price performance and storage capacity.

Speaking of storage, he noted that "[PC hard] disks have moved from a megabyte to 10 gigabytes [in capacity]. By the end of the decade, a terabyte will be the typical storage on a personal computing device." He also cited advances in wireless technologies, helped by "easy and inexpensive connections to get high-speed capabilities."

Mr. Gates also spoke of significant gains in server performance. "Its 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-to-10 times as much for," he noted.

However, "on the more sober side, there are a number of things that have made this a tough year," Mr. Gates asserted. One negative factor, he said, is a more conservative attitude toward capital investments, particularly in IT spending, as well as the overall economic climate.

"Its very challenging," he said. "It requires that companies have the strength to see these [tech] advances through." Some of these advances, he added, will take "many, many years of development."

"The complexity of managing systems is still a black mark," he said, "and as you get more servers and more clients, the challenge that this represents is even worse." He added that "management software today is not systematically bringing those costs down the way that they will in the future, so theres a lot more work to be done there."

A final negative, said Mr. Gates, is slow broadband deployment. "Yes, theres been growth in the last year, but the prices have gone up somewhat and it's not as fast-moving as many, including myself, would have hoped that it would be," he said.

In terms of office workflow, Mr. Gates said Microsoft has "identified some of the inefficiencies that take place in the office." Recent introductions of tablet PCs have aimed at automating and increasing efficiency where tasks like note taking, reading and annotation are necessary, he explained.

"Its gratifying that this year we had the tablet PC launch, which has included some 15 systems, with many more coming based on that concept," he said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, November 25, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.