Zardon

LAS VEGAS — Microsoft Chairman Bill Gates took on the pessimists in the computing industry last night with this message: Technology is far from dead.

Acknowledging it has been a tumultuous year, Gates said people are underestimating the potential of technology and ignoring that companies are seeing huge returns on their innovations. Gates gave the keynote speech at Comdex, the computer industry's biggest trade show.

"I hope you get a clear sense that innovation is going to create opportunities for all of us in the years ahead," he said.

Gates' pep talk — an annual highlight of Comdex — might ring hollow for many in an industry hobbled by a deep economic malaise that shows few signs of lifting. Tech companies are suffering from a dearth of business spending, with few companies enjoying the kind of sustained growth Microsoft has seen.

But Gates' speech this year is particularly crucial for Microsoft. The company is trying to invigorate the PC market with new editions of the Windows operating system. Simultaneously, it's trying to rally the industry around its new technology platform, .NET, that will become increasingly significant in the coming decade and may give Microsoft an even bigger role in the world's computing infrastructure.

If enough software developers and corporate computing centers adopt .NET, the company may be able to extend its dominance into business processes that run over the Internet, as well as into new markets such as phones.

But the company faces challenges from traditional competitors such as Sun Microsystems and IBM and the emerging platform based on the freely shared Linux operating system. It's also rolling out the software at a time companies are reluctant to spend on new technology.

Gates used his speech to pitch Microsoft's big gun in this battle, a new operating system for the server computers that power corporate networks and Web sites.

Called Windows .NET Server 2003, the software provides the plumbing for companies to develop new Internet-based services and better share information among different computers and applications.



Gates announced that the latest test versions will be distributed in December and the final version is scheduled to be launched in April. The company had hoped to ship it by year's end but has faced delays, including extra work to improve its security.

The 125,000 Comdex attendees will have a hard time ignoring Microsoft's pitch for the new server — all they have to do is look up. Hanging over the main entrance to the massive Las Vegas Convention Center is an enormous banner advertising the product.

As part of his pitch for a future built around .NET, Gates emphasized Microsoft's efforts to expand the industry's focus beyond the PC.

"We'll think about personal computing in a different way. It's not just about sitting in front of that desktop PC," he said, noting that software is becoming a key part of the human routine and will be integrated into such devices as pens and clocks.

In Gates' view, this will be helped along as companies embrace the high-volume, low-cost economic model that changed the personal-computer industry. The handheld device and video-game-console markets already are seeing success with this model, he said.

Gates revealed several new products that Microsoft will introduce in the coming year, including a line of everyday objects that use software in new ways.

Company researchers have been working for more than two years on what Microsoft calls "smart personal object technology," or SPOT.

The idea is to add Microsoft software into everyday objects, such as key chains and watches that continually receive data updates from the Internet.

Gates demonstrated a travel alarm clock with software that updates itself as it passes into a new time zone. The clock can provide weather and traffic information for a particular area, and it can set its alarm based on a person's meeting schedule.

Analysts were unsure yesterday whether smart objects would catch on with consumers and the rest of the industry.

"The next year is certainly not the time to bring these things to market," said Charles Smulders, an analyst at Gartner Dataquest. "Although there will be innovation, it will be taking a back seat to more practical concerns."

Gates also unveiled a new product in Microsoft's successful Office suite called OneNote, set to go on sale next year. The software is a new tool for taking notes that helps in arranging personal notes, audio recordings and images in new ways.

A group of office workers, for example, can use OneNote to prepare a presentation for the boss. Gates also brought Kinko Chief Executive Gary Kusin on stage to announce a new partnership in Microsoft's .NET services area called File, PrintKinko's.

The service, aimed at business travelers, allows a person to send a print order over the Internet to a nearby Kinko's for processing. Kinko's essentially becomes a printer on a computer network, and will confirm the order online.

Beyond the product talk, Gates showed what Microsofties now call the "humor video," a staple of Gates' keynote speech. This year, the Microsoft team parodied the "Behind the Music" documentary format regularly featured on the VH1 cable music channel.

The seven-minute video, "Behind the Technology," was played as an exposé of the personal computer and featured appearances by entertainment and industry celebrities.

It showed Steve Ballmer hawking a $99 computer, and selling Microsoft Bob, a product the company developed that failed in the market, along with mood rings on the Home Shopping Network.

Gates himself says in the video: "It was very clear to me that the Internet was where everybody was going to go. It was especially clear to me after everybody had already gone there."

Also making tongue-in-cheek appearances were one-time Microsoft adversaries Marc Andreessen, co-founder of Netscape Communications, and John Scully, a former CEO of Apple Computer. Kim Petersen

Vampyromaniac

heh, wish I could see that video

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