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Saturday, January 29, 2005

Bill Gates On Microsoft's IPTV

Businessweek publishes an interview with Bill Gates where he shares Microsoft's vision about the IPTV business.Excerpts with edits:
Microsoft first invested in TV technology more than a decade ago but found little success over the years. Now it seems the market that Microsoft and others first envisioned is close to become a reality. Soon, channel surfers will get vast new choices in programming and the ability to customize their selections. And Microsoft's decade long pursuit gives it much experience to draw on. Bill Gates explains,"TV started as analog, went to digital broadcast, but now is making the evolution to IPTV [Internet protocol TV, which uses Web technology to deliver programming]. And when you go to that generation, you can do something dramatic. We believe that software can improve the TV experience".
One of the important changes is that Microsoft's set-top box software no longer needs to run on Windows. TV viewers care about the TV viewing experience. If you can really make it better, then it's a very profound impact. Whether it's game shows or sports or news or advertising...you should have a show that fits what you're interested in., and it's only when you get that IPTV framework that you get the chance for that kind of innovation. Microsoft is a believer in the power of software. Anywhere we see a chance for great software, we're going to invest in it - and we're going to just stick with it. It's very important for us to have gotten in early to do a TV platform.
Microsoft believes that that it could win a substantial number of the cable and telecom deals around the world, and could see a pretty good-sized business. Not a Windows-sized business, but a very, very good-sized business. And that is reinforcing other related works - media [compression technology], digital rights management. It's a great thing for getting other efforts around the company to critical mass. Gates concludes by saying that "We see this [Microsoft TV] as being quite a profitable business".

My Take:
It is clear that Microsoft has strategised well about its moves in the consumer electronics sector. We covered recently digital convergence in living room wherein we covered, Inspired by a residential consumer electronics market that is potentially several times larger and more lucrative than the PC business, armies from at least ten different tech-related industries—including PC makers, CE makers, cable companies, telcos, utilities, media companies and software developers—have amassed here in the desert to plan their assaults on the living rooms of the world. We also covered Russell Beatties viewpoint that Its game over for microsoft's competitors in the consumer electronics sector where we concluded,"Hats off to Microsoft - despite several criticisms on multiple fronts, they are repeatedly exhibiting ability to innovate( in some case immitate) and execute well". Microsoft's recent deals in IPTV market further fortifies its advances in the consumer electronics sector.

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