Gates Downplays Linux Threat

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March 24, 1999 (12:00 AM EST)

By Eric Hausman,

Bill Gates said that while he views Linux as a competitor, he does not expect it to have a significant impact on commercial markets.

Speaking in New York to promote his new book, the chairman and CEO of Microsoft tried to downplay the possible impact of Linux on Microsoft.

"There has certainly been a lot of free software out there for the last 20 years," Gates said. "The main thing that has held that back is that because it's free software there's no central point of control. So what you see with Linux, and other things, is you get proliferations of different versions and everybody can go into the source code, and everybody does."

But that creates confusion regarding which applications work with which versions, he said, because there is no central testing organization.

Gates also said Microsoft puts more features into its products.

"We put things into our system like systems management that's not that much fun for university developers," he said. "Linux doesn't have that stuff. It doesn't have the graphics interface. It doesn't have the rich set of device drivers.

"So certainly we think of it as a competitor in the student and hobbyist market. But I really don't think in the commercial market, we'll see it in any significant way."

Gates' comments on Linux were his most noteworthy during the nearly one-hour appearance, in which Microsoft closely controlled the questions that were asked. No questions, or answers, about the company's long-running antitrust case were forthcoming.

Gates did speak of the Digital Nervous System and the need for businesses to take advantage of the opportunities the Internet is providing.

"Business is going to change more in the next 10 years than it did in the last 50," he said.

The goal, Gates said, is to redefine business organizations, to let them make quicker decisions and better decisions. The four key principles are: the Internet changes everything, every worker is a knowledge worker, customers should be at the center, and bad news must travel fast.

A strong e-mail system is the starting point for a successful transition to this new model, Gates said.

In addition, companies must improve their corporate memory, letting employees access information in less than 60 seconds. Companies also need to eliminate paper forms, whenever possible. And, he said, companies must easily capture customer feedback and include partners in their system.

Microsoft will continue to play a major role in this process, with ongoing initiatives in the Internet, interoperability, scalability, and simplicity areas, Gates said.

Proceeds from sale of the book, Business @ the Speed of Thought will be donated to support community-based programs worldwide that use technology in innovative ways to support education and skills development for disadvantaged children.