Network: Is Bill losing his touch?

The Microsoft chairman got more bad news at last week's European IT Forum.

Bill Gates played down future developments in information technology last week as the research group IDC revealed that by 2002 the PC will have lost its monopoly as the device used to access the Internet. At IDC's annual European IT Forum in Paris, Gates also robustly defended lengthy testing periods for the delayed version 5.0 of the Windows NT operating system.

Meanwhile other assembled leaders of the IT industry wondered privately whether the Microsoft CEO is losing his ability to execute. The question on their lips was this: is Microsoft starting to look like IBM did in the Eighties - weighed down by impossibly complex development goals, losing its grip on an industry that is evolving faster than it can move itself, and, on top of all that, distracted by the prospect of a lengthy legal battle with the US government?

Gates' message was that Microsoft's Windows technology is standard and ubiquitous. Since it will do everything an organisation wants it to do, there is no need to move away from it.

"[It] will not stand in the way. There is no need for major investments", he said. The task for enterprises now is to make information flow more effectively round the organisation by building "digital nervous systems" so that employees can share knowledge.

Always one to practice what he preaches, Gates noted a rule he had made at Microsoft concerning the prolific number of e-mails which are sent around the firm's Redmond, Washington HQ. For every piece of good news, a win here and a goal achieved there, a piece of bad news must be sent out, too - a bug here and a computer crash there, perhaps. "Bad news is actionable" - that is what it means to fire up your digital nervous system.

But Gates went further, attacking the pretenders to the PC throne. Two years ago at the same event, a head-to-head clash with arch-rival Larry Ellison, CEO of Oracle, had seen Gates' PC crash on stage when Ellison's Network Computer (NC) wowed the audience. Predictions that NCs would replace PCs spread around the world. But, Gates pointed out, since then the NC idea had been eclipsed by falling PC prices and easier-to-use software.

"The Network Computer is pretty discredited", he said. Gates also rounded on Java. Proponents, often the same people who promote the NC concept, claim that this programming language will provide an operating system more suited to the networked age than Windows.

But Gates, of course, still has his doubts. "That people are going to rewrite every software application in a single language, to me that seems pretty mythical. But we will have to see." Gates also defended the work being done on NT5.0 and the "breakthrough" it represents in corporate computing. But it was not until the questions and answers that the real issue of its delayed release was addressed. Although Microsoft officially says NT5.0 will be out next year, industry commentator Gartner Group believes 2000 is a more reasonable date, since only then are any bugs likely have been ironed out.

Gates identified the problem as one of testing. The test periods of beta software are now nine months rather than the six months which had been the norm with NT4. There is a need for new testing methodologies, Gates admitted. Gates has an easy manner on stage (notwithstanding his four bodyguards), but one wonders whether he would have looked as comfortable had he heard IDC's latest research announced earlier in the day.

"[The Internet] is the largest and most extensive business opportunity in the history of IT", said Patrick McGovern, chairman of IDC, as he introduced the new research. Last year, of the 32.9 million devices shipped with Internet connectivity, a massive 96 per cent were PCs, which, given that 90 per cent of those run Windows, means that Microsoft dominates the Internet access market. However, in only four years' time that 96 per cent will have dropped to 57 per cent.

Frank Gens, IDC's senior Internet analyst, predicted that there will be a big change in Internet access technology away from the PC to interactive television, web-enabled mobile phones and online games consoles. Is Windows CE, Microsoft's operating system for handheld computers and set-top boxes, going to be successful? Will Pentium chips fill all these new boxes? "I think not", Gens replied.

The Web in 2002

n The Web-user population will reach 320 million, from 97 million today, with a quarter of those located in Western Europe.

n Web sales will hit $425bn, $55bn originating in Europe. Business-to- business commerce will take a 79 per cent slice of this $425bn pie.

n 40 per cent of people going online will be purchasers (30 million in Europe), compared with only 28 per cent today.

n The total amount of money being spent on the Internet will fall only a little short of $1 trillion, up from $211bn today.

Source: IDC