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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.
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.
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.
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
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.
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.
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?
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.
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.
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.
Not to mention that Bill always seems to forget that his mommy was on the board of the UnitedWay with IBM's then CEO. I'm all for using your connections, but this was by far the most significant, and most overlooked, factor in MS getting the IBM PC contract.
Good people do not need laws to tell them to act responsibly, while bad people will find a way around the laws-Plato
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.
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.
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
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.
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The problem is - that's still recursive logic. When the IBM PC debuted, IBM didn't have a monopoly on that market. No one did, as the market largely didn't exist. (To the extent it did, the monopoly on the PC belonged to Apple!)
Nor did IBM's 'monopoly' of the PC market last long, as more than a few companies were quick off the mark to get their entries to market. So quickly and so successfully that IBM was all but knocked out of the ring within a couple of years.
Offering a product people want to buy, at a cheaper price than their competitors. Those bastards.
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
..."Jolt" Cola after all. No, it was a trash can.In TFA (sorry, yeah, I know) Bill mentions how he and Paul Allen pulled the source code of an operating system out of a trash can. Of course, this has long been suspected of Vista.
It is dangerous to be right when the government is wrong.
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.
.
The headstart and the fact that 100% of PCs were running PC DOS by the time CP/M 86 and the UCSD P-System were released produced a natural result.
Of course, CP/M 86 was always a poor imitation of a 16 bit O/S pasted on top of an 8 bit system as was the UCSD P-System. So was PC-DOS, but it evolved over time. The UCSD P-System was limited to 64k even on m68k, so it never got over its limitations. Not that it matters. They never had a chance.
Disclaimer: I used to write UCSD P-System device drivers for pay.