Bill Gates' Vision for Vista

The Microsoft chairman talks about the prospects for his new operating system, the tech industry, and his future after Microsoft

It was a day designed to whip the software-consuming public into a frenzy of anticipation. Microsoft (MSFT) staged event after event in New York City in the hours leading up to the release of its Windows Vista operating system at midnight on Jan. 29.

The day started off with aerial dancers unfurling a giant Vista banner on the side of a building in Manhattan's Chelsea neighborhood. At noon, Microsoft Chief Executive Steven Ballmer answered questions fired at him by the media at the posh Cipriani 42nd Street restaurant. And, in the evening, Ballmer and Chairman William Gates III shared the stage during a three-hour launch-event extravaganza at the Nokia Theater in Times Square.

Gates had flown in the previous night from the World Economic Forum in Davos, Switzerland, and faced a dozen press interviews during a conversation-packed day that included appearances on NBC's Today and Comedy Central's Daily Show. He was keyed up and happy during an interview with BusinessWeek senior writer Steve Hamm. Gates discusses—among other topics—delays in the new operating system, the role of Windows competitor Linux in bringing technological innovation to the developing world, and why Microsoft has more impact than Steve Jobs.

Edited excerpts of their conversation follow.

Is there a single feature of Vista that you personally find most compelling?

Well, as people get into the product, they'll see more and more. They'll see the whole new look and how that can make them effective. If they use it for a while, they'll see that search lets them have tons of files, and photos, and music, and navigate that stuff really easily. If they're being creative, they'll see how the movie maker lets you do HD video editing and burn DVDs very easily. It just depends on what you're interested in.

If you've got kids, the parental control might jump to the top because this is the first operating system to have that. Being able to see an activity log of where a kid has been going on the Internet is a good thing.

I know you've been asked this plenty of times before, but why did it take so long—more than five years?

Well, we haven't been idle. During that time, we had many Media Center releases, many Tablet releases, lots of things like desktop search. We had a security-oriented release called XP SP2. But, we also had to invest in the layering of the operating system, so that we could be more agile in the future, and have things at the higher layers, like the browser, release on an every-two-years, or even in some cases every-year-type basis, whereas the deep things like the scheduler, the file system, you don't want to change those more than every three years or so, because they affect compatibility. So you want stability in those pieces. So we invested a lot in layering and security.

People are talking a lot these days about software as a service. Microsoft has its Windows Live projects and things like that. But I've even heard people say, oh, this is the last Windows of this type—a big, monolithic, piece of software. Is that true? Is the Windows of the future going to be very different from Vista?

There certainly will be major new releases of Windows as we get things like speech, and vision, and more advanced capabilities. The fact that an operating system connects out to Internet services, that absolutely is the future, and that's our Live initiative. You're already seeing things along those lines like Office Live, and even in this next year we'll have some new Live services.

When you carry around your machine with you, say you're on an airplane, you're not connected to the Internet, but you still want all the richness of a desktop application. You want more empowerment, so your PC has got to run without the Internet and it's got to run with the Internet. We have a lot of work to make things user-centric, so that as you go between your different PCs we connect through the Internet, so all the stuff you like shows up there.