>REDMOND, Wash., May 23 (Reuters) - The spectacular bursting
of the dot-com bubble is not the end of the technology boom
only "the end of the beginning," Microsoft Chairman Bill Gates
said on Wednesday.
"This next decade is the big one. This is the decade when
your involvement with computing will be pervasive," Gates told
a meeting of about 140 corporate leaders at Microsoft's fifth
CEO Summit.
Although dot-coms never lived up to their unrealistic
promises, technology will radically improve how many other
companies manage data, customers and partners, Gates said.
The next few years will see software and the Internet tie
together everything from PCs to handheld computers to new
devices like the tablet PC, a folder-sized portable machine
with a large-screen that can be written on, he said.
In line with that bullish theme, each CEO received a Compaq
Computer Corp. handheld iPaq computer powered by
Microsoft Corp.'s Pocket PC platform.
But there was a delay of a few minutes in the start of the
conference as the devices apparently overwhelmed the wireless
network set up to allow attendees to send messages to each
other and submit questions to speakers.
Ironically, in his earlier remarks made moments after the
wireless network problem, Gates said the only weak link in
deploying new technology was high-speed Internet access, which
was proving too costly to roll out quickly.
BROADBAND PROGRESS VERY SLOW
"There is no hardware limitation that will affect what you
want to do, but there is one exception and that is the cost of
broadband communication, primarily to the home," Gates said.
It was optimistic to think 20 percent of U.S. homes would have
a fast Internet link within four years, Gates said.
"That is an area where progress continues to be very slow,"
Gates said.
This year's gathering included old Microsoft friends like
Michael Capellas ofCompaq, new partners like Meg Whitman of
online auction house eBay Inc. , and non-tech attendees
like lifestyle guru Martha Stewart.
In a media briefing, several chief executives offered their
views on the economy, technology spending, and how they planned
to use computers and the Internet to boost their businesses.
"We're seeing some stability come in to the market," said
Sanford Weill, chief executive of financial services giant
Citigroup Inc. . "We're going along a sort of muddy
bottom, and hopefully it turns out to be the bottom, but it's a
little too early to tell."
Weill said the series of interest rate cuts combined with a
$1.35 trillion tax cut could add as much as 1 percentage point
to economic growth this year, but corporate technology spending
could show further weakness as companies focused on profits.
"Most CEOs are very focused on the numbers for Wall Street
and there's been a lot of postponing of technology spending
where the payback couldn't happen at the same time as the
expense," Weill said.
Gates said investment outside of the dot-com and
telecommunications sectors appeared strong, but joked that last
year's gathering of top business minds had failed to predict
the current slowdown.
"The CEO conference's record at economic forecasting is not
super strong," Gates said.
LESSON FROM CHURCHILL
The past year, in which the value of the Nasdaq index was
cut in half, high-flying dot-coms were laid low and spending on
technology slowed, provided the insight that the so-called New
Economy had not rewritten old economic laws, Gates said.
"How could a technology that reduces barriers to entry
allow the creation of companies whose value is greater than
ones that created assets in the real world where you build
stores and there are barriers to entry?" Gates said. "That
paradox has now been resolved -- there was no reason for that
to take place."
But, sticking to his message that the connected computing
era has only just begun, Gates said the situation reminded him
of remarks by Winston Churchill during World War Two.
"He said, 'Now this is not the end, it is not even the
beginning of the end, but it is perhaps the end of the
beginning," Gates said.
He said he expected retail sales over the Internet to
quadruple in the next five years, and put his stamp of approval
on eBay and retail giant Amazon.com Inc. as examples
of Web companies that will survive.
"There's no doubt in my mind that some companies, like Ebay
and Amazon, that were created partly as part of this Internet
excitement, those are companies that are going to be here for
the long-run," Gates said.
As for his own business, Gates said software was becoming a
tough sell.
"Intellectual property has an interesting problem, which is
that it lasts forever. Your own installed base is serious
competition. You have to do better," Gates said.
Sales of Microsoft's core products, the Windows operating
system and the Office suite of software, have slowed in recent
years as new PC buying trails off and existing customers find
little reason to upgrade.
It will launch new versions of Windows and Office this year
and plans to convert its products into fee-based Web services
that can provide a steady stream of subscription revenue.
REUTERS
Rtr 19:37 05-23-01 |
