Slashdot Mirror
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.'"
Yep, exactly. He had no idea what the market for his product was going to evolve to, but he approached it in such a way that MS could adapt. They adapted so well that they pretty much became 'the market' and we all know what happened then.
Invexi - a Phoenix, AZ based web design and web development company.
Make lots of money or lots of good software. Pick one.
Balance is the key.
Vista is was an over ambitius project. The OS X for the Non-Mac user, with everything that Apple decided not to put in OS X, They listen to their customers and tried to combine all the ideas into one product...
Part of a reqired MBA Class for Information Technology states the larger the project the higher chance of failure. If they had more MBAs they may have known that, and broke it down much earlier.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
This I think is a good example of where a better SALES organization wins out.
The problem with software is that there are exit barriers. Once you've bought
a system you are somewhat commited to it. This is what leads to grannies to
think that they need msoffice for their old word documents.
That sort of thing doesn't NEED innovation. All you really need to do is to
not eggregiously piss off your captive audience. That is a much lower bar.
He points to Lotus and whines about lack of innovation. I'd really like to
know exactly what innovations that microsoft have made that are relevant
to their customers and Lotus product.
I really don't see it.
I might as well be running a pre-hegemony copy of smartsuite for all the
actual "innovation" that goes on with this stuff.
Ultimately, he's trying to frame non-technical successes in technical
terms to deflect from the fact that his stuff really isn't all that
great from a technology point of view.
A Pirate and a Puritan look the same on a balance sheet.
While the coup that Billy snagged back in the day was brilliant in hindsight, it was still a very very small financial score. What happened afterwards was a lot of luck and without a doubt a lot of good business sense. You don't have to love Microsoft to still be amazed is how far and fast they grew. Microsoft was so far behind Apple in the GUI business in the late 80s and yet they still own the market. That has to count for something, eh?
Like Steve Jobs said at D5 (http://d5.allthingsd.com/20070531/d5-gates-jobs-transcript/):
"Well, you know, Bill built the first software company in the industry and I think he built the first software company before anybody really in our industry knew what a software company was, except for these guys. And that was huge. That was really huge. And the business model that they ended up pursuing turned out to be the one that worked really well, you know, for the industry..."
So there are two important things, they were focused on software only, and they adapted the correct business model to be focused on software (able to make quick, temporary alliances with many factions).
Basically, it can be summed down to being an agile, nimble competitor. Which has no resemblance to what they've become.
I was a consultant at Lotus at the time Microsoft started winning in desktop applications.
Bill Gates is essentially correct:
1. Lotus did a much worse job of hiring in professional management and bridging the gap between software development and business.
2. Lotus complicated their tools-set and architecture unnecessarily. This is one factor that killed 1-2-3. Lotus went straight from assembly code speedy to bloated and slow. Ironically, as this was happening, Jon Sachs wrote 1-2-3 C, a simple, fast, and very portable reference implementation.
3. Lotus did a bad job with follow up products. Instead of launching and improving, they would launch, get disappointed, give up, do something else. Or, in the case of 1-2-3, they would overcomplicate. They had very innovative products - ones that could have changed spreadsheets in fundamental ways, and that would still be innovative today. But they did not know how to nurture these products.
Microsoft faces a lot of the same problems now. Microsoft can't seem to make regular incremental improvements to key products, for example. But business isn't about being perfect. It is about being less bad than the other guy.
I wrote parts of this stuff
Mod me a troll if you want, but, i'd say there's some slight "revisionist historian" work going on here, by gates... He's probably trying to "clean up his legacy" image...
The REAL secret of ms' success is that they are fucking RUTHLESS cut-throats. Hell, gates & company for years didn't play the lobbyist game, failing to pay homage to DC, until, that is, they figured it was to their tax, legislation and overseas-business advantages.
Any SMART board and administration in a company would hire and exploit the best talent it could afford to buy, so msoft is no great difference here. It comes down to ruthlessness, the kind that MOST companies CHOOSE NOT TO ENGAGE IN. They way microsoft plays is like gangsters or ninjas joining a game with weapons or rules-bending tactics while others try to play by the rules, even if they are at a disadvantage by playing by such rules.
Yeh, I TOO would like to know what that man or his writers are/were smoking.
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
I think you may very well be the only person I have ever seen state that Microsoft Windows "just works," or that Mac is unfriendly.
Windows 9x was a piece of crap. 2000/XP are quite nice, though I am glad I don't administer them professionally.
MacOS confused the shit out of me because it lacked a CLI of any note prior to OSX, but I wouldn't say that it was "unfriendly."
But all the time I spent as a kid trying to get games to work on Windows 95, when they were made for Windows 95, "Just Works" is not something that I would use to label it then.
Microsoft was one of the first (maybe the first?) company of that era who grew HUGE and simply refused to pay dividends to stockholders. The company grew so well, and shareholder value grew so well, that it worked out ok for everyone, making many a millionaire out of many a stockholder. But the fiscal conservative part is true and interesting. They hoarded cash and they didn't (until recently) spend it on acquisitions. Instead they more or less bullied their way to higher market share, with plenty of cash to pay plenty of lawyers as they went along.
I'm not implying that it couldn't have happened some other way, just that in this case, that's the way it happened.
Think for a second how the PC hardware world would look like today if Apple had gotten a hold on the desktop before Microsoft. That PC you're running Linux on would probably cost three times as much, or more likely wouldn't even exist.
The widespread use of Windows was what ended up commoditizing PC hardware.
Web2.0: I love when people Flickr my cuil and digg my boingboing until my google is reddit and I start to yahoo
Mr Kapor claims that Microsoft "took advantage" of its position in controlling the operating system to make life hard for independent software developers like Lotus.
When these criticisms are put to Mr Gates, he says he finds it "ironic" that he could be accused of such a thing when Microsoft had "evangelised" its software to other companies, begging them "please write software for our platform".
I was at Lotus from '83 to '93, and I distinctly remember Microsoft visits, begging us to target our apps for their next OS: OS/2. While Excel for Windows was almost certainly already in development.
End of.
People seem to forget that when DOS was dying and it was time to move to an OS with a graphical shell there was a choice. There was OS/2 and there was Mac. OS/2 seemed certain to win but it turned out to be utter crud. Mac was a niche at the time only really appealing to the creatives. Windows 3.1 was not good, but it was better than the rest. And Windows for Workgroups with decent networking clinched the deal.
As the manager of a small ISV I know for sure that our success would not have been possible without the existence of a universal de facto standard, namely the Windows desktop. We haven't had to port our app for 10 years because of the stability of the Win32 API. Compare this to the hell of Mac development over those 10 years. And as for Linux? All rather academic since none of our potential clients have expressed any interest in running on Linux.
They won because they were better than the competition at the key points in the battle. Excel beat 1-2-3 because it was better. Word beat Word Perfect because it was better. Outlook beat Notes because it was better. And Windows beat Mac because it was better. Not that the MS products were universally wonderful. Sometimes they won because average is better than rubbish. But they were still better when it counted.
End of.
Actually, there's an entertaining book called In Search of Stupidity that makes the same claim as Bill Gates.
Tech Companies succeed not by maximizing excellence (the book is a response to In Search of Excellence) but by minimizing stupidity.
Let's look at some of Microsoft's early competitors and the dumb decisions they made. Ironically, though, for each and every point I list, you can see that Microsoft has learned all the dumb answers of its competitors.
1. CP/M, ultimately crushed by DOS. Microsoft basically gave DOS away to every OEM there was, while CP/M stuck to its higher priced format. Now, Linux is making inroads on Microsoft because its free, whereas Microsoft is increasingly a stickler for Windows licensing.
2. Borland vs Microsoft. Borland struck an early lead in Microsoft in tools by making a Pascal that was better than DOS BASIC, and then, by making a C++ that was better than Microsoft's. But, Microsoft came up with VB, whose scripting style made it easier to work with than Borland's Pascal, and negated the advantages of Borland C++, and then, for C++, Microsoft's Visual C++'s 2.0 was hands down a better IDE than Borland's C++ IDE was.
Now, Microsoft is losing tools mindshare to Linux, because, interpreted languages such as Python, Ruby and Perl / PHP are easier to do quick and dirty RAD style web apps with, while Microsoft's own offerings are getting increasingly complicated... and Microsoft's letting their own C++ product languish while the GNU compiler keeps getting better and better, and Linux IDE's such as KDevelop actually now surpass Visual Studio for C++ development. Microsoft needs to realize that the .NET one platform fits all approach is ultimately a loser, but, we Linux fans hope they don't realize it until it is too late!
3. Borland vs Microsoft Round 2. Borland's Quattro Pro was an early favorite over Excel, but Excel wound up carrying the day just through a sheer weight of features. But the really telling battle came when Borland bought Ashton Tate, and Microsoft bought a tiny company that made an Ashton Tate clone called FoxPro. FoxPro was, way, way faster than dBASE and Borland was late with its dBASE anyway. Microsoft would later seal the deal with MS Access, which was easier for quick and dirty database projects than either xBASE product.
Now, Microsoft's own office products are late, and Open Office continues to make inroads. Nobody has really answered Access yet, but... MySQL has quietly dominated the enterprise for quick and dirty databases in the same sort of way Access snuck into the desktop.
4. Microsoft vs IBM. Oh, let's see, how did IBM screw up OS/2, let me count the ways. IBM wanted to tie OS/2 to PS/2 offerings... IBM's OS/2 marketing was hamfisted whereas Microsoft basically let everyone copy Windows like the plague... whereas Microsoft wanted Windows to run on all sorts of PCs... Windows wasn't "as good", but it did have a better message queue than OS/2 and didn't require users to throw away DOS completely at a time when that mattered...
Nowadays, Microsoft is the company that ties Windows to specific hardware, whereas Linux runs on just about everything. While Microsoft still has a stranglehold on PCs, in every other kind of computer out there, from cell phones to digital control devices to routers and set top boxes, Linux actually has a growing presence. And, ironically, if you want to write for POWER Linux, IBM will be more than happy to set you up with an account at an IBM data center... what will Microsoft do, hmmmm?
4. Microsoft vs Apple, round 1. Windows color, Macintosh, black and white. Woops... but even today, we can see Linux rolling out with better and better eye candy and graphic effects. When Vista first threatened integrated 3d graphics ala OS/X, Linux people could have almost panicked, yet, they rolled up their sleeves and by the time Vista arrived, Compviz was here and many Linux desktops actually look better than Windows. Can you say Ubuntu?
5. Openness. Microsoft came to being in a day when Microsoft's level of documentation gave it a more open feel over what software bundled by hardware makers would give. While we think of Microsoft as being hard nosed and closed today, 20 years ago, they were
This is my sig.
I have Vista (now SP1) on my laptop and it runs perfectly well.
Of course one of the first things I did was remove all that sickly blue marshmellow eye-candy, and reverted to the Classic "Win2k" GUI.
If you didn't know any better, you'd think it was W2K.
It NEVER crashes. It boots quickly, and oh yes- I even have Linux on the PC.
But guess which OS I have defaulted my GRUB to boot into?
.
- aqk
F U
What are you smoking? "We didn't used to?" Since when? Business has ALWAYS been cutthroat. "We didn't used to" dumbest thing I've read on here so far today, and that speaks volumes. WOW
There's a difference between being innovative and knowing innovation when you see it. After all, they bought DOS and Word. Gates does deserve credit for the business savvy and courage to invest in the right products at the right time.
It's unfortunate that Gates doesn't give more credit to his employees and customer base. A lot of guys like Raymond Chen worked many sleepless nights to make Windows backwards compatible with the most popular programs. For a long time Microsoft worked very hard to keep their developers and users loyal to their platforms. There came a time when people wanted MS Windows and Office in part because it's what everyone used. You would be a more valuable employee to most companies if you used Word - not MacWrite or WordPerfect. Do people use Facebook because it's awesome or because their friends use it? The same goes for email, chat clients, picture formats, etc. When I invested in Windows I wasn't interested in the OS - I was interested in the community, products and services around the OS. I never liked Windows; it was just a necessary evil for me to use the hardware and software that I did like.
Slowly, Microsoft has been alienating much of that community. How many developers have had to face competition from MS in the form of standalone products or features integrated right into Windows? All the while those competitors have to subsidize their MS competition by paying for Windows, Visual Studio, etc. One thing Microsoft does well is use successful products to subsidize those that are no good or face stiff competition. Think of Zune, XBox, etc. Those competing firms have felt the blows over the years. A lot of people still support Microsoft because they have their careers invested in MS technologies, but many people have also had their careers ruined by the same - or rather, their career using Windows, as people will adapt and find alternatives.
Monopolies and bootstrapping aside, this looks like a case of killing the golden goose to get the golden egg. Many of the "one-product wonders" that Gates slams in the interview were the companies that pushed Microsoft to the top. Gates says these companies could "never get their engineering sorted out," but MS definitely had an advantage being in control of the API's.
Microsoft owes a lot to the people who have put up with having a "broken computer" time and again, the developers who released their cutting edge software for Windows, the US judiciary's leniency in anti-trust cases, and the hardware industry that doubled performance every 18 months encouraging people to buy yet another copy of Windows. It's a shame that Gates can't show a little more gratitude to the people who have given him so much.
--
They've got how many billions of dollars laying around and that's the best they can do?
The real problem was when there was competition in the market they destroyed it using legal(ish) yet underhanded methods. MS-DOS on the IBM PC was a tiny part of their profits - BASIC made them much more (Applesoft BASIC, for instance, was written by MS and bundled in Apple ][ sales, even though Apple had their own Integer BASIC).
DR-DOS kinda existed before "8 years" (really 6 or 7, I think - 1981 vs 1988) in CPM/86, but it was MUCH more expensive than competitors MS-DOS and (IBM) PC-DOS and not fully compatible. My uncle had CPM/86 on his PC in those days and I remember it not working with some of my PC games (though I did eventually learn that games that included their own boot worked).
MS killed competition in two ways - exclusive contracts (put only MS-DOS [later Windows] on your machine and get cheaper licensing) and bundling equivalent but often (initially) inferior software for free (see Novell Netware, Lotus Notes, Netscape Navigator, to some extent GEM, etc).
Linux/OSS is the ultimate problem for them - they can't buy it and they can't beat it in a price war, which is why they repeatedly vow to crush it, yet can't.
Microsoft's business model, as we all know, has been to sell second-rate software to unsophisticated customers. But why did this succeed?
I'm at an age when I can begin touting my age as a factor in making arguments, so here is my take on this. Some of us remember the "mainframe" days. My particular experience was working at Motorola's government electronics group during a time when there was a need to upgrade the (that's right, "the") engineering computer. Bids were taken, executives were wined and dined, and a Sperry Univac was bought (replacing a much-loved but very tired Honeywell model). The engineers were livid because the Univac sucked. I actually sat in a small, packed conference room with Sperry bigshots while we berated them on the problems with their computer. Not two years later, the Univac was dumped for---drum roll--an IBM. Engineers were pleased with the new machine.
It was during this period that I first heard the mantra: "You can't be fired for buying IBM." Everyone knew it. It always remained a mystery what influence Sperry was able to exert, but there was always a suspicion of foul play in the decision to get the Univac.
This period was approximately 1982-1984. An IBM PC showed up in my lab. Other small lab computers were showing up, such as HP and an excellent machine from Three Rivers Computer, which engineers were using for suspicious activities such as writing reports. Management became petrified, and a moratorium against the purchase of new personal computers was put into place. (i'm not kidding--I was on a committee to decide what to do about the "problem." One of the subjects we confronted was networking and Ethernet. The consensus of the committee was, Who the hell would ever need 10 Mbps?)
The decision was made (around the time I left the company to return to graduate school). IBM PCs were the official choice of Motorola's government electronic group.
This might sound like a trite explanation, but I have thought about it for many years. I truly believe that such a reasoning was behind much of the success of the IBM PC (and by IBM's decision to farm out the OS, Microsoft).
"You can't be fired for buying IBM."
"The initial competitors were IBM and Apple, both are alive and well"
First off, IBM wasn't a Microsoft competitor until OS2. Up to that point, Microsoft was a business partner... IBM supplied hardware, Microsoft supplied software. It wasn't until MS screwed IBM that the relationship turned bad. Remember, OS2 was jointly developed by both (but more by MS than IBM), and the agreement was for OS2 to replace Windows. MS then took what work they'd done on the project, poured it into a project that would become Windows NT, and essentially stabbed IBM in the back. So while IBM was hugely profitable at the time because of their hugely rich mainframe business, their PC sector was poorly run, very much so. The PC Jr in particular was a fiasco. And that's why the cloners came and destroyed IBM in that market so quickly.
Second, while Apple was also profitable at this time, it was because of the Apple II cash cow, which provided the majority of Apple revenues until 1986. We think the Mac as legendary today because of what it could do at the time, but sales were initially dissapointing. And pick up any of several books about Apple during the period and you'll find out just how horrible Apple's leadership was. Woz was basically a geek that didn't want any management responsibility, Mike Markula was a VC guy that had good business sense, but didn't know anything about technology, and so Steve Jobs basically ran the place on the strength of his personality. And the problem is that back then, Steve Jobs was a lousy manager. He was great at motivating people, but he couldn't manage for sh*t. He consistently ran over budget, over schedule, overworked and terrorized a very talented team, and basically acted like a spoiled, imperious rich kid. People put up with it because of the reality distortion field, but he was just an all around awful guy. On trip to Japan to inspect a Sony floppy drive factory, he made such an ass of himself that Markula pulled him aside and threatened to fly back to the US without him. All told, he was so bad at what he did, Apple fired him, remember? Jobs is a great business leader now, but he really didn't learn how to manage until his failure at NeXT, where suddenly, it was his money he was burning through, not someone else's. Before NeXT, Jobs always got what Jobs wanted, usually with someone else's dollars. He was at times more concerned about the ambience of his facilities than he was of the actual product. He learned hard lessons about business priorities. Read about his period at NeXT. Jobs will never be a humble man, but his years at NeXT really wised him up. Failure really is the best teacher.
Bottom line... at the time period Bill Gates is talking about, IBM and Apple were badly run in the personal computer market, and Microsoft just took advantage of it.
Life is hard, and the world is cruel
Not necessarily true.
The latest issue of Harvard Business Review has a case study on Toyota's success, and how it is the result of a culture of innovation and respect. It encourages competition, but in a constructive manner. And rather than praise success (say, a promotion), they have a culture of reminding you that your coworkers were just as good and just as close to making it. You are expected to question your superiors, and you are constantly reminded that the customer is your top priority.
There are several exceptions to your statement, and while Microsoft has done a lot of things wrong, they have also done a LOT of things right. Stereotypes and generalizations are the root of conflict.
I watched TFV in TFA too, and what he seemed to be saying was that a key to their success was having access to the source code for the operating system they were using. Oh the irony.
That's why money is the root of all evil. It allows selfish and evil men to harness good men in ignorance.
Just so you know... the quote (verse, technically) is that it's the *love* of money that is the root of all evil. This is because the people that are being dominated in your story allow themselves to be in that position because of their greed. They aren't ignorant - they may act like it, but they know the guys on top make more and that their job is to continually search for news ways to acquire even more. They want money just as much as the guys on top... and as they scramble to try to get it, the people that already have it begin to look for ways to expand their wealth and prevent these others from doing the same.You are using English. Please learn the difference between loose and lose; they're, there, and their; your and you're.
Though Packard Hell soldiered on for years in the US market as a 'cheap' entry level computer despite it's [well deserved] odious reputation among the cognoscenti. It didn't finally flatline in the US until the mid/late 90's. I remember a (joke) contest at a BBS party in the early 90's - first prize was two (dead) Packard Hell machines. Second prize was one working Packard Hell...
But yeah, even though they are now almost forgotten today (how fast they forget!) Compaq was the leader in PC's through the 80's and most of the 90's.
In 1979 Microsoft 8080 BASIC was the first microcomputer product to win the ICP Million Dollar Award.
No one - no one - had to tell IBM in 1980 how far and how fast Microsoft had risen in the world of the eight bit micro.
.
Apple? Commodore sold more than all of their competitors together.
DR-DOS and CP/M are not even remotely the same product. CP/M was an operating system for personal computers that pre-dated DOS. IBM offered both operating systems for the IBM-PC, but DOS was a lot cheaper and while CP/M may have had some minor advantages, DOS was bundled with a good BASIC for it day and was much less expensive, so CP/M died.
DR-DOS came about much later. I think a product has a right to refuse to work with other products. I mean, building in interoperability with another product is a cost that someone has to pay, so, if Microsoft didn't want Windows to run on another verion of DOS, that's their perogative. Really, the failure to answer Windows in the marketplace was more the fault of companies like Lotus, who had the resource to develop a Windows product but never really did, and Visicorp, whose Visi-on product never materialized except for buggy and way too late. Even if IBM had made a graphical TopView for DOS, that could have given them a big lead... but they didn't. And why did Lotus let a rather remarkable Magellan product totally wither on the vine and die?
This is my sig.