In June 27, Bill Gates relinquished the daily activities he retained after handing his CEO position to Steve Ballmer some seven or eight years ago. While he still has the role of chairman, he will no longer be intimately involved with the operations of his company nor will he carry the title of chief visionary for Microsoft.
Many in the industry have referred to Microsoft’s success as the result of his leadership, his great intellectual and technological capabilities, and his ability to see a vision and execute to that vision. His goal was to put a PC on every desk in the world, which he did in a most brilliant fashion. He was savvy enough to understand Microsoft’s monopoly position in the IBM compatible market and exploit it with monumental success. And yes, he possesses a great intellect and is technologically brilliant in the world of operating systems. One pundit noted that “Gates changed computing, changed business, and changed our lives.”
That last comment is an overstatement.
Actually, it was IBM’s entry into the desktop personal computer market that changed the way the world looked at personal computers. Prior to IBM’s introduction of its personal computers, the market was fractured between several small companies. There was Apple of course, along with Tandy through their Radio Shack distribution channel, Amiga, Commodore and others. The market was not substantial, as the masses wondered what to do with a personal computer. Without a practical use for these computers, the only users were the geeks that liked to play with them.
In those days CP/M was the dominate operating system from a company called Digital River. When IBM decided to enter the personal computer market around 1977, the decision was made to use outside vendors for all parts, including software and semiconductor processors, as opposed to using internally developed and manufactured components. IBM started discussions with Gary Kindal, the head of Digital River, on the use of the CP/M operating system for its new IBM Personal Computer. But Kindal was too difficult to work with and IBM looked to a small struggling software company, in Redmond, Washington near Seattle that was founded in 1975 by Paul Allen and a bookish looking kid by the name of William Gates III. Today, Microsoft is a household word.
When IBM came calling, Gates quickly bought an operating system called QDOS (quick and dirty operating system) and renamed it MSDOS (Microsoft Disk Operating System). Over time, MSDOS morphed into the Windows operating system. That is not innovation. That is a technology purchase that Microsoft evolved many times into what we see today as Windows Vista.
This was all happening in 1977-78 when the IBM effort was getting underway. In 1983 the IBM Personal Computer was introduced to the world with such success that the sales numbers took even IBM by surprise. A huge reason for that success was a spreadsheet program called VisaCalc. In an instant, the public and particularly those in businesses now had a reason to use a personal computer. We were all freed from the drudgery of calculating budgets or forecasts by hand and calculator.
Eventually Microsoft developed its own spreadsheet version, calling it Excel. It's easy to develop an application program when you can follow a great template such as VisaCalc. It was a smart business decision on the part of Bill Gates, but not innovative.
Microsoft went on to purchase an application program that allows users to prepare presentations on either paper or clear transparencies. That program today is called Power Point. Thus the package now referred to as Microsoft Office was born. This is certainly not innovation.
Mr. Gates’ vision was limited by his inability to see past an operating system and a suite of office software—Excel, Word, and Power Point. After all, he and his company missed the Internet and what it meant for the software industry. And when he finally saw the threat of the Internet to Microsoft, he issued a memo that was supposed to turn the company’s focus onto the Internet. That never happened until it was way too late, which doesn’t say much for his visionary or his leadership skills. Microsoft got into Internet search with advertising after both Google and Yahoo built up tremendous leads in these markets.
How about Software as a Service (SaaS) where an application is hosted on the web rather than actually in the PC on your desk? Not recognized by Microsoft until a small, nimble start-up company called Salesforce.com developed customer relationship management software and put it on the web with a pay-as-you-use business model.
Mr. Gates was rightly vilified by the industry for lack of quality control: Microsoft software was and is continually released with bugs or with announced features left out of a release.
Under his leadership, Microsoft put an entrepreneurial company, Netscape, out of business. When Netscape and Marc Andresen developed the first successful web browser called Navigator, Microsoft used their monopoly status to decree to PC hardware companies, such as Dell and Hewlett Packard, that only Microsoft’s less effective Internet Explorer browser be allowed on their PC’s at time of sale. Netscape sued Microsoft for anti-trust violations and the Justice Department ruled in favor of Netscape. But it was too late. Navigator was sold to AOL, Netscape as a company was gone and Marc Andresen started a new company.
The personal computer, popularized by IBM and a useful spreadsheet program, changed computing, changed business, and changed our lives—not Bill Gates and Microsoft. Mr. Gates was handed a monopoly that he skillfully grew to create one of the most profitable companies in the world. Now that is the work of a smart business man.
With all of that being said, I can only admire Bill Gates for his philanthropic activities.
Realizing that he could immensely aid those less fortunate and actually giving up his passion—the daily interface with the company he loved and co-founded—to implement that realization, is the mark of a great human being.
I wish you only good luck in your new endeavor, Bill Gates.
Copyright by Bill Durrenberger August 1, 2008.
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