Podium: The exciting future ahead

From a speech by the chairman of Microsoft to the Professional Developers' Conference, Denver, Colorado

THE PC industry is continuing to grow at a very, very rapid pace. The fundamental structure, in which you have lots of companies specialising, and you have standards that allow these to come together and create customer solutions, has been the successful business model.

And there's no going back. Users have a choice of hardware that's independent of their choice of software. They've got a high-volume world that allows far more applications to be developed - far more peripherals and better chips than any previous structure in the computer industry.

In fact, if we just look at the last two years, the shift towards the PC part of this industry has been very, very dramatic. The key proponents of the PC approach, people such as Compaq and Dell, have been growing fantastically. Compaq has picked up the expertise from Digital and Tandem and brought that into its total focus. We have lots of players, people such as NCR, Unisys and Siemens, and the Japanese companies, that historically have been far more focused on mainframe or Unix activities, that are now making the PC the centre-piece of what they're doing. Even Hewlett Packard has made a dramatic shift to focus on PC activities.

And so not only are we the fast grower - the high-volume, low-price part of the industry; we are the part of the industry that's doing by far the most R&D, more than double what's going on in the rest of the business.

We can look at this in the hardware dimension or the software dimension, and see fantastic progress. Of course, Moore's Law continues at its unbelievable pace, giving us faster individual processors. But that's not our only performance win. We're also now taking more of those processors and putting them together.

So, along with the software dimension, the improvements in scalability, the focus on very high reliability and the focus on distributed computing all complement the hardware improvements and explain why we've seen such incredible growth.

New technologies are going to open up the information age. They're going to make it so that people's expectations on software are dramatically higher than they are today. In fact, when I sit down with business people, they're constantly now talking about how their websites, their sharing of information internally and the way they structure around these tools, are going to make the difference in how competitive they are in the future.

I think it's very exciting how companies are seeing their information infrastructure as a key thing for their future. And I think it's software, in the same way that it appeared to be the key element at the founding of this business 25 years ago. I think that, once again, software will emerge as the most important element.

There's a certain irony in this, that at the same time that we have 20,000 new software companies that have been created over the last five years, and that we have this innovation where our industry is directly generating 25 per cent of the country's economic growth, we have a situation of increased government involvement in it.

I think it's fascinating that somebody could say that there's a lack of innovation. There is no lack of innovation here. There is no lack of investment. There is no lack of competition. Today, at this time of economic uncertainty, it certainly would be unfortunate if government involvement with companies such as Microsoft, Intel, Autodesk and Cisco were to stall the remarkable explosion of these new jobs, the steam of the economic engine.

For all of you who work at the engineering level, imagine the government coming in and saying that we shouldn't put HTML support into our operating system. We'd be doing a disservice to people if we didn't build HTML into the operating system - if we didn't use that as an opportunity to unify the way we present the shell, the way that we do forms, the way that we do help. Also, imagine us not being able to go and talk to partners about technical activities.

For example, we went down to Apple to talk about taking Quicktime, and taking the work that we had done in our media player, and putting those together in something that we thought would be better for Apple, better for us and better for customers. Certainly there was some great work on both sides to be brought together. That kind of discussion makes sense, and the fact that Apple chose not to do it is fine. But, to find the government twisting that into a kind of discussion that should never take place, that's very scary to me.

There's an exciting future ahead.