Regarding his plans to step down from Microsoft on a daily basis in 2008, Gates said multiple people have and will continue to play critical roles.

"There's always been this illusion of one person playing such a key role. It's always been literally thousands of people with different roles," Gates explained.

Gates also applauded Apple for its success with the iPod but said Microsoft's own Zune system offers a differentiator by way of wireless Wi-Fi communications. Microsoft's Linux interoperability deal with Novell, meanwhile, fits in with the company's interoperability goals, Gates said.

Schwarzenegger gave a brief speech hailing California's technology and its economic recovery. He also emphasized a need to rebuild infrastructure. The state still has challenges in areas such as healthcare and education, Schwarzenegger said.

"We work hard and our economy now has come roaring back," he said. Californians also are optimistic about the future now, Schwarzenegger said.