DERTOUZOS: It is ironic to me that in the United States, the bastion of capitalism, where people have given of their work lives and capital to create a huge industrial economy, we are now asked to surrender the very same factors of production-our labor and our capital-to develop software that will be open and free for all. I do see some qualified benefits to open software, but I wanted to get your views on the big picture before going any deeper.

GATES: Most of the people and companies that create intellectual property will continue to want to get some payment for it, as with any creative area. The beauty of all intellectual property compared to physical property is that there is no marginal cost of production. The world benefits immensely from this, whether it's from a great book or a new drug or a new piece of software. There are fixed costs, so most work will cost something, but for software sold on a high-volume low-price model the price is very small compared to the value.