Microsoft CEO Bill Gates has attacked the US government antitrust lawsuit against his company, calling it a mistake because the Windows operating system's dominance in the PC market is not assured and faces challenges.
"The current operating system we're selling won't be adequate for the demands of the future," Gates said, speaking at New York-based think-tank The Manhattan Institute.
Later in the afternoon, Gates made another stop in the city to announce a US$100 million gift to a charitable cause, but the most of his day in public was taken up by his address at the think-tank and in a subsequent question and answer session where he fielded several questions on the government lawsuit.
There are "five or six things" that will happen over the next twenty years that will cause Microsoft to radically alter the operating system itself, Gates said. Though the PC model of computing and the way the operating system is distributed may not change, "even if we call it Windows, the code in there will have to change dramatically." People will have much higher standards for computing technology, he said, expecting things like speech recognition and more readable formats for computer-generated text "where you don't get a lot of strange error messages."
The fact that America Online is paying billions of dollars for Netscape Communications showed that competitors to Microsoft, who are vying to reach the public with new, easier-to-use technology, can still create value for themselves and the industry, Gates said.
Gates defended Microsoft's decision to incorporate its Internet Explorer browser into Windows for free, and pointed to AOL's impending purchase of Netscape -- which after Microsoft's move also started giving away the Navigator browser -- to show that a competitor may thrive by doing the same thing. Microsoft's move to give away its browser has been interpreted by its critics as predatory pricing.
"Our decision that browsers would have a revenue stream from advertisers meant that we didn't have to raise the price of Windows ... that was bringing competition to the browser market," Gates said. "And certainly now with AOL paying billions of dollars to buy Netscape the notion that you (can) stay in business when the browser's free because other revenue sources make it a fantastic business -- and (the question of whether) they have access to distribution channels to allow them to get their product out there -- that's been answered very resoundingly ."
Asked whether he thought the government's antitrust case was a misguided attempt to knock down a company that had become too rich and powerful, Gates replied, "I can't delve into their mental process, there's many paths to making a mistake."
But despite his lambasting of the antitrust efforts against Microsoft, Gates did allow for a governmental role in technology. "Clearly the government has a role. There are issues that are essentially political issues," he said. One important political issue is privacy. "Should your employer be allowed to see your criminal record? " Gates asked.
But there is one area that the government should definitely not touch, Gates said "The government does not need to set standards, that is one thing for sure. Internet standards are moving so fast I dare any government to keep up with them."
Gates also touted what he called a new concept, the "Web work style."
Similar to the “Web Lifestyle” term he has used in past addresses, the Web work style is "a new style of work that is utterly dependent on using digital information."
Despite the fact that many office workers now use computers to edit and create documents, a lot of information created in organizations ends up on paper, he said.
Taking billing statements as an example, he said there is a vast amount of cost and complexity involved in printing and sending bills to customers and business partners. But as more and more companies and consumers get hooked up to the Web "all of that will go away," Gates said. "There will simply be a series of bits that are transmitted and then automatically categorized and there will be rules that'll be set that will say, 'Is this unusually large? Is this different than what I would have expected?,' and notify somebody to pay attention to that."
More than just making business efficient, automating this type of data transmission, collection and analysis will transform the nature of many businesses, lowering the costs of entry into different markets such as publishing and even manufacturing as companies can compete using fewer people, Gates said. He pointed out, for example, that manufacturers now spend more on information workers than on factory floor workers.
Later, Gates and his wife, Melinda, announced a US$100 million gift to help childhood-vaccination efforts in developing countries.
The William H. Gates Foundation will donate the money to the Program for Appropriate Technology in Health, a Seattle-based nonprofit group, which will transfer funds to other organisations such as the United Nations Children's Fund and the World Health Organization.
At the Manhattan Institute Gates noted that his family has given over US$2 billion dollars in philanthropy, and talked about the challenge the IT industry and the U.S. faces to ensure the world's have-nots reap the rewards of technology. The challenge is "to spread the benefits of technology as widely as possible."
But one veteran philanthropist was somewhat skeptical of Gates’ contributions so far.
“What he's doing is not bad but it's unimaginative to just throw some money at a problem,” said Robert Glynn, chairman of the board for the Lampadia Foundation, which focuses on philanthropy in South America. “There's lots of money available for Third World vaccines already, and $100 million is going to disappear pretty quickly. What someone like a pioneer like Gates can do is put some of his people to work on solving problems that face the Third World.”
Many of these problems are technology related, such as figuring out a way of getting libraries using the outdated Isis information system hooked into the more contemporary Marc II system, which electronically links libraries around the world, he said.