Bill Gates: on web services, Linux, security and more...

Where does Linux fit into the picture?

Linux is what Unix was in the 1970s: a perfectly reasonable operating system. There's a lot being done with it. Of the two operating systems that are gaining share, one is called Linux and one is called Windows. And Linux is wiping up Unix's share while our overall share has continued to grow somewhat. Clearly, at the server level there'll be intense competition where [companies] like IBM put WebSphere on top of Linux. That's very expensive and we just put the app server into Windows. And then people can do the value comparisons.

But with IBM pushing Linux, isn't there customer interest because they can offer a wider solution?

What do you mean by "wider"? Wider in terms of being more expensive? Wider in terms of the number of consultants required? What's wider mean in this case?

They're putting multibillions of dollars behind the Linux initiative. But what does that mean? They don't develop [Linux]. Now they charge people to run software on top of Linux and services.

Right. But now they're pushing Linux for the desktop.

People have had Linux on the desktop for a long time. It's not a substantial share of what's going on at the desktop.

So at the end of the day it's the Unix guys who are feeling the greater impact of Linux's adoption?

Remember, there are hundreds of incompatible versions of Linux. The fact that we call it Linux hides the fact that this driver works on this version and this app works on that version. But there is a world where you don't test for binary compatibility because you don't have testers. It's just a different world than ours. That approach has certain benefits and advantages in terms of the way things get put together and ours has certain benefits and advantages. It's the primary operating system we'll be competing against.

Five years ago it would have been Windows versus OS/2. A few years before, it would have been Windows versus Macintosh. Before, maybe it would have been C/PM 86 and before that maybe CP/M 80. There's always been some challenger to the operating system. Linux - which is only a kernel - is not where the interesting stuff is going on nowadays.

Talking about security, Microsoft's invested heavily in Trustworthy Computing the last couple years - including stopping all development to get the problems ironed out. How far along are you?

The initial wave of security problems were email-related transmissions of malicious programs. Then a little over a year ago malicious programs spread in other ways as well. That was a big wake-up call because most of our customers didn't have problems with those things. It was the customers that had the up-to-date software and firewalls in place that didn't have the problems. For a high percentage of customers we hadn't made it easy enough for them to really audit that they had the right firewall capabilities in place and make it really easy for them to know which things they should pull through as fixes as opposed to feature improvements.

There's been immense progress on this because it's been the top priority on what we're doing. Our system is actually more robust because people are trying to do things to it. In our case, we have lots of people seeking the glory of saying: "Hey, I found this flaw". They're not actually targeting a particular computer. So we're under very extreme scrutiny in terms of people trying to find these things. The big thing for customers is getting the updating and firewalls in place.

Why isn't the updating happening regularly? Does that aspect need to be automated?

Most of it comes back to us. Every patch has differences in terms of importance and the chance that it might disrupt things. If a patch is clearly labelled that it will cause no regression and you should put it in - you should just click and - boom! It goes in. But if something is a little bit of a new feature or a speedup that might disturb something, that has to be characterised in a very different way. And so you want clear labelling, clear regularity, and as few security critical things flowing through as possible. That's where we've made major advances.

During the negotiations to put the anti-trust questions behind you, have Microsoft's product development plans been affected to the point that you feel you're fighting with one hand tied behind your back?

We've always tried to make sure that as we reach accommodations that our ability to innovate on behalf of consumers is not held back in some dramatic way. So far we feel good about our ability to innovate under the framework we're required to live in.

Jai Singh is editor-in-chief at CNET News.com.