In this segment, Gates talks about the evolution in people's attitudes about "computing itself, which was thought of as a scary, threatening thing that governments and large corporations would use to track info about you.
"It’s been a real change to say that computing was going to be about the individual, about empowerment," Gates said.
When he co-founded Microsoft in 1975, "there was no software industry," he said, and the company made some "heroic assumptions" to base their business model on.
Now, 30 years later, China recently passed the U.S. as the largest broadband market, and the U.S. will never catch up, given China's population size.
"It’s a very global biz in terms of where the talent is, where the innovation is.”
The impact of software in the next 10 years, what Gates calls the second digital decade, "will be far more dramatic than all software has done in this 30-year period since PCs became widely available."
"My daughter doesn’t know what a record is; pretty soon a phone book or paper-based encyclopedia will be equally antiquated," Gates said.
To see another part of Gates' keynote address, in which he discusses why the market isn't always the best system for distributing technology, see this other Vator.tv video story by our campus correspondent Taylor Buley.
In a humorous moment provided at the expense of his hosts, Gates told the audience of students, faculty and other Stanford attendees that he watches mostly MIT physics lectures on the Web but that he was "looking forward to seeing more Stanford courses out there."