July 2008 Issue
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BMOC #1: Bill Gates

College Tour
Carnegie Mellon University
Bill Gates
Thursday, February 21, 2008


JARED COHON: Good afternoon. My name is not Bill Gates. I'm Jared Cohon. I'm the President of Carnegie Mellon University, and it's my great pleasure to welcome you to this very, very special event. I'm proud of Carnegie Mellon. I'm always proud of Carnegie Mellon, but I'm especially proud of you today. The enthusiasm that you've shown for this event for Bill Gates is phenomenal. Your patience and perseverance in getting into this place are both notable. And it should be pointed out, there are 720 seats in this room, and Maconomy is also full. Hello, Maconomy. I can't hear them down there. So, by my math, that makes about 1,200 people who are sitting down waiting to hear from Bill Gates, and not me. I'm very mindful of that. Thank you for coming. Thank you for being such great students and faculty, and colleagues, and thank you for waving the Carnegie Mellon flag today.

You heard that request, and I want to emphasize it. Mr. Gates has gracefully agreed to allow you to photograph him, but flash photography only in the first few minutes. I guess photography without flash after that. It's going to be like a rock concert, but instead of lighters, there will be cell phones, put on quiet, please. But do take pictures. I encourage you to do so, because this is truly an historic day.

We have the great honor of being the last stop on Bill Gates' farewell tour. And in addition, and most importantly, you're going to be in the presence of a legend. There are not many people who have changed the world as decisively as Bill Gates has, and there are fewer still who have accomplished the kind of change he has accomplished as rapidly, and thoughtfully, and purposefully.

You know the story of Microsoft, so I'm not going to repeat it here. It's just a remarkable story. It's one of the great business stories, one of the great business successes, technology successes of all time, and a great example of technology leadership.

We at Carnegie Mellon have enjoyed a long and productive relationship with Microsoft, one that has existed for a decade. We have hundreds of alumni and former faculty who work at Microsoft. In this room today, there are 57 students to whom Microsoft has extended job offers. Now you know the real reason for Bill Gates' visit here today. I'm impressed he's come all the way out here just to recruit you all. We're also very proud that we have 12 Gates Millennium scholars who receive very generous support from the Gates Foundation for their undergraduate and graduate studies. Many faculty have connections to the company and research projects the company funds. And, of course, most specifically here at the Gates Center for Computer Science, which is rising as we speak. That was made possible by a very generous $20 million gift from the Bill and Melinda Gates Foundation in 2004, shortly after Bill Gates' last visit.

Please join me in giving a Carnegie Mellon welcome to a visionary computer scientist, a brilliant business leader, the world's leading philanthropist, and a great friend of this university, ladies and gentlemen, Bill Gates. (Cheers and applause.)

BILL GATES: Thank you. Thanks very much. I'm excited to be back here at Carnegie Mellon. The work that's going on here, as you all know very well, is fantastic world class work. As the president said, Microsoft has been very lucky to hire some brilliant people from the university, and we're continuing that tradition this year with a great new crop of people who are going to do some amazing work.

Some of our top people, including Rick Rashid, who runs Microsoft Research; Harry Shum, who has the simple job of running the development group that competes with Google Search, and many others have been at Microsoft a long time, and already made a huge difference in the work that they do. We also have a great ongoing relationship in terms of the research that's going on here, and I had fun afternoon meeting with a number of the faculty, hearing about their latest developments, talking about where things are moving rapidly, and how we do a better job in computer science of making it a tool for all the sciences; how we do a better job of using computer science to reach out to people around the world so that they get the benefits of the very rapid innovation. I know a lot of those collaborations are going to lead to great new products, and a lot of impact in terms of how technology gets used.

So I've been looking forward to coming here, and what I want to talk about mostly is where software is going, and some of the opportunities. I think people are even underestimating the impact of software, and some of the ways that it can improve a wide range of things. For me personally, this year will be a year of change. This summer I switch from being full-time at Microsoft to being part-time there, and from being part-time at the Foundation to being full-time there. And that's the first time I've really changed my work focus since I was age 17, and Paul Allen and I decided that starting Microsoft would be a great thing and, in fact, interrupted my college studies at that time. I haven't resumed them, I don't know when I might. Although with all these online courses now, you could say that I'm sort of back at college, because I'm a great consumer of online courseware. Anyway, the change will be a new thing for me, and I don't know what it will be like to have that last day, and start at new things. And so a few friends volunteered to make a little movie to help me get ready for that. So let's take a look at what they did.

We had a lot of fun making that, of course, I don't think I'll have too much spare time with the ambitious challenges of the Foundation, and I will continue to work on some of the more exciting Microsoft problems, whether it's in natural user interface that I'll be talking about, or areas around knowledge management, some fun projects I'll keep my hand in, and then the full-time work at the Foundation that is very, very ambitious. Let's talk about software. Why has it become so important, and how will that change? When Microsoft got started, software was not important. Computers were very few in number, and they were used by governments and large organizations. If anything, they were sort of against empowerment. You were worried it was going to bill you the wrong amount, and you would staple the punch card, and try and mess up the big machine. The idea that this would become the tool for creativity and collaboration, and communication, the best tool that we'd ever created, and that as we connected them together a whole new phenomena would develop around that, that wasn't obvious back in 1975.

But Paul Allen and I thought, okay, we'll do software. We'll build a platform, and encourage other people to write software. Now, there was an assumption there that we could get millions of machines out, because, after all, if you want to make it economic to spend tens of millions developing software, and sell it for $100 or so, you've really got to get that base out there. But because we made that bet, and we got that going, it became a virtuous cycle. That is, as more machines would sell, it created the market for a broader range of software, and that further drove the market for the machines, and in fact that volume allowed the price of the machine to come down. And that's why from 1975 onward, that personal computer market actually not only became significant, it actually become the center of the entire computer industry. The large machines we use today, and the big server farms, or corporate data servers, these are all based on the Windows PC architecture which, because of its volume, has come down in price, and improved in performance very, very dramatically. And so we have a large software industry.

Today, there's over a billion Windows personal computers in use. There's about two billion cell phones, 20 percent of which you could think of as a computing platform, but say in three or four years there will be about two billion of those that do have the capability to run software applications. We have software that's being used in the car. We have software that's being used in set-top boxes. So a wide variety of places where software is employed today.

Broadband connections are only in 300 million locations, 300 million people having access. So that's a smaller number, but the growth is very, very high. In fact, a few weeks ago, China passed the United States to become the largest broadband market in the world, and because China has more people, we're not likely to catch up. In fact, in a couple of years, they'll have more broadband users than we have people, so it would be very, very difficult. I think that just emphasizes that this is a very global market in terms of the innovation, the actual use of the technology, it is everywhere in the world that it's making a dramatic difference.

Now, why could we be so ambitious, and why has the personal computer taken on more and more activity? Part of it is the innovation in hardware. A key insight that got Paul and I going was that Moore's Law, the rule predicted by Gordon Moore, said that we would have double the number of transistors every two years. And that meant that we could dream about almost arbitrary levels of computing power. In fact, Moore's Law looks like it will continue out into the future more than a decade, but it won't give us the same clock speed scaling we've had in the past. So it's an interesting challenge of computer science in terms of making it easy to write programs that run across the multiple cores, because that's how we'll be using those extra transistors.

The other aspects of computing, the storage capacity, will also go up exponentially. The wireless and wired connection speeds, because of optic fiber improvements and signal processing improvements, those likewise will have the same exponential improvement. So they aren't holding us back in any way.

Some of the changes are more qualitative than quantitative. The idea that we have high resolution, so that something like Virtual Earth can display a 3D model of the world, and you can walk down the street, point at a building, go in, see what's going on. If you want to buy books, it doesn't have to be a 2D format, it can be the bookstore that was created for you with books that you might find interesting because of what your friends are reading, or interests that you've shown in the past. So making 3D reasonable, the refresh rates, the richness, we're just at that threshold.

The idea of screen technology being inexpensive, so that we can project onto the walls, and tables, and any surface that's out there in the home environments, and the office environments, there's breakthrough technology that will be in the marketplace in three or four years that will make that very possible. So whether it's your room and you want to have a theme, or the various business data in the office, all of that can be displayed.

I think one of the greatest changes that will take place is the way that we interact with software. To date that's overwhelmingly been through the keyboard and the mouse, the pointing device. And I'm not saying that the keyboard goes away, it's a very nice way when you've got your hands free, you've got the table to do it on, a nice way of particularly doing text oriented activity.

But we're going to complement it with a variety of other interaction capabilities, and I broadly talk about the use of natural user interface. Perhaps the most simple of these is just touch. You see it with the iPhone, you see it with a number of PCs out there, the idea of putting touch on the screen, and making that a way that you can interact with simple applications is very, very inexpensive. The next I'd highlight is the pen, this goes beyond touch in terms of the resolution and capabilities. Here you can take your notes in a meeting or in a class. You can look at an article, annotate it, say what friend you'd like to send that note off to, very straight-forward, natural thing. And as we get the hardware form factor, this tablet form factor that's light enough, and thin enough, and has the right price, and battery life, all the kind of reading and note taking activity will naturally move to the digital realm.

We've already seen many things that were done non-digitally that have moved to the digital realm. The print-based encyclopedia that I grew up with, the World Book my friend Warren Buffett happens to own this is basically obsolete today. He says it still smells good, and I admit neither Encarta or Wikipedia have managed to match the smell, but it's a pretty good price to get that feature. So we've had a transition, the interactivity, animation, timeline capabilities of that online encyclopedia just blow away anything that could be done in print. And all textbooks will clearly go that way. My daughter goes to a school where they've been using tablet PCs there for over a decade, and so they're one of the most advanced at how you don't need that paper textbook. And some of the benefits they've had in terms of their instructional approach, as they've learned year by year by year, are really fantastic, and not just in math and science, it's across a wide range of subjects they now have experienced teachers who've really embraced this, and now that's spreading to many other locations, and that will be heightened by the hardware and software advances. So I think the pen with ink is a very important form of interaction.

Another big one, and this goes back to some work done at Carnegie Mellon many decades ago, and continuing to improve, is the speech recognition capability. This is one of those problems where computer scientists were a little optimistic. We only missed how soon we'd have it right by a couple of decades or so. But that's okay. What it speaks to is the incredible recognition capability, and learning capability that humans have, and matching any of these human recognition systems has just made us admire how great those systems are. But with speech now in known domain, the quality has gotten quite good. So we have Tellme software, for example, that runs on the cell phones that can take a business inquiry, or a search inquiry, news inquiry, and respond to that in a very rich way. Today that software handles the vast majority of all directory assistance requests in the United States. And so we're building up a database of what we get right, what we get wrong, constantly retraining it. There will be hardware improvements in terms of multiple microphones that will help with the various noise elimination problems we have, but constant improvement now that we've hit that magic threshold. We'd say that there will be more searches done through speech than through the keyboard five years from now. And so it's one of the big bets that we're making is bringing that both to the cell phone, and to the auto, and to the living room, and to the PC environment is that speech interaction.

You saw recently Ford in all of their new models put in this thing called Sync, which is a speech interaction thing, and I've been very pleased to see the response to that. Select your music, initiate a call, even send a simple text message, that is a speech-oriented activity. And so the foundation of research over the last few decades helped, and it's been refined, and refined, and the power of the hardware finally let us say that that is moving into the mainstream.

There's another type of natural interface that I think is perhaps the most important of all, and I'll call it vision. That is the cameras that connect up to a PC are very, very inexpensive, and the software algorithms that are being worked on here, and in many other great academic centers, and Microsoft Research and others is getting better, and better, and better. So the idea of recognizing gestures, recognizing individuals, recognizing objects, it's to the point where it's very effective. And so we're putting a product called Microsoft Surface into the marketplace, it's like the table, and when you put your fingers down it sees what's going on, if you put a cell phone, it will realize that's what it is, and try and contact it with Bluetooth. If you're playing checkers, it will know, or dice, or cards, or anything that might be fun to do. It's seeing what's going on. And so instead of talking about a computer on every desk, we'll talk about a computer in every desk. In fact, every surface in your office, or your living room will be intelligent. When you go to that whiteboard and put up the schedule for a project, you can point, dive into different milestones, circle things, put up a video of somebody who you're engaged in a telepresence conversation with, all in a super natural way. And the home environment, like organizing your family photos, or picking which videos you're interested in, or playing new types of games where you have all that surface area for display, you can do something quite immersive, and quite fantastic. All of that is very achievable in the next four or five years. And so this Surface type computing, both vertical, such as whiteboard, or an intelligent mirror in your home, I'll let you think about some clever applications for that, I'm sure we won't think of them all, it's an even more impactful form of making the computer pervasive, having it be everywhere, and the software progress on that problem is the reason that I'm so optimistic that that will come into the mainstream.

Now if we think about this in terms of different activities, I'm saying that information workers, workers who work in offices will be far more empowered with information. Their ability to drill down into data, look at critical paths, understanding what's going on with their most important customers, collaborate with people at a distance, stay in touch, be alerted when something is not working well, take their key objectives and have indicators that really keep them up to date about those things. Themselves individually, program in little algorithms that relate to the domain they work in, whether it's analyzing quality, or looking at the sales process, all of these things will be available to them. And today they are only very partially empowered. A lot of their time is not spent very effectively. They don't see the external data. They don't see the patterns from that data. And so that mission of making people in the office way more effective isn't nearly done, and software is the thing that will complete that and make those jobs not only more effective, but also a lot more interesting as well.

If we look at developers, we still write code at a very low level. It hasn't changed really for 20 or 30 years. I mean, we had Pascal, and FORTRAN even before I used computers we had those things. And we haven't we're not at a level of abstraction where the data models, or the ability to make declarative statements have really gotten to be the way that, say, a business would customize applications. Big businesses today can have millions of lines of code where the differences between them could be described in terms of, say, 100 pages of English. So there's a huge explosion as you get down into executable code that leads to high cost, long lead times, difficulty of proving that it's correct, difficulty of changing. The number of lines of code really is your enemy in every way. So we need this model-based abstraction. Again, an area that a lot of good research work has been done in, but now I think we really are on the cusp of being able to say that businesses for their kinds of applications will be able to write about a tenth as much code as they do today.

Part of this is that the computing environment they run in will be far more abstract. The idea of hard disk failure, computer failure, that will be abstracted away from them, and it will be a layer below that restarting, reproviding those resources, and so their code won't have to work on those things whatsoever. In fact, for an IT person who today is managing error messages, and moving files around, or which program runs on which machine, that will be a completely automated task, both in customer data centers, and in some big pool data centers that people like Microsoft and others will provide. I often talk about these as mega data centers, because they are literally tens of millions of processors, and the whole way that you architect servers and storage, and electricity and cooling is utterly different as you move into that realm of scale. And, in fact, there are great scale economics that can work in your favor as you take advantage of those new architectural approaches. We're just scratching the surface, even the very chip designs themselves will be influenced by how they should run in this type of environment. Now, that's not to say all the computing will be there. We need a lot of computing near to the user to have these natural interfaces be incredibly responsive and effective. We'll still have computing at the corporate data center level. But this cloud computing will come and be a very important element, both the computing piece and the data storage piece.

If we think of user activities in the home environment, that will also be very different. TV today is passive, channel-oriented type experience, and we've finally gotten about a million users connected to TV shows through the Internet with partners like AT&T, and about 20 of the other big phone companies around the world. Once it's connected up that way, the ability to make the show personalized, so on the news segment you see the subjects you care about more, the subjects you don't care about less. If you're watching the Olympics, the sports that intrigue you, you can ask for more information on, and skip over things that are not of interest to you. Game shows, sports shows, educational shows can all be a lot better. Advertising, which is the life's blood of TV by being personalized and interactive can also be more relevant to the user, and more beneficial to the advertiser as well. And so TV is on the cusp of a big change. We have the best content providers around the world now thinking through for each of these genres how they take our tool kit and take their shows and present them in this richer way. And we won't have a dichotomy between video on the PC and video on the TV, those two things will be brought together. So as we construct your personal guide, if we know that you have a relative who is doing some sports, even if it's very obscure, and a parent just happens to take an HD camera and posts it to the Web, we'll know that that belongs there on the list of things that you might be interested in.

Even education itself, which hasn't changed a lot, as we take and split education to the lecture piece, the study group piece, and the accreditation piece, the first and third piece, the lecture and the accreditation can be done on a scale way. Already the very best lectures in the world, the video of those are being put completely online, available to anyone, and it means students around the world are coming up and accessing those things. I recently was confused about solid state physics, so now MIT doesn't even know it, I'm taking a solid state physics course. And it's absolutely fantastic. I watch it when I want, I do the homework problems, I send e-mail to my friends when I get confused. It's a whole new way of getting access to information, and thinking about these different elements. And so I think something profound is going to happen there as well.

So software will change a lot of activities. Now software is becoming important not just for these direct uses, which you think of, okay, this is what the computer science department should be doing, programming data centers, natural user interface. Software is also important to the other branches of science. They're dealing with so much information that the databases, the queries against those databases, and the pattern, the need for machine learning to figure out what is going on with that data is absolutely essential. We were talking this afternoon about some work being done at this university where a lot of people are now focused on computational biology. What do those queries look like, what do those structures look like, how many levels of semantics are there in that? Without software, these problems are intractable.

Even a science that at least I used to think of as very simple, astronomy, is now a data-driven science. It's no longer about being the lucky person who is there at midnight and is looking at the telescope and something really cool happened up there, and you write it up, and you're a famous astronomer. Now there's all this data, various wavelengths, and various times, and whatever proposition you have about how the universe works needs to be tested against all that information. And so making it easy for a scientist anywhere in the world to take data from any of those telescopes, or satellites and various things and try out their ideas, that's an important foundation for that science to move forward.

Organizing that information might be the most difficult in biology, because the range and the amount is very tricky, and one piece of that is studying the brain. Microsoft Research is trying to reach out, not just to computer science departments, but to these other science areas as well, and have them tell us what they'd like software to do in modeling, in visualization, in data structuring, and use that to push the limits to help us understand where new inventions are necessary. The brain is a great example of that, so I want to show one collaboration just as an example, and this is one I hope it's not politically incorrect, that's with Harvard, and a brain scientist there named Jeff Lichtman. So let's hear a little bit about the challenge that he faces.

So I've got here on the screen now this software called HD View that takes that scan data that they have from the mouse brain I'm sure you're all looking forward to seeing the mouse brain and puts it in a form where people can navigate through it, and apply software algorithms to finding out what's going on. Dealing with images like this, you need high performance, we make it easy to get at zooming in, panning, looking at it in different ways. We can also take these different layers. So that's the different slices layered on top of each other. If I just focus on one at a time, you'll see as I go layer by layer I can see the different things that are going on there. Visually navigating and looking for features is part of it, but having software be able to efficiently get at the data is perhaps the most important thing.

Here we have software analysis that went in and found various boundaries in the different layers, and now it's trying to go layer by layer and see how those connect together, and then it's able to recognize where the neurons are, how they connect up to each other, and then start to form a model of what's going on in the mouse brain, how it changed over time, what the levels of functionality are.

Obviously, we're decades away from the total deep understanding there, but it's going to take software analysis, and software tools like this, connected to those domain experts, in order to make the kind of progress that we're interested in. That type of deep collaboration of the software experts, and these domain experts, is a real theme. And I know Carnegie Mellon has been a pioneer in thinking about these interdisciplinary problems, how do you make sure that you can expose people to enough computer science, and have in one person a lot of this knowledge, and in groups that are working together those capabilities.

It really is a fascinating problem, but a necessary problem to solve. It's almost like mathematics was, say, in the early 1900s, where the it became such an important tool for describing what was going on that people in the sciences, like it or not, needed to become familiar with those techniques. And the real breakthroughs in the 1900s, across many areas, were partly because of those mathematical representations.

I want to talk now about a special issue in terms of the impact that software might be able to have, and that is taking the perspective of the 6 billion people on the planet, and trying to look at how software will impact the top third, the richest 2 billion, the middle third, the next 2 billion, and perhaps most interestingly the bottom third, that 2 billion.

In some ways people think, well, can't we just make things cheaper, and scale them down, and that will have a very nice impact. In fact, in places where you don't have electricity, you don't have training, you don't have a schoolroom, or a teacher, it's not going to have much impact. The needs, the problems, the priorities are different than simply saying, hey, let's just take what we have and make it lower cost.

Making it lower cost is a fantastic thing, that's much more an issue, though, for that middle 2 billion, and the industry has done a great job bringing these things down. It's really the connectivity costs, and the training costs that dominate everything else. The hardware costs, software costs, and all of these things, the software is donated for these outreach type projects, the hardware has gotten fairly inexpensive. In fact, we have a cell phone now that you can connect up to a TV set and get a large screen display. So you're looking at cell phone type costs, even to do full-screen type applications. But, then you still need somewhat of a network. We can often piggyback on the cell phone networks, but there are cases where that's not even there.

We think what's going on with this the most challenged 2 billion, there are a variety of things that have to do with their farming production is very low, 64 percent of these people are rural, small farmers. The amount of nutrition they have is very, very low. The level of disease is very high. If we take the big, infectious diseases, 90 percent of the effect of these diseases is on that bottom 2 billion.

In fact, that's part of the reason why we have what I would refer to as a market failure. That is, the market directs itself to solve problems based on economic signals. And so the top 2 billion can send very strong economic signals. A good example of that is the top 2 billion, they don't like being bald, so billions are being spent on curing baldness. Nobody is dying, but, boy, they've got their money out on the table, and that's great. Some day I think they'll solve that. The bottom 2 billion, 1 million children a year die of malaria, and yet there's less than 10 percent as much put into malaria research as there is into baldness research. And you think, well, is that appropriate, or is that a market failure.

How do you solve a problem like that? I'm not someone who is suggesting that we mess up in some dramatic way the incentive system that has done so well. After all, if we look at the last 50 years the incentive system we have actually has done very well, not for everyone, and we need to be aware of that, but broadly the fact you can even talk about that middle 2 billion, that is an incredible success story, 50 years ago there were the rich countries and the poor countries. And now we have a complete distribution, even within countries we have a very interesting distribution.

Unfortunately, if we look at that bottom part, there are a few areas that are heavily represented, particularly sub-Saharan Africa. Parts of Asia, but most of those areas have seen rapid improvement. If you take out, say, Afghanistan and Yemen, and you're really looking at the toughest things, you're overwhelmingly talking about sub-Saharan Africa.

So we need to do something to try and get this innovation to apply to these problems. And I'm really pleased to see that there is a growing awareness of those problems, and a growing willingness to put energy into thinking about them, and thinking about where innovation can help.

For myself, I left the university without any awareness of the conditions of poorest 2 billion. If you had asked me I would have said, yes, I guess they have less food, less electricity, and things, but I didn't really understand the trap that exists there, and the nature of those problems. It was 15 years later that I was reading a newspaper article that talked about rotavirus and said it killed a half a million children a year. I thought, well, what's rotavirus, I've never heard of it. Is somebody working on it? It turned out at the time basically nobody was, because, again, it's a case where there's no signal that says that's something of importance, and it ought to be pulled together.

So I think if you go back 10 years ago it was very easy for somebody going to college, even somebody going to a medical school, where you think a lot of these problems would be highlighted in a fairly dramatic way, it was very possible not to know much about them. I think that is changing. I see the interest level, of course, the availability through the Internet to learn about these things, the desire to get out and see some of these conditions is much stronger today.

I was meeting with some of the students who are working on the thing called TechBridge here, which is aimed at thinking through what are those needs, and where they can be addressed. I've seen some wonderful projects that are actually getting out in large numbers. And sometimes they're not cool because of the technology, they're really only cool because of the impact. One that I'll site we call Digital Dream, and this was done by our India research lab that has a particular focus on the needs of they call it the bottom of the pyramid, those 2 billion.

They went out to these farmers and saw that a direct use of computing wouldn't be possible, no cell network, no electricity, and that the real problem you want to solve is the productivity, the farming productivity. If you have a drought, if you haven't grown enough the season before, then you literally face malnutrition that has a lifetime negative effect, or in the extreme case even starvation. So they saw that there were techniques that if these farmers applied they could more than double their output, but the current extension system just wasn't getting the message to them in the right way. So the adoption rates for typical advances among small holders was about 15 percent.

What they did was they did was they took the advanced technology of DVD and they went out and took films of the farmers doing it the right way, in local language, brought those back, edited them, took the best practices, and hired people who knew these farmers, were socially connected to them, to go out with a battery-powered DVD device and showed those videos. And what they got was a tripling in the adoption of these farming practices.

So a significant impact in terms of the nutrition, and the ability to live through bad seasonal effects, in fact, they even created this wonderful dynamic that the farmers wanted to be in the video. It's a lot like American Idol, but this is Farmer Idol, I've got this technique, you've got to get me on there. Competition in something like that is a wondrous thing to see.

Now, that's just one vignette, there's a lot in health, in micro-finance, education, so much to do and the failure rate of many of these projects will be very high. The ability of these tough conditions to defeat things that even you might think would work is daunting, and yet if we keep trying, if we have the awareness, we get out there and learn about it, I think we can do phenomenal things. So when we think about why software, and all these technology innovations are magic, I think we should feel the best about it if we're making sure it's magic for each group of 2 billion in the world.

So I hope you've gotten a sense of the incredible optimism I have about the advances that will be made. In fact, I expect a lot of them to be made by the people here. I think you're in this field at really the most amazing time ever. And so I'll be fascinated to see the wonderful things that you do.

Thank you. (Applause.)

MODERATOR: Now we'd like to do a question and answer session, and since professors are sometimes defined as people who can talk about anything, but it always takes them at least 90 minutes, what we'd like to do is have students, only students, ask the questions. The other thing I'd like to say is, we'd like the questions to really be questions, and to the point, so that Bill actually has a chance to answer them. So please. There are six microphones, and we'll hear them all. Please come up.

You're not a student. Please step on up.

QUESTION: Hi, this is actually a question about the Bill and Melinda Gates Foundation. I'm someone who really likes the kind of idea of the Foundation work, and I was looking online and when I was looking at potential jobs with the Foundation all of them you need 10 to 20 years of experience, yet you're telling us we should go out and make sure we do really good things. I was wondering, how do you expect to be able to go do good things if you can't have any starting point?

BILL GATES: Well, the Foundation today has about 400 people, and over the next three years that will grow to about 1,000 people, but clearly the main thing we do is grant to partners. The grant level is about $3 billion a year, and it's a lot of partners doing the research, doing the activities out the field. So I'll check that job thing, we should be more open to undergraduates, and summer-type activity, I'd expect I think maybe a third to a half of the openings should be getting young people in, getting that exposure, and so that they can be involved in these things. I'd say overwhelmingly, though, even as I look at that, it would be the partner organizations, there would be even a broader set of opportunities. So thanks for highlighting that.

QUESTION: Thank you.

QUESTION: I want to start by saying that I'm delighted by what your foundation is working on, and I wish that everyone would do just that. But, more to the point (inaudible)

BILL GATES: Sure. Really, I'd be glad to autograph it. (Applause.)

MODERATOR: Why don't we get the next question going while we're at it.

QUESTION: Good afternoon. I'm to your right.

BILL GATES: Hi.

QUESTION: My name is (Caranda Baker ?), and I'm a Masters of Arts Management student. And my question is, with all of the software advances, and all the technology advances we're seeing in the art and culture sector, if that's going to change the way that audiences are experiencing our art, specifically traditional art, such as museums and ballets. And I'm curious to know if you and your foundation have considered any strategic partnerships, or if you know of any organization to help the arts industry embrace technology and then also to help shape how the audience is going to experience it, so that we're not coming to it from a reactive perspective, but from a more proactive perspective?

BILL GATES: I'm sure there's a lot of change that will take place, and a lot of innovation that can be done. It's not an area that the Gates Foundation has picked as a focus, and I think there are some of the big foundations that have some elements of that. I don't know very well what can be done. I do know, sort of moving slightly over from art to design, that that's an area where the skills needs from companies like Microsoft and many others are very high. And creating new tools, whether it's expression or other things, and creating a very strong design community within Microsoft, and people that we're partnering with, that is a very big issue for us. It doesn't get into the full-blown art elements of it, but some of the training, and some of the tools may have an overlap there. So that's the most direct interest that I'm connected with.

QUESTION: On behalf of the (inaudible) we would love to be able to partner with someone of your caliber for that, so that when we make those innovations they are done right, and appropriately, and so any help that you might consider with the Foundation in the future would be greatly appreciated.

BILL GATES: Thank you.

QUESTION: (Off mike.)

MODERATOR: Don't drop out, now. (Laughter and applause.)

BILL GATES: I've certainly been incredibly lucky, in terms of the support I've had from people in my family, my parents encouraging me to read and do things. The friend that's probably been the best for me is Warren Buffet, my best friend, has got no technology, he stays away from it, but his sense of focusing on what counts and integrity, and a common sense about how business is done, I've been very privileged to spend time with him. And he actually writes quite a bit about how he looks at the world.

I'd really encourage everyone to look at those Berkshire annual letters, they're online right there at the Web site. There's a lot of very broad wisdom, not just about what stocks to buy, a little bit of that, but thoughts about how people think about themselves, and what goals they might have for themselves. He's probably had more impact than any non-relative.

MODERATOR: Why don't we take a question over here.

QUESTION: I know I was beaten to the question, but would you be able to sign my copy of Vista?

BILL GATES: Sure, just get it to my office, or to me as I leave, and I'd be glad to. I'm good at signing things.

QUESTION: Thank you.

MODERATOR: In the middle.

QUESTION: Hi, my name is Victor, I'm also from the School of Computer Science. I heard a lot of you talked today a lot about the future of software, and how it's going to impact the world. One thing (inaudible) I wanted to know what your thoughts were on that, how you think that could impact the world, and the steps Microsoft is taking to get into that field.

BILL GATES: I think robotics is a very important field. In fact, the person who runs the robotics group at Microsoft, Tandy Trower, and I did an article that was in Scientific American, I guess about a year and a half ago, or something like that. We have a pretty good-sized group, and they've done what's called the robotics toolkit, and there's a couple of very interesting things about that. One is that it lets you describe any robot, and what sensor systems are in that robot, and put it in there, so it's physically represented, and logically represented.

That's part of a simulation environment that includes a very deep physics engine. And so we actually took this to the biggest robotics company in Europe, KUKA, and they put their robots in, and described them, and they were actually able to see where their grippers weren't using the right materials, where they had too much shaking in the robot, because the simulation was rich enough that they could understand exactly what was going on there.

So that toolkit, we're trying to get all the innovations of vision sensors, and radar sensors, or whatever planning modules people are putting in, and get them to be able to work together across any of the different types of robots. It's also got a way of doing the programming. So that's just our thing.

I would say that robotics a tiny bit we still don't know what the highest volume applications will be of those. It's the kind of thing where if you take a long-term view you know that some day in health and service things, and manufacturing, this will be a very big deal. Today a lot of it actually is kind of playing around with the different robots, and looking at how we can get the costs down. So it's ripe for some innovation and invention, and Microsoft's role is to provide tools and a platform that's one of the choices for people doing new robotics work.

QUESTION: (Off mike.)

BILL GATES: Many of the problems in computer science are large-scale problems that you need dedicated research over a long period of time. So many of them are not that well suited to the startup environment, something like a speech recognition system that's going to be used very broadly. And so there are more focused problems that startups will be able to do very well. The general organization of the computer industry is there is lots, and lots, and lots of companies, more at the smaller scale, some at the medium scale, a few at that very, very large scale, and they each play their own unique role.

In terms of an opportunity to create a new company that becomes one of those gigantic companies, I am exactly the wrong person to ask, because it's the thing that I don't get that is this huge opportunity. Say the CEO of IBM was sitting here and I came up to the Microsoft in 1973 and I said, hey, you're crowding the damn computer industry, what room have you left for me? I don't think he would have said, oh, we're going to screw up personal computer software, so go for it. (Applause.) So if you can make a breakthrough in AI, something that's, say, smarter than a human, then there are things that are pretty clear in terms of their impact that could be done. Will those be done by small companies, large companies, will they be done incrementally, a big breakthrough, it's hard to say.

Ten years ago I don't think I would have known to say, search-based advertising, that's worth hundreds of billions of dollars, now I know. But, we all learn and I'll bet there are things out there when we get together 10 years from now we'll say, geez, that was clear, and if you pick one of those things the opportunities are incredible. I'd say that in terms of advancing computer science, a lab that has a long-term perspective, and is really going to disseminate the stuff out there, a very high percentage of the new stuff will come out of that type of environment.

MODERATOR: Over here.

QUESTION: In learning about the global health initiative in Botswana that you're partnering with Merck, I kept on thinking, what could Merck get out of this, what can a corporation really get out of like pouring this money to build an infrastructure, and I wanted to know what do you from your perspective, moving from a for-profit corporation to philanthropy and giving, what do you think the contrast really is in running a for-profit corporation to a non-profit?

BILL GATES: Well, the scorecard is different, but the importance of hiring smart people, and being very ambitious, letting things fail, because you're taking on things that are very difficult, I'd say there's more parallels than there are differences. The scorecard in business is very crisp. It's profitability over the long-run, that's how you're, largely, not exclusively, but in terms of staying around, that is a big part of how you'll be measured.

In a foundation it's easy to get sloppy, because you don't come in every morning and think, okay, we're going to go out of business, same thing with governments, they can be a little sloppy, they don't have to think about that. So how do you make it work? You come up with objectives. Say, for example, 10 million children a year 10 million children are dying this year of diseases they shouldn't die of. So you say, okay, 15 years from now that number should be 2 million. And we'll measure ourselves according to whether we, in terms of the partnerships and government generosity, and things we cause to happen, whether that takes place.

Now, some people say to me, don't say that out loud, that's so ambitious. Well, I'm willing to fail. That should be the objective. It's a very high bar. It would be a rate of decrease dramatically greater than even the wonderful things that have gone on in the past. So in each of our areas we set goals. For small holder farmers we did a coffee grant of $100 million. We want to have 250,000 coffee growers who have twice the income that they have today, and we will be able to measure that one will take eight years. We'll be able to measure whether that happens or not. So the need to bring in science, and economics, and understand what is likely to work or not is very similar to a business.

In terms of corporations and the things they do, I think the reason that Merck did Botswana is very similar to the reason why Microsoft does so many things in the technology donation area. If you do it the right way, it really reinforces the values of your company. In our case it's empowerment through software. In their case it's good health through the miracle of advanced drugs. So they I don't even know if they got how much credit they got for it, but they were part of the $100 million partnership that really created the model in Botswana. Then when the U.S. government got very generous, though PEPFAR and through Global Fund, that the learnings there were very impactful, not just in Botswana, but elsewhere.

So it's wonderful that Merck did that, and were they able to hire people in a better way, was the image of the company, in terms of how they interacted with the political environment better because of that? They'd have to judge. But, I do think these value-based activities, the large corporations who are competing for talent, and need to be a strong member of society, I think if we give it to them in the right framework, they will be willing to devote some of their innovators to learning about these conditions, and doing more work.

In the drug companies there's quite a range of which ones do a lot and which ones don't. GlaxoSmithKline does the most. I won't say the name out loud of the one who does the least, but it's quite a spectrum, and I'm hoping that people move in the Glaxo direction. In fact, part of my additional time will be to sit down and give specific thoughts on how people should do it.

Part of the reason they don't is that when they invent a drug that's for the developing world people come along and say, because you did it, you should give it away for free. So the ones that don't invent those drugs say, yes, if we ever had any, we'd give it away for free, it's those other guys who are inventing them, tell them to give them away for free. So it creates this huge disincentive if "activists" don't understand what behavior they're causing. So there are some conflict dynamics in this thing, but we are moving in the right direction. Merck's donation was a good, early example of it.

QUESTION: (Off mike.)

BILL GATES: Particularly when you talk about the middle 2 billion, stuff like the CK Prahalad at Fortune, he said at the bottom of the pyramid, but I would edit it and say the middle of the pyramid. There is logic like that that really does work, and does make sense. And companies really should want to stretch. But, we need two factors working together, we need their desire to stretch their business down into these markets, as well as their value-based desire to in terms of hiring people, and how they're perceived by consumers, and governments, to do things, even things that have no likely economic benefit at all.

If you look at what Dannon has done with yogurt in Bangladesh, the partnership they have with Grameen there, they won't make any money out of that. They know, and that's fine, and there are people like Yunus, who got the Nobel Prize for his micro-finance work, who think it's very important to have both, and you have to be clear about which. It is not true that we can just stretch the profit motive all the way down, because in the extreme conditions it's a situation that absolutely there is no market reason somebody would get involved in that.

I remember going to a conference and they said to me it was one where I came in at the end, and they said, we figured all this out. We didn't need you to come speak, we're just going to get personal computers out there. And I said, really, wow, you're going to solve disease? And they said, yes, pipe into the Internet, and I said, but no electricity, no literacy, is that really the solution. When you get out there it will be kind of evident. I was in South Africa once, in Soweto, we gave this nice computer to this community center. The day I was there they had run this power cord, and they were pouring diesel into the generator, and every minute I was there that computer was running. Then I let, and they went back into their tin huts, and that computer hadn't run since.

That's not to say there isn't impact. The libraries program that we did first, the Microsoft foundation did first in the U.S., every library, then we went to Mexico, Chile, Botswana, Latvia, Romania, now India, that really did work, because it was thought through, and we learned as we went. The stories now where you get these Mexican rural women coming in to the computer, and they're afraid of it, but they try it out, send mail to their relatives, now it really works, and it's gotten into place. So I think the answer is both recognition and profit will drive us to the right thing, but we can't just have one.

QUESTION: You talked about sub-Saharan Africa, and from my experience I've seen that a lot of people have pumped money, but it's not sustainable. They put in a few hundred million, they see it doesn't work, they go off. And there needs to be.

BILL GATES: Wow.

QUESTION: They see the World Bank gives them aid, and it doesn't work out, and it's not sustainable. How do you think that is your foundation looking at that? Is there anything what is your opinion about how to make it more sustainable? So like I 50 years there is still something going on. When we do it now we talk about it, it happens for five years, and then we just forget about it.

BILL GATES: There are failures where people do aid, and it doesn't work. I don't know any individuals who have given $100 million, and it didn't work. That would be great, then at least we'd have the lessons, and then next $100 million we'd be smarter about. The conditions over the last 50 years have improved everywhere, and in many places they've improved fantastically, life expectancy, a reduction in population growth, any measure you want to pick there is very amazing improvement. So the things for example, what World Bank did to build roads in India, that's what enabled the green revolution to happen, that's what enabled people to have twice as much nutrition per person, which was a key enabler in terms of their ability to take on complex tasks, and help improve themselves.

Nutrition in the world is this miracle thing. In the 1960s the Club of Rome said, no, it's Malthusian, we'll never have the food, we'll starve, well, literally within six years of their saying that India and Pakistan became net exporters of grain. So a little bit we don't talk about the success stories. We always focus now on, okay, the part that's left. Mis-governance in some countries has held things back. Literacy is better almost everywhere, health is better almost everywhere.

A statistic I love is that the richest country in the world, I only have to go back about 80 years ago, the richest country in the world had worse health than the poorest country in the world has today. That is the United States, the infant mortality, life expectancy was worse than in the very worst country in the world today. Why is that? Because we have done we have gotten a virtuous cycle working in a lot of places, and things like World Bank have come and done very good things. Not all are successful. The success rate is better than, say, venture capitalist success rates, but it's not 100 percent.

If we just look at the failures of venture capitalists we'd say, oh, what are we doing, that's just a waste. Well, you have to measure the things that were the runaway success hits that have happened. Smallpox elimination, that's a great thing. Polio, if we put a little more money into it, another billion or so, the world would be able to celebrate the second major disease that we've gotten rid of. So it's a framework of lots of success stories and lots of failures, and it's being analytical about those, instead of philosophical, pretending that everything has worked, or that nothing works, that's where the brilliance is going to come in.

MODERATOR: We have time for one more question.

QUESTION: (Off mike.)

BILL GATES: Dream Spark is an announcement that Microsoft made earlier this week that extends the way we give out free software tools to students. We've had a thing where we worked with the academic departments and give them the Microsoft Developer Network, and they can give our tools out. We found that wasn't reaching all the departments, and it wasn't reaching all the colleges, and it didn't extend down into high schools. So what we announced this week is anybody who has a student identification can come in and get Visual Studio, or Expression, or a variety of things.

Now, some of these are very well designed for entry level programming. Our Robotics Studio, for example, because you've got this simulation environment, you can actually generate in pure software you can take the robots that are in there and change them, or you can take and build one from scratch. Even at the high school level some people have done some neat things.

You can take Expression, which is an animation tool that competes with Flash, kind of like that, but we think a little better, you can take that and do some interesting things with that, that kind of ease you into programming, because at first you feel like you're just doing properties, and a tiny bit of logic, and the next thing you know, you've got those general concepts.

It extends all the way up to hardcore C++ programming, as well, and we've got all the same tutorial things that we have for the professional developer. So we do think it will draw people in. Some of it is for the self-motivated, and then getting it to be used in classrooms, getting textbooks around it I think will draw more people in. It's partly related to this thing where less and less people are going into programming and computer science, at least in non-Asian countries, and that's almost paradoxical given the level of opportunity that at least I think is there.

MODERATOR: Before we finish, I would like to bring Jared Cohon back with a special recognition of the transition Bill Gates is making in his life now that we would like to recognize. Thank you.

JARED COHON: Thank you, Randy.

Before we close, I just want to make one important administrative announcement. When we are absolutely finished, which will be in about 90 seconds, we ask everybody to exit to the rear, those three rear doors, not on the side. That's important. Take your time, it will go reasonably quickly.

You all know, and I was fascinated by the fact that most of the questions were actually relating to your Foundation work, very different from four years ago. You all know, and you heard from Bill, he'll be stepping down from full-time involvement with Microsoft to take up full-time involvement with the Bill and Melinda Gates Foundation. That will happen this summer, and we want to recognize that.

Bill and his wife Melinda pledged to spend their fortune in their lifetime on projects that will expand opportunities to the world's poorest citizens by improving healthcare, expanding access to education, and promoting global economic growth. Bill Gates is surely unique, a 21st Century original, but you'll forgive us, Bill, but you actually remind us of someone else who is actually very close to the heart of this institution.

Andrew Carnegie also built up one of the world's great businesses by grasping the possibilities of an emerging technology. At the height of his success in 1901, he, too, turned this considerable energies and endless optimism to full-time philanthropy. Carnegie took on the most urgent challenges of his time and created many new institutions, including this university, of course, whose positive impact on the world is as fresh and alive, and there he is, and as powerful today as they were a century ago. We hope and expect that you, Bill, will have the same kind of lasting impact. We know of Bill's interest in history, I know of his admiration for Carnegie's belief about wealth and philanthropy, about which Carnegie wrote extensively, so upon entering your full-time career as a philanthropist, we thought it would be fitting to connect you, the greatest philanthropist of the 21st Century, with the greatest philanthropist of the 20th Century. We would like to present you with something that was Andrew Carnegie's own from his days at Carnegie Steel. And here it comes.

BILL GATES: Wow.

JARED COHON: And there it is. (Applause.)

BILL GATES: Fantastic. Amazing. (Applause.) Thank you. That's wonderful. Thanks very much.

MODERATOR: Thank you everyone for coming. It's an excellent audience.

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