It took him 17 years, but Microsoft Chairman and Chief Software Architect Bill Gates finally made it to Israel, stirring great excitement and curiosity among the local business community and committing the company to Israeli technological development.
Referring, on his arrival on Tuesday, to Israel being an extension of Silicon Valley, Gates said at Microsoft's "The New World at Work" event Wednesday in Tel Aviv that Israel is unique in its advancements in technology, driven by the universities and its willingness to take risk and try new things.
"What equips a region for success in technology is its commitment to education, having fantastic universities that do state of the art research," he said. "I think that the commitment to those top universities in Israel is part of the reason that their are so many successful technology companies here, and why companies like ours decided to have R&D facilities here."
Microsoft, which started its Israel operation in 1989 with three employees, today has an R&D facility in Haifa and, together with its 50 percent ownership of MSN Israel, employs around 400 people locally.
While committing to return in the near future, Gates didn't explain what took him so long to arrive and dismissed claims that the timing of his maiden visit was connected to any inroads that competitors such as Google and Linux are making here.
"I'm here to learn about the Israeli market and certainly not to conduct any sales activity," he said. "I wish I had come sooner, but I'm here now. We have over 2,000 partners in Israel and want to reach out to them."
Gates also welcomed Google as its newest competitor, saying that there was still much to be done in the world of search engines and that both companies would be making dramatic changes over the next few years to bring about these improvements.
He added that while Microsoft faces strong competition in half its activities such as from Google in its search engine business, it was involved in activities such as Internet TV and speech recognition "where no other company has made the investments it has."
Gates referred to these technological developments in his presentation to over 2,000 Israeli businessmen, giving his vision for the new world at work. He outlined the trend towards bringing about complete complimentary services in products, where one software application will satisfy all possible modes of communication.
While Gates said that the short term impact of software development had generally been overstated, the long term rate of its implementation was generally underestimated.
Gates acknowledged Israel's role in bringing about technological advancement and said that his meetings with Microsoft's partners in Israel and with some of the larger corporations here reaffirmed his commitment to make sure that the company was strong in this market.
To this end, Microsoft signed an agreement of cooperation with the Office of the Chief Scientist in the presence of Gates and Minister of Industry, Trade and Labor Ehud Olmert, launching a program to assist Israeli start-up companies to accelerate their growth and success.
While the world's largest software company pledged to invest $1.4 million in the project over the next three years, Gates insisted that the point of the project was not the amount of the investment.
"It's about technology and helping start-ups simplify and build on the work they're doing here," Gates said. "The impact will be that at a very early stage, those companies will have an opportunity to see where they fit into the Microsoft architecture, how they want to take advantage of that and how we can help them, in there business, particularly when we can give visibility to their work in the worldwide market."
In an afternoon meeting with Prime Minister Ariel Sharon, Gates made a similar pledge of goodwill to the country, launching a project with the government and other companies to donate a computer to 250,000 children in the periphery over the next five years.
Microsoft generated revenues of $39.79 billion in the 2005 fiscal year ended June 30, and had a net income of $12.25b. Gates said that the company has an R&D budget of some $7b. It is scheduled to release its first quarter earnings results for 2006 today.