REDMOND, Wash.—PC users could see big breakthroughs in the years ahead as what is in the Microsoft Corp. pipeline is more exciting than anything the software giant has ever cooked up, Chairman and Chief Software Architect Bill Gates said at the annual financial analysts day here on Thursday.
In a talk about innovation and how it fits into the software industry, Gates said that being able to redistribute $30 billion indicated just how far the software business model has come.
Pointing to the effect that new hardware has had on enabling new scenarios and advances in software, Gates highlighted the ability for users to be able to run both 32-bit and 64-bit applications on the same piece of hardware.
On the home front, TV will also be redefined going forward as phone, cable and wireless companies work together to deliver high bandwidth to the home, he said.
While software innovation has taken place in both the business and home, he said the business space will continue to be the biggest contributor to revenue and profits for Microsoft, which has a wide range of competitors, many of which are not as focused on software as Microsoft is.
Microsofts biggest competitors include IBM, Linux, Oracle and SAP on the business front, and Google, Apple, Sony and Nokia in the consumer space, Gates said.
"A lot of what we need to do with software is to increase its agility. This is a software opportunity for us, but it can also gate how many of those innovations get through," Gates said.
Measuring innovation could not be done with one number, Gates said, adding that one measure that could be looked at is the number of patents sought by a company. There is also a big differential between how many patent applications were filed and how many were issued, as it can take up to four years for the patents to be approved, he said.
"During this fiscal year we expect to file for a little over 3,000 patents, significantly up on the more than 2,000 we filed last year. It was a little over 14 years ago that we entered into an agreement with IBM to license their patents. Our patents are on some pretty basic things and so we end up with a very broad portfolio and we will continue to invest in this," he said.
Pointing to new agreements over the past year, Gates cited its cross-license with SAP as well as its licensing agreement with Sun Microsystems, Inc. under its new relationship with that firm, he said.
Turning to the concrete advances in todays software, Gates pointed to developments in speech recognition; ink and the Tablet; machine learning; spam, which had been cut in absolute terms; search; and notifications.
Then, looking at research advances for future software, Gates suggested that the storage of memories, such as pictures, videos and audio recordings of friends and family, was an area with great potential.
Steven Drucker, the lead researcher for Microsofts Next Media Research Group, gave a demonstration of future digital media advances. Visual analysis, for example, allows such things as face detection in pictures to help users annotate pictures with key words.
Showing a list of thumbnail images, Drucker said users could assign keywords using the date and time of the pictures—the only metadata available. The pictures could be clustered by date, time frames and similar-looking photos, as well as other characteristics.
"We are trying to exploit the graphics ability of the machine and tie all this together. You will see the advances in products like Longhorn and the like," he said.
Gates said modeling was also something users would be hearing more about out of Microsoft. The term is currently being used to describe how two pieces of software relate to each other, he said.
Microsoft also continues to listen to its customers, who want clear advice on how to isolate their networks and avoid attacks. They also want to know more about updating and authentication, with a move away from passwords.
"We can take cost out as we improve the reliability of the systems," Gates said.
Productivity remains Microsofts most important franchise, but even with its Office brand, it it fell well short of expectations in the past year, along with business analysis, Gates said.
Looking ahead, he said software remains the key element. Microsoft will continue to solve the toughest problems and continue to strive to relate to customer needs and the value proposition it offers, he said.
"You will see big breakthroughs in the years ahead as what is in the pipeline is more exciting than anything we have ever had," Gates concluded.