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TIME Europe, Nov. 11, 1996
The Road Back To Paris
Microsoft Europe President Bernard Vergne talks to TIME
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Bernard Vergne, president of Microsoft Europe, has watched as EU countries struggle to fit information technology into their homes and businesses. He offered an overview on the Eurotech market from his office in La Defense in Paris.
TIME DIGITAL: Where is the European tech market headed these days?
Vergne: Had you asked me that question two or three years ago, I would have said that Europe was behind the U.S. by only three to six months in product development. The one big change is the Internet, and there Europe is probably a couple of years behind the U.S. — and it just happened in a couple of years! The phenomenon hit the U.S., and there was a market with a critical mass of PCs in the home, critical mass in the workplace and the right attitude. In Europe those critical masses have not really been reached.
TIME DIGITAL: What's likely to begin changing that?
Vergne: One essential thing will be the deregulation of the telecommunications business, which will happen by 1998 — so within the next 15 months. Already we're seeing a lot of signs of price wars and of tariffs going away. It's the good things of competition: the cost of communication is already much lower than it was six months ago. That in itself is one small step. The second force is simply gravity. The most advanced corporations in Europe are embracing the Net. Intranets are being set up by large corporations. And they're starting to be public about the benefits they are getting from them.
TIME DIGITAL: Fewer than 10% of European homes have PCs, as opposed to 30% in the U.S. What's holding back consumers in Europe?
Vergne: Cost. You're starting to see PCs for slightly under $1,000. But once you reach the consumer and the value-added tax, which is 15% to 25%, it becomes less attractive. Also, the economy is not very good in many European countries. So the mood is to try to save a little money rather than buy something new like a PC. Finally, it's not clear that national education in every country is grabbing the opportunity [that PCs offer]. To some extent that's the one element that worries me. We have kids coming out of school, and they haven't played with a computer.
TIME DIGITAL: Can Europe still innovate?
Vergne: There is a lot of innovation here. There are very fine companies in Europe, but it's hard to establish your business and grow only in Europe; the market is worldwide. Innovation is here, but it comes with a much more global attitude toward technology.
TIME DIGITAL: Microsoft has a reputation for working well with a huge number of business clients. What's your advice for CEOs in Europe?
Vergne: Look at the information-technology investment not as a cost that you have to endure but as an investment for achieving better production and efficiency. I think we need to spend time explaining the value of the Internet not as a magic thing but as something that lets you hook up and communicate with others, and show the benefits as a competitive tool. That's the best way to evolve, but it's reactive evolution, not proactive. Europe is accepting technology reactively — not proactively, as in the U.S.
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