One On One With Bill Gates

Computer researchers have dreamt for years of building a take-anywhere system that reads users' handwriting and understands their speech, and the PC industry's bone yard is strewn with their failures. But Microsoft thinks the stars are finally aligned to make such a machine viable, and this week at the Comdex trade show in Las Vegas, chairman and chief software architect Bill Gates will show the company's attempt to buck history.

Gates will use his Nov. 11 Comdex keynote address to jump-start Microsoft's marketing push around the Tablet PC, a clipboard-sized computer due next year from Compaq, Acer, Fujitsu, and other vendors. Gates recently exchanged E-mail with InformationWeek senior writer Aaron Ricadela about his hopes for the project.

InformationWeek: Computer researchers and designers have been talking about the utility of a personal, tablet-style computer since at least the early '70s, when [Xerox Palo Alto Research Center's] Alan Kay was promoting his vision of a Dynabook. Yet other attempts to mass-market a device like this haven't been terribly successful. What factors in the computer industry do you think are sufficiently aligned today--both in terms of technical capabilities and component costs--that may enable the Tablet PC to become popular?

Gates: We've already seen several attempts at introducing tablet type devices, but they've generally been designed for specific purposes and built on proprietary platforms. The Tablet PC is a natural evolution from the laptop--it's a Windows XP business PC that already runs all the applications people need, but extends far beyond the laptop by offering greater portability, as well as pen and speech capabilities. In fact, many Tablet PCs will look much like today's laptops, and all will be equipped with keyboards that are either attached or detachable. The real value of the Tablet is that it makes it possible for knowledge workers to bring the power of the PC into more places than ever, and they can do it right away, with the same software they use on their office PC or laptop today.

In terms of technology, when you compare today to the days of the Dynabook, or even five or six years ago, you see that several key technologies have really come together to make these kinds of devices a reality. We're seeing battery life that now can approach a full day of undocked usage, low-power microprocessors that run at speeds comparable to desktop PCs, great display technologies like ClearType, higher-density memory storage, and inexpensive display screens.

InformationWeek: As a related question, a year ago, in July 2000, you'd said publicly that as the cost of processing power continues to fall, the costs of PC displays and of network connectivity will be the most important market obstacles for the computer industry to overcome as it tries to reach users in new ways.

Does this still hold true? And if so, what does that suggest about which components of an "office of the future" will be quickest to arrive, and which aspects of knowledge work will be hardest to digitize?

Gates: It still holds true, but it's not nearly as much of an obstacle as it was in the past. Much of the focus for Microsoft and the industry is to bring the power of the PC to every aspect of people's lives. As the price of chips and memory has come down, people have been able to buy incredibly powerful PCs at prices that would have seemed impossibly low even a few years ago. Getting the costs of display technology and network connectivity down are still challenges, but the industry is making great progress.

For example, we're starting to see wireless network infrastructure in more and more businesses--and even public places like airports and hotels--and many computer manufacturers will incorporate wireless support directly into their Tablet PCs. At the same time, innovations in display technology have helped make a fully featured, affordable Tablet PC a reality. These trends will have the same kind of impact that inexpensive memory and chips had--they'll work together to transform the way people think about computing.

InformationWeek: One of the most striking aspects of the Tablet PC demo I saw was obviously working with the digital ink input. What applications of ink do you think will be most popular, say within a year of launch, and perhaps two years after that?

More specifically, there's ink support being built into Visio, Groove, and the new Microsoft "notebook" app? Those are three very different applications. Which application--drawing, real-time messaging and collaboration, note-taking--do you see as being the most popular initially?

Gates: Combining the power of the PC with the simplicity of pen and paper is an important focus for the Tablet PC, and many applications will be enhanced by incorporating support for digital ink--for marking up and collaborating on documents, taking notes, or converting digital ink into text. It's hard to predict which specific applications people will really be excited by--what we can do with digital ink is limited only by people's imaginations--but the three applications you mention fall into what we believe are the most compelling initial categories.

InformationWeek: How long does Microsoft believe it will take for new applications to emerge that are designed for the Tablet PC, either from Microsoft or from your ISV (independent software vendor) partners? How important to the Tablet's initial success will be the adaptation of existing applications to support digital ink and other features?

Gates: Since all Tablet PCs will be equipped with a customized version of Windows XP, any Windows application will run on the Tablet PC right away. But I think even greater benefits will come out of the many applications that developers will extend in innovative ways to take advantage of the Tablet PC's unique capabilities.

To help make that happen, we delivered our Tablet PC SDK (software development kit) to the development community at this year's Professional Developer's Conference, and we're working with partners who have already signed up to support the Tablet PC through unique and innovative applications.

But many existing applications will benefit from the Tablet PC without any additional development. Since people can directly manipulate objects on the screen, design applications will be more useful. Improved display quality and ClearType technology makes reading on-screen a far more comfortable and intuitive experience. The portable form factor and wireless connectivity will enable even richer collaboration. And of course, Microsoft's own applications will handle digital ink natively once the Tablet PC is available.

InformationWeek: The 'notebook' app I've seen demonstrated, and which I understand will ship with Tablet PCs, is obviously not an ink-enabled version of Word; it's a handwriting note-taking application, impressive in its own right. Meanwhile, Office XP contains the capability to insert handwritten text into a Word document, though I understand that development stemmed from Asian language support work, and wasn't built with the Tablet PC in mind.

My question is: How much value is there in delivering a version of Office that supports ink input? More specifically, how could future versions of Office really exploit the Tablet's wireless-centric usage model? Can you help explain how Microsoft could design into a general-purpose Office release, features that would be compelling for Tablet PC users? Or would it make more sense for there to be a dedicated version of Office for Tablet users?

Gates: The Tablet PC creates great opportunities for many new and existing software applications, including Microsoft Office. When the Tablet ships in the second half of 2002, there will be new add-ins for Office XP that will integrate digital ink support for annotations and E-mail communications.

As for wireless connectivity, Office XP is already full of rich collaboration features that get even better on the Tablet PC form factor--although there's little difference in the software, sending E-mail or working collaboratively on a document are instantly more productive and exciting experiences when you can take your PC just about anywhere. As we move forward, Office, like many other software applications, will incorporate even richer innovations as they continue to build upon the capabilities of the Tablet PC platform.

InformationWeek: Which system OEMs do Microsoft consider its closest partners in the Tablet PC project; which do you anticipate will be fastest to market with Tablet PCs? Your published list of OEM partners includes Compaq, Acer, Toshiba, Fujitsu, and Sony. I hear that Dell is interested, but that there's no signed agreement with them. Nevertheless, they seem like a conspicuous omission from your OEM partner list, as do IBM and Hewlett-Packard. How would you characterize those three vendors' interest in, and commitment to, the Tablet PC project?

Gates: When the Tablet PC is available next year, people will be able to choose from an impressive array of form factors, designed both for specific purposes and general use. Since the Tablet PC is an evolution from today's laptop PC, Microsoft has already been in discussions with every major laptop manufacturer. Leading OEMs are designing and developing these machines right now.

The OEMs you mentioned are all important players in the PC industry, and we talk to them constantly about a variety of future plans. But right now I can't talk about their current plans for the Tablet PC.

Information Week: What technology is Intel contributing to the project? Can you contrast this with Transmeta's contributions? The prototype Tablet Microsoft has manufactured features a Transmeta processor, and [Transmeta chief technology officer] David Ditzel says the biggest hardware engineering challenge for a device like this is getting the heat out, or running cooler in the first place.

Since Tablet PCs need to be vertically thin, and don't feature a fan, their components sound like they're designed with low power consumption in mind. Ditzel says DDR memory complements the Crusoe chip well in this area. Question is ... do you see Tablet PCs built with SDRAM? And has Intel contributed technology or design thinking in the power-consumption and heat dissipation areas?

Gates: There are a number of innovations that have converged to make PCs more versatile and portable than ever. Many companies in the industry--and certainly in the microprocessor industry--are very focused on technologies that bring fully-featured PCs into more places.

As a result, we now have high powered CPUs that draw less current, hardware that produces lower thermal envelopes (allowing people to hold the Tablet PC in their hands comfortably for long periods of time), and batteries that can last an entire working day. The Tablet PC is very much an industrywide initiative, and these are just a few of the breakthroughs that make it possible.

InformationWeek: Are there changes or advances to Windows that Microsoft is designing for the Tablet PC edition of Windows XP which could help overcome power-consumption challenges?

Gates: Creating a portable, lightweight PC that delivers long battery life is a major challenge, and delivering effective power management for the Tablet PC has required that hardware and software manufacturers work together to improve performance. Many standard tasks, such as shutting down and starting up a PC, consume a large amount of battery power.

By making sure that the Tablet PC platform is legacy-free, power management capabilities are boosted significantly. For example, all Tablet PCs will be able to resume from a standby state in less than two seconds. In addition, there will be native control over CPU power states and selective suspend for USB and 1394 devices. And enhancements to the Windows XP device drivers have made it possible to more aggressively put devices into power-conserving states.

InformationWeek: Right now, Microsoft says Tablet PCs will ship during the second half of 2002. Do you have a ballpark goal or estimate for unit sales during the devices' first year on the market? Put another way, what's your best guess for the percentage of overall PC sales, or of mobile computer sales, that Tablets will account for by the end of 2003 (or their first full year on the market)?

Gates: As with any new product, it's difficult to estimate exactly how quickly the Tablet will be adopted. This is especially true in the current economic environment.

But I'm bullish about the prospects of the Tablet PC--since it already runs all of today's most important applications, many laptop users will want one right away. By the end of 2003, you can expect to see one-third to one-half of the ultraportable market move to the Tablet PC. Users, developers, and IT managers have a clear sense of what the Tablet PC offers: an opportunity for people to use their PCs more often, and in new ways, to do their work more efficiently and effectively.

InformationWeek: Much of Microsoft's pitch about the benefits of working with the Tablet PC center around making workers more mobile, and adapting the mobile PC to the way people work and interact. Are there additional benefits to deploying these devices for corporate IT purchasers and planners? The target price points I've heard range from $2,000 to $2,500, certainly more expensive than most laptops, more so one year from now. How can businesses justify the additional cost of these Tablet computers?

Gates The Tablet PC provides workers with a fully-functional PC whenever and wherever they need it. That alone makes it incredibly valuable to any organization. Also, the Tablet PC is simply a business PC--with standard laptop components, a customized version of Windows XP Professional, and support for all of today's most important business applications. This makes it incredibly easy and cost-effective for any business to move from laptops to Tablet PCs. In terms of hardware pricing, that's up to each computer manufacturer, but most will likely price their Tablet PCs in roughly the same range as today's business laptops.

InformationWeek: How much has Microsoft invested so far in the Tablet PC project, including research, development, and evangelism? How much do you anticipate Microsoft will have spent overall by the time the product is launched?

Gates Microsoft is incredibly invested in the success of the Tablet PC. During the past 10 years, we have had so many people from across the company focused on the Tablet PC--from Microsoft Research, to the Office and Windows groups, to our Developer Tools group--that our total financial commitment to date is hard to quantify. The Tablet PC is also a critical platform for our .Net strategy, since it represents the smartest, most innovative client and richest user experience. The Tablet PC is something that a lot of people have dreamed about for many years--both at Microsoft and other companies--and next year it will finally become a reality.