For most people, working for one of the richest and most famous businessmen and technologists in the world would seem like a daunting task. But Mr Kevin Dillon, chief executive of Microsoft's European Operations Centre in Dublin, seems to take it in his stride. He is unstinting in his praise for his boss, Mr Bill Gates.

"I think he has proven to be an extraordinary visionary and technologist who has introduced products that have changed people's lives and he continues to stay focused on innovating," says Mr Dillon.

As head of the European Operations Centre, Mr Dillon has little contact these days with Mr Gates, who has assumed the role of chief software architect within Microsoft. But he has worked with him in the past.

"He had an exceptional intellect and command of detail at the business level as well as the technology level in those days," he says. "I think he created a culture of hard-driven, detail-oriented, can-do people and that was very exciting. He has built a culture that has been very successful.

As the company and its senior executives have matured, so has the business culture, according to Mr Dillon.

"There has been some refinement of that culture, perhaps a softening in some respects, but the core elements of focus, detail, drive, closure and getting things done have remained," he says.

Now more than 10 years with Microsoft, Mr Dillon should know a thing or two about its culture. He joined the company in 1991 following what he calls a long journey. Born in South Africa in 1954, he began his career as a legal officer in the country's navy, which he followed with a period of commercial law practice. From there, he joined Price Waterhouse, spending six years in San Francisco's Silicon Valley and two years in the UK advising US technology companies on establishing international operations.

Joining Microsoft, he became the European director of finance and administration at its European headquarters in Paris. In 1993, he led a strategic project to centralise all European operations into Dublin. That project ultimately led to his transfer from Paris to Dublin in 1997 and his appointment to his present role. Last year, as part of a change of strategy and vision at the company, Microsoft began shifting away from an emphasis on manufacturing and increasingly investing in high-end core competencies, such as the management of Internet data centres. Dublin was chosen as its regional hub for its new Microsoft.Net strategy. The decision means Microsoft will supply all of its software to the European, Middle Eastern and Africa (EMEA) regions via the Internet from Irish servers.

"At each stage of our various investments, we have evaluated whether we add further to Ireland, which is our operational and development hub in the EMEA region, or should we locate some of these new lines of business elsewhere," says Mr Dillon. "Almost without exception, we have repeatedly gone for Ireland for the reasons we came originally - a great place to live and work, a high-quality workforce, a business environment that is favourable, and that obviously includes taxation, and an incredibly proactive Government and IDA."

But he concedes that the Republic could have lost the investment - it took some two years of negotiations with the Government and billions of pounds of infrastructural investment before Microsoft was prepared to accept that the Republic's Internet connectivity was adequate. Progress made getting broadband into the Republic through agreements with Global Crossing and 360 Networks helped to seal the deal.

But much work remains and other infrastructure issues need to be addressed in seeking to establish the Republic as an e-commerce hub, he says. The costs of moving what he terms "packets of data" from the Republic into continental Europe or the US are still too high, compared with the cost of moving data from another European location. When conducting online business, Internet service providers have to partner or peer through a hub, yet there is no direct Dublin peering hub, he says. Peering occurs through a London exchange, which drives up costs and hinders performance.

He also says it is impossible for companies like Microsoft to locate outside Dublin, where costs are cheaper, because the telecoms infrastructure is still a problem. There is a further need for ongoing deregulation and, critically, the unbundling of the local loop, which will help drive down telecom costs, he says.

Despite these drawbacks, Microsoft's commitment to the Republic is not in question, he maintains. In fact, at a time when other companies are retrenching, freezing recruitment or cutting jobs, Microsoft has plans for continued recruitment and expansion in the State.

"Our business is continuing to expand," says Mr Dillon. "The rate of growth is slower than it was, but it is still a growing business. Everybody is focused on the fact that growth has slowed, but it hasn't reversed. As we grow we need to add people."

A new range of Windows and Office products is being introduced, while various elements of Microsoft Ireland will be involved in developing and testing the new X-Box games console to rival Sony's PlayStation.

"In fact, we're hiring and increasing our investment in people to be able to launch those products."

In Sony, he knows Microsoft is up against quality competition.

"We are very serious about XBox. We believe our product's features take the gaming platform to a whole new level which is significantly beyond what is offered today by any competitor, including Sony, in terms of the capabilities and what is being built into the console."

The new Microsoft.Net strategy is regarded by many as Microsoft's response to an increasingly competitive marketplace. But perhaps the biggest threat to Microsoft's ability to maintain global dominance for years to come is the US District Court's decision last June that the software giant had violated US antitrust law and that it should be split in three to prevent future violations. Microsoft is appealing the decision.

"We don't have a time when a judgment in the appeals court will be heard," says Mr Dillon. "We've always felt the decision was incorrect. We certainly don't agree with the findings - although we respect them - and the remedy that the District Court imposed without any evidence to hear whether it was feasible or supportable is something we are very strongly opposed to. Our expectation is that on appeal, there will be a significant reversal of the lower court position."

He concedes the legal action has taken its toll in terms of the time required from senior management and costs, but says the company is maintaining a business-as-usual approach.

"It is a difficult thing for any company to go through, but we have stayed focused on our strategies, products and customers." And that includes the Irish base of operations, an area in which Mr Dillon says he feels at home. But he was no stranger to the country before locating here with Microsoft. His parents are Irish.

"I knew the country very well. Every year, I was dragged off the beaches of Cape Town to come home to Ireland. I enjoyed it, except I missed my surf board," he says.

His surf days are past him now, Mr Dillon claims, but adds that he plays a "horrendous" game of golf whenever he can to relax. Looking after a two-year-old child, along with his wife Jayne takes up a lot of the couple's time, he says. They have two other children in their teens.

Having travelled widely in the past, Mr Dillon says he is content to stay in the Republic. "We have lived in a lot of countries, but I think this is the most balanced. It has been an exciting time in Ireland and we absolutely love it."