Bill Gates steps down today


Bill Gates

Today is Bill Gates’ last day at the helm of the largest software company in history: Microsoft. Bill, thanks for creating and running a company that has transformed the industry like no other - I wish you the best!

Although I am not a huge fan of proprietary software today or some of the things that Microsoft has done (e.g. FUD) and is currently doing (e.g. Vista), I have always had a large amount of respect for Microsoft’s role in industry - in the early 1990’s, I really wanted to work for Microsoft like everyone else, and I was an early Windows advocate.

However, the motivated, Bill-centric Microsoft of the 1980s and 1990s is very different than the Microsoft of today. It’s not hard to see that Microsoft has undergone bureaucratic stagnation in the past decade and is having trouble with their direction today. I am a big Mac OS X and Linux user as a result, but there are still many Microsoft technologies that I love (Office, Exchange, SQL, AD, Certificate Services).

Bill’s passing of the torch reflects the need for change within the organization. I want to better understand the internal state of Microsoft such that I can follow them in the next few rocky years of change. As a result, I read the book Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era by Mary Jo Foley (May 2008). This book is not a grand predictor of what Microsoft will do by any means, and it is clear that Foley does not know much about Web 2.0, Apple, Linux or Open Source from the comments in the book. But that is fine by me because I have a good handle on all of those technologies……what I need is someone with an inside knowledge of Microsoft, and Foley is that lady. She has followed Microsoft devoutly for 20 years (which is hard to do because you have to absorb tons of bullshit marketing terminology and names).

Although the book isn’t well written and quite dry and repetitive in parts, there is plenty of very valuable information about the state of Microsoft today and in the past decade. Plus, the Forward is absolutely amazing! It was written by Mini-Microsoft (the anonymous long-time Microsoft employee who started a blog to complain about the problems plaguing Microsoft internally in an effort to elicit change within the organization).

Foley has a weird love-hate relationship with Microsoft that comes through clearly in this book. While she isn’t afraid to slam some of Microsoft’s strategies and actions, she remains a little too optimistic about certain Microsoft practices (she did follow Microsoft closely for 20 years, so what can you expect?). The main thing I hate about this book is that Foley keeps assuming that Microsoft will be buying Yahoo and many sections of the book have not been modified to reflect the fact that the deal fell through…

Essentially, the information in this book has helped me get a better grasp of Microsoft today and has confirmed/enhanced some of my views on Microsoft’s future position in the industry.

Some of the best points from this book are:

  1. Microsoft is a huge company that won’t be changing radically anytime soon. They still make most of their $$ from Office/Windows licensing and will likely do so for many years. However, there will be a point where Windows becomes more of a liability to Microsoft than an asset.

  2. Microsoft will have trouble adapting in a Web 2.0 world. Web 2.0 relies heavily on SaaS (Software as a Service) where most information is accessed from servers across the Internet. Microsoft doesn’t think SaaS will take off quickly. As a result, they promote S+S (Software + Service), which is a balance of client software that connects to services on the net. I think S+S will be common in the short term, but SaaS will quickly become standard in the next 5 years. Right now, Microsoft’s “Live” services suck big time.

  3. Microsoft is better at copying rather than innovating. Most of Microsoft’s innovations have gone nowhere in the past decade (e.g. TabletPCs). I agree completely….one good example is Active Directory…….Microsoft created Active Directory (the most amazing Microsoft service) by combining the existing Kerberos, LDAP, and DNS technologies together in a beautiful mixture.

  4. Microsoft will probably become more business-oriented and less technical with Steve Ballmer at the helm (Gates favored his tech guys).

  5. Microsoft will probably hire their new leaders and influential people from outside organizations (new blood). Although Foley thinks that Steve Ballmer is good for the company and should stay, I disagree. From his actions and PR, Ballmer has no vision, and Microsoft needs new blood.

The one aspect of Microsoft that didn’t come through clearly in this book is that Microsoft tries to do everything. Because of their size, they can afford to do this, but innovation suffers as a result. Microsoft prefers to keep their hand in several technologies (most of which have not panned out) for long periods of time. It’s the old “don’t keep your eggs in one basket” approach. The reality is that they do lots of stuff very poorly compared to other companies (Google, Adobe, Apple, Nokia, etc.). Symbian, Linux and Apple rule the mobile space, Google rules the Internet search and SaaS space, Apple rules the commercial/personal space. Microsoft rules the enterprise space and the gaming space. Although Microsoft has tried to be good at everything in the past decade, Bill Gates pointed out in his 1995 autobiography The Road Ahead that this approach is impossible and not what Microsoft should do……..perhaps Microsoft got out-of-hand as it grew into a huge bureaucracy….

Two quotes from the book stood out in my mind - I think they capture many of the problems facing Microsoft today:

  • Gates is probably getting out of technology at the right time. Funnily enough, it’s not really a business for nerds anymore. Gates was at the center of the personal computer revolution and the Internet revolution, but now the big innovations are about exactly the things he’s bad at. The iPod was an aesthetic revolution. MySpace was a social revolution. YouTube was an entertainment revolution. This is not what Gates does. Technology doesn’t need him anymore. (“Bill Gates Goes Back to School,” Time Magazine, June 7, 2007)

  • Will Microsoft be the platform that people want to escape to, or will they be the platform that people want to escape from Currently they are the platform that people want to escape from, because they are the platform that restricts freedom rather than gives it. If Microsoft want to be where the action is, they need to get back to giving people the freedom (and the tools) to do whatever they want. (“Microsoft 2.0, Now with Less Bubba,” Mini-Microsoft, October 3, 2007 post)

I think the first quote (Time Magazine) is a bit harsh, but not untrue entirely. Microsoft obtained success in the past because it ruled the PC revolution - their business model still reflects the needs of that time. Today, the PC revolution is gone. We are now in the age of the Internet revolution (a whole different ball game that has different rules and business models). Microsoft must adapt to this new environment, and large bureaucracies such as Microsoft change slowly.

The second quote (Mini-Microsoft), in my mind, sums up all of the bad vibes surrounding Microsoft today. I can relate to it personally, and given that the author of the post is a long-time Microsoft employee with a good grasp of the company, the comment has plenty of weight.

I can’t wait to see how this story unfolds in the next 5 years.