The Engadget Interview: Bill Gates, Part 2
posted May 3rd 2005 1:31PM
Let's change gears a bit. There's been a lot of talk recently about a possible compromise between HD-DVD and Blu-ray, but Microsoft isn't mentioned in these discussions. You guys aren't firmly in one camp or the other, but how important is a single unified standard to Microsoft?
Well there're certainly some great features in terms of the fabrication costs that the Toshiba proposal has and there's some capacity benefits from the Sony camp. And I'm not a hardcore hardware person to know if there is a way to get the best of both worlds, given the politics of who gets the patent royalties and the credit and into the market first and all that. It may take a little bit of time for this to be worked out. We're not at the center of that because we're not a hardware company, and yet we need to make sure that whatever comes out is supportable in Windows. And there're some configurations of those devices a year ago that in terms of the way they were thinking about things technically wouldn't have worked well with the PC environment. We've made significant progress with both camps on that. For example, supporting what we call VC 1 as an encoder that we have as a feature in Windows. Not exclusively, but as one of the required things that happened like six months ago. That was a great milestone for us.
Microsoft is basically agnostic towards either format?
[Long pause] We want to see a single format, and we think it's best for the PC industry for a single format to emerge. That won't necessarily happen and if it doesn't then to some degree we'll have to support both formats.
I really wouldn't want to pick that. I think you basically would have a stalemate because who's going to buy movie
thinking that they're buying a Beta movie? I think it would freeze the marketplace. That's why there's so much pressure
to try and get this resolved. I think basically the winner of [any stalemate] will be called DVD. And HD movies, at
least those delivered on an optical disc, would be set back two or three years.
That actually leads to my next question about home entertainment and the PC. Microsoft has a lot of behind the scenes
initiatives right now, but what do you think the relationship is between the Media Center PC and then something like
Foundation, Microsoft's software for set-top boxes?
Let me try to be succinct about this. In the home you're going to have a variety of devices. So you'll have a set-top
box which you can think of as kind of the simplest device. It will clearly be able to handle digital rights management
and deal with high definition digital video. And then you'll have something like a video game that will be a superset
of that. And so, for example, Xenon is more powerful than any next-generation set-top box and it can be used as a
set-top box, but obviously it can do a lot more than that; you can run the entertainment and other software
there.
Then you have a Media Center PC that's even beyond that in terms of storage and the kind of ecosystem that exists in
the PC world. And so in the case of the set-top box you typically would store the video back on the server, either the
Media Center server in the home, or the your video provider server back at the head-end. And that does have an
advantage over sticking a hard disk on everything because you don't even have to think about recording something [ahead
of time]. The old shows are just there. There are various rights issues to work out on this, but we've got the user
interface and IPTV gives you the ability to watch a show anytime you want without having planned that before the show's
aired or having this hard disk in your living room. You shouldn't have to have that.
Anyway so all these things that have to work together in the home, and the cheapest device is that set-top box. We're
working with the cable industry and the telco industry on that piece and then we do all this server software for them.
You're right that this IPTV thing is very exciting and it doesn't get that much visibility because you know right now
the design wins are with cable and telco, and until they roll out big numbers the people won't get that TV is going to
change, and that the way you're going to serve, the way you're going to find things, the way you're going to interact
with the ads, the way you're going to think about DVRs, that's just going to change. And even the boundary between
what's an interactive game and what's TV, that boundary—of course there will still be those two poles—but there'll be
things that are even in the middle in terms of learning and game shows. Some of this stuff was talked about 15 years
ago when we first got into this and those dreams are becoming a reality.
But how does the Media Center PC, for instance, survive the transition to digital TV? It seems like there's a
lot of resistance on the part of the cable companies to provide the kind of support for CableCARD that third-party
digital video recorders, be it a Media Center PC or TiVo, really need to be a part of that ecosystem you're talking
about.
Oh, we'll get support for CableCARD into Media Center. That's the whole idea of enabling different end devices to
connect to the cable network. I mean there are a lot of efforts to enable that to happen. We're working hard with the
cable industry right now to get through the specific qualifications there. But that's a very necessary thing and it's
nice that the framework guarantees that end devices can get connected up on an objective basis. So we're off doing
that. In fact, we have good relationships with the cable industry that are hopefully helping us get that done faster.
So we will do that. We have a DTV over-the-air antenna capability in some of the Media Center PCs today, but we really
want easy access to all video sources. Today what you have to do is you have to do an analog to digital convert back
in, and that's a little bit harder to set up, a little bit more expensive, and you give up a little bit of quality when
you do that. You really want to have those digital bits directly, but they reasonably want to make sure that there's
some degree of protection there as good as, say, they have on DVD or other things.
Before we have to wrap things up, I wanted to ask you about Tablet PC. According to IDC, only 1.3% of all PCs
sold last year were Tablet PCs. Is that good enough? Were those the sorts of numbers that you were expecting when you
launched the platform a few years ago?
Well I believe in Tablet and I'm never the best person to know what the ramp up will be like. We're not mainstream yet
and we are hardcore, we're going make it better and better and get this thing to be mainstream. I'm very encouraged by
this sales growth we're seeing right now. The last three months has been the record by far. You know, it just takes
time. You gotta get the cost premium down. We're working hard on this one. We expect it to be a standard feature of
every portable and that would be more like 30% of all PCs than 1% of all PCs. So we're going to get there.
How far away are we from that, do you think?
I'm not good at predicting that. I'll be bold enough to say two years away, 2 ½ years away. It's very non-linear. It's
not like you go one, two, three, four, five, six, seven, eight. I mean you go you either go one, one, one, one, one, or
you go one, ten, 15, 20, where it's just "Oh, you didn't get graphics user interface? What were you thinking? You
should have graphics. You didn't get a USB connector? Come on. You know that's a necessary thing." And we need the word
to spread. We need people to sit on a plane and see somebody next to them who's using OneNote and they go, "Whoa, what
is that?" We need people to annotate things and mail it to people and when they get it they open it and say, "How did
that person do that, that is so cool the way they've circled and underlined and done those things." And we just need to
get the price points coming down. We need the dual-spindle machines that we didn't have. In retrospect it's clear, in
both software and hardware, that there was a lot to be done to get into the mainstream.
But doesn't what you just said point to the fact that a big part of the problem isn't just hardware and
software, that it's also with the way the Tablet PC has been marketed?
Yes. But then again, when you finally get that magic thing where you get the right hardware and software and right
marketing it's never really the size of the marketing budget, it's more how you get the exposure. Because after all,
all marketing does is take enough of a group that loves the thing and gets them talking to their friends. And we have a
little bit of that right now. The people who own Tablets, many of them are rabid Tablet evangelists, and so we need
about ten times as many of those before we're moving towards the mainstream. There's a lot of neat technology behind
this, there's a lot of user benefit, like digital reading, digital annotation, and so I know that the Tablet OS we have
today is good, but the next big change will be the Longhorn Tablet. And we haven't shown any of the public that and
that's when I said we've only shown a glimpse of Longhorn. We haven't shown Media Center Longhorn, Tablet Longhorn, the
browser. A lot of stuff is ahead of us.
Media Center, Tablet PC will all be integrated into Longhorn, correct?
That's right. They will ship. We'll have different SKUs but all those things there will be a major release that will
ship with the client and so that's the big update for those things.
So I'll be able to get my Tablet Media Center PC?
Actually we are looking at that, we will have an SKU that combines those. That's been a little bit of a missing piece.
People like Toshiba that are doing these machines that are great for that have been very clear about that.
Well, thank you so much, it appears we're out of time.
I had a good time talking with you. You've got a fun job!
Thanks again to Bill and the people at Microsoft for their time; we'll have a podcast of the interview later this
week!
Well done, Peter.
P.S. I'm not real big on the Xbox, TabletPC, or Media Center. I know nobody probably cares, but next time maybe hit up some questions about Visual Studio and .NET, k? Peace.
#34 i'm amazed one still can say, after reading the interview, that "Gates Bill Gates is the only true visionary of our times". Duh. all Bill G. Says here is "we'll see what will become of the market and adapt" (That goes for set-top boxes and personal media, HD-DVD vs Blu-Ray, cellphones...)
Better yet, on some market they have already entered (Xbox, tablet...) "we're new to it, we have to understand and adapt".
Come on, did Sony wait for the PS2 to impose their view to the video game market?
Was the first iPod just a try in order to understand what should be a MP3 player based on users response?
The only "visionnary" part, as far as i see it is when he says they most often anticipate on available processing power when developping advanced features. I have a weird feeling about this, however.
Anyway, of course he should say so, because
1) on new markets, MS can afford spending millions on the launch of a "prototype product" just to take a grip on a market; and think about the user later
2) in the markets where they are already dominant (OS...) it's not like people actually have a choice. MS can also afford bringing "whatever they want" on the market, people just cannot "escape" windows like that and actually sentence the OS for it's flaw.
Also, i don't thing they've actually bought CP/M, they just presented DOS against it to IBM and IBM chose DOS.
And next, i'm a bit surprised nobody mentionned how Gates sees marketting! He's sure right in a few ways, but come on, is this how a leading edge company would talk about marketting?
By the way, I have posted a defend on NZ National Business Review vs Engadget on Bill Gates Interview, as well as some marketing view:
http://www.mindsharer.com/articles/marketing/newspaper-on-engadgets-interview-with-bill-gates.html
Mr, Bill Gates !
I'm Phong. I'm a Vietnamese. I have an invitation to invite you to go to Vietnam to invest. You will be successful !!!!! Thank you very much for your attention !!!!!
Can someone please explain why Microsoft is being blamed for forcing the evils of DRM on us?
I thought that the content providers (RIAA & MPAA) were the ones pushing for a licensing system? If MS don't provide one, then they'll have to pay for a third-party system to be bundled with Windows. It's not as if the RIAA would just let it go...
(I'd mention Apples DRM system, but the reality distortion field has twisted iTunes into a holy place where you can still hear them chanting "Power to the people" as they're slowly led further into the abyss.)
Oh I can't resist... FairPlay! I understand that this technology will be foisted on us, like it or not, but PLEASE don't insult me. Their next marketing campaign will be for the government... "Tax - You're gonna love it!"
"I think you missed the context. Read it again. What he said is that if there is a stalemate between the two new standards, DVD will *win* in the sense that it will remain the most popular choice because many consumers will wait for one of the new standards to pull ahead before switching. Your analogy is flawed because DVD had already become a standard and started suplanting VHS before DIVX was even in the picture. It would be better to compare it to the battle between DVD+R and DVD-R."
i think you missed the point. you are clearly confusing the "Divx" codec that currently exists with the failed "Divx" video discs... which appeared at the same time as DVD (and were based on DVD). in theory DVD and Divx were competitors in a format war. clearly DVD won... as now no one has any recollection of the Divx disc and only the completely unrelated format that nicked its name several years later. Divx was basically a time-limited video disc... meaning you could hop down to the Circuit City (and only Circuit City) and buy a new movie for as little as $4. you can then watch the movie... as much as you want... for 48 hours. after that it stops playing. the players had a modem line and called home to activate/deactivate the discs. clearly a greedy greedy stupid move. and hence no one ever bought them.
a *better* example to have used would have been MD vs. DCC... that was the supposed format war for the next generation of recordable audio media. cassettes were clearly showing their age... so a replacement was needed. instead of releasing affordable CD recorders... which is what everyone really truly wanted at the time... two camps came up with their own next-gen DRM-laden digital recorders. no one really wanted that. but they were released anyhow... and MD and DCC battled it out for a bit... both with piss-poor sales compared to CD and with both eventually being beat exponentially by the existing popular digital format being made recordable. and without stupid restrictions. CD-R.
basically he is saying the same thing will likely happen with a Blu-Ray/HD-DVD war. if there is a format war between the two... the real winner will be plain old DVD as people have already invested in DVD. studio have already invested in DVD. and most people are perfectly happy with DVD and most people don't (and can't on your average standard definition TV) see a reason to change. (by most people i mean the majority of non-nerds with normal standard definition TVs and that don't know the difference between the 4 connections on the back of a DVD player and just use composite... the majority that aren't going to move onto the next thing already.)
basically this 'war' is going to be amongst a very small percentage of buyers. and most movies will remain being produced on DVD. and DVD will stay the 'default' lowest common denominator for many more years. without a 'war' and with dual media compatibility (with older DVD and new DVD on the same physical disc... usable on both types of players) a lot of problems/delays could be avoided i would think.
I love reading anti-MS screaming. It's hilarious.
Listen: What MS may or may not have done years ago w/r/t Apple's GUI is irrelevant. I use Windows, Office, and a Tablet PC now because they best suit my needs and my desires.
For example: I am perfectly capable of running Thunderbird/Sunbird or any number of Outlook alternatives on my PCs, and for a time tried that. Ultimately, I was frustrated by the software, and reverted to Outlook 2003 -- sacrificing a small amount of performance for a huge leap in integration and functionality.
I am perfectly capable of running Linux -- I tried for a while with Red Hat 9. However, after literally a month working with linux experts online and in person trying to get my HPNA network, and later my simple wifi network, to run, I gave up. An operating system that doesn't work with my hardware out of the box, won't play MP3s out of the box, requires aggravation to just connect to the internet, and won't support the vast majority of software, is NOT for all intents and purposes superior to the end-user.
Finally, to say that Windows is 12 years behind mac and Linux is just ludicrous. I have a Macintosh in my closet right now that's about 12 years old. I'd love to see it handle Half-Life 2, even IF it had the processing power to do it. Heck, I'd love to see a sub-$1500 G5 run HL2. Because I can run it at maximum settings, 1280x1024, with 12xAA and 16xAF on my $700 PC. As for linux -- it may be slightly more efficient in theory, but the time saved in a few processor cycles is no where NEAR the time spent trying to get it to work all the time.
My windows machine just works, it does what I want it to do, and it's flexible enough to allow me to interface with other devices. I can use my iPod, albeit regrettably through the infinitely clumsy iTunes and the inferior design of the iTunes Music Store. I can swap hardware in and out at will to upgrade whenever I like. I can use Firefox instead of IE for all practical purposes. I can run legacy software and interface with legacy hardware. On Linux, you have to jump through hoops (assuming it's even possible ) to use an iPod, gaming for the most part is out of the question, and even basic office applications fall short. I've used OpenOffice -- it's nice for basic word processing, but then again, so is WordPad. I need the functionality that MS Office, and only it, offers.
Thank you for your rant, but we don't use Windows simply because we're peons lulled in by what everyone else is doing. I built my computer myself and made the conscious decision to install Windows -- at first dual-booting with Linux, then alone when I realized how useless that is -- because Windows does what I want, does it easily, and does it without fuss.
#4, Yeah, "hardcore" seems uncharacteristic for him.
I would really like to see him say "rocks the" ... like Engadget. That would make my day.
Eg. DOS rocks the 640k!
Eg. MCE rocks the DRM!
Kyle, very well said, I completely agree with you. For those who suggest that Microsoft is stealing ideas, well, I have news for you, everybody does, what it boils down to is 'who's stolen product people like best'
Bill Gates really doesn't care which will be the ultimate DVD HD format. What Bill does care about is that Windows Media will be the supported codec, including Microsoft's DRM.
Having control over the codec & DRM should earn Microsoft a sh*tload of money. Apple -of course- doesn't want this to happen. That's why the upcoming war in the digital world will be the media war (and it's actually already happening). Apple will try to push the MPEG-LA standard h.264 (and probably an open standard DRM), while Microsoft will try to push their propriatary Windows Media & DRM.
I agree with you for most part, Kyle Pflug. From "ease of use" point of view, Linux is still a few yrs behind Windows. GUI in Apple is probably little better, but performance is also important.
Only issue I have is about the security in windows, but with all these nerds betting their lives to hack M$ products (DRM10 already broken, but that doesn't harm users), no Gates' product is safe. But, this doesn't actually show the weakness of Windows, it shows collectively, determined people can do wonders. With this much effort any secirity on earth could be broken.
About stealing stuff from different companies, I just think these are pure craps. If any evidence was there, M$ wouldn't be where it is today. Losers always put allegations, who cares?
"Microsoft has even fined people for selling non-Microsoft products, so shut up." I think Stalfos is 1 of those people who got fined for not selling Windows :-)) Where do you hear such stories ?
The world wouldn't be any better place without M$ or Gates, Apple / IBM / Sony / Somebody else would have been in it's place doing the same...
I think that Kyle has hit the nail on the head. It's not about what you can possibly do with the product; it's what you can do with it right out of the box. The average computer user is not going to want to screw around with a bunch of settings just to surf the web. They want to be able to pull their new pc out of the box, plug it in and go.
I still do not understand why everyone always bashes Microsoft. Is it envy? I mean, is it just because he makes more in one week than any of us will make in their lives? If that is the only reason, then you guys need to get a life.
All this "Microsoft is a monopoly stuff is making me sick. Microsoft simply has superior products; the company is being punished for being successful. When a company starts to become successful, other companies like Netscape, Sun Microsystems and others think they can cash in on this success and sue because they cant get up off their lazy rears to develop a superior product to compete.
I don't know if it is only me, but I was expecting few juicy questions regrading Microsoft's approach vis-a-vis Google, iPod etc.
I have to say I am disappointed.
We only had half an hour, which wasn't nearly enough time to ask Bill about everything we would have liked.
Bill said Tablet sales have spiked in the last three months... when did we launch with Tablet PC show hosted by James Kendrick (and special guest host Marc Orchant)? THREE MONTHS AGO.
Wow. Bill, just put the money in my paypal account.
The amount of rubbish that I'm reading in this forum is absolutely disgusting. It makes me wonder if there is a bastion of logic anywhere in this world. I just cannot understand the anti-sentiment toward Microsoft. Why does everyone see it as an evil corporation out to takeover the world just because some other company can't earn its annual US$25 billion? It is an absolute joke that the industry leader is treated with absolute hatred for merely pioneering software before anyone else (even if there was a bit of pilfering here and there).
Many of you idiots forget that there can never be a market where everyone suddenly has equal opportunity to earn multi-billion dollar profits. The fundamental principles of capitalism dictate that. So get over yourselves and realise that Microsoft has done nothing that is perceivably wrong in terms of its business model.
Tablets will take off when the price premium is not very much. say $50 more, that's a no-brainer decision right there.
I have a Tablet PC that's convertible (Fujitsu) and though it sucks for gaming, it is just great for note-taking, scribbling your ideas and for those times when you don't have a desk to type on, the character recognition is quite good so you can go slate and just keep on humming. Reading ebooks and pdf files, it's awesome. Those who diss haven't tried them for very long.
For a site that is supposed to be about edgy & not so fashionable gadgets. Featuring the "Bill Gates" interview all over the site seems like a editorial mistake for this site. I mean you are five starring the most boring interviewee of recent history. A guy who hedges his bets constantly to copy whatever someone else has already done.
I would think it would be more interesting to 'feature' Chun King the 22 year old kid who pirates DVD's by hand & sells fake 'hello kitty'
cellphone holders while constantly evading the police off of 5th Ave.
That would be slightly more of a read than this crap. By the way. I like engadget. Read it everyday, but this is less than wallpaper. If you want a interesting interview get him (Bill) to tell you about how he needs more cheap foreign workers imported & how unimportant it is to just train the natives that were already working for him. Now that would be an article. Wait I forgot this isnt a investigative journalism site. Sorry going to take my Ritalin now.
Jeff, that is one of the most ridiculous comments I've ever seen on Engadget. They asked a bunch of really good, pointed questions about stuff I've never seen Bill asked about. They focused the interview on gadgets, not labor issues, and that's exactly what I would have expected them to do.
You can't bash on a man that gives billions to charity.
Bill, can I borrow a billion dollars? I'll pay you back as soon as I get the money. Also will gladly tell people about OneNote. Seriously: software is going to rule, 99% of hardware will be virtual when hologram keyboards/other interface devices and micro-projectors get cheaper. Eventually we'll have a projected display which reacts like a tablet, beamed from a tiny device equipped with a powerful processor and a powerful wireless connection.
Bill gates did make his monopoly by stealing other peoples ideas, but so did apple. Most software is just an improvment of something else. Unlike linux windows dosn't put there source code out there because they wouldn't make any money. But if they ever did it would be change and bettered and changed and better. Bill gates is improveing the software market, but he is slowing down progress in that same market. The xbox may be a computer but so is the playstation. Both can acually be configured to run linux. So they didn't really didn't try to cheat and call a computer and game console, they just came up with a better computer the playstation. I'm not saying bill is a good guy or not, just nobody is perfect. Some people just get morre attenion then others.
Interesting interview. It will be nice to see MS move into the livingroom with their stuff. I just hope that MS keeps things open for third party developers.
wow, nice interview! keep up the good work
it ramins to be seen what the end product will be like. u cant bet on anything bill gates says.