WinInfo Daily UPDATE, March 1, 2004

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In the News

- Microsoft Executives Hit the Streets to Pump Up a Slowing Leviathan

==== In the News ====

by Paul Thurrott, [email protected]

Microsoft Executives Hit the Streets to Pump Up a Slowing Leviathan

After two decades of hypergrowth, the Microsoft juggernaut has slowed dramatically, so for the past few weeks the company's two most famous executives have been out stumping for a kinder, gentler software giant. In the new Microsoft they're projecting, however, growth will slow and new recruits will have to be convinced that a career in software development is exciting, not a chore. Blame the company's security problems for the most recent dip in interest in Microsoft, if you like, but these problems have been digging away at the company's core strengths for years as it struggles to duplicate its Windows and Microsoft Office duopoly's success in other markets. So Microsoft CEO Steve Ballmer and Chairman and Chief Software Architect Bill Gates have turned up the volume a notch--as if to say, "Hey, we still matter."
Ballmer, who was in Toronto last week to discuss a deal with Bell Canada, talked about his company's slowing growth. Although the high-tech industry has largely rebounded from the recent recession, Microsoft's financial prospects going forward are going to be quite subdued--a far cry from the go-go days of the dot-com boom. "We're not going to grow 25 percent a year," Ballmer said during his trip, noting that Microsoft sales are on track to grow only 12 percent this year. "It's not going to happen. I think everybody would say that 25 percent growth is nutty. Some years, some people would've said \[that 25 percent growth is\] ho-hum stuff."
Meanwhile, with mounting pressure from shareholders and financial analysts to divest some of Microsoft's $53 billion cash hoard, company executives said last week that Microsoft will reveal its plans for the cash at its July financial analysts meeting. By that time, the company's last major antitrust lawsuit (with the European Union--EU) should be largely wrapped up, and Microsoft will know how much it has to pay for its legal transgressions. Gates noted last week that the company is considering a stock buyback or dividend. "We're all about one thing and that's developing software," he said. "We shouldn't be about holding investments. We should be \[thinking\], 'Is there opportunity in software, and are we the company that's seizing it?'"
Meanwhile, Gates spent the past several days wooing students at the most prestigious US technical universities, urging them to pursue careers in software. While visiting Carnegie Mellon University, Cornell University, the Massachusetts Institute of Technology (MIT), Harvard University, and the University of Illinois at Urbana-Champaign, Gates warned students that the United States is losing its technical edge to other countries as interest in computer science wanes. "We need your excitement," he said during a trip to Harvard last week. "Most of these \[computer-industry\] jobs are very interesting and very social, \[and\] you work with lots of smart people. I'm excited about the future of computing, and I'm excited to see how each of you can contribute to it."
Not helping Gates's cause, however, is the fact that US companies are outsourcing many high-tech jobs to India and other international high-tech centers, largely because the overseas programming talent is less expensive but no less capable than its US counterpart. This situation has caused students to look into other technical careers, creating an ever-downward-spiraling high-tech job market. But Gates said students need to look beyond the traditional "screen-and-keyboard" PCs we use today toward a future of computerized devices--at every level of our lives--that will be unencumbered by wires, processing-power, or battery-life problems. He calls this movement the "disaggregation" of the PC.
Curiously, when asked what subject he would study if he were a student today, Gates shied away from the traditional software-development career path he made possible for so many people. "If I were a student today, I would look for paradigm shifts, something like artificial intelligence \[AI\] or computational biology," he said. "Anyone who has in mind a real paradigm shift should take that risk."

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