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.'"

Comments

Re:Supplying the OS for PC's probably helped ...

[nurb432]

"out flying a plane" is just urban legend. Go find some of Gary's intervies for the truth on the subject.

But i agree, there was a lot of luck involved, and a but of underhanded backroom deals.

Secret was scamming, stealing, working hard

[Maxo-Texas]

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.

Multiple Factors

[edwebdev]

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.

The real secret which he will never admit....

[QuietLagoon]

... leveraging and building upon the MS-DOS monopoly is the reason why Microsoft was successful.

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.

Bill was handed a monopoly ... and he learned.

[khasim]

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.

Re:Bill was handed a monopoly ... and he learned.

[LaughingCoder]

The difference being that Microsoft had their monopoly to fall back on when their other attempts failed.

I knew this thread would fall into the trap of recursive "reasoning". Repeat after me, "a company cannot exploit its monopoly to become a monopoly". When they started they were a small scrappy company. Yes, there was luck involved, but they also had "the vision thing" going for them. MS viewed software as a viable business. They did not subscribe to the widely believed notion that software was just the necessary evil you bought from your hardware vendor to get your hardware to work. That vision led them to make decisions, like hiring business people and engineers, with the goal of building a long-term, sustainable business selling software that ran on *other* people's hardware. I am not saying they were the only ones to have such a view, nor even that they were the best. But it was somewhat controversial at the time, at least among the big computer hardware makers, and so I admire them for pulling it off and for being a major player in the "re-wiring" of the computer industry.

Re:Bill was handed a monopoly ... and he learned.

[ShieldW0lf]

You're right that most companies don't choose to engage in those ruthless tactics.

However, the most powerful companies do. And we reward them. And we get what we deserve.

Look around you. This is how powerful companies are built. In every industry, right from food and power on to music and movies on to automobiles and military hardware and anything else you can think of, they are all run this way.

That's not an apology for any behavior. But, you need to recognize, for things to change, you can't just hate the player, and you can't just hate the game. You have to hate them both, and you have to hate them enough to set your own safety and comfort aside and put a stop to it by whatever means are necessary. They've always relied in you being too scared and or lazy to take the necessary steps, and they've always been right.

And we get what we deserve.

Re:Bill was handed a monopoly ... and he learned.

[metlin]

Wow.

I am just amazed at the amount of idiocy that is emanating in some of the posts. And then, you see that ONE post - the one, magnificent post that takes the cheese cake. Surreal, really.

I think money is *great*. It is one of the greatest economic inventions of man, and pardon the pun, but provides us with a common currency to trade our skills for our wants, whatever those may be. It is the new measure of your competitiveness.

When you give someone money, you give them the freedom to use it the way they see it. I do not want to be paid in something which imposes restrictions on how I use it as it conforms to my world view. That very action signifies a moral high ground and arrogance that you know what's best for the people, rather than letting people make their choices.

And what economic elite? You can become an economic elite if you want. Hell, this country is full of rags to riches stories. It's always amazing, but people make excuses. I tell you - you could become a millionaire today if you truly wanted to. At the end of the day, it breaks down to exactly what YOU want, and how far you are willing to go to achieve that. If you want something else more than the desire to make money, then you do not want money badly enough, and that is YOUR choice. Don't go around blaming the "economic elite" or some such vague term to signify a nebulous tyranny (that probably exists in your head).

That's why money is the root of all evil. It allows selfish and evil men to harness good men in ignorance.

Apart from your obvious logical fallacies that make no sense whatsoever, your last statement (like the rest of your comment) is a load of horse dung. To quote, "The race may not always be to the swift nor the victory to the strong, but that's how you bet." There's nothing wrong in trying to be the strongest and the fastest the way society sees it. It's unfortunate if it happens at the expense of others, but then, that's competition for you. If others are not willing to play to win, then they shouldn't be playing at all.

To me, money is a great motivator. It is an enabler, and gives me the means to do fantastic things. And quite honestly, it is not someone else's problem whether or not the way I spend MY money is in fitting with their morals or their world view. I work my ass off and make sacrifices to give ME the freedom to shape my world the way I like it - if someone else wants to one-up me, more power to them.

Money is also a fantastic equalizer. You can be rich, poor, black, white, short, disabled, lanky, religious or whatever else, and nobody will refuse to pay you if you are good enough, and nobody will refuse a trade for money.

Your post, and rant, is nothing but unfiltered nonsense.

Re:Supplying the OS for PC's probably helped ...

[Illbay]

This is true for a good many businesses - although sometimes "luck" is in the eye of the beholder.

I used to provide engineering consulting services for a specialty repair contractor. Since there were a lot of "big boys" who were already well-established doing what he did, he opted (with my help) to take on more "risky" jobs that the established contractors wouldn't touch because they were, well, "too risky."

He soon got a reputation for being, not just a good contractor who got the work done on time and on budget, but a "go-to guy" who would succeed where others wouldn't even try. And soon, he was getting even the "bread-and-butter" jobs instead of the established firms because of "brand familiarity."

In the end, you gotta deliver. Microsoft might be the Great Satan, but they have a lot of satisfied customers you don't hear from, who got stuck on their stuff, and swore by it.

Like Harry Beckwith says in his book "Selling The Invisible": Your main competition isn't a company or a salesman or a technology, it's the "status quo."

Re:May the Microsoft Bashing Begin...

[neapolitan]

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.

McDonald's

[Zordak]

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.

Microsoft's Success

[mlwmohawk]

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?

Re:Supplying the OS for PC's probably helped ...

[hackstraw]

But i agree, there was a lot of luck involved, and a but of underhanded backroom deals.

Right, luck in terms of timing, but this quote really bothers me:

"Most of our competitors were very poorly run"

The initial competitors were IBM and Apple, both are alive and well. Remember, that Microsoft got their start by buying some crap inhouse developed OS called DOS, and convinced IBM to put it on their PCs (before they even bought the software). Round two was when IBM had a deal with MS with the OS/2 project, and Microsoft completely backstabbed them with Windows 95.

Those were the two biggest "successes" of MS.

Re:Supplying the OS for PC's probably helped ...

[dedazo]

Microsoft was so far behind Apple in the GUI business in the late 80s and yet they still own the market.

Let me fix that for you: Apple was so far behind Microsoft in the application business in the late 80s and early 90s that they just limped along while Microsoft snagged the desktop. People buy PCs to run applications, not operating systems.

Most of you don't even remember how hard they had to fight to convince companies to write software for their newfangled windowing system when everyone was perfectly happy with DOS. Gates is being disingenuous when he says his competitors were "poorly run", the real reason is that his competitors (including IBM who saw the PC as a toy) didn't have his vision and drive to (as he said back in the 80s) place a computer in every home. People like Mitch Kapor didn't see any value whatsoever in graphical environments - after all he was selling 1-2-3 hand over fist to companies still running DOS. He paid dearly for that. And once Microsoft controlled the desktop, they could do anything they wanted, which eventually would get them into trouble.

The reality is that no one saw it, except Gates. One could argue that Apple saw it (or wanted it), but they were too busy trying to dick around with the hardware and their OS was always an afterthought. The first "real" PC I ever had was a souped-up Zeos Pantera 486 with 16MB of RAM, a Diamond Stealth64 sporting an amazing 4MB of VRAM, a SCSI card with a 105MB HDD on top and - get this - a gynormous 17-inch monitor. I paid close to $6K back then for that. Today I can put together something that is for all purposes a super computer compared to that, for about $600. The reason for that is and always has been Microsoft Windows.

Re:Supplying the OS for PC's probably helped ...

[timeOday]

The first "real" PC I ever had was a souped-up Zeos Pantera 486 with 16MB of RAM, a Diamond Stealth64 sporting an amazing 4MB of VRAM, a SCSI card with a 105MB HDD on top and - get this - a gynormous 17-inch monitor. I paid close to $6K back then for that. Today I can put together something that is for all purposes a super computer compared to that, for about $600. The reason for that is and always has been Microsoft Windows.

Insanity! That's like giving Henry Ford all the credit for the industrial revolution. Moore's law was stated in 1965 when Bill Gates was 10 years old. The truth is, without Microsoft, PCs today would be a bit better or a bit worse, there's no way of knowing for sure. But they would still be here. And sitting here typing this on my Linux PC (running X which also pre-dates Windows by a longshot), posting on the Internet (where MS was a latecomer because Gates' competing vision was distributing Encarta on CD-ROM), I see little to be thankful to Microsoft.