Gates Says Online 'Manias' Over; New E-Biz Phase Beginning - InformationWeek

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Gates Says Online 'Manias' Over; New E-Biz Phase Beginning

The Internet is rapidly moving into a "third phase," Microsoft chairman Bill Gates told business leaders gathered today in Redmond, Wash., for his annual CEO Summit. The first and second phases were about businesses setting up Web sites and beginning to handle business transactions over the Internet, regardless of profitability--sort of "manias," Gates said. The next phase will be a rational one in which companies figure out how to make real profits as well as personalize delivery of information and integrate today's disparate systems into holistic, seamless systems for delivery of products and information.

Gates' annual gathering, which this year drew more than 160 global business leaders, is meant to enable Microsoft execs to influence decisions within major companies worldwide on a range of issues. Press access is severely restricted at the 4-year-old event, and the guest list is for the most part secret. Although the subject of Microsoft's antitrust difficulties--which were being argued in a Washington courtroom even as Gates was giving his opening speech--did not come up, it is an important undercurrent at this year's conclave.

Gates envisions the Internet's third phase as an era where the Net evolves from a single-direction, portal-oriented, and content-driven environment to a bidirectional one allowing more interactive services, expanding communications, and increased knowledge sharing. It will encompass "a transition from an offline economy to a real-time, online economy," said Gates, who in January resigned as Microsoft CEO and took the title of chief software architect.

While much of what Gates said was not new or unique to Microsoft, today's speech is seen as the lead up to the company's Forum 2000 event, coming June 1, where Gates will unveil his much-touted Next Generation Windows Services, or NGWS. That initiative is aimed at providing a roadmap to how Microsoft's products and technologies will change to support evolutions of the Internet.

Gates described four areas where changes in the Internet will have an impact. In personal services, for instance, financial systems such as banking, brokerage, and insurance accounts will be seamlessly linked with users' calendars, instant messaging, voice mail, etc. Gates also highlighted business-to-consumer, business-to-business, and business-to-employee categories.

In one demonstration, which Gates said took two employees two weeks to build combining existing systems from third-party vendors using Microsoft's Commerce Server and the Extensible Markup Language, he showed a customer ordering a product on the Internet. The order was processed, billed, and passed to a warehouse system worker's handheld device, and confirmation was sent to the customer's cell phone via voice synthesis. Today, "paper and manual processes are the rule, not the exception. Tools [built] around XML will make this [integration] pretty straightforward," Gates said. Gates also called out key technologies that will enable his third phase. Among those are the proliferation of broadband and wireless communications, PCs equipped with cameras and microphones, smart cards to enhance security as well as handwriting and voice recognition, and intelligent agent technologies.

As a nod to Microsoft's upcoming NGWS announcement, Gates said that in the future information will be stored on the Internet and delivered to whatever device the user is interacting with at the time, be it a handheld device, a cell phone, or a PC, all in the correct format for the device.

Other than Gates' opening keynote and a short panel discussion featuring Compaq CEO Michael Capellas; Autodesk CEO Carol Bartz; and Sir Richard Branson, president of Virgin Group Ltd., the summit is closed to the public and press. The two-day event is being hosted at Microsoft's plush new executive briefing center in the heart of the company's sprawling campus.

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