Open Season on Bill Gates
Tucker, William
VEZ434-4'•W 12.4 Open Season on Bill Clan Bill Gates and Microsoft have committed the crime of understanding the Information Age better than anyone else. Now the Reno Justice Department has...
...Were it trying to right old wrongs, it might investigate the dubious steps that gave Netscape an early head start in the browser market...
...The commission's lawyers set off to learn the rudiments of the industry by inviting Microsoft's competitors to provide complaining depositions that served as tutorials...
...The anti-trust suit against IBM, filed on the last day of the Johnson administration in 1969, was not dismissed until the first weeks of the Reagan administration in 1981...
...The Altair sold thousands of kits but soon had imitators...
...Instead] the FTC staff apparently decided that looking into this newfangled software industry was kind of interesting...
...I don't think I like Silicon Valley," reported Friedman...
...Industry analysts predicted it would have 20 million subscribers within a year and AOL, CompuServe, and Prodigy quickly appealed to the Justice Department on the grounds that Microsoft's operating system gave it an unfair advantage...
...Gates can't afford to let Microsoft stop growing, even if a few customers' flower beds get trampled," echoes Fortune...
...If Microsoft's historic growth of 25%-plus per year slows and the stock's steep climb halts, many of those people may no longer find it worthwhile to devote most of their waking hours to the company...This isn't megalomania...
...Six months later, Microsoft announced its own operating software for handwritingrecognition, developed by some of the same programmers who had examined Go's software...
...The following spring, both Gates and Allen quit Cambridge and headed for Albuquerque to meet Ed Roberts, the designer of the Altair, who owned a small company called Model Instrumentation and Telemetry Systems (MITS...
...According to a long-standing practice, Microsoft offered computer manufacturers deep discounts in exchange for a royalty on every computer they shipped, whether or not it featured Windows...
...He had the most brilliant mind that I had ever dealt with...
...Gates," said Ann Noel Pattyn, GM's "top Nethead," "I don't think it is advantageous for one entity to get exclusive ownership of the World Wide Web...
...there are better and cheaper products available but consumers don't know about them...
...Independent programmers trying to write software for general use had great difficulty because they )ften had to write a different version for each operating system and each manufacturer...
...They agreed to supply Roberts with a BASIC language vt'azv iettOMORODAYMOMMUMPOISOMM What is harder to fathom is the fear and loathing Microsoft has generated in the business community...
...in Delaware, told Industry Week...
...The strategy proved disastrous...
...Microsoft has launched "carpoint.com," a Web site that allows consumers to make point-by-point comparisons among new cars of all makes and then solicit bids from nearby new car dealers...
...Microsoft has an extremely flat corporate hierarchy...
...The bet was that by setting the PC industry standard, IBM would create such a large market that even a proportional share would produce huge earnings...
...DOJ and the courts will do well to end these practices...
...When Microsoft put out a press release in November 1989 downplaying the rivalry between OS/2 and Windows, the Federal Trade Commission smelled collusion...
...The American Spectator • July 19 9 8 The vista we now see unfolding before us— capitalism made "frictionless" by the nearly free flow of information is a vision perceived by Bill Gates while at Harvard more than twenty years ago...
...Virginia Postrel, of Reason, gives a more favorable interpretation: "Great products did not make Microsoft number one...
...Unfortunately, the answer to that executive's question is, "Because they may soon be appropriating your wealth...
...Bob Ingle, president of new media at Knight-Ridder, Michael Eisner, CEO of Disney, and David Coulter, CEO of BankAmerica were all reported to be terrified of Gates...
...In the early days, he worked for days at a time without sleep, and for weeks and months he hardly left his office...
...The Altair (named after a planet in Star Trek) was only a mock-up and Roberts had little manufacturing capability...
...The argument is that Microsoft uses its near-monopoly in the operating system to force customers to buy its inferior software...
...First, as owner of the predominant operating system, Microsoft could always jiggle its code to make other applications slow or dysfunctional...
...Bob Dole, who once criticized the Justice Department's pursuit of Microsoft on the floor of the Senate, is now representing Netscape, Microsoft's alleged victim...
...Gates, who had once considered going to law school, had written much of the contract himself...
...Microsoft is the flagship of this armada, charting America's course into the Information Age...
...Bamum, a master at educating the great unwashed about their latent desires for computers," writes Zachary Pascal in Mother Jones...
...Customers should also be allowed to choose which Web browser they want coupled to their operating system...
...Every part of IBM was invited to submit Design Change Requests [for OS/2], which usually turned out to be demands that the personal-computer-system software be changed to fit the needs of mainframe products better...
...In order to avoid a lengthy struggle, Microsoft signed a consent decree in 1995...
...Writing in Wired in 1996, Georg, Gilder predicted that the anti-Microsoft consortium could soot make Windows obsolete...
...As Peter Huber has written in Forbes: "Almost every new feature added [to Windows] was sold by some other vendor in a separate box first...
...One thing about Microsoft that both friend and foe agree on is that it does not persist in its mistakes for long...
...In Overdrive, former Microsoft executive Jeff Lill told James Wallace: "[F]rankly this is Microsoft's forte: A competitor comes in and does something interesting, we basically clone it...
...In a widely reprinted article, Fortune recently warned the nation's top executives: "Microsoft: Is Your Company Its Next Meal...
...The answer seems to be: Not only has Microsoft led America into the Information Age, it has also absorbed the lessons of the Information Age better than anyone else...
...Even now he keeps a Herculean work schedule...
...Both sides ended up feeling offended...
...In July of 1980, a three-man team of IBM executives headed by Jack Sams found themselves in the Seattle offices of a young man who had already made his name in the fledgling industry—William H. Gates III...
...In November 1994, Microsoft brought MSN to market...
...There is no geography in Silicon Valley, or geopolitics...
...He died in a barroom brawl in 1994...
...The IBM-PC's immediate success was the result of a stunning new strategy—"open architecture...
...It seems unlikely...
...The issues here are much greater than some alleged antitrust violations...
...He never combed his hair, worked obsessively, often slept in his office and did not change his clothes for days...
...Gates said he could provide a machine language written in BASIC but didn't have an operating system...
...Gates is, after all, incredibly competitive...
...The clones hold the other 88.3 percent...
...That's an amazing, amazing, amazing company...
...I admire the hell out of them...
...Others took a different tack...
...IBM turned down the offer...
...How did Microsoft become the most feared American corporation since Standard Oil...
...Like Henry Ford, who tried to put a car in every driveway, he is a slave to the mass audience...
...Finally, competitors believe that Microsoft, even though practicing open architecture, secretly favors its own applications writers by cluing them in on pending upgrades of the operating system...
...He had severely underestimated the demand and was desperately trying to keep pace...
...It was, however, allowed to "integrate" software products...
...But the hostility is not limited to Gates's rivals...
...With all deference to Mr...
...In the 198os, Peter Drucker pointed out that the only task of middle management in American corporations was to ferry information back and forth between the foot soldiers on the front lines and the executives who made decisions in remote corporate offices...
...At one point a "Chinese wall" supposedly existed between the operating and applications divisions at Microsoft, but Gates himself reportedly says no such wall exists...
...0 n a cold December morning in 1974, 22-year-old Paul Allen, a programmer for Honeywell Corporation, was walking through Harvard Square when he spotted a copy of the January issue of Popular Electronics...
...In November of 1994, Mosaic Communications brought out PC and Mac versions and the Internet came 45 During the 1980s Microsoft began to earn its reputation as a "silicon bully...
...In 199o, for example, Microsoft approached the Go Corporation, a small California company that had developed a technology for recognizing handwriting...
...Consider this: In 2003, a company named Teledesic is scheduled to launch its "Internet in the Sky," a network of 288 low-orbiting satellites that will link together the remotest parts of the world into one fiberless network with bandwidth broad enough to support high end-uses such as videoconferencing...
...Microsoft long denied doing this, but in a 1992 book, Undocumented Windows, Andrew Schulman verified it beyond dispute...
...As Gates wrote in The Road Ahead: "IBM, with more than 300,000 employees, was stymied by its commitment to company-wide consensus...
...One of these programmers, 21-year-old Marc Andreessen, developed a form of Mosaic and moved to Silicon Valley where Jim Clarke, of Silicon Graphics, helped him form Mosaic Communications Corporation...
...It is driven by the rules of Wall Street, and those rules require that the company's profits continue to grow by at least zo percent a year...There is only one way Microsoft can continue to meet that target— by moving well beyond the desktop PC and into new business...
...OS/2 appeared in 1989 but failed to catch hold...
...Sites developed with these tools became the World Wide Web...
...Gates is exceptional in his comprehensive awareness of the business (he reportedly knows the license plate numbers of most of his top executives), but he is also extraordinarily accessible: any Microsoft employee can e-mail the CEO and expect an answer...
...In-putting information meant switching the lights over ma times in succession without a mistake...
...World's First Minicomputer Kit to Rival Commercial Models—Altair 8800," proclaimed the cover...
...Now they knew their moment had arrived...
...Modem drivers (Hayes' Smartcom, $155 in 1998...
...Most real-world transactions take place with imperfect knowledge...
...Microsoft later acknowledged it used at least 16 such codes...
...In 1989, Tim Berners-Lee, a researcher at the European Laboratory for Particle Physics in Geneva, invented HyperText Markup Language (HTML) and HyperText Transfer Protocol (HTTP) and distributed them for free over the Internet...
...By 1987, IBM was growing restless with its own open architecture...
...Today, Apple holds only 4 percent of the PC market, while IBM clones hold 96 percent...
...Although Microsoft delivered, it also began dissociating itself from IBM...
...When Microsoft realized it was pioneering in the wrong direction, it quickly changed gears...
...On April 3 of this year, tilt Wall Street Journal reported that, following several missed dead lines, Federal Express had canceled its contract with Sun fol the replacement of its older UNIX system, and had turned to—would you believe it...
...DOJ insisted, to the contrary, that Microsoft was using its market leverage to force manufacturers to pay for copies of Windows they didn't use...
...In tried-and-true fashion, GM has posted its own products on the Internet, waiting for 80 July 1998 • The American Spectator...
...Sur has licensed Java cheaply and there are now 700,000 program mers writing in the language...
...Now the Reno Justice Department has joined forces with Gates's competitors to teach him a lesson, ignoring what his brilliant career could teach them...
...As for forcing Windows to carry Netscape's Navigator, however, that sounds like one of those jerry-rigged antitrust solutions that is supposed to "level the playing field," but only forces all competitors into the same procrustean bed...
...Seizing the opportunity, Gates said he might be able to come up with one...
...Working out of a garage in Cupertino, California, Steve Jobs and Steve Wozniak had invented the Apple, a desktop computer released in 1977 for $1300...
...Roberts was operating out of a run-down shopping center, sandwiched between a bar and a massage parlor...
...A software package called OfficeVision, in which IBM 44 July r 9 9 8 • The American Spectator invested $z billion, never saw the light of day...
...memory management (a Quarterdeck product, $79 in 1991...
...In the early years, he worked for days without sleep, and for months hardly left his office...
...A computer has only so much memory, so the more that software can be compacted, the faster and cheaper computers become...
...His favorite example is the QWERTY typewriter keyboard, designed with no apparent logic, which has been almost impossible to dislodge...
...The Redmond giant hat once again turned on a dime...
...Well, I'll tell you or anybody else, and I told IBM executives this the next week, that by the time you were with Bill for fifteen minutes, you no longer thought about how old he was or what he looked like...
...His decision is determined largely by what everyone else is doing...
...Dan Bricklin's VisiCalc, the first spreadsheet, was written in 1979 for the Apple II, but most Apple software was written in-house...
...For almost five years, the private economy has been so strong, so self-sustaining, that even politicians have a hard time claiming credit for it...
...into its own...
...Apple took what might be called the traditional business approach to the burgeoning computer market...
...How did Bill Gates, the child prodigy from Seattle, become the object of a nationwide manhunt...
...MITS would own the language, under the condition that it would exercise "due diligence" in promoting it...
...Among other problems, it lacks the point-and-click environment...
...After inviting numerous complaints against Microsoft about arm-wrestling and stolen software, DOJ came up with a substantial charge...
...So why does UNIX continue to dominate...
...Rather than spend a year developing its own browser, Microsoft licensed Spyglass's version of Mosaic for $3 million in December 1994...
...That's our strategy...
...If you wanted to use Apple software, you had to buy Apple hardware...
...Then in February 1994, a Microsoft employee was snowbound in Ithaca, New York, for the night...
...In this case, a largely West Coast based revolution has diminished the East Coast, New-York-to-Washington "policy-maker" axis...
...Microsoft has an amazing ability to communicate internally," says Carl Howe, director of computer strategies at Forrester Research, in Cambridge...
...Gates and Allen, who had assembled a staff of high school friends, moved back to Seattle...
...Big Blue began developing OS/2, an operating system designed to pull the PC back under the umbrella of IBM's older mainframes...
...Competitors have long hated Microsoft...
...Guess which one is most likely to have his company prepared to take advantage of the new technology...
...News 6 World Report...
...By the time Microsoft left Albuquerque, the world of personal computers was already exploding...
...The jingle "DOS isn't done until Lotus won't run" is supposed to have originated with Gates himself...
...Before long almost everyone of political import will have chosen up sides—except Bill Clinton, Al Gore, and Michael Kinsley...
...it's just business...
...David had overtaken Goliath...
...It is Microsoft's greater understanding of the Information Age that has Michael Eisner and Rupert Murdoch quaking in their boots...
...While still at Seattle's Lakeside School, the pair had founded a small company, "Traff-o-Data," which analyzed traffic counts for the City of Seattle...
...Microsoft's efforts to "set the standard" surely qualify as a case of "path dependence...
...On January 20,1993, Microsoft's total stock value slipped past IBM's market capitalization of $26.76 billion...
...Everybody in the communications business is paranoid of Microsoft, including me," said Rupert Murdoch...
...They don't waste time and they get things done...
...The first lesson is in applying information technology to internal management...
...UNIX is too technical — it's too hard to learn," Roger Kash, manager of Saturn Corporation in Tennessee, told Industry Week in 1996...
...Why are the browser wars different from any other Coke-versus-Pepsi-type market, where two firms battle for market share...
...Were the government seeking to break up path dependence in order to clear the way for a better technology, it might go after (Continued on page 8o) The relentless scythe of cheap information is cutting across the entire spectrum of commercial transactions...
...In Hard Drive, James Wallace and Jim Erickson recounted Sams's recollection of his first trip to Redmond: I knew Bill was young, but I had never seen him before...
...As Virginia Poste', editor of Reason, writes: "Apple in fact acted like the ultimate monopolist...
...Microsoft claimed: 1. it was easier to count computers than to count computers with Windows installed...
...Kildall would insist later that he was on a business trip—not just skylarking—but the image would prevail...
...disk defragmenters...
...Of this 96 percent, however, IBM's share is only 7.3 percent...
...Buyers and sellers are finding each other as never before...
...News 6 World Report, "The commission...turned out to have been the last group of people to have noticed that the IBM-Microsoft marriage had completely come apart...
...The story that follows is a history of a cultural transformation—as seen in the birth and growth of one corporate entity...
...Gates bought the rights for $5o,000, eventually hiring Paterson as well...
...When I asked an all-too-typical tech-exec here when was the last time he talked about Iraq or Russia or foreign wars, he answered: Not more than once a year...
...Anyone developing an "e-commerce" site faces a choice: to develop site for Netscape or Explorer...
...Silicon Valley sees the Redmond, Washington giant as poaching on its territory...
...Gates and Allen took up residence in a nearby motel...
...And it has worked damn well...
...Even now he keeps a Herculean work schedule, yet makes time to water-ski, play tennis, drive fast cars, and ice skate...
...Gates and Allen —who had incorporated as "Micro-soft" — started to shop their language to other competitors...
...The relentless scythe of cheap information, however, is cutting across the entire spectrum of commercial transactions...
...If we were to start from scratch today, Windows NT would be a very serious consideration," added Dennis Courtney, of Dunlop Tire in Buffalo...
...But the hostility is not limited to Gates's rivals...
...The size of a breadbox, the Altair had nc monitor or keyboard...
...After successfully piggybacking aboard the PC, Microsoft began expanding into software applications...
...The question remains, why...
...patible with Sun's system...
...04 The American Spectator • July 1998 81 Tucker/Gates (Continued from page 46) UNIX...
...In 1992, IBM and Microsoft parted ways...
...But of course such a transformation always upsets the status quo...
...In 1992, programmers at the government-funded National Center for Supercomputing Applications, at the University of Illinois, designed a system enabling ordinary users to browse the World Wide Web without using UNIX and its arcane commands...
...These machine languages are simple sets of instructions that translate a computer's ability to manipulate i's and o's into some rudimentary functions such as mathematical calculations and logic...
...Of course there is the possibility that some other standard will eventually prevail...
...If it weren't for the financial investment we have in the UNIX environment, I'd go to NT in a flash," Jeff Sherman, of Remington Arms Co...
...Then in 1980, IBM, the 800-pound gorilla of the computer industry, secretly decided to enter the personal computer market...
...Although Andreessen claimed that the idea of a Web browser had come to him in a coffee shop in 1992, others argue that many people — particularly David Thompson, of NCSA—were more involved...
...Microsoft has been accused of several unfair practices...
...Kildall had licensed CP/M to many manufacturers, most of whom had created incompatible versions, making it difficult if not impossible to transport data between systems...
...Word and Multiplan were also developed originally for the Mac...
...Buyers and sellers are finding each other as never before...
...During the 1980's Microsoft began to earn its reputation as a "silicon bully...
...As a result, Kildall probably threw away the opportunity of a century...
...Take the case of General Motors...
...Mat is harder to fathom is the fear and loathing Microsoft has generated in the business community...
...On May 18, the Department of Justice filed an antitrust suit against Microsoft Corporation, charging it with anti-trust violations in promoting its Internet Explorer over rival Internet browser Netscape...
...He is forever challenging himself and others with logical puzzles and memory games, a Gates family pastime that has become a Microsoft tradition...
...McNealy has put together a consortium of Microsoft rivals—IBM, Oracle, Novell, Netscape, and TCI— in the hope of creating a "network computer," a personal computer that store both its programming an memory on a giant "seri er" — the Internet itself...
...Most of them originally cost more than the whole of Windows costs today...
...By 1994, Microsoft had discovered that even a supposed monopoly in operating systems was no guarantee of success...
...His wife, who was running the business, was deeply suspicious of IBM's non-disclosure agreements and refused to let Sams in the door...
...The Armonk behemoth was soon showing its weakness...
...WILLIAM TUCKER is The American Spectator's New York correspondent and a columnist for New York Software...
...Oddly enough, Microsoft's first successful software was written for Apple...
...The new owners soon claimed exclusive rights to Micro-soft's BASIC...
...drive compression, fax utilities...
...Yet DOJ has chosen to go after Microsoft...
...In the office market, Windows NT—an industrial-strength version of Windows—is a clearly superior product yet still holds only an $8.5 billion market share as opposed to UNIX's $49 billion...
...A measure of this came in April when New York Times editorial-page columnist Thomas Friedman visited the center of the computer industry...
...They could have spared themselves the trouble...
...Robert Bork, supposedly the most libertarian Supreme Court nominee in recent history, is also on Netscape's payroll...
...If consumers find Microsoft Word, Microsoft Excel, Microsoft Network, Microsoft Outlook, Microsoft Money, and Microsoft Publisher on their screen, they will have little incentive to buy The American Spectator • July 1998 anything else...
...Microsoft, which had just gone public, asked IBM to buy 3o percent of its stock...
...Economists have long noted that "information costs" are what prevent us from enjoying Adam Smith's ideally free market where competition always brings prices to their lowest marginal level...
...Gates demands that employees show the same spirit...
...Some deride this approach as lowbrow...
...Forbidding computer manufacturers to load or advertise non-Microsoft software on Windows systems is almost certainly illegal...
...Its phenomenally talented staff is compensated largely by means of stock options...
...The tie-in turned out to be the most important issue...
...In 1969, the Department of Defense's Advanced Research Project Agency had created ARPANET, the first "Internet...
...In one provision, Microsoft agreed not to "tie in" any new applications with the purchase of its operating system...
...Sams made an appointment to meet with Kilda]] in Monterey...
...Gates is a postmodem P.T...
...And so, the sixth-largest corporation in the country, already under an 11-year investigation for monopolizing the computer industry, put its future into the hands 43 of a small Seattle software firm headed by a 24-year-old college dropout...
...do it marginally better and throw some marketing clout behind it, then relentlessly make it better over the years...
...There is a disturbing complacency here toward Washington, government and even the nation...
...By 1979 several operating systems were in use...
...Meanwhile, AOL has absorbed CompuServe to take a dominant position in the market...
...Reason: Enhancement of product's substance.' Someone at IBM didn't want the PC operating system to offer multiple typefaces because a particular IBM mainframe printer couldn't handle them...
...Microsoft tried to challenge it with an office suite called "Odyssey," but the imitation never got off the ground...
...The other two principle investors are Saudi Prince Alwaleed Bin Talal and William H. Gates III...
...Simultaneously, attorneys general from 20 states filed companion suits on almost identical grounds...
...Gates is, first of all, incredibly competitive...
...All of these and countless other now-standard features, once came in separate packages...
...As Gates wrote in The Road Ahead, "We glimpsed what lay beyond the Intel 8o8o chip [Altair's major component], and then acted on it...
...Working on a breakneck one-year schedule, IBM decided The American Spectator • July 1998 for the first time in its history to farm out portions of a project...
...In the Information Age, consumers have many more choices at hand...
...IBM quickly agreed to license MS-DOS with the understanding that Microsoft would retain ownership...
...Microsoft (now without the hyphen) went to court and won back the rights to its BASIC on the grounds that MITS had not exercised due diligence in promoting it...
...Microsoft has no choice but to expand," says U.S...
...But the logic of engineering works against this argument...
...It's not often that you can walk away from a deal, particularly a deal with a company of Microsoft's size and reputation, and six months later both companies can look each other in the eye and say that was a fair deal...
...The Microsoft antitrust suit puts politics back at center stage...
...Money is extracted from Silicon Valley and then wasted by Washington...
...W]e may be seeing a welcome new consensus emerging that government has a role to play and that it should not be ridiculed on reflex for every intervention," celebrated The New York Times...
...1 ronically, it was during this period that the Justice Department started to get interested in the relationship between IBM and Microsoft...
...Some people, of course, also worry about Rupert Murdoch...
...We asked, `What if computing were nearly free?' We believed there would be computers everywhere because of cheap computing power and great new software that would take advantage of it...
...Microsoft's BASIC and Digital's CP/M dovetailed nicely and they had often talked merger...
...The company refused to license its hardware, preventing anyone from building compatible systems...
...Software is cool in ways that, say, the pulp-and-wood-products industry most definitely is not...
...The two most popular were Apple DOS (disk operating system), exclusive to Apple, and "Control Program for Microcomputers" (CP/M) written by Gary Kildall, founder of a small company called Digital Research (shortened from "Intergalactic Digital Research") in Monterey, California...
...The archconservative Orrin Hatch, whose Utah constituent Novell is one of Microsoft's bitterest enemies, has led the attack in the Senate...
...Preoccupied with developing the Microsoft Network, Gates remained strangely oblivious to the Internet...
...A week later, Kildall made an attempt to reestablish communications with IBM but nothing materialized...
...But Microsoft has not stood still...
...In fact, Pepsi sued Coke for antitrust violations at almost the same time that DOJ sued Microsoft...
...There is even a half-baked theory floating around that Microsoft is trapped in some kind of Marxist dialectic of self-destructive growth...
...Basically, the company acknowledges this strategy...
...hat makes Microsoft such a different company that even oldline competitors such as Disney, Knight-Ridder, and General Motors feel threatened...
...With extra work you can write HTML code that will work on both Netscape and Explorer," says David Smith, vice president of Internet strategies at the Gartner Group, "but if you want to take advantage of all the bells and whistles you have to choose one or the other...
...In that year, IBM lost $5 billion, an alltime record for an American corporation...
...and 2. if manufacturers didn't install Windows, customers would pirate copies and install it themselves...
...Now IBM was back in Redmond, still without an operating system...
...Rival computer companies have long hated Microsoft...
...IBM clones dominated the PC market, while IBM itself owned only a small share...
...Jobs and Wozniak, who were hardware specialists, needed someone to write the underlying language...
...Computers have short-circuited this process, giving executives more up-to-date information and giving foot soldiers enough knowledge to make more decisions...
...He was out flying his airplane...
...Along the road of progress, Arthur argues, early decisions, made arbitrarily, often establish technologies that are "objectively inferior...
...MSN still has only 3 million subscribers and loses $20 million a year...
...Gates has purchased a small Flori da company with competing technology and is already market ing its own network computer...
...Overall, Microsoft is known for taking other people's innovations, making inferior imitations of them, and incorporating them into its overarching system...
...This is what Scott McNealy, CEO of Sun Microsystems, intended in creating Java, the language that enables programmers to "write once, run anywhere...
...Meanwhile, after two poorly received attempts at imitating Apple's point-and-click environment with "Windows," Microsoft finally hit the jackpot in 1990 when Windows 3.o became the industry standard...
...Gates believed that cable television would be the main thoroughfare and was soon negotiating with Time Warner and Tele-Communications Inc...
...1111117W 42 July 1998 • The American Spectator that would give the Altair some simple abilities to handle logical and mathematical problems...
...The system was called "Mosaic...
...The hardware would be developed at a top-secret plant in Boca Raton...
...At the time, Allen was writing code for 24-ton, $ioo,000 mainframes called "minicomputers...
...In the past two years, Microsoft has launched aggressive, Internet-based businesses that threatened the status quo in automobile retailing, newspapers, and travel," reports Fortune's David Kirkpatrick...
...Remarkably, although OS/2 was meant to undercut MS-DOS, IBM asked Microsoft to collaborate...
...The big winner, it turned out, was Microsoft, whose operating system became the industry standard...
...I remember change request #221, 'Remove fonts from product...
...A month later the company—now called "Netscape" — paid the University of Illinois $2.2 million in damages and up to $1.4 million in future licensing revenues for its unauthorized use of Mosaic...
...If I don't care enough about the wealth-destroyers in my own coun41 try, why would I care about the wealth-destroyers in another country...
...In building its case, DOJ has relied heavily on the theory of "path dependence" developed by economist Brian Arthur...
...What happened when IBM first visited Redmond has become one of the legends of the early days of computing—and perhaps the reason why Silicon Valley still resents Gates to this day...
...As Randall Stross wrote in U.S...
...Whereas Apple had hoarded the rights to its hardware, IBM licensed its specifications cheaply, inviting other firms to build "IBM clones...
...Microsoft Excel, developed specifically for the Mac, was a huge success, even though it was not dependent on the MS-DOS operating system...
...Gates's greater understanding of this has Eisner and Murdoch quaking in their boots...
...Soon Gates and Allen were writing code for Commodore, Radio Shack, NCR, Texas Instruments, and other brands of personal computer rushing onto the market...
...There are only stock options and electrons...
...Integrating software is precisely what the personal computer revolution has been all about...
...Microsoft proposed a buy-out, but changed its mind after seeing Go's software...
...Founder and president of Teledesic is Seattle telecommunications magnate Craig McCaw...
...CD-ROM drivers (Corel's SCSI, $99 in 1993...
...After the deal, former Spyglass owner Mike Tyrrell told Overdrive author James Wallace: "I'm a huge Microsoft fan, even though I've sat across the table from them...
...Sales of the Altair petered out and Roberts sold the company...
...After years of sitting on the sidelines, politicians now have renewed importance...
...But in an unprecedented step, the FTC, at the urging of its staff, turned the matter over to the Justice Department...
...Sun has filed an antitrust suit charging that Microsoft is trying to create a version of Java incom...
...Online services such as CompuServe, America Online, and Prodigy had begun attracting customers...
...The result is a company that is very, very fast and alert in responding to market changes...
...It was Bill...
...When someone came out to take us back to his office, I thought the guy who came out was the office boy...
...When the PC hit the market at almost halfApple's price, Apple refused to cut its own prices, betting that its loyal users would not desert it...
...Gates had been programming since he was 13...
...In 1984, Apple had introduced the graphic user interface (GUI) for Macintosh — a "point-and-click" environment originally developed (but never successfully marketed) by Xerox...
...Allen grabbed a copy and ran to see his high school friend Bill Gates, a 19-year-old sophomore at Harvard...
...We got more than io,000 such requests, and talented people from IBM and Microsoft would sit and discuss them for days...
...Microsoft has also understood the implications of the Information Age for consumers...
...But we've already made the big switch from the mainframe to a distributed client-server environment, so we wouldn't just change over right now...
...The reason is that computer users prefer uniformity...
...More complicated is the "operating system," which determines how the different parts of the computer interact...
...You talk to fifty different people inside there and they all have exactly the same story...
...When the IBM team arrived, however, Kildall wasn't there...
...An OS sets up files, organizes the computer's memory, manages the interaction between the monitor and keyboard, and creates a platform for higher applications...
...TCI...
...Microsoft got the job...
...But even if Microsoft is forced to sell other people's products—even if Bill Gates is required to carry a 50-pound sack of Netscape Navigators on his back for the rest of his life—it is doubtful Microsoft will be any less formidable...
...The company had not foreseen—as Gates had done—that software would be the more valuable product...
...We don't even care about Washington...
...The University of Illinois had licensed Mosaic to eight other companies —one of them, Spyglass, was Netscape's closest rival...
...Carpoint.com is threatening General Motors' "gmbuypower.com," where customers can only buy GM cars...
...There was talk about an "Information Highway" (a term coined by Gates) that would bring the world's databases into the home...
...But one thing is already clear—the government has again become a player in the Information Age...
...But things don't work that way anymore...
...With a cash reserve of $io billion—more than the annual revenues of most major companies—Microsoft combines the giantism of an American corporation with the speed agility of a corporate "gazelle...
...Only twenty minutes away at Seattle Computer Products, a 24-year-old programmer named Tim Paterson had written a program he called QDOS ("quick and dirty operating system"), which his company had been shipping for about a year...
...A1997 GQ article entitled "Imposter Boy" charged that Andreessen was a second-rate programmer who essentially stole Thompson's ideas...
...So what does the Justice Department hope to accomplish by suing Microsoft...
...Mitch Kapor's Lotus 1-2-3 had become the standard spreadsheet after Kapor guessed right and wrote the program for the PC...
...Characteristically, Microsoft decided to duplicate what already existed, building its own online service...
...In search of a machine language and an operating system, IBM executives wandered into what was then largely unknown territory, the West Coast...
...Its user interface was a set of sixteen red-light switches on the front panel...
...The irony is that path dependence cuts both ways...
...In 1993, the Federal Trade Commissioners deadlocked 2-2 on whether to file a complaint against Microsoft...
...Douglas Coupland's novel, Microserfs, satirized this perpetual undergraduate life on the Redmond "campus...
...On her first day of work, a new secretary had gone running into the hallways complaining that "a little kid" had gotten into "Mister Gates's" office and was playing with the computer...
...G ates was still only 24 years old and looked 19...
...Normally such a deadlock would have ended the investigation...
...The case could take a decade to decide...
...Good-enough products did...
...46 July 1998 • The American Spectator consumers to queue up out of brand loyalty...
...But will Justice be able to establish that Microsoft products are objectively inferior or arbitrarily chosen...
...A web browser is, in effect, the operating system for the Internet...
...Critics claim that this stifles innovation in the software industry...
...Wandering the Cornell campus, he found American undergraduates had already downloaded Mosaic and were surfing the Internet with ease...
...Third, Microsoft puts hidden sections of code into DOS and Windows that interact with its own applications programs, making them work faster and better than the competition...
...Second, Microsoft has been known to talk about collaboration with small companies, asking to see their software, and then "discovering" that Microsoft already had something very similar...
...He recommended Gary Kildall, an old acquaintance from Seattle...
...If Word, Excel, Publisher, and Photo Shop all have their own print functions, for example, it is much more efficient to combine than duplicate them...
...Silicon Valley sees the Redmond giant as poaching on its turf...
...Many of Microsoft's practices are indeed blatantly anti-competitive...
...Roberts took his earnings and went home to Tennessee, where he fulfilled his lifelong ambition of becoming a country doctor...
Vol. 31 • July 1998 • No. 7
