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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.'"
..."Jolt" Cola after all.
Any technology distinguishable from magic is insufficiently advanced.
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
I have no problem with Microsoft, or Bill Gates. As long as his billions actually end up doing something besides pillaging my wallet with every broken version of windows I'm forced to upgrade to (cough VISTA cough)! But I do have a problem with someone saying "Here's how we got rich..." because their actions are usually not repeatable. After all, we can't start an operating system revolution by stealing someone else's GUI because it's already been done. Many times over.
while(true)
{
//Begin Microsoft Bashing ad-infinitum
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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.
I'd be afraid to smoke what they apparently put in the crack pipes at Lotus, at least in the Notes division.
What I'm listening to now on Pandora...
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.
microsoft was succesful because they care for *selling* a product rather than selling a *product*. that's why they wanted to sell their toy of an OS while IBM wanted to continue development.
first to market
first to resell their own product with a different paintjob.
microsoft is succesful because that is what they targeted. selling. if they wanted to make great programs they would harvest every cutting edge algorithm relative to computing known to mankind .
Looking for people to chat about multicopters, coding, music. skype: gtsiros
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.
So, Mr. Gates, please explain what the hell happened w/r/t Vista. Are you saying it flopped because you didn't have enough MBAs and bean counters on the team?
It flopped because it's now difficult to improve the OS enough for people to care. Win95 over Win3.1x was pretty much revolutionary and 2000/XP was even a leap from 9x but because the OS isn't crashing anymore and it does what people need it to do on a regular basis, they just don't have an urge to upgrade.
Vista was basically more of the same and with the mass media and corporations pretty much panning it (much like WindowsME I suppose) why would anyone be interested in running it at home unless it was forced upon them. I don't see it changing much with whatever the next rushed version of Windows is because whatever they come up with, it won't be worth the upgrade like it was in the past.
Good luck to Microsoft.
Correction:
All Bill Gates did was [steal the idea for] a GUI [from Apple, who stole it from Xerox] when every other operating system was still command line based.
Heck, people remember what they want to remember. He most likely thinks that's how it was... Not really it just sort of a happened, they lucked out and when they did they kept running with it. Most people won't admit that their success was luck based, or due to family money, or family/friend connections. They want to think its all because of their own hard work that they've got that nice house and car or richie rich fortune, and they also want others to think that as well.
Nothing to see here. Rich guy got richer, and it now rewriting his history to fit his view point. It's a plot type that's happened lots in the past and will happen lots in the future.
What? You have no idea what you're talking about. There were plenty of operating systems with guis way before Windows. And the rest of your comment is pure nonsense.
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.
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
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
Apple actually licensed the GUI patents from Xerox. They didn't steal anything.
How do you "do" software?
The AntiJoey
Amiga, ATARI, DecView, GEM, Lisa, MacOS, OS/2, PARC, SunView, X11
Microsoft didn't "bring about" the GUI, they stole the most basic aspects of it and wedged it on top of DOS, which BTW they also stole.
You just couldn't be more wrong.
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?
"Claims by Microsoft that people were buying the software because it was good are pretty self-serving."
I didn't know anyone intentionally bought M$ products. I thought they got shoved down everyones throat when they bought a new PC.
Gates is a lousy programmer and a marketing genius.
Professional Politicians are not the solution, they ARE the problem.
Case in point, Bill Gates did NOT write MS-DOS. He BOUGHT it from someone who DID write it. And only then because Bill Gates had already been approached by IBM for licensing of such.
So that alone disproves your theory.
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.
Microsoft leadership wisely understood that the vast majority of business owners and other people at the time had no clue what would be good or bad in computing equipment generally, or software or operating software or application design and features specifically.
The key was to get something out there fast, market it as if it was good, and make sure it was what was installed by default on all of
the cheapest computers available.
Only the 0.01% computer or software experts out there would be lamenting for the substantially greater quality and simplicity that could have
been, if only there had been a sophisticated market to begin with.
The effect continues. I mean, for example,
it's now clear to absolutely anyone with a
clue that macs and osx are far superior to
windows xp or vista pcs, but the market share
is still the exact opposite of what it would/
should be if quality were the deciding factor,
and price and lock-in wasn't.
Where are we going and why are we in a handbasket?
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.
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.
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.
...as I type, the full programme from which the interview is sourced is on BBC Two until 8pm. It's hosted by Fiona Bruce and is called How a Geek Changed the World. It'll shortly be available on the BBC iPlayer, alternatively I'm sure some kind Beastmaster-lover (or hater) with a TV capture card will upload it to YouTube in good time.
Those using pirated Tinysoft signatures(TM) are a real threat to society and should all be thrown in jail.
So for once Bill Gates has said something of significant importance for everybody -- everybody, that is, who is smart enough to recognize the wisdom here.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
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.
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.
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.
Don't buy what they're selling.
Don't buy MSWindows, of course.
But, also, don't buy "netbook" class PCs with iNTEL chips.
Huh? Why? Isn't AMD just as bad?
Actually, I was thinking of VIA, of course. Or wishing that someone would build a netbook with a low-power PPC or an ARM or (why not?) ColdFire. The more, different CPUs, the merrier.
Supporting the underdog is actually an act of self-preservation. Keep the dogs busy fighting each other and they have to treat us with some sort of respect.
Don't buy what they're selling, but especially when they're selling the "Everybody's doing it!" excuse.
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.
The heads of record companies are geniuses.
"When information is power, privacy is freedom" - Jah-Wren Ryel
Rich CEO says success of his company is due to his own smarts and foresight. News at 11:15 (we need the other 15 minutes for the dupe).
Assorted stuff I do sometimes: Lemuria.org
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
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.
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."
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
"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
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.
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.
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Certainly the blunders of their competitors were a huge help; Bill Gates is correct and if you look, Microsoft has made a lot of mistakes but they've never stopped improving the products. Very rarely is a Microsoft product discontinued at 1.0 or 2.0; granted, it might not exceed the competition until version 6.0, but it always improves.
Another has been simplicity, and one that Microsoft is getting away from. NT domains were fairly simple to understand and setup. Exchange 2000 was easy to get running (Exchange 2007 is a beast by comparison, much much harder to use).
Another is their developer tools, and this one still applies. You can install Windows, SQL Server, and Visual Studio and have an easy to use complete development environment. They always provide a lot of information and samples for integrating with other products like Exchange, Sharepoint, IIS, etc. This becomes a self-sustaining user community. If I want to know how to hook up to some random USB sensor device from company XYZ, I know the fastest and easiest way is to search for "deviceXYZ USB C#". On the first google page someone will have posted example code detailing how to do it.
I don't have to pick from 13 different IDEs, 5 different app servers, 18 different packages/JARs, or whatever else. I don't have to spend time thinking about "the platform" if I go with Microsoft. I don't have to figure out exactly what JVM version is installed or what version of what kernel/.SO needs to be installed. All those decisions have been made for me and I can get on with the business of writing code that I can actually hang sales on - that will actually pay my mortgage. No time spent on any of that other crap will ever make me a single dollar, and everyone already has Windows boxes anyway so requiring Windows isn't a barrier to entry anywhere except maybe at Sun.
Manufacturers aren't blind to this (part of the self-sustaining community/critical mass. Why do all other auction sites fail? Because buyers want a lot of sellers and sellers want a lot of buyers, hence eBay is the monopoly. The same thing applies here). They write drivers for windows, provide code samples for VB or C#, etc.
Is the Microsoft platform the best way to accomplish things? Maybe, maybe not. Can I get it to perform well and be reliable without having to spend a lot of time messing with it? Absolutely. Do I have to worry about supporting the platform itself? Nope. I just spec Windows 2003 SP1, SQL 2005, CLR 3.5 and that's it. That is all that I and the client need to know to be absolutely certain that the app is going to work on their system. I know where events will be logged. I know where files will be installed. I know what libraries are present and I know there probably won't be any bugs due to incompatible versions.
Natural != (nontoxic || beneficial)
Microsoft was able to parlay this first success into their success with DOS and then on to the current dual money makers of Windows and Office.
I personally dislike Microsoft software. I think it is unimaginative, poorly-written, bloated, slow, and responsible for holding back personal computer innovation for the last fifteen years. But don't say that Microsoft was handed everything. Give credit where it is due.
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?
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