The richest man in the world dropped in on the University of Waterloo Thursday, intent on inspiring students to follow in his footsteps with a career in computing.

A few hundred students from the math, computer, and engineering faculties at the southern Ontario university greeted the Microsoft founder under heavy security, as Gates made the only Canadian stop of his six-school North American tour.

"Waterloo is a special relationship for us," Gates told CTV News. "Most years, we hire more students out of Waterloo than any university in the world, typically 50 or even more."

That figure doesn't include other students who take co-op placements or short-term employment while still at school.

"Microsoft has had a long relationship with the University of Waterloo going back to the very early years of the company," said University President David Johnston. "They are particularly attracted to the very high quality of computer science, math, computer and electrical engineering students that come from the university."

Students who couldn't fit into the auditorium while Gates was speaking packed into several rooms to watch his presentation on closed circuit televisions.

"It's all about hiring the best," Gates said. He believes there's going to be a major shortage of software engineers in the next decade, and his company will be scouring universities for them.

"Part of the reason why I go around to the universities is so people know what an ambitious agenda we have for the software industry."

Videotaping was restricted as Gates showed off a preview of the yet-to-be-released Xbox 360. He also demonstrated other projects under development, including Microsoft Office 12. Using a spoof from the movie Napoleon Dynamite, his bit about the new productivity suite was a favourite among students in the crowd.

Gates told the audience that phone numbers and e-mail will eventually be obsolete, that fingerprints will become the new passwords, and devices like tables and phones will double as interactive computers.

CDs and DVDs are also something he thinks will soon be a thing of the past. Gates calls this the golden age of software, and predicts there will be more advancements in the next 10 years than there have been in the last 30.

"(High definition DVD) is the last physical media format there will ever be", Gates said. He feels people are tired of using discs, and will increasingly get their movies and music from on-line sources.

"It was really informative," said University of Waterloo student Natalie Owen. "I'm in computer science, so it was nice to see what he thought about the development in the industry."

"He's a really impressive man," said student Evan Doupe. "He started up a business with a friend from school, and look where it came."

Gates, 49, has an estimated net worth of more than $46 billion US, according to Forbes magazine.

"It was awesome to see him in person," said student Andrew Rizkalla, "He's been a role model of mine for a long time."

With a report from CTV's Jim Troyak