The world according to Gates

Why did Bill Gates, the world's richest man, take time off from building his fortune and fighting the US Justice Department to lecture to a bunch of London students? Kam Patel went to find out.

A while back, the United States government, accusing Microsoft of being an "illegal monopoly", demanded that the company include a rival's piece of software for searching the internet if Microsoft's own software, Internet Explorer, was going to be bundled into its latest computer package, Windows 98. Microsoft's founder, chairman and chief executive Bill Gates, memorably responded that it was like asking a company to include two bottles of Pepsi with every six-pack of Coke.

So students were amused to note that when Gates came to the London Business School last week to give a speech, he was two bottles short of a six-pack. There they were, four bottles of Coke, two diet and two regular, neatly arranged on a little table next to his podium. But no Pepsi. Hey! Either Gates really does have a problem with this "bundling" malarkey, or someone at LBS has a sharp sense of humour.

But it is not really a laughing matter. The US Department of Justice and attorney generals from 19 states have joined forces to take Microsoft to court over countless allegations of sharp practice. The trial has seen Gates and his company receive a hammering from government lawyers. Some states are even looking to break up the company. Yet, at the LBS, in front of 100 students and academics, the richest man in the world, whose personal fortune stands at about $100 billion, seemed relaxed, clad in baggy sweatshirt rather than shirt and tie and flashing his trademark grin.

Forty-three-year-old Gates was at the business school as part of a world tour to promote his new book, Business @ the Speed of Thought, published last week. The book is being marketed as a "guidebook to the digital age and a milestone examination of how technology is rapidly reshaping business and society". Business, thunders Gates, in the book's introduction, is going to change more in the next ten years than it has in the past 50 because of rapid advances in digital technologies. And if you want to survive this change, you had better listen to what Gates has to say. The book lists 12 commandments to follow if you want to succeed in the digital future. Go forth and create the paperless office is one. Give all employees access to all company information, says another. And another of the 12 steps urges businesses to use digital technologies to gain access to information as close as possible to real time and to act on it. It sounds vaguely impressive, yet experts say there is little new in the book, either in terms of vision or strategy.

Stefaan Verhulst, an expert in media law and policy at Oxford University, says: "The book clearly touches upon digital technology and its applications for business at large, but it contains little new business strategy, little that has not already been discussed in works by people such as Nicholas Negroponte. And dealing with information as a just-in-time operation - well, is that not, for instance, a Reuters leitmotif?

"It is a sterile book," adds Verhulst, who gave evidence to the House of Commons culture committee's probe into the multimedia revolution last year. "In the light of the Department of Justice's anti-trust case against Microsoft, more interesting would have been to see Gates's 12 commands for a business strategy in the computer industry."

Sterile book or not, why did one of the world's most powerful men choose the LBS to launch his work - and why to an audience of students?

Students, according to Gates, are the future. His big hope is that the "web lifestyle" will become pervasive in all firms and the vehicle for fulfilling that hope is this generation of students. Gates told the LBS audience that, even in the US, where information technology is commonplace, fewer than 10 per cent of people are totally at ease with digital communication. "They tend to be young people coming out of universities and people who work in technology companies," he says. "In fact, one of the great advantages the US has had in terms of using this technology rapidly is that those students are the change agents. When they are recruited into companies, they are already accustomed to signing up for courses and researching things electronically and so they demand a similar medium of communication from their employers."

There are many universities around the world pushing at the frontiers of digital technologies. Gates would like to see British universities adopt a mechanism for sharing best practice. In the US, some universities will only accept applications from students on-line. And tasks like submitting coursework or receiving grades are all done electronically. "The more radical steps are probably being taken in the US I requiring everybody to have a laptop computer and then designing the curriculum around the laptop is typical at some business schools - and that's something I think will spread."

Gates also cites the LBS's forays into the digital world. The school has set up web sites that allow alumni to keep in touch with new ideas being developed at LBS and offers virtual tours of the campus for prospective applicants. "All these projects have emerged in the past three years," he says. "At Microsoft, we learned about the internet because our people visited universities. We were working with the phone and cable companies I but they move very slowly. It surprised a lot of people that what really drove digital communication to critical mass were the standards that had been around a long time in universities."

The basics of networking: optical fibre, which allows ultra-fast electronic communication, and standards like HTML, a language used for designing web pages, are just two of the developments that were born in universities but have proved critical to industry. According to Gates, universities will continue to play a major role in the development of the IT industry. Research on computers that can recognise and translate human speech is one area where a breakthrough is crucially needed: "It is a tough problem because people demand high quality. The keyboard is not that bad. So, we are probably four or five years away from speech recognition being a typical interface."

A more likely advance in the short term is a computer that can recognise handwriting and translate it into a digital format, Gates says. "At a meeting like this three or four years from now, everyone will have a tablet PC and will be scribbling notes on it. Then you will not have a mismatch between what you do on paper and what you do on computer." Such challenges mean it is a pretty exciting time to be in business, he told the LBS students.

So what did the students make of Gates? Andrew Halsall, president of LBS's technology society, said: "The 20-minute talk was good but a little short. I would have really liked a one-to-one with him." Halsall has not had time to read the book, though he has read extracts published in newspapers. "I think there are a few new thoughts there. Having said that, it is a fast evolving landscape, you are always going to be a little behind the curve in terms of putting it all in a book."

Gates's demand that businesses should make all information available to all employees resonates with LBS student Brian Balleck. He has seen the problem first-hand in the software company he used to work for and emphasises how paralysing a company's paranoia about keeping new products secret can be. "Businesses really need to empower their employees," he says.

Student Heather Seal found Gates much more human than the geeky image he is lumbered with. "Obviously he is very intelligent, but not in an off-putting way." But she did have one bone to pick. Instead of prophesying the future in his new book, Seal suggests that Gates and his company should address existing problems, such as their operating system: "It always crashes on me. Sorting that out should be Microsoft's goal before it gets too carried away with the future."

Staff and students were on their best behaviour and not one asked Gates about his run-in with the anti-trust busters in the US. But perhaps that is because they have a pretty good idea who will come out on top. Seal, for instance, believes the US government does not have much of a case. "No one really knows how big the computer market is going to be so I do not see how you can take this sort of (restrictive legal) action at this stage. And from what he said in his talk, Gates seems to be a lot more worried about the competition than is usually suggested."