Gates says innovation trumps economy
LAS VEGAS (Reuters) - Microsoft Corp Chairman Bill Gates said on Sunday that keeping up with technological developments from rivals is more important for the company's fate than coping with a downturn in the global economy.
Speaking to Reuters in an interview ahead of his speech at the Consumer Electronics Show in Las Vegas, Gates said Microsoft needs to keep introducing the new technologies hatched from the billions Microsoft spends in research and development into its products to stay ahead of rivals.
A recent slowdown in the U.S. economy and a growing mortgage crisis have raised concerns about consumer demand at a time the world's largest software maker is pushing customers to upgrade to new versions of Windows and Office productivity software.
"I don't think the fate of Microsoft depends as much on whatever happens in the economy as it does on the getting the breakthrough innovations from Microsoft Research into the products and staying ahead," Gates said.
When asked specifically about rival Google Inc., considered by many company as Microsoft's biggest threat, Gates said the company has a ways to go to catch up with Google in Web search and digital advertising.
Still, the world's largest software maker is often not given enough credit, according to Gates, for its success in areas like business software.
"The tendency not to focus much on business computing is a little too bad because business computing -- making jobs more fun, making people more effective -- really has a big impact on the economy," said Gates.
"Certainly from a revenue growth point of view, those (business products) are a very big deal."
On the back of strong demand for business products like collaboration software SharePoint and upgrades to Windows Vista, Microsoft posted its strongest quarter in years in its fiscal first quarter that ended in September.
Gates said it would compete with other software makers like Google and Salesforce.com who see their applications running on the Web, or "in the cloud" of the Internet, replacing traditional software makers like Microsoft, whose products run on an individual's or company's machines.
"We're about ... software and we don't care whether it's in a box or how you get it," said Gates.
"The arrival of the cloud is a great thing. We have a lot of software people, including competitors, taking advantage of that ... so it is the new frontier and it will be the frontier that companies will prove themselves out on. That's where all of our investments are."
Unlike Web rivals, Microsoft is adopting a hybrid model of traditional forms of software with simple links into Web services, which allow a user to easily publish and share photos in a computer's photo gallery onto the Internet.
(For an edited transcript of our interview with Gates, please go to blogs.reuters.com/mediafile/)
(Editing by Tomasz Janowski)
