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Bill Gates Reveals Secret of Microsoft's Success
Hugh Pickens writes "Bill Gates, in a interview with the BBC, revealed the secret of Microsoft's success: 'Most of our competitors were very poorly run. They did not understand how to bring in people with business experience and people with engineering experience and put them together,' said Gates. 'They did not think about software in this broad way. They did not think about tools or efficiency. They would therefore do one product, but would not renew it to get it to the next generation.' Mitch Kapor, founder of the Lotus Corporation, has a different view: 'Claims by Microsoft that people were buying the software because it was good are pretty self-serving. I'd like to smoke what he's smoking.' Gates also said that he took a 'conservative balance sheet approach' to running Microsoft explaining that he wanted 'great financial strength so we would have the flexibility to do software in the new way, or whatever we wanted to do.'"
While I think Gates' point about merging people with business and engineering experience is valid, there's always an element of luck involved - good thing for Microsoft that Gary Kildall was out flying his airplane when IBM came by.
Hulk SMASH Celiac Disease
It was all three.
Microsoft repeatedly used this tactic.
1) Pretend to work with another company
2) Steal the good ideas from that company
3) For bonus points, if possible make the next product from that company suck.
4) Profit!
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Microsoft outright stole some products (Stac comes to mind)-- after they LOST in court, then they bought the company on the stock market.
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However, they worked like demons on their own stuff too. Microsoft worked hard- very hard. It competed very hard (frequently on the edge of legality and sometimes past it). It cheated, scammed, lied, stole.
But it also polished better than ANYONE. Microsoft made things that were arcane and difficult into automatic and easy things.
And it supported (and supports) its customers extremely well. The two times that I called for customer support, they pulled out all stops to support me (a sound card problem with 5 senior engineers, a level 1 and level 2 support on the line- and by god they figured it out after 3-4 hours on the phone). When my business went through the recent DST thing, we had multiple microsoft people on site verifying everything- holding regular meetings. None of our other vendors did that.
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I've compared M$ to an evil parent that wants the best for you as long as you stay home and never go out on your own.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
There are two "secrets" to Microsoft's success:
1. Microsoft had the luck to work in an exploding market while it was still in its infancy.
2. Microsoft had the shrewdness (or ruthlessness, perhaps) to continue leveraging the advantage conferred by secret 1 for the decades to follow.
Everything else is just Gates' PR people trying to make history be kind to Gates, in spite of the fact that he raped the personal computer industry of profits and innovation during his tenure.
IBM handed Microsoft a monopoly on the OS for their new PC "toy".
Bill Gates & Co then hired people who knew how to exploit that monopoly.
Yes, their competitors made mistakes. So did Microsoft.
Microsoft Bob.
Microsoft Blackbird.
Etc.
The difference being that Microsoft had their monopoly to fall back on when their other attempts failed. Their competitors did not.
Bill is going for the "humble" bit now. But that's not how it happened.
Yes to that specific case and I agree with what you are saying, but the general process repeats itself over and over in business and technology.
Facebook? Give me a break -- look at the prior art of Friendster and even Myspace. When Facebook was being started at Harvard I thought it would not take off because of the current dominant players.
Google? Anybody old enough to remember when Altavista was the king of search? We used to always use that engine in college.
AIM? Remember ICQ? Ntalk? Otalk?
Original ideas are few, and even Gates admits he was not very original with his ideas in many, many interviews, but he did implement them well, er... market them well, and protected his monopoly with a vengeance.
Slashdotter, ID #101. UIDs are in binary, right?
Microsoft succeded the same way McDonald's did---sell a bland, familiar, mediocre product in huge volumes at a low-ish but profitable price (this worked for PCs because it's bundled; home users would not have actually paid for Windows). Really, there's no big secret here. The same model works very well for Wal-Mart and Ikea too. It's hard to get those obnoxiously-high volumes if you try to sell on quality and overall value.
I think this is part of Vista's problem. It's still low to mediocre quality, but no longer bland and familiar. It's like McDonald's suddenly trying to get people to buy $12 steaks.
Today's Sesame Street was brought to you by the number e.
First and foremost MS is a marketing company. A company that realized early on, quantity is better then quality as it get you onto the consumers/businesses systems.
Second they are a legal firm that applies a chess strategy of sacrifice the pawn to more the knight forward.
Or in other words, what is the risk vs. payoff of breaking teh law?
Third they are, by the court decisions of court around the world, a trust breaking law breaker, a company run in part with anti-trust law breaking tactics.
Fourth, what development they do, it is with intent to dumb down the users and always leave them coming back for improvements but never really doing a complete job.
"The way to be successful is to make people need you" which is achieved by consumer entrapment abuse.
The reason for concern MS has had over open source and its halloween documents evidence is because Open Source, though not a freeing of the consumers is in fact a big step in that direction.
Moore's law helped hide how inefficient MSFT coding had become. The marginally legal and outright illegal activities of the business/sales units would not have had this much of success if the vendor lock had not been achieved.
But deep at the core, the dominance of MSFT is because the ignorance of the user base rather than any brilliance of MSFT products.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
No but they can be handed a monopoly (by another near monopoly).
Microsoft's success came from a complete lack of ethics.
While companies tried to compete on a level and ethical playing field, Microsoft was dirty dealing them. Stealing their work, poisoning business relationships, intentionally disrupting their businesses, etc.
I can't think of one, that's right, not one product of theirs that won on its own merit. Their whole office suite wouldn't be anything if they didn't create back doors in Windows and DOS for them. Windows wouldn't be anything if they did not poison relations between the likes of Xerox and DRI. DOS would have had competition from DRI if they didn't embed bogus warning messages in their applications. FUD is the modus operandi of Microsoft and how they "succeed."
They took illegal and unethical advantage of every piece of software they ever sold. Every last piece of their software works against every other software ISV.
Those they couldn't beat, they put out of business by dumping "free" versions on the market. Netscape anyone?
When I saw smart I mean it literally. Bill Gates saw the business world. The giants and players who could easily throw you around. The only way to truly compete is to offer something noone else had.
Sure, he ganked the GUI from Steve Jobs, but understand that he ganked the concept... not the code. Bill Gates and his company had a TERRIFIC understanding of what the average user would want in an experience. They also understood what a company would want when making technical decisions at the time
1) Will it do what we need it to do?
2) Can we easily maintain it?
3) Can our users learn to use it quickly and easily?
4) Is it cost efficient?
5) Does it "just work"?
The answers to all of these ONLY Microsoft could say yes to. Apple lost in #3 and #4. Every single apple I used growing up was completely non-user friendly. Microsoft spent millions upon millions understanding what users want to be able to do and made multiple ways to do it to allow a user to choose how they like doing things.
I hear a LOT of people complain about windows software but every single Office App, I've ever used has lived up to my expectations. In my 15 years in the IT industry I still feel that 90% of the problems are user error when it came to basic installs.
The other 10% was comprised of plethora of wierd setups, odd configurations, and *gasp* bad coding.
Don't get me wrong... Microsoft has written a lot of seriously wacked out code that has no business in production. But lets compare... to Lotus Notes. That thing is about as friendly as a porcupine with a machete. It's almost as bad as Groupwise. These people spend $1.99 at Big Lots on a book for "User Friendly" and "Tech Support Friendly".
You might hate microsoft, but they took what every software company was lacking and built that into their business model. Bill Gates is a genius... a low down dirty scoundrel genius... but a genius none-the-less.
Other people also saw that selling an OS without selling the hardware could be a viable business. Yet those other companies did NOT survive.
Again, Microsoft BOUGHT their OS from someone who wrote it because HE saw that the OS did not have to be sold with the machine BEFORE Bill Gates saw that (as you claim).
Again, Bill Gates BOUGHT the OS from someone else.By your "logic", Edison would have been a "genius" for buying an electric light bulb from someone else who built one.
First of all, Xerox had a working demo and many ideas. Apple paid Xerox for rights to use the technology. However Apple designed the Macintosh from the group up based on the ideas that Xerox had developed. They did not have access to the APIs or code that Xerox had.
Microsoft on the other hand had access to many internal APIs that Apple supplied them because MS said they needed them to develop MS products. Microsoft developed Windows based on these APIs. Slight difference.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Here's another history lesson for you.
http://members.fortunecity.com/pcmuseum/dos.htm
Looks like people (and companies) were writing Operating Systems (and apps) without selling hardware for YEARS before that.
Also, in the English language, "every" and "most" are not synonyms.
A lot of people seem confused or misinformed about the history of Microsoft. I believe that Microsoft is a monopoly because they made a deal with IBM whereby when IBM sold a PC, Microsoft received royalties for MS-DOS. This contract, I hear, was an invention of Bill Gates Sr., a lawyer. The royalties were paid regardless of whether MS-DOS was actually on the machine, thus IBM could not sensibly sell PC's with alternative operating systems (i.e. PC-DOS, etc.).
Thereafter they wielded this contractual monopoly over PC operating systems skillfully, a shining contrast when compared to their essentially bland programming output, and were responsible for a variety of anti-competitive practices over the years. I lament not having documented my observations of these practices, but embrace, extend, extinguish has been honed on many, many occasions from more brutal and subversive tactics such as looking for and intentionally breaking other companies' software (viz. Corel).
Make no mistake, Microsoft's business strategies have been diligently locking in customers through proprietary formats and libraries, as diligently as they have been snuffing out any actual competition with the same. Their contributions to research, development, and technology are essentially non-existent, and virtually unheard of when compared to their revenue.
They are not a development shop; I recall some absurd (but probably accurate) statistic that the cost to the economy due to lost productivity from things such as blue screens of death and the untenable Word interface amounting to the same cost as the September 11th, 2001 World Trade Center attacks, every hour. (This is not to mention the lost productivity to Solitaire) That's a false dichotomy, since who's to say that perfect (or at least working) software would result in ideal output, and it's much the same as saying the millions of songs downloaded each year amounts to trillions in lost revenue to the record companies. Nevertheless, I know that I prefer to waste my time on Slashdot, as opposed to rebooting my machine, or restarting a mangled list in a Word document.
I think OS/2 could probably run MS-DOS programs at least as well as Windows 3.x (or 95). But at the time, IBM tried to use OS/2 to regain its hardware monopoly from the clone market. So PS/2-OS/2 ended up being much pricier than a clone with Win3.x. That's what made it the better DOS program switcher.
And by the time OS/2 opened up to generic hardware, the windows API was well established as the de-facto standard. To late for the better system to win.
Of course, it was sheer ruthlessness that allowed Microsoft to lead IBM to believe that OS/2 could eventually become the standard. Microsoft was supposed to be involved in OS/2. Who knew they were also working to undermine it...
Kind of like Intel and the OLPC project. Or Microsoft and OASIS. Or, truth be told, IBM and Unixware.
Posted from my Android phone. Oh, I can change this? There, that's better...
Selling office 97 pro for $99 to the consumer, and licensing it to universities for $1 a copy is reaping HUGE benefits right now. An entire generation of people, college educated people, grew up with office 97 and now demand it at home and in the workplace.
Microsoft's success can be pinpointed to one day in time when all of IBM's lawyers were at Gary Kildall's house. Gary was out screwing around in his Cessna that day and Dorothy basically freaked out during the negotiations for DOS. When Digital Research punted the IBM deal, that's when the phenominal $50,000 investment in Tim Patterson's DOS became Microsoft Legend.
I'm not sure that Gates knew that IBM was going to pull parts off the shelf to slam together a PC, and I doubt he knew that clever reverse engineering of the ROM BIOS that Compaq would do would cause the Attack of The PC Clones to occur and the money bags to fall from the sky at Microsoft.
If you ever read any Gates biography, documentaries etc, almost all literature dedicates a large amount to that particular point in time.
Bob Cringley's PBS Triumph of the Nerds spends about 30 minutes of the documentary on this decision.
Stephen Manes' Gates: How Microsoft's Mogul Reinvented an Industry--and Made Himself the Richest Man in America -- dedicates an entire chapter to this event.
Even Noah Wiley's Pirates of Silicon Valley does a silly bullet time effect on this one moment.
Yes, and CP/M and p-system were more expensive, and thus DOS became the dominant system. They gained a monopoly through a bit of luck and a bit of business acumen. Then they exploited that monopoly.
So Microsoft offers the most desirable of three choices, based on multiple factors... cost among them... and they became, by customer choice, the overwhelming favorite. That makes them predatory at this point? And while MS was the favorite choice of PC users, PC's still weren't the goliath of the market yet.... until the mid-80's, the Apple II ruled the roost, and then the Macintosh arrived, and sold very respectably. The Amiga also provided a serious challenge. Microsoft had a technical monopoly of sorts, but it was on one platform... they had significant competition from other platforms all throughout the 80's. Microsoft didn't become truly dominant until the early 90's, when Windows 3.1 really began to popularize home computing, And they sealed it by knocking the ball out of the park with Windows 95. Then they started acting like a monopoly.In the big money sector... business IT... Microsoft was still a bit player until the 90's, and they had to get their foot in the door by marketing Microsoft operating systems as "playing nice with others"... meaning, yes, you can run Windows as a workstation on your existing (and expensive) Unix and Novell servers.
Microsoft did become a monopoly, I grant you, but they were nowhere near one in the time frame you mention. They were, while profitable, still small fry in the early 80's, and made much of their money writing software for other platforms. Excel was a Macintosh product long before it was a Windows product.
Life is hard, and the world is cruel
I especially liked the part where he describes the unlocked heavy machinery that he and Paul 'played' with. I see that he adopted the exact same security model for Windows. Even after the tenth time they broke into the machinery, the company set up a security guard rather than lock the machines. How did that get translated into Windows: ports open, but the anti-virus is running!
It is dangerous to be right when the government is wrong.