Bill Gates Page 13

  Gates was already likely aware of Jobs’s beliefs that Bill was exceptional at business but could have been far more exceptional when talking about the product. “They were never as ambitious product-wise as they should have been. Bill likes to portray himself as a man of the product, but he’s really not. He’s a businessperson. Winning business was more important than making great products.”12

  Later, it was revealed that Gates had written a letter to Jobs congratulating him on the company he had built and his family, as friends rather than competitors, as Jobs was dying: “After Jobs’s death, Gates received a phone call from his wife, Laurene. She said; ‘Look, this biography really doesn’t paint a picture of the mutual respect you had.’ And she said he’d appreciated my letter and kept it by his bed.”13

  Chapter 8

  BILL GATES IN WRITINGS

  The most meaningful way to differentiate your company from your competition, the best way to put distance between you and the crowd, is to do an outstanding job with information. How you gather, manage, and use information will determine whether you win or lose.1

  Bill Gates’s writings include the following:

  The Open Letter to Hobbyists, in 1976, Microsoft’s first year

  The Road Ahead, in 1995

  The Road Ahead: Completely Revised and Up-to-Date, in 1996

  Business @ the Speed of Thought, in 1999

  The Trustworthy Computing Memo, January 2002

  Mr. Gates has multiple writings, including one 1995 book that projected his vision of the future of technology.

  Bill Gates was seen as a visionary in some aspects of technology, but he was often a little behind in recognizing patterns. He has co-written two of books; one most notably is The Road Ahead in 1995. At the same time, Windows 95 was also being released (August 24, 1995), with the very first version of the Internet Explorer web browser. The bundling of Internet Explorer with the Windows operating system was a fairly novel idea in 1995.

  The age of the Internet as most users know from web browsing is relatively new in the history of computing. While there were ISPs before 1993, the Internet was exceptionally limited. A commercial, for-profit company was not even allowed to operate on the Internet due to the operating agreement until April 1993. The earliest for-profit companies we know today with online presences—like Yahoo!—were established shortly thereafter in 1994.

  In those early days of the Internet, users with computers may or may not be connected consistently. In December 1995, there were a total of just 16 million users online, which was less than one-half of 1 percent of the world’s population. While the tool was quickly becoming more useful, the product was a specialized market with few organizations attempting to make profit online. By the end of 1998, 147 million users were on the Internet, then 3.6 percent of the world’s population. By early 2013, there were 2.5 billion users on the Internet; 2,500 million or more than one-third of the world’s population. As a result of this rapid growth, many businesses have changed models over time.

  The original browser with image capability was called NCSA Mosaic, released in 1993. Before that time, all webpages could include only text in browsers like Lynx. Over time, extensions of the Mosaic product were labelled Netscape with a branch now called Firefox. Another path was that of Microsoft Internet Explorer.

  The Microsoft Corporation did not develop its own web browser originally. A firm called Spyglass was a startup initiated by the University of Illinois at Urbana-Champaign; that firm licensed the NCSA Mosaic product and made modifications, and the modified product was licensed by Microsoft as Internet Explorer. Like with previous innovations such as the need to develop an operating system for IBM a decade and a half prior, the company did rely upon the expertise of others in order to create the product that was needed. Microsoft did recognize the importance of the Internet, but Bill Gates admits he was not the one who made the connection.

  INTERNET LEADING A REVOLUTION

  Robert Kahn and Vinton Cerf, two of the originators of the Internet as we know it today—wrote about a very innovative individual in the 1970s who saw the ability to use technology and computers to connect government agencies and educational institutions, building a highly competitive economic system.

  The name is not Gates, Allen, Ballmer, or anyone else at Microsoft.

  The name is not Jobs or Wozniak or anyone else at Apple.

  The name is Al Gore Jr., former senator from the state of Tennessee, former vice president of the United States, and the 2000 nominee for president of the United States. He coined the phrase “information highway” a little before the use by Bill Gates in 1995. And by a little while ago, Microsoft was still located in Albuquerque in the late 1970s.

  The Internet innovators wrote of Gore, “As far back as the 1970s Congressman Gore promoted the idea of high speed telecommunications as an engine for both economic growth and the improvement of our educational system. He was the first elected official to grasp the potential of computer communications to have a broader impact than just improving the conduct of science and scholarship. Though easily forgotten now, at the time this was an unproven and controversial concept.”2

  Innovation may take time, and the ways in which the Internet may be used were no exception. Looking at the dates your favorite companies developed their online websites, you might notice that the years start in the mid-1990s. For instance, Yahoo! and Amazon were founded in 1994; Google was founded in 1998. There is an exceptionally good reason these popular sites did not exist before then; an agreement to allow the commercial use of the Internet was not made until March 1993. Without businesses on the Internet, the uses were often government, scientific research, colleges/universities, and open discussion groups but no commerce. Usage stats drastically increased afterward.3

  THE ROAD AHEAD, FIRST EDITION IN 1995 (THERE WERE TWO)

  This one (revolution) will involve unprecedentedly inexpensive communication; all the computers will join together to communicate with us and for us. Interconnected globally, they will form a network, which is being called the information highway. A direct precursor is the present Internet, which is a group of computers joined and exchanging information using current technology.4

  As a revolution, Gates spoke about many ideas that were difficult to implement with technology in 1995 but much easier today. He noted that while adults might have trouble adapting to using computers and various information tools, children born later would be able to readily use technology to communicate and work without much difficulty.

  He stated that the two biggest factors in the workplace would be related to productivity (given ready access to vast quantities of information) and changes in work interactions due to networking. He also saw the potential for an increasingly connected workforce to begin working remotely, noting that there would be many potential social, economic, and environmental aspects resulting from these new ways of communicating and working. For instance, individuals could live further from the traditional place of employment, traffic could be lessened by remote workers, and air pollution would be decreased.

  While Gates had already been shaping the computing industry for two decades, The Road Ahead was his first foray into writing best-selling books. (AP Photo/HO)

  Gates did not see technology as a panacea, though. He did worry that improvements in technology and communication could cause more affluent people to leave cities, which could harm the tax base and other citizens. Another worry—when most people still were not on the Internet—was the concessions that would need to be made for security, both wired and wireless: “Wireless service poses obvious concerns about privacy and security, because radio signals can easily be intercepted. Even wired networks can be tapped. The highway software will have to encrypt transmission to avoid eavesdropping.”

  And he even talks about personal frustrations and beliefs along the way, ranging down to a traffic light that stays on red for an unacceptable amount of time near his office. There are little human touches with his writ
ing that are always present; some reviewers see these examples as contrived to add personality into his work.

  He did envision that the information highway would best be used in education, so he donated his revenue from the book to teachers who were using computers in the classroom, citing the opportunity he had in computing because the Mothers’ Club at Lakeside School had provided a computer where he refined his skills. He similarly donated the funds from his book four years later, Business @ the Speed of Thought.

  In the afterword, Bill Gates also shared a fear, which is present in many of the other comments he has made over the years. He noted, “My focus is to keep Microsoft in the forefront through constant renewal. It’s a little scary that as computer technology has moved ahead there’s never been a leader from one era who was also a leader in the next.” The concern that Microsoft could always be surpassed and made irrelevant is a consistent theme for Gates.5

  In addition, Gates shares a vision of what his home—then under construction—would look like and how he would incorporate technology now that he expected to be prevalent in all homes of the future, although he does make a concession that his wealth permits activities not yet available to others.

  CALLS FOR DETOURS

  Gates immediately faced criticism for the book among some reviewers, who dismissed the book as simultaneously unable to separate the technology and business components of the book. In the American Spectator, Joe Queenan included in a withering review of the line “though billed as Gates’s personal vision of the electronic future, The Road Ahead is basically 286 pages of shilling for Microsoft and the Internet” and later the missive:

  Though he would dearly like to think of himself as a visionary, Bill Gates’s talent has always been marketing, not technology. The genius of Microsoft has never been to arrive at the cutting edge before its competitors, but to convince its customers that it has: Witness the triumph of Windows over Apple’s vastly superior operating system. Gates would like to think of himself as Johann Gutenberg or Thomas Edison. But he’s really just a hi-tech Ray Kroc. He has one basic talent: He knows how to move the merchandise.6

  In fact, the reviewer forgot who had worked extensively with Apple in the development of the operating system, that the book was not about the Internet itself but an extension of what the current Internet was, and that Bill Gates had indeed done something that Apple had not done since the departure of Steve Jobs in 1985, which was to sell massive quantities of products at the price points consumers desired. Jobs was about to return to make Apple competitive, with the $150 million investment from Microsoft. Queenan did—inadvertently—get something exceptionally right in the review. Although the book was not about the Internet per se, people who were just connecting to the Internet liked the current Internet sufficiently well to avoid going toward Gates’s highway, which became apparent almost immediately.

  THE ROAD AHEAD, SECOND EDITION IN 1996 (OR TAKE TWO)

  So why was there a second edition to The Road Ahead? The road had changed, and the road changed rapidly. In fact, the second edition has a subtitle not present on the first edition, and that was Completely Revised and Up-to-Date. The first edition was published in 1995, and the revised version was published the next year. Gates initially thought the information highway would be an extension of the current Internet. Not only was the Internet a complete game-changer in how individuals used computers and technology, adoption was much more rapid than Bill Gates had expected. The current Internet was making those who connected happy, so the leader of Microsoft had to re-envision the vision.

  Recall in 1995, Gates had told Don Tennant in an interview “an Internet browser is a trivial piece of software”; Microsoft was at tremendous risk in the antitrust trial due to this very software—Microsoft Internet Explorer—in 1998, as the company leadership was unwilling to cede control of how users were able to make Internet connections. The second edition varies from the first in terms of content and even chapter titles, and the description of the Gates home even has different visuals included as examples, although still had problems predicting how the Internet would evolve; even the most straightforward paragraph from the first edition was modified for the second edition. The inability to precisely define how the Internet would develop is actually a benefit in hindsight; claims that Gates—or Microsoft—manipulated the way users chose to use the Internet can be readily refuted. Some applications that Gates projected have disappeared, replaced by compelling alternatives.

  Gates—years later—noted that Microsoft had not been perfect and had missed many large changes over the years but did not enumerate what he thought were his firm’s failings: “When we miss a big change, when we don’t get great people on it, that is the most dangerous thing for us,” Gates said. “It has happened many times. It’s OK, but the less the better.”7

  BUSINESS @ THE SPEED OF THOUGHT, 1999

  In his next best-selling book, Gates describes the “digital nervous system” he had mentioned in his November 1997 report to shareholders at the Microsoft annual meeting, as well as previously at the 1997 CEO Summit. Ostensibly by then, his business guidance would be less important to competitors, or would at minimum placate competitors during the Microsoft antitrust trial.

  The digital nervous system is based upon how information flows through companies, and Gates believed there should be “maximum and constant learning.” He stressed that in an increasingly competitive business environment, “how you gather, manage, and use information will determine whether you win or lose.”

  In a diagram, he articulates how precisely he believes his digital nervous system works, with “the digital processes that closely link every aspect of a company’s thoughts and actions. Basic operations such as finance and production, plus feedback from customers, are electronically accessible to a company’s knowledge workers, who use digital tools to quickly adapt and respond. The immediate availability of accurate information changes strategic thinking from a separate, stand-along activity to an ongoing process integrated with regular business activities.” He explicitly refers to businesses that hire consultants and then must pull together information just for those consultants; given this information is gathered through a special process, the information has not been available consistently for real-time feedback and use by internal decision-makers.

  He also makes some errant comments along the way, commending the IT capability of a soon-to-fail Saturn that followed the model he described, and spoke about the need to transmit bad news rapidly, while facing a federal antitrust suit. Speaking about his belief that the company could always fail, he may have been attempting to catch the attention of judges or industry observers. “One day somebody will catch us napping. One day an eager upstart will put Microsoft out of business. I just hope it’s fifty years from now, not two or five.”8

  Gates was insistent in many venues that the software written by Microsoft—the entirety of the company’s intellectual property—would have no value in five years’ time and would require constant innovation and renewal: “There’s not a single line of code here today that will have value in, say, four or five years’ time. Today’s operating systems will be obsolete in five years.”9

  He also speaks about failures at Microsoft, including Multiplan’s inability to compete against Lotus 1–2–3, another database called Omega, an early personal digital assistant, and even OS/2 as the “long-term operating system strategy” where Microsoft had invested hundreds of millions of dollars; in The Road Ahead only the $2 billion spent by IBM, which was paying Microsoft, was mentioned.10

  Gates also notes that something had occurred in 1995 that required the massive revision to The Road Ahead in 1996, without referring the reader back to that book:

  By late fall, the Internet phenomenon had eclipsed Windows 95 as the industry’s story of the year.

  On December 7, 1995, we held our first Internet Strategy Day, where for the first time we publicly previewed the array of technologies we were developing to integrate Int
ernet support into our core products.11

  BUSINESS @ THE SPEED OF THOUGHT, CRITICISM, 1999

  Gates’s work immediately received both praise and criticism. Some wondered how Gates could get through the entire book without mentioning the active Department of Justice investigation at all, even mentioning critics and companies involved in the antitrust litigation as examples of firms applying the principles he was espousing, and wondered how Gates was willing to write a book about the use of electronic communication—or even think of using e-mail—after the deposition and e-mails were read in trial: “You might think a man who has had his company e-mail captured by the government, read aloud in a courtroom and printed around the world would be put off electronic messaging for life. But Gates the author adores the medium.”

  Going further, Gates talks about the way his competitors—like those involved in the antitrust trial—use technology in the way he promotes. During an antitrust trial, speaking about how one’s competitors operate might be seen as a disadvantage. As a matter of practice, Gates’s praising the companies who were testifying against him may have been a strategic choice: “Now Bill the tousle-haired billionaire is back, bursting with business advice and all the exuberance of a boy genius. Sun, Apple, IBM and Intel are merely examples of companies that use digital nervous systems. You’d never guess they also play a major part in the feds’ case.”12

  Seven years later in 2006, Gates wrote a “How I Work” narrative, with the insistence on using e-mail as the most common method of communication at Microsoft, where even faxes and voicemail messages were directly tied to e-mail:

  At Microsoft, e-mail is the medium of choice, more than phone calls, documents, blogs, bulletin boards, or even meetings (voicemails and faxes are actually integrated into our e-mail in-boxes).

  I get about 100 e-mails a day. We apply filtering to keep it to that level; e-mail comes straight to me from anyone I’ve ever corresponded with, anyone from Microsoft, Intel, HP, and all the other partner companies, and anyone I know.13