This article is the first in a three-part series that was published in the industry newsletter, the Multimedia Monitor, beginning with the November 1996 issue. Copyright 1996 and 1997, Phillips Business Information, Inc. For more information about the Monitor contact 1-301/424-3338 (Inside U.S. 1/800-777-5006) Fax 301/309-3847. EMAIL [email protected] Appears here by permission.
In this series of articles we look at the role of Microsoft Corporation and other "eagles of the Information Age" and how they have influenced the evolution of the microcomputer industry. Is Bill Gates the villain in this story -- or could he be a hero? Are there any heroes to be found? Part two will examine struggles involving IBM Corporation vs. Microsoft and WordPerfect vs. Microsoft. In part three, Bush analyzes Microsoft vs. Netscape and America Online Inc., et al, vs. Microsoft.
Perhaps I am slower than a lot of people, but I have only recently recognized that there are many folks out to convince everyone that Bill Gates is not a very nice guy. Of course, villainy is not new. Every age has had its share of villainous characters. But find a villain, and there is usually a hero not far away. Dragons were constantly on their guard for knights in shining armor. Cowboys in black hats had to look out for the guys in white ones. And let's not forget that Lex Luthor is constantly in trouble with Superman. [Unless, of course, Superman has already done him in. Sorry, but I don't remember.] So, if Gates is the villain of the Information Age, who are the heroes?
Given the extent to which Gates is Microsoft -- a company with all but uncontested impact on virtually every phase of the digital world -- the answer to this question can have serious consequences for anyone doing business today. To begin a search for an answer to the question, let's first examine the assumption of villainy.
My own reflection began during my attendance at a new media conference early this year in Cannes, France (Monitor 3/96 16). After noticing booing and hissing in a session when one of the panelists spoke of Microsoft, I mentioned this to a colleague at the next break who promptly voiced her support. "Right on!" she declared. "I hate Bill Gates!"
Late this past spring, my mother read to me over the phone from a letter from my brother-in-law in which he spoke of the futures of his two sons, my nephews. Both were getting ready to graduate with excellent grades that placed them in the top of their classes in computer science. One attended Brigham Young University -- close to the home of Novell and Corel WordPerfect, longtime denizens of the IBM/Microsoft/Intel "Kingdom of IBM PCs and compatibles." The other was graduating from Berkeley -- across the bay from the "Universe of UNIX" -- that is, Sun and Silicon Graphics -- not to mention Cupertino, a.k.a. "the Apple Orchard." The Berkeley nephew was dismayed at his brother's decision to accept a job working for the "Great Satan" -- you guessed it -- Microsoft.
At another conference this summer, I recounted my growing awareness of this phenomenon in a conversation with a rather international group. Participating was one woman who is a software distributor from Ireland; two male educators, one from England and the other from Australia; and, finally, another woman who is an American living and teaching in Australia. Responding to my statement of how interesting I found all of this Gates Hate, the American woman joined her voice with those of the Booers and Hissers of Cannes and Berkeley. She said something like, "He is a villainous creature who must be stopped! He has no right to be putting all of those nice little software companies out of business!"
All of this talk of evil was enough to launch me into an investigation of whether I had observed only isolated incidents or more general sentiment. To explore the possibility that everyone else in the world thinks Gates is great, I turned to the Internet for a completely unscientific survey. Running queries on Digital's AltaVista in which I searched the Web and Usenet news groups, I did not have much luck with "I love Bill Gates." So, I tried phrases like "I hate Bill Gates" and "I hate Gates" and "I don't like Gates", etc. I found 83 examples of people placing their opinion in one of these categories. Indeed, I was astounded at the number of Web sites dedicated to "Gates Hate." Compare this to 79 examples of those voicing similar feelings about Bill Clinton. Even the oft-vilified Newt Gingrich only got 44 points in my survey, with only 38 weighing in against Rush Limbaugh.
Capping off my reflection was an interesting sequence of events that took place at the Gartner Group Symposium/ITxpo 96 at Walt Disney World, 7-11 October 1996. I was fascinated to read in USA Today (14 October, p48) that, following a panel discussion involving many of Gates' supposed enemies, one attendee said on the way to the door, "Every time Gates talked, you could hear the sound of teeth grating." Indeed, the writer of the article in which this remark appeared commented that the conference was not Microsoft-friendly and reflected "fear and loathing of the software giant." Fear and loathing? Sounds to me pretty much like typical sentiments directed toward villains -- which makes this meeting a good place to start our search.
The Search for Villains and Heroes
If the image of heroes and villains implies struggle, then we are well-served in extending our metaphor into the computer marketplace. Given our assumption that heroes are found not far from the villains, consider a few panelists at the Gartner conference: Two of Gates co-panelists at the conference were Jim Barksdale of Netscape and Steve Case of America Online, both of whom came up with some serious digs against Microsoft. "I don't think the US government knows how to ensure competition," Barksdale announced to Gates and to an applauding audience.
Another panel featured Gilbert Amelio of Apple and Lou Gerstner of IBM, who each got into the act with pleas to corporate America to look beyond Microsoft products. Their primary justification was to keep Microsoft from crushing every other player. Could such a gathering of eagles of the Information Age -- joining their cries of opposition to Microsoft (and thus to Gates, as well) represent the heroes we need to balance our villains and heroes scenario?
Let's look closer at the four struggles represented by this group, as well as by one other: The struggles that are underway in the computer marketplace today involve microcomputer hardware, operating systems, word processors, net browsers, and online services. As battles between our major players, these struggles can be described as: IBM vs. Apple vs. the rest of the PC-compatible world; UNIX vs. Mac vs. Windows vs. OS/2; IBM vs. Microsoft vs. Apple vs. the whole UNIX world; WordPerfect vs. Microsoft; Microsoft vs. AOL vs. Compuserve; and Netscape vs. Internet Explorer vs. a bunch of others now drifting into obscurity.
No single figure is more central to each of these struggles than Microsoft, as exemplified by the following mostly bilateral conflicts: Apple vs. Microsoft; IBM vs. Microsoft; WordPerfect vs. Microsoft; Netscape vs. Microsoft; and America Online, et al, vs. Microsoft.
Identifying the combatants in these battles is the easy part. Distinguishing the heroes and villains promises to be much more of a challenge. However, as difficult as it promises to be, knowing the difference is probably as important for sheer survival in the business world of the Information Age as for any period of history. Do not construe this exercise as an attempt to defend Gates. There is something entirely incongruous about the richest entrepreneur in the world needing someone like me to come to his defense. He doesn't, and I won't. What we will do is examine each of these conflicts, drawing lessons from the heroes we find along the way.
Apple vs. Microsoft
My AltaVista survey results revealed that "Gates Hate" is more prominent among Mac fans than with other groups -- providing a rationale for starting with Apple in our examination of the various conflicts listed above. In addition to Gilbert Amelio (the current CEO of Apple who appeared at the Gartner conference), a partial list of potential heroes to be drawn from the Apple vs. Microsoft struggle includes Amelio's predecessors: Steve Jobs, John Scully, and Michael Spindler. I also queried AltaVista on each of these names, with the closest hit being "I hate Scully" -- referring to the Agent Dana Scully character of Fox Network's X-Files.
A former student of mine stopped by my office on campus the other day to chat about Web goings-on. After I bounced off him my findings on "Gates Hate" and its relationship to Microsoft, he passed along a rumor that was new to me. It seems that the only reason that Microsoft produces software for the Mac is to avoid additional antitrust problems from the Federal government.
This was an interesting rumor indeed, causing me to remember a neighbor of ours in a suburb of Paris, France, back in 1985 -- a British fellow named John who worked as an executive for a large insurance company in Paris. We exchanged computer stories during our train commute each morning, and I kept hearing how much he loved his Mac running Microsoft Excel. According to John, this combination was so much better than Lotus 1-2-3 on the PC that he was never going back. I don't know how many other people bought this Mac/Excel hardware/software combination, but it seems quite safe to guess that Microsoft helped Apple sell a lot of Macs to people like John. It is wonderfully fascinating to consider how Microsoft's management was sufficiently prescient to begin such an effort to forestall future antitrust actions!
In an interview with David Allison of the Division of Computers, Information, and Society at the Smithsonian Institution's National Museum of American History, Gates -- in describing how he chose to pit Microsoft against Lotus (Microsoft's chosen competition of the day) -- in fact speaks of his intersection with this same chapter of Apple's story:
So, instead of really attacking Lotus 1-2-3 simply at the DOS level, we decided we would focus on the graphical version and do the work on Macintosh and Windows and sort of be a generation ahead if we were right about graphical interface. So Microsoft worked very closely with the early Macintosh team. We were their testing group. They had no testers. We helped shaped the features of the machine … The Macintosh was a very, very important milestone -- not only because it established Apple as a key player in helping to find new ideas in the personal computer, but also because it ushered in graphical interface. It is hard to reconstruct, but people didn't believe in graphical interface. And Apple bet their company on it, and that is why we got so involved in building applications for the Macintosh early on. We thought they were right. And we really bet our success on it, as well. (See http://www.americanhistory.si.edu/collections/comphist/gates.htm).
Continuing our examination of the potential heroes that Apple brings to the fore, we see that Steve Jobs is the first in line, the person largely responsible for bringing the Macintosh into the world. How well I remember a visit we received at the US Air Force Academy from Dan'l Lewin, one of Jobs' employees at Apple and one of the folks he later took with him to NeXT. It was the end of 1983 and the Academy was in the process of deciding to require each student in subsequent entering classes to purchase his or her own personal machine, and, of course, Apple wanted to be considered for that huge procurement action. After we had dutifully signed the requisite non-disclosures, Lewin unzipped the canvas carrying-case and dramatically removed the toaster-like Macintosh that was to be released in January 1984. No question, we were all impressed as we watched it boot and go through its paces. I am not sure if it came in that meeting or later, but of course the killer question stopped Apple's show: "But will it execute the software that runs on the Air Force-standard, Zenith-brand, PC compatibles?" How short-sighted of us to dare putting things in such terms!
The story almost ended for Apple with the closed-up box and dinky, no-function-key keyboard with the required constant shuffling of the right hand between keys and mouse. Luckily, Apple brought in Jean-Louis Gassée from Apple France who drove around Silicon Valley with the license plates on his Mercedes [or BMW, sorry but my memory fails me again.] that read OPEN MAC. With his help and that of a few other key Apple employees, they fixed the keyboard and opened up the machine. The Mac II was born in 1987, saving the day for Apple -- at least so far.
But Mac was not the only invention of Jobs' -- who, along with Steve Wozniak, was also the co-inventor of the Apple I and II. Jobs also brought us the Apple III and Lisa, each incompatible with other Apple machines. Apple has continued this trend in creating the PowerMac, a Mac not quite entirely compatible with previous versions of the machine.
If this is not enough to remove Jobs from the hero category, consider his adventure at NeXT. "You'll have a nice pair of doorstops there in a couple of years!" a computer industry colleague told me on the phone in 1989 after I had proudly announced our procurement of two new NeXT machines at the Air Force Academy. "But," I responded, "How about all the 'free' applications that come with it? The magneto-optical disk drive? The built-in digital signal processor?" He was not swayed, nor were very many other people in the marketplace. I still can't get over the keyboard -- slightly larger than Classic Mac but still non-standard -- that Jobs insisted on placing on the machine. Historically, it is interesting to note that to produce his NeXT machine, Jobs had a great deal of help from Ross Perot, one of the first serious investors in NeXT. [Please note in all fairness that, although it has a dead magneto-optical drive, a new hard drive has given extra life to one of these machines. It still lives on as part of investigations into Web technology I am doing with the Air Force Academy. See http://moliere.byu.edu/digital/.]
Sure there has been vision there, enough to get Jobs onto the cover of Wired in February 1996. But, while acknowledging the flop that was NeXT, the writer forgot about Apple III and Lisa. However, Jobs has a few very interesting things to say in that interview, confirming the struggle with Microsoft and even declaring that Microsoft won:
The desktop computer industry is dead. Innovation has virtually ceased. Microsoft dominates with very little innovation. That's over. Apple lost. The desktop market has entered the dark ages, and it's going to be in the dark ages for the next 10 years, or certainly for the rest of this decade. (Wired 4.02, p102).
Could he be right? I can't help but think that better mousetraps will still bring the world to the doors of their inventors. As far as I am concerned, some of the things that Jobs would call innovation have cost a lot of people a lot of money. (As for me, I still get a kick out of being able to run software on my new Pentium that I ran on the first PC I owned -- a PC-compatible, Toshiba T1100 laptop that I acquired in 1985.)
From the same article, we get another glimpse of Jobs' thinking as he summarizes his current philosophy, speaking primarily of the Web:
Wired: What's the biggest surprise this
technology will deliver?
Jobs: The problem is I'm older now, I'm 40 years old,
and this stuff doesn't change the world. It really doesn't.
Wired: That's going to break people's hearts.
Jobs: I'm sorry, it's true. Having children really
changes your view on these things. We're born, we live for a brief instant,
and we die. It's been happening for a long time. Technology is not changing
it much -- if at all. These technologies can make life easier, can let
us touch people we might not otherwise. These things can profoundly influence
life. I'm not downplaying that. But it's a disservice to constantly put
things in this radical new light -- that it's going to change everything.
Things don't have to change the world to be important (Wired 4.02,
p106-107).
If Jobs is a hero, then we should take heed. On the other hand, decision-makers within companies who underestimate the extent of changes that are upon us could be seriously burned if they listen to Jobs and he turns out to be wrong. As an example of one who takes issue with Jobs' current philosophy, Walter Wriston (former chairman and CEO of Citicorp/Citibank) recently commented on the above quote from Jobs in another Wired interview :
Far be it for me to argue with a guy who has $500 million and is a real guru, but I don't think his statement stands up. We used to have a life span of 30 years, on a good day, and now people live to be 80 or 90. Our quality of life is an order of magnitude better than it ever was. This is due to medical technology, nutrition, education, environment -- all of it technology-based (Wired 4.10, October 1996, p205).
Although I think Wriston's interviewer slightly misrepresents the context from Jobs' interview (I contend that the technology specifically referred to was Web technology), Wriston is absolutely correct in his conclusions. Innovations in all of these fields were dependent on the exchange of information, making the Web and its associated technologies prime candidates for promoting and ensuring innovation in the future. The Web, therefore, will have significant impact in the future on all of the things Wriston mentions. Thus, for the moment, my vote is not to place Jobs in the hero category. Sure, he gave us Mac, but without the intervention of others, it would have died long ago. We'll see if Toy Story and Pixar are enough to kick Jobs back into the hero category of the Information Age.
How about John Scully, the person that Jobs brought to Apple from Pepsico and who played no small role in Jobs' departure from Apple? I very much enjoyed reading Scully's book, Odyssey (Harper and Row, 1987), in which he lays out fairly clearly how the Macintosh was saved from Jobs' idea of keeping the machine closed. He also spoke of a phone conversation with Bill Gates, who had called in 1985 to advise Apple to license the Macintosh technology to other manufacturers. Given that Microsoft accounted for about one half of all Macintosh software, it is interesting to consider what would have happened if the Mac had been available more cheaply and in greater numbers. Unfortunately for Apple, Scully chose not to take Gates' recommendation. It also appears that he perhaps got a bit too visionary with his support of Newton, a technology that has not lived up to Scully's expectations and was, perhaps, a technology that was significantly before its time.
Let's consider Scully's replacement, Michael Spindler. Have you ever wondered why for so many years the Macintosh was so much more expensive than PCs? It is possible that if Apple had taken Gates suggestion, prices would have dropped, but consider Spindler's actions. On 15 September 1992, he announced in his keynote address at MacWorld Expo/Canada that aggressive price-cutting would deprive the industry of the resources to continue innovation in hardware and software. He said that the key was not in cheaper hardware, or even in more powerful hardware, but in imaginative new software. Given that all the new software I have seen has always demanded more powerful hardware, it is not clear to me how Spindler's proposal could become a reality.
This speech brought accusations of a lack of vision as people called him a sort of "meat-and-potatoes and nuts-and-bolts" kind of a guy. Educom's Web-based Edupage service summarized an article from Business Week in October 1994:
Dreaming at Apple: "Meat-and-potatoes, and nuts-and-bolts. Bull…! I am as much of a dreamer as anybody else," says Apple CEO Michael Spindler. Spindler's dream is to improve Apple's global market share from its current 10 percent to the 20 percent share it needs to motivate software makers to continue to write applications for the proprietary systems. Insiders say the uphill battle leaves no room for errors that have dogged the company in the past (Business Week 10/3/94 p88). (See http://www.ee.surrey.ac.uk/Contrib/Edupage/1994/10/02-10-1994.html#7.)
Nor was there any point in bothering Spindler with dreams and vision! He was a meat-and-potatoes/nuts-and-bolts kind of guy. Check out this excerpt from the New York Times that was summarized by the Edupage service of Educom in December 1994:
Spindler Speaks His Mind: Apple Chairman Michael Spindler warns against the vision thing, saying that the consumers, and not industry executives, will decide how technology will transform life in the 21st century. Spindler sees no need for the highly touted Information Superhighway, and feels 60 channels are plenty. Taking on high-profile execs Bill Gates and Andy Grove, Spindler says, "They believe that just because of the technospeak it's going to happen, but it's not," and warns that overhype will result in a backlash from disillusioned consumers. Still, there's room for improvement and innovation in the computer industry: "We still have to switch our computers on and off. We go to the restroom, and when we leave it flushes automatically" (New York Times 12/1/94 C2) .(See http://www.ee.surrey.ac.uk/Contrib/Edupage/1994/12/01-12-1994.html#1.)
When I read this in 1994, I realized right away that Apple was in for some hard times. I think history has born this out, but it got worse from there -- as shown by another write-up from Edupage:
Apple Targets High-Growth Markets: Apple CEO Michael Spindler wants to focus the company on "high-growth market segments" such as publishing and multimedia, in education, business, entertainment and the home. "We don't want to be simply throwing Macs out there to do office work," he says. Spindler rejects the idea of making the Mac a more general-purpose machine: "This isn't diapers or soap or soda pop. We need to make computers that better understand their users" (Information Week 7/10/95 p32.) (See http://www.ee.surrey.ac.uk/Contrib/Edupage/1995/07/09-07-1995.html#6.)
Although there are some good ideas here, I think this passage reflects a person out of touch with reality and shows why Spindler was canned and why Gilbert Amelio was brought in to "save" Apple. Furthermore, consider that Gates was quoted in the December Edupage issue as saying, "Too many people are having this big debate about whether the future in home devices is going to be more like the PC or the TV. The answer is you're going to have both; people will have networks in their home, and the TV and PC will be some of the many peripherals on that network" (Wired December 1994, p166).It seems pretty clear to me who is turning out to be right.
How do we sum up this Apple vs. Microsoft struggle? First, it can also be cast in terms of a Mac vs. PC conflict. In June 1992 (Monitor 6/92 p24), I described the situation as it existed then and as it pretty much continues to exist:
The evolution of the microcomputer industry has given us what I call the Dual Double-Edged Sword Phenomenon: Macintosh and MS-DOS. On the Macintosh side, Apple's absolute control results in greater ease for users who must integrate additional functionality into this environment. On the downside, a smaller installed base has given rise to fewer hardware and software options that often bring higher prices than are usually seen on PC-compatible products. On the other hand, MS-DOS flexibility has created a huge installed base that in turn has generated a large number of machine and peripheral manufacturers. This, of course, has driven prices down, but the lack of the monolithic control of the overall system enjoyed by Apple has created integration problems that at times defy the imagination.
What does all of this mean for the Mac? Is it dead? Unless Amelio can continue to make solid progress, the end might come sooner than many Mac lovers are willing to admit. Apple seems to be doing a lot of right things -- lowering the price and opening up the system to licensing. The system is the darling of certain classes of users, such as multimedia. Only time will tell if it is too late.
Conclusions
So, what can we glean from this analysis of our first group of potential heroes? It is certainly too early to decide where Gates falls on the scale of Good to Bad to Ugly. There are indications that some evidence is not as was rumored -- but then again, such is not our purpose anyway.
There is a certain irony, nevertheless, in the fact that -- according to Apple's own John Scully -- Gates offered advice in 1985 (five years before Windows achieved success with version 3.0) that many people today are convinced would have saved Apple from slower than expected sales for the Macintosh. Is that the action of someone who has had designs on wiping out the Mac from the beginning? Of course, Gates could have easily changed his mind since then -- an unlikely event in my view, however, given that Microsoft continues to sell a lot of software for the Macintosh.
Then there's the persistent rumor that Microsoft continues to go slower on putting functionality on the Mac versions of Word than they do on the Windows versions -- which doesn't make too much sense, given that Microsoft must compete against other word processors for the Mac, rather than solely against its own Windows version.
In terms of lessons learned about the kinds of things that heroes do, it seems pretty clear that heroes understand the extent to which open systems benefit everyone. Heroes promote and use open architectures. Attempts to keep things closed do not often succeed, as evidenced not only by the Mac I and Lisa, but by many other obsolete machines. The early days of the microcomputer revolution are filled with examples: TI 99/4, Atari, etc. (There is additional evidence of this lesson in the IBM vs. Microsoft saga that we will examine next time.)
Another lesson in heroism involves the compatibility issue, when moving from old products to new. Without becoming slaves to the past, heroes will provide smooth upgradablity to users -- something that few players in the microcomputer industry have achieved. On the one hand, it is possible to focus too much on installed base (as we will see next time with WordPerfect). On the other hand, it is also necessary to provide consistency over time, across a wide product line -- something that Apple's people have failed to do. Yes, there are difficulties with Windows, but I have applications that ran under Windows 3.0 that I am still able to run under Windows 95, not to mention the DOS apps from 1985 that I can still run today if needed.
Does this make Bill Gates the hero of the common computing man (or woman) -- cheerfully making our lives easier, giving us more functionality, and making money for his happy minions, thousands of third-party hardware and software developers, and (okay, we admit it) himself? Or is he the diabolical villain -- luring unsuspecting innocents into his outer rings of hell with attractive, inexpensive functionality (or bug-ridden non-functionality as asserted by the Gates Haters), only to draw them down inextricably into a dark spiral of dependence and despair? Assuming for a moment that he is indeed the villain, then who are the heroes waiting to save us all? Stay tuned.
Michael Bush is Associate Professor of French and Instructional Science at Brigham Young University. He is also a partner in Alpine Media of Orem, Utah, a company specializing in multimedia development for education, assessment, and foreign language training. In 1992 he retired from the Air Force as a Lieutenant Colonel at the US Air Force Academy, where he was principally involved in the design and implementation of the largest interactive videodisc language learning center of its kind on any college campus in the world. Bush may be reached at Department of French and Italian, 4013 JKHB Brigham Young University Provo, Utah 84602 , 801/378-4515, fax 801/378-4649, e-mail: [email protected]. Or, contact Bush at Alpine Media, Suite G-1, 560 South State Street, Orem UT 84058, 801/226-4283, fax 801/223-9069.