COMDEX FRANCE: Gates touts concept of competition

Despite Microsoft's success, it doesn't plan to rest on its laurels, but instead will continue to put up a fight against its competitors, Chairman and CEO Bill Gates told a crowd of several thousand here at Comdex France today. 'The mentality of Microsoft is to always look for what we should be worried about,' Gates said. 'We all have to earn our success a month at a time.' Microsoft employees work in an environment where making products better is like an obsession, he said. 'Even though there is no financial crisis we are very good at creating a crisis atmosphere,' Gates said. Gates spoke about the competitive nature of the computer industry in a question and answer session after giving a short speech about how businesses, schools, governments and individuals need to take advantage of the Internet and Internet-based applications.

Despite Microsoft's success, it doesn't plan to rest on its laurels, but instead will continue to put up a fight against its competitors, Chairman and CEO Bill Gates told a crowd of several thousand here at Comdex France today.

"The mentality of Microsoft is to always look for what we should be worried about," Gates said. "We all have to earn our success a month at a time." Microsoft employees work in an environment where making products better is like an obsession, he said. "Even though there is no financial crisis we are very good at creating a crisis atmosphere," Gates said.

Gates spoke about the competitive nature of the computer industry in a question and answer session after giving a short speech about how businesses, schools, governments and individuals need to take advantage of the Internet and Internet-based applications.

While some of Microsoft's competitors think that Microsoft is too powerful and are calling the company a monopoly, that is completely untrue, Gates said. Microsoft's revenues represent only 4% of the overall software industry worldwide and 1% of the overall computer industry, he said. "There is room for a lot of good companies, he said. Netscape Communications Corp. and Sun Microsystems Inc. don't have guaranteed futures, but neither does Microsoft, Gates said. "The computer industry is the most competitive industry in the world," he said.

If it were true that Microsoft is a monopoly, it wouldn't have lowered prices, continually improved products and doubled research and development spending, Gates said. "That's why I love this business, because it is so competitive," he said.

There will be no demand for Microsoft's existing products in three or four years, Gates said. Microsoft has to try to better its suite of products by investing in research and development and listening to its customers in order to be the company to replace these products -- otherwise Microsoft's competitors will do it, he said.

Being able to recognise what customers want and where the industry is headed is one of Microsoft's greatest talents, Gates said. "We come to work every day not because of some financial goal, but because we are excited about building great software," he said.

"We were surprised when the Internet became such a big phenomenon and we found ourselves behind some of the smaller companies that had been inventive around the Internet," Gates said. "We had to step back and say: 'look, if we don't do a great job on this we are going to go out of business'."

But while Gates claimed that competition and the constant pressure to increase the technology and value behind products are driving Microsoft to succeed, he didn't appear very worried about the strength of two of the company' most formidable adversaries, Netscape and Sun. He said he was unsure if either company could succeed based on their current business models.

"Scott McNealy (CEO of Sun) is always talking about Microsoft," Gates said. "Sometimes when you listen to him, you forget what company he comes from ... Hey, he is spreading the word that he is worried about Microsoft." However, when asked whether he was worried about Sun, Gates simply said, "No."

The Unix market is fragmented and the volumes are very small, Gates said. While Unix shipments went down last year, shipments of NT workstations grew 80% he said. "I couldn't guarantee that Sun will do well in the future because not allowing their customers to use NT I think will prove to be a mistake."

As far as Microsoft' well-publicised fight with the US Department of Justice over the questionable integration of the Internet Explorer browser into Windows, Gates said that Netscape and the rest of the Internet industry have been working on this level of integration since the advent of the browser.

"It was clear from the beginning that the browser would become a feature of the operating system," Gates said. Netscape planned to turn Navigator into an operating system to replace Windows, he said. "They (Netscape) always knew it was natural for the operating system and the browser to go together."

During a question and answer session later in the day, with Dominique Strauss-Kahn, France's minister of the economy, finance and industry, Gates reasserted his commitment to working with the French government to develop research and development in the IT industry. However, Microsoft has no plans to site an R&D facility in France, Gates said.

Rather, Microsoft will cooperate with the French government to offer training to IT professionals and engineers, Gates said.

Several attendees who listened to Gates' speech were impressed with his candor.

"He explained that Microsoft has made mistakes," said Dominique Bourrus, European sales director of Zenith Data Systems in Puteaux, France. "It's good to know that Bill Gates can make mistakes too."

"Bill Gates is a man who reacts well to hard questions," said Jean-Pierre Castric, commercial director at Microsens France in Verdun, referring to the question and answer session led by the Comdex France organizer after Gates' presentation.

However, another attendee was less than impressed. "Bill knows how to say things without really saying anything," said Serge Boursin, human resources director at RATP, the operator of the Paris Metro.

(Joy Dietrich in Paris contributed to the report.)

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