So perhaps the real point of Microsoft's .NET initiative, besides changing Microsoft's financial model in the hope of increasing revenue, is a reaction to the fact that software, Microsoft software in particular, has become too complex for the average user to maintain and use to build applications, so that has to be outsourced. He advanced the view that there was a higher rate of piracy in small businesses than in large ones, but the theory was based on lower sales to small businesses. Perhaps it had not occurred to him that canny small businesses had not swallowed the propaganda that they needed constant updates. It is also being whispered that the primary reason for a downturn in software sales in some sectors might not be Y2K, but rather the result of a greater general realisation that upgrades are not particularly essential. We get something less than 25 per cent as much revenue per computer in the installed base for small businesses versus large businesses.
Small businesses are loath to upgrade.
Small businesses pay people a lot of money to get their desktop applications integrated with their accounting and their customer management, and then they don't want to change anything. The next generation, Gates suggested, would have the Internet as the platform, with the software being .NET and consisting of XML, being scalable, and being a service. The next release of Microsoft Windows will have some significant aspects in terms of storage and authentication, and instant messaging capabilities. The next version of Office will have very significant things. The enterprise servers is where we've made the most rapid progress by embedding very rich XML support, even in the servers being released this year.