Microsoft is in the midst of a major push to Internet-enable every product in its lineup. This transition may be one of the largest market adjustments ever embarked upon by a company the size of Microsoft. Bill Gates recently outlined the factors driving these changes and detailed the company's product strategy to IDG editors Sandy Reed and Michael VizardQ: How are the changes around the Internet going to affect IS, and how should managers view intranets and the Internet?
A: 'Internet' is the term you use when you're reaching outside your company. And in the long run, the Internet will have much more of an impact, because it changes the way you work with suppliers and customers. But over the next couple of years, the biggest payoff is going to be finding intranet scenarios for information sharing.
Q: How will this be accomplished?
A:A rich data type, HTML [Hypertext Markup Language], has completely taken over, and a rich directory with security will be built into the OS.
Q: Some of your competitors argue that the Internet means we need to adopt a server-centric computing model using thin clients. They say Microsoft won't be able to accommodate this computing model.
A:We sell more server software than any of those guys, and Web browsers are the most demanding applications running on the PC today, so I'm a little confused about what [thin client] means. When you browse around and find some audio file or find a Shockwave file, you're using more code running through your memory than running any productivity application. And browsers are the fastest-growing application. Unlike the productivity applications, which have actually plateaued in terms of what they require, these browsers are very large today. That's why we're integrating the browser with the operating system, so that it's in your standard working set. You don't have to think of it as extra memory. When you see the shell, it's using HTML to display; when you do Help, it's using HTML to do the display - so it's not extra on top of the operating system. We've got to get it down in there and get it richer. I'm just fascinated to know how you're going to do 3-D navigations on a thin client. You're going to do voice recognition on a thin client? You're going to do user profiling on a thin client?
Q: As the browser becomes part of the operating system, what happens to the traditional applications suite? Is that evolving into a subset of components?
A:Nope. Users are not interested in going out and buying 14 different pieces they have assembled in different ways, so that when they mail the spreadsheet to someone else, he doesn't have those same components. It wasn't tested together; the Help file isn't written for that; there's not a single person that you can call to support that. It's like saying that the car market is going to be a component market and you'll go get an axle here and a radiator there. And productivity applications have come down in price faster than anything else, and as you mail those things around electronically, the desire to have a common format for those things is very strong.
Q: One of the things IS people worry about is bandwidth, and where it is going to come from to make all this happen.
A:People have been moving incredibly rapidly from [10Mbit/sec] Ethernet to [100Mbit/sec] twisted pair, or even the wiring closet connected up to an ATM [Asynchronous Transfer Mode] backbone. It's very clear-cut what direction people should be going in. They should move as quickly as they can to TCP protocols, and the [100Mbit/sec] Ethernet off of an ATM backbone is a great solution. There may come a day where you'll bring the ATM all the way down to the PC, but that's probably two to four years out. The LAN isn't where we'll find the huge bottlenecks.
Q: So where are the networking problems?
A:It's the wide-area network where you've got the big problem. There are two types of WAN: There are public WANs and private WANs, both of which will use Internet protocols. You could get to a point where private WANs disappear altogether, but it means that the public WAN [the Internet] would have to evolve pretty dramatically in terms of how people trust the security and being able to have guaranteed deliveries. Now, that's destined to happen. It's a question of when it will happen. And so people say, 'I don't need any more leased lines.'
Q: Is there anything the telecomms industry needs to do to accelerate this process?
A:Bring down the price of ISDN. For us, that's like encouraging Intel to make fast chips. We want communications to be infinite bandwidth and free, just like we want chips to have infinite speed and be free.
Q: Is every department going to have its own World Wide Web server?
A:It's just like file sharing. Web serving today is not very compute-intensive. This is nice, because the links run through the DNS [Domain Naming System] in one direction. If you move Web pages from one server to another server, the users don't see that, unlike when they used to use network commands. So you'll be able to reconfigure. You'll put a lot on one server. And that's why we were so hard-core about the Internet Information Server: because people can put literally gigabytes of data on a single server. You won't need that many servers for a corporate Web unless you're putting up video or just an incredibly high access pattern.
Q: Some of the Unix vendors harp on scalability and clustering and say NT won't have the scalability required.
A:Buy the most expensive Sun box you can and compare its Web performance to an inexpensive Windows NT box. Let's not joke around: Pentium Pro processors have more performance than the RISC community is putting out. I'm not talking about price-performance; I'm talking about performance in the absolute. And we have tuned for the Internet a lot more than they have.
Q: What role will BackOffice play?
A:I'll give you an example where you'd use the ISAPI interface up on the server. With the client you're just using the Web browser to look at data, but you're doing dynamic HTML generation up on the server, where you're generating queries on the fly that go to the database, and it comes back to this ISAPI interface. This is one of the more exciting things that certainly won't get the headlines. All these pieces on the server work together. That's a big deal to people.
Q: There's been a lot of noise about Windows 95 v NT. Did this become a larger issue than you might have thought?
A:The processors move very quickly. Intel's done a very good job on their part. Memory prices have moved slower in the last years than ever before and will go back to the normal trend, hopefully, fairly soon there. If normal memory trends had been in effect, memory prices would be well under half of what they are today. So where you're seeing an 8Mb system, you could easily see a 16Mb system, and that would make the whole Windows NT thing even more interesting. But Windows 95 volumes for corporate buyers are way bigger. When users buy a machine, they get Windows 95.
Q: Will PCs be bundled with NT 4.0?
A:Primarily with Pentium Pro machines. I don't think you'll see too much Windows NT bundling on Pentiums. With memory prices coming down and the Pentium Pro, you'll see a nice combination.
Q: What are the top challenges that Microsoft as a company is facing right now?
A: Well, we've got to make sure that we're leading the way on the Internet. We've got to make sure we get Exchange out, because if somebody goes down what we would call the wrong path, then they're going to have the two separate directories and user interfaces. And continuing the Windows NT momentum.