The woman behind Gates: Wife and former Microsoft engineer, Melinda (background) co-chairs their philanthropic foundation

He is silicon valley's original poster boy. Geeky, self-made, and fabulously rich (actually, the world's richest). Thirty years after he founded Microsoft along with buddy Paul Allen, Bill Gates continues to have a stranglehold on the PC market. Nine out of every 10 PCs in the world use Microsoft software. Yet, Gates sees potential all around. On a four-day visit to India last fortnight, and accompanied by his wife Melinda, Gates unveiled a massive $1.7-billion (Rs 7,650-crore) investment plan. Even as he hopped across the country (he visited Delhi, Chennai and Bangalore), meeting with politicians and bureaucrats, he deftly combined the twin task of evangelising Microsoft's vision of the future and taking stock of the work being done by the Bill and Melinda Gates foundation, which he has endowed with a staggering $28.8 billion (Rs 1,29,600 crore). On his ride back from Tamil Nadu Chief Minister J. Jayalalithaa's office to the Chennai airport, Gates, accompanied by Microsoft India Chairman Ravi Venkatesan, spoke with BT's Venkatesha Babu. Excerpts:

How much of a threat is Google to Microsoft?

What Google offers today in terms of products is quite interesting. They have the leading web search site and people are looking at whether we will be able to do things better and compete with them. And I think this is just a great example of how competitive this business is. Google did not even exist six or seven years ago and now they are a company worth over a $100 billion (Rs 4,50,000 crore) and they are darlings of the press in terms of doing new things (smiles). We are absolutely building our search capability that we think will be better than what Google will offer and the only clear winner in that competition are the consumers.

Is the entire Windows Live initiative (web-based software products) that you have been pushing, aimed at combating Google and, say, its other offerings like its partnership with Sun to push a free office suite?

No. Google and Sun are two different companies. The press has been really smart to realise that (their partnership) has really no content. I don't hear Sun as much as I used to (smiles). Mostly it is Google, Yahoo and eBay. Windows Live is not just about web search. It is about...for example, you move from one pc to another or move from a pc to a phone, having your information automatically show up, your files, your calendar, your favourite links and being able to do it automatically, so that you get more value out of the devices. It is actually a very user-centric thing. And that is not something anybody has done before. We now understand how exactly we can do that. Windows Live is more about these things rather than about any particular company.

Are you looking at an acquisition (like of AOL that has been rumoured) to strengthen yourself in this space?

Frankly, there are many respects in which Google is the leader, many respects in which Yahoo has certain strengths. But given our popularity in instant messaging and Hotmail, all players will innovate and compete and try to gain more share. Every year we make lots of small acquisitions. That will continue because there are lots of innovative things that help us execute faster by acquiring. We have never used big acquisitions as a huge part of our strategy. The only exception to this is in the applications space, where we bought Great Plains. That was a good-sized acquisition. Other than that, we have made just small acquisitions and aimed at organic growth. That will be probably the framework as we go forward.

The open source community seems to be gaining steam across the globe. Is this a matter of concern for you?

Businesses have always used commercial software because of the kind of support and indemnification, compatibility and innovation that comes from commercial software. Some people have said that Indian developers should just do this open source and give away all their work (for free). But I say that the quality of work done here is such that it deserves to be licensed, paid for...that is the way you create new jobs, reward people so that they can benefit from it. That is what creates the (virtuous) cycle that helps companies create jobs, pay their taxes and allows governments to invest more in the kind of basic research at university level work.

"The quality of work done here is such that it deserves to be licensed, paid for. That is the way you create new jobs"

Have you been advocating this to the governments, as most of them (states) in India have been talking of going the open source way?

Well, actually we have shared portions of our operating system (OS) used in any country, including Windows, by governments. You see what has happened is that the use of proprietary Unix and mainframes has started to go down. What's happened is people have started using Intel-type hardware and Windows. That's gone up. Within the Unix space, those running on proprietary hardware has gone down, while those running on Windows has gone up.

RAVI VENKATESAN: In the desktop market our share remains exactly what it was and we closely looked at Linux shipments and that is what we call 'Surrogate Piracy'. Once it gets into users hands, they essentially use pirated version of Windows. On server side, our market share has gone up from 56 to 64 per cent. We are doing very well. The real casualty has been Unix.

Is MS trying to build itself into an all-in-one tech giant, spanning not just software but also hardware, since MS sells computer peripherals and now the Xbox in a big way?

No. In fact, part of the strength of our model is how dependent we are on our partners. We don't make hardware. The Xbox is a special case. In future generations we will change that to pure software because of the subsidised hardware there. We let Intel and AMD do the chips, we let people like hp and many others do the PCs. We will just do what we are best at. Also, most of the value gets created on top of us in terms of applications or services. That is why the strength of the great companies here in India that have become the best in the world on software services, they have been using our platform and that is why they have been growing so much. We will never ever try do everything. The only company that ever tried that was IBM, which tried to sell hardware, software, applications and consulting. In contrast, Microsoft teams up with partners here to offer complete solutions to customers.

What are the three really big opportunities in the tech world that excite you today?

Well, broadly. Digital Workstyle, Digital Lifestyle and Digital Inclusion. The Digital Workstyle, the way people are still using paper today, trying to work across company boundaries, across different locations. Even MS office, with all its success, scratches the surface in terms of empowering workers with lots of information, allowing them to collaborate and even next year, when we release MS Office 12 SharePoint, we take this to a new level.

I am also excited about Digital Lifestyle, the way you organise your schedules, music, photos, different activities. All this is being done more on a digital basis. These things are affecting all sections of the economy, even in education will be better done. You go across to the internet, find people with similar interest. The next 10 years will be the most interesting our industry has ever seen.

"The $1.7-billion investment here is a review of how far we have come and a commitment to grow this business"

The current Digital Lifestyle works well if you are well to do, whether in India or the us. But to achieve the original vision of a computer on every desk and in every home, we have a long way to go in terms of relevance, simplicity, ease of use. And low cost. We have to make a lot of innovation to appeal literally to the rural and poor users. India is the place where we are pushing this more than anywhere else. In fact, we have many groups in India doing super well. One that is not the largest, but my most favourite, is our research group we put in here that looks at new approaches for low-cost computing and come up with products that combine the best of features of cellphone and PCs. We have real dedication to that and we have taken concrete steps. But there is a lot more we can do.

You have announced this $1.7-billion investment in India. Were you little bit late to realise the India potential?

No. We have used this opportunity of my visit here to just dimensionalise the thing that MS is doing here. But many people might not have recognised our growth here, including our fourth research centre here, some of the services work we do, the maturity of the MS India development centre. We have been hiring here hugely and working, investing with our partners to grow our business. So, it is not as though my announcement is just a discontinuity. It's simply a review of how far we have come and a commitment to grow this business. If anything, we have been conservative in telling our story here. I would like you to examine a year from now which (of the announcements made by majors) and how far they have come (laughs).

What should Indian IT services company do more to reach the next level. Do you see a product success story coming out of India?

(Laughs, pointing out of the car) Well, we are driving past the Intellectual Property of India (office). The domestic market could grow faster and bigger, and become more helpful to them. The huge spectrum that people talk about, software services and products, is not a black and white thing. In fact, our Live software showcases that best. The Indian companies will have to continue being the best. Product success story from India...near future, in the next 2-3 years, unlikely. Will it happen in the next 10-15 years? It is extremely likely.

You have been giving away a considerable portion of your wealth through the work being done by your foundation. What gives you more joy, Microsoft or the foundation work?

Well, the biggest thing I have done in my life is the work I have done at Microsoft...the whole pc model. What it has been able to create is the sense of empowerment, nothing tops that. When I come to India, I see that in many ways. Students using computers or companies creating high-paying jobs here because of the model we brought in. Now, because of that success, I have this wealth and that brings huge responsibility to it give away back to the world in a way it will have the greatest of impact. If I did not have the MS success, I would not have this responsibility. I am able to use some skills and processes I learned there and apply this to charity.