Bill Gates (Bill!) dropped by the Computer History Museum on Friday for a brief congress with the Microserfs of Silicon Valley and a conversation with John Hennessy (President of Stanford). Topics covered by the conversation: security, DRM, malware/adware, making computers even easier, and The Future.

But first some fun.

The event opened with Microsoft’s “Behind the Technology” video, a spoof of VH1’s “Behind the Music” that charted the rise of Microsoft from the days of the Altair to present day. In a particularly hilarious sequence, Anthony Michael Hall recounted the stress of playing Bill Gates in “Pirates of Silicon Valley“:

Anthony Michael Hall: Preparing for that role was challenging – the caffeinated drinks, the cold pizza, the late nights, the lack of showers – it was hell. I mean, this guy was a geek.

Video cuts to Bill Gates

Bill Gates: He’s supposed to look like me?!? Come on – that guy’s a geek!

The video was rounded out with comedy ranging from the absurd (P. Diddy rapping about DOS and his all-DOS rap album project, “DOS Forever”) to the downright scary (Steve Balmer reprising his “Monkey Boy” antics as he hawks Microsoft Bob in a pitch that would put Ron Popeil to shame). Bill even got in on the comedy:

Bill Gates: It was very clear to me that the Internet was where everyone was going to be. It was especially clear to me after everybody had already gone there.

The video wrapped up with a highlight of the fictitious next episode of the program focusing on the exciting world of databases while cutting to a shot of Ellison aboard his yacht.

Right – humour aside – what was on Bill’s mind? Here’s the summary from my notes.

Natural Interfaces

John Hennesey put the question to Bill: what do you see as the biggest failure of computers? Bill responded that we’d been working on speech recognition since the mid-sixties and we were still having a difficult time with getting it work reliably. The need for speech recognition, from his point of view, is being driven by the need to provide more natural user interfaces which enable people to interact with computers in an intuitive way. The same thinking also applied to digital ink and handwriting recognition – and in both cases, Bill believed that Asia would be on the forefront of these technologies, driven by the unsuitability of keyboards for handling Asian languages.

Privacy and Security

When asked about the tradeoff between privacy and usability, Bill started by talking about the threat of spam and phishing attacks. In the case of spam, he felt the current solutions were about halfway to solving the problem – he noted that in the case of Microsoft’s internal network, he’s never received a piece of spam. In contrast, he viewed the threat of malware and adware to be on the rise – and revealed that Microsoft intends to provide a solution. This is rather ironic, given that security holes in it’s own products, primarily Internet Explorer and the Windows operating system, are providing the means to infiltrate users’ computers and propagate this menace.

The conversation turned to talk about the threat of allowing arbitrary code to run on a computer. Bill explained the difficulty Microsoft had in trying to simplify the concept of security for the user – initially, they thought it would be enough to have a popup ask the user if they wanted to allow a script or embedded executable on a web page run on the user’s computer. Unfortunately, Microsoft soon learned that users’ simply clicked on “OK” for everything! Going forward, Bill believes there needs to be tools to “prove” code, to show or describe contracts between code modules.

Preventing bad code from being installed in the first place only provides part of the solution. Another part is isolation to ensure that any infected machine is unable to propagate its infection to other machines. Part of the problem, according to Bill, is that the Internet is an open system. Unlike biological systems, where the spread of a virus is limited by the local environment, a machine on the Internet can contact just about any other machine – infection runs rampant. In the future, Bill believes we need to build systems that enforce isolation by default – who to accept connections from (or data, as the recent JPG decoding flaw illustrated so effectively). In short, the Internet is missing some form of guarantee; whether this is achieved by layering something on top of the existing system or by establishing a new system remains open to debate.

Digital Rights Management (DRM)

Inevitably, the discussion turned to focus on DRM, which is only natural as any system that can “prove” code might just as easily be able to be used to ensure that the user can’t access media for which they haven’t paid. Most interesting was how Bill focused this discussion on privacy of tax records, patient records, and other private information, instead of media. When asked later by Brad Templeton about the feasibility of DRM in light of the analog hole, Bill was quick to contrast the DRM requirements of media from those of other private information. Undoubtedly, Microsoft is going to pursue DRM for applications like health records – and in that domain, he argued that there is no equivalent to the analog hole (though I would argue otherwise – copying the information by hand counts, at least in my mind).

When it comes to media, Bill viewed this mostly as a consumer issue. There will always be leakage, but the key to successful DRM would be removing the barriers to transportability. I should be able to move my music around without a problem – the rights and the music should be held separately, in fact, he argued. The transportability of secured media will be the determining factor for where the balance between free and paid media – make it easy for the user, and they’ll pay for that convenience rather than scrounging to rip off the content producers (a point hit on in “The Long Tail” in this month’s Wired).

Open Source

During the questions, one of the audience members asked about how Microsoft would proceed in light of the threat of Linux and Free/Open Source Software, especially in developing markets like China. Bill got a little out of joint here when the person posing the question mentioned that more that 50% of all servers were running Linux. “First, start with the facts,” Bill quipped, and proceeded to explain that Windows was still dominant in the server market.

Bill then pointed out that China already has free software – they’re running pirated versions of Windows! The key to the future for Microsoft in these markets was proving the value of the software, the system, the support, and the ongoing innovation required to meet customer needs that Linux was not capable of delivering. In countries where Microsoft faced high piracy rates, this strategy had brought compliance rates into line with those in North America, and he seemed convinced that the same would happen in China.

Bill went on to point out that Linux was mainly serving to unite the fragmented UNIX market – something that the UNIX manufacturers had been unable to do (“Every week, they’d all get up on a stage somewhere and swear to work together, and then the HP guy or the IBM guy would go back to the engineers and demand they make their version better than everyone else’s!”). In his view, in the future there will only be two operating systems: Windows and Linux. As for the others? Bill got a bit cocky here, saying:

Bill Gates: Microsoft has had clear competitors in the past. It’s good that we have museums to document them.

Then again, the Computer History Museum just happens to be located in a former SGI building, so perhaps the cockiness is justified.


This topic came up somewhere in the DRM discussion, but was touched on only briefly. Bill contrasted the difficulty of securing software from securing the electoral system in terms of the problem of having to convince the public at large that a system is secure. As he put it quite succinctly:

Bill Gates: Software is magic. People don’t want magic involved in ensuring the integrity of the voting process.



Unfortunately, I never had the opportunity to ask Bill a question provided by my co-worker:

When you and Paul Allen wrote the first version of Basic for the Altair on a home-made software emulator, the legal system was, shall we say, less mature than it is today. Your hacking led to one of the largest creations of jobs, wealth, and technological progress in this country’s history.

Do you feel that what you did then would be possible in today’s intellectual property framework, and do you see that as a good or bad thing?

Overall, I was pretty impressed with the event. Although I had seen Gates speak before at a Microsoft conference (where he delivered a keynote speech and introduced a few demos), he seemed more engaged in this discussion. Though nothing he said was especially surprising, the breadth and depth of his apparent knowledge was impressive. It’s worthwhile to try and see him if you ever get the chance.


A couple of weeks ago, I heard Julie Hanna Farris of Scalix contrast the current environment in Silicon Valley with that of the Bubble era:

It’s been interesting to reflect on the past nine years. Scalix is my fifth startup. The first startup was in ’95 at the beginning of the bubble, and so I watched what happened as we went up the bubble. The last startup was a company that had an $850 million dollar exit after one year. I watched the discipline of the investment banking community completely go out the window from the first startup (it was the “four to five quarters” discipline) to my last company. They would approach us and sit down and talk with us and we’d say, “Well, we’re working on our first big deal and we think we’re going to have revenue soon,” and they’d say, “Well, you don’t really need that – why don’t we talk about taking you out?” It was a bizarre experience.

Scalix also is two years old – we started during a desert, and I started the company as an entrepreneur-in-residence at a venture firm. I’ve often wondered if that hadn’t been our start, if we would have been able to get off the ground because it was quite an adverse climate. I think the return to discipline is valuable – I think what disciplined a company after the crash was fear. And the combination of discipline and fear created a really hostile climate for entrepreneurs. The bar became very high – became, in some ways, impossibly high. Advising the venture firm that I was involved with on deals as they were coming in the door, I was a lot of great stuff, a lot of great entrepreneurs, and it was kind of sad to see that they didn’t really have a chance to get going because of the fear and because a lot of the unanswered questions (because they were so early stage)…there weren’t answers to the questions that were on the table.

We’ve seen a balance come back, but I’m concerned that we’re actually in a mini-bubble now, again. It seems we have a difficult time being balanced and sanguine and getting real about what it takes to build a long-term sustaining company. I think that part of that is coming off the high of the party that felt really good and intellectually knowing, “Well, gee, that was a passing thing,” and another part, an irrational part, saying, “Well, maybe we can do that again”. I see some of that going on right now.

The past month has seen a lot of action. Hell, the last week has seen a lot of action. Yahoo acquired Oddpost; Microsoft acquired Lookout; Google acquired Picasa; Symantec snapped up Brightmail and TurnTide in quick succession. Reaching back a little further, Friendster got VC money, and NewsGator got VC money. Looking forward, Novell appears to be cash heavy and looking for acquisitions.

It hasn’t all been funding and acquisitions. There is much jockeying for strategic alignment and position, and trends of note in the news as well. Flickr (a hometown favourite) and Feedburner decided to get together; MovableType got themselves a new CEO and acquired its French partner; both Microsoft and Sun approved internal employee blogs; bloggers have been invited to the Democratic National Convention; and Technorati has just passed the 3 million blog mark. Meanwhile, Apple has announced a new iPod to follow up on its Airport Express. Things are hopping in the circle of Silicon Valley life.

What’s going on? Is this the start of something real or a bunch of geek intellectual wanking? Is Julie right? Is this activity a result of a lack of discipline, a land rush? Or the Next Big Thing? While, it’s unclear where all of this will end up, I find it interesting to note all of these technologies are enablers for the individual – individuals create the content, individuals control the content, and individuals use technology to choose which content matters to them. Not a distributor or broadcaster in site. Provided the lawmakers don’t get in the way with silly legislation, this has the makings of a truly liberating wave of technology for consumers, a new era of interpersonal connections.

The trick, of course, will be figuring out if anyone can make a buck off it!