Q&A: Gates talks convergence in the digital home

At CES, Microsoft chief touts Home Server for the multiple-PC household

 LAS VEGAS -- Microsoft Corp. is at a crucial point in its expanding efforts in the consumer arena. Company Chairman and Chief Software Architect Bill Gates used his keynote address at the International Consumer Electronics Show (CES) here to unveil the Windows Home Server and announce that major service providers  will offer the Xbox 360 as a set-top box alternative.

2007 International CES

2007 International CES: Jan. 8-11, Las Vegas

Before delivering his keynote speech, Gates discussed the evolution of what the company calls "connected entertainment." He also talked about the future of product distribution over the Web, how far Microsoft will go in hardware and -- as he enters his last 18 months at Microsoft full-time -- lessons he's learned as a technology visionary. An edited transcript of the interview follows:

You've been working on IPTV [Internet Protocol television] for some time now, and with the announcement that service providers will be offering the Xbox essentially as a set-top box alternative, it seems things are coming together. Can you talk about how this came about -- what happened on the technical side and what happened on the business side to make this deal come to fruition? Obviously, the success of the 360 -- in terms of getting the very best games that use high definition and getting people online so they could find their friends, do contests, be spectators -- that's become a key part of advanced gaming. In parallel with the Xbox 360 being developed, people like AT&T and others bet their company on having a state-of-the-art video offering, and we became the partner to provide the software platform for that. And so they spent 2006 getting it put together.

Now, in the next two years, they're really gonna drive the numbers in a very big way. The idea of having as one of their offerings the ability to connect up to Xbox we think will be very attractive. In some ways, you can think of this as a convergence device; it lets you project any PC in the home through the extender up into the living room. It lets you download high-definition videos. It lets you play video games and now with IPTV, it gives you the state-of-the-art TV viewing experience.

So all those things you want in the living room really don't require five remote controls and different user interfaces. Obviously, as we drive the price down because of the incredible volumes there, that will allow this, as a set-top box, to not be a superpremium price and yet have way more capabilities than the term set-top box has ever called to mind.

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