Mr. Gates focused on various seams or "constraints" that have held back development of a better infrastructure for business. In the 1980s, the problem was that hardware was not sufficiently developed to allow rapid development, he explained. In the 1990s, hardware advanced, but there were constraints on connecting devices until the Internet matured enough at the end of that decade.

"People thought that was the last boundary, the last thing to be solved," said Mr. Gates. "They were wrong." In the current decade, which Mr. Gates has dubbed "The Digital Decade," the challenge is to overcome the "seams" in order to establish software connections that will enable better commerce, he noted.

Today's "seams" include boundaries that prevent technology devices from communicating, as well as those that keep different software applications from working cooperatively, Mr. Gates observed. "Many things are not done because of these difficulties," he said. "You are going to have many devices; they should be connected."

Once we get rid of the seams, said Mr. Gates, "we can deliver all the scenarios we dreamed about."

How will that happen? According to Mr. Gates, "It requires a lot of investment" in research and in building new software applications. He added that companies should work with industries who are conducting pioneering research, while "standards organizations need to move into new frontiers" to better enable communication.

He focused particularly on "boundaries between corporations, where the ease of moving information in a secure way is still way too difficult. We have to schematize data in standard ways."

Mr. Gates also talked about Microsoft's initiative to provide "trustworthy computing," providing reliability and security. "These are software problems and they're not easy software problems," he noted.

According to Mr. Gates, Microsoft's "most acute focus is security. It's the largest thing we're doing." He emphasized that software must be kept up to date with the latest patches to prevent security breaches. He added that the software maker is working toward providing automated updates to make the process more manageable for customers.

Spam, or unauthorized commercial e-mail, is another tough problem for the security of the software infrastructure, said Mr. Gates. He noted that spammers exploit e-mail to find a few customers. Even if they only get one in 10,000 potential customers interested, the proposition is economic for the spamming company because the cost of sending mass e-mails is so low.

Mr. Gates said that advances in anti-spam software, along with legislative efforts aimed at stopping spam, "will shift the tide" and make it "no longer attractive" to be a spammer.