Microsoft's 'super optimistic' chief

Given that Microsoft's stock has not risen as much as the Nasdaq, what is the reason for all your optimism?
We have passed through a transitional phase in the last few years, and it is much easier for me to be optimistic, for a few reasons, and I will go through probably three of them.

No. 1 is seeing the pace of change and the impact of technology unabated, despite all the blippity-blop and bloopity-bloop in the press about, "is IT dead?" and all that. I never believed it, but it is sort of good to be through it.

No. 2, I see what we have coming in our labs, and we have just got an incredible pipeline of stuff. I am superenthused about what we have in our pipeline.

No. 3, we have crossed from the phase of lawsuits and settlements to a phase of moving on with life -- this EU thing aside -- where everybody is sort of getting all hubbubed up about it. Yeah, it is an important thing, but there is a framework in the United States. We have learned how to live in that framework. We're rising to our new responsibilities.

Somebody asked me, "Are you past your prime?" No, we are not past our prime. We are through adolescence and into our prime, so we may not have the same kind of random herky-jerky energy of adolescence, but now, we are showing more. We hum on all cylinders with the appropriate responsibility of an adult in his prime.

You have talked about big bets, and one of the biggest ones is Longhorn. It is not just the OS; it is all the other things you want to do, with Office, etc. It seems like this is going to take longer than you had hoped -- a long time, whatever adjectives you want to use for it. How do you run the business in the meantime? It is a long time between versions of Office and Windows.
Let us really ask that. First of all, we did decide that we need a big step forward. We think there are a lot of advances that we want to make for applications for the consumer that we were not going to get out of what I would call a small step; we needed a big step.

Big steps always take long periods of time. I felt good about that decision -- I feel good to this day about that decision. That is No. 1. No. 2, it is not like Office releases, in any sense, have slowed down. We did Office 2000; we did Office 2003; we are working away on the next release. Most of our customers do not use Office 2003 yet. It has been in the market, what, four or five months -- something like that -- and maybe 1, 2, 3 percent of the installed base use Office 2003 so far. I think we have got plenty of headroom before we need another product to bring huge benefit to a lot of people.