Q&A with the Visionary-In-Chief
Business Week Online
A talk with Chairman Bill Gates on the world beyond Windows
Since the government's antitrust case against Microsoft Corp. went to court last October, Chairman William H. Gates III has kept a low profile, granting few wide-ranging interviews. BUSINESS WEEK Correspondent Michael Moeller and Senior Editor Kathy Rebello caught up with him during a stopover in Chicago on Apr. 26. He explained the company's sweeping reorganization, then supplied additional answers via E-mail.
Q:Microsoft's financials have never looked better. So why reorganize? Some would say if it isn't broken, why fix it?
A: Companies fail when they become complacent and imagine that they will always be successful. That's even more dangerous in a world that is changing faster than ever, especially technologically. So we are always challenging ourselves: Are we making what customers want and working on the products and technologies they'll want in future? Are we staying ahead of all our competitors? What don't our customers like about what we do, and what are we doing about it? Are we organized most effectively to achieve our goals? Even the most successful companies must constantly reinvent themselves.
Q: What are the three key principles of the reorganization?
A: First, our vision had always been a computer on every desk and in every home, and we've gone a long way towards achieving that. But it was also clear that we needed to build on that vision. Although the PC is still at the heart of computing, it is being joined by a large number of new devices--from palmsize PCs to smart telephones. At the same time, the Internet has changed everything by giving the world a level of connectivity that was undreamed of just five years ago. So we needed a new vision centered around the Internet and focused on giving people the power to do anything they want, anytime they want, anywhere they want, and on any device.
Second, the new structure puts the customer at the center of everything we do by reorganizing our business divisions by customer
segment rather than along product lines.
Third, we're now holding the leaders of our new business divisions accountable to think and act as if they are independent businesses. That will give us even more flexibility to respond to changes in technology and the marketplace.
Q:You've been freed to spend more time as the company's visionary. So what technology do you see on the horizon that will dramatically change people's lives?
A: I'm optimistic about what the industry can achieve, but the word ''dramatic'' will mean different things to different customers. If
you're a large enterprise customer, being able to connect your employees with on-demand videoconferencing for collaboration would be dramatic. If you are head of IT for a large corporation and can deploy software, do updates, and change users on a companywide network of PCs, and never visit a desktop, ever--that's dramatic. If you have a PC at home and use the Web to buy products such as a car, a TV, or a dishwasher, and if you can use your PC to track the warranties, find the nearest repair center, and have your PC store remind you of all that information--that would be dramatic.
Q:Do you think information appliances will become as popular as desktops? If so, how will Microsoft fare in that world?
A: Desktop PCs have been incredibly successful. Most businesses have them, and 50% of homes do. And for most people, the PC will remain their key computing tool, but it will also work alongside a lot of other cool devices. That's why we've expanded our vision to giving people the power to do what they want, where and when they want, on any device. That means on PCs, handheld PCs, phones, or smart TVs such as WebTV. We're working hard to provide the software, like Windows CE, for a range of devices. I'm not sure that everyone who currently has a PC will also have a handheld, but the market will be very large.
Q:Is the company more serious now about going beyond the PC and Windows?
A: We've been doing things that go way beyond the PC for a long time....Who is the biggest mover in TV-based Internet computing? Well, that's us. Has it taken over the PC? No, it has not. Is it something important that we believe in? Absolutely. So it's always hard to bring the right balance to those discussions....The last thing I want to do is get this notion that we won't have any full-screen devices and we won't be creating documents ever again.
Q:Which three companies do you consider to be your biggest competitors today, and why?
A: In 25 years in this industry, I have never seen so much competition in every single area, and the competitive landscape and market boundaries are constantly changing. In the software industry, the barriers to entry are very low, so anyone with great ideas can build a business. New competitors such as Linux are constantly emerging and growing amazingly fast. In the U.S. alone, $14.3 billion in venture capital was raised in 1998. That was a record, and all of the 24% growth [in venture capital] last year was invested in IT companies. Plus the VC number doesn't count the cash that companies like IBM, Intel, Compaq, Time Warner, Disney, and many others are investing in startups. So it's hard to name just three competitors, because we have so many in each of our businesses, and they are changing constantly. But I can probably narrow today's list down to IBM, Sun, AOL/Netscape,
Novell, Linux, and Oracle.
There's an unchanging competitor too--ourselves. Customers can choose whether to stay with the software they have or upgrade to
our new products. We have to ensure that all new releases are much, much better than our previous products. If they aren't,
customers won't upgrade.
Q:Is there any threat that keeps you up at night?
A: Well, my daughter used to keep me up, but she's older now. I imagine when our new baby comes I will also have some sleepless nights. Seriously, every year we have been in business there have been serious threats to our future. But we just work hard and keep focused.
Q:Has the Justice Dept.'s antitrust suit against Microsoft had a significant effect on the company?
A: The legal side of the thing doesn't really affect the people at Microsoft who are building the software, working with customers, or anything like that. If you looked at my calendar, you'd find maybe 2% to 3% of my time is spent on this. I did my deposition. That was a few days. I talk to lawyers every couple weeks about how they're seeing things....Contrary to this image that's created in the press, it's not something that is a major focus for me.
Q:Can you imagine yourself doing anything besides leading Microsoft?
A: I've said many times that I have the best job in the world. I get to work on really interesting projects, like figuring out how to
make digital, audio, and video so easy that a grandmother can see her three-month-old granddaughter on her PC. I get to work with an incredible group of smart people who are helping solve hard technical problems. I love the software business, so I plan to stick around for a long time. |
