Gates: $1b for NT development this year

During an unusual question-and-answer session, Gates discussed the next version of NT and a host of other topics ranging from Java to security to network computers.

NT 5.0 is in the hands of some developers, and beta testing should begin in the fall, Gates said. First shipments should take place in the first half of next year.

The 5.0 upgrade will work more closely with Internet standards and will use public key encryption technology, he said.

"At the server level," Gates said, "this is our product." Gates also gave his thoughts on the following:

Java: Not surprisingly, he downplayed the notion that Java is the key to the future of the computer industry, as Lotus Development Corp. President Jeff Papows said during his Comdex keynote Monday. Java will be useful, Gates said, "but I think it's a little strange to get religious about this."

Security: Internet Explorer 4.0 will contain "security zones" that enable network administrators to set policies for intranet and Web surfing, based on the trust he or she has for different sites.

Gates said the federal government is only hurting US businesses through its encryption limits, and he and other executives will go to Washington tomorrow to discuss the issue with legislators.

The Network Computer: Gates defended the Microsoft-led NetPC concept as an extension of PC technology, but he ridiculed the idea of the NC.

"The NC is not compatible with the PC," he said. "The NC is not compatible with each other. That's why they call it the NC - not compatible."

Support: Although Gates said Microsoft has little interest in getting into the implementation business - leaving that to partners such as Digital Equipment Corp. - he said Microsoft will expand its sales force and consulting business in the coming year.