Bill Gates: Hero or fool?

A Wall Street Journal reporter says in a new book that even though Gates screwed up Microsoft's future he still might "shoot the moon."


Andrew Leonard
August 30, 2001 11:30PM (UTC)

Microsoft executives have long argued that the attempt by the Department of Justice to discipline the company through an antitrust suit has been willfully foolish. Sluggish courts, they declaim at every opportunity, can't possibly keep up with the fast pace of technological innovation. By the time any final judgment can be made, the dynamics of the marketplace will ensure its irrelevance. So best not to even try: The only real solution is to let untrammeled competition decide winners and losers.

Never mind, for now, the niggling little fact that Microsoft's actions in previous years (for example, illegally abusing monopoly power to crush other companies) might have a rather significant impact on just how much competition will exist a few years later. There is still a basic truth buried in the somewhat disingenuous argument: High-tech markets change really fast, and court proceedings are a cumbersome way to deal with that problem.

Advertisement:

As are books. David Bank, a Wall Street Journal reporter on the Microsoft beat since 1996, runs into the same problem as the DOJ in his otherwise excellent book "Breaking Windows: How Bill Gates Fumbled the Future of Microsoft." The vast majority of the book is devoted to the argument that Bill Gates, through a combination of bad technology decisions and poor management, led Microsoft astray. His decision to step down as CEO in 1998 is portrayed by Bank as a result of his errors. In particular, Gates' uncompromising legal strategy is depicted as a disaster, setting up Microsoft for Judge Thomas Penfield Jackson's devastating findings of fact and his order to break up the company.

But then, just as Bank must have been wrapping up his manuscript, came the two days of appellate court hearings early this year in which federal judges raked the Justice Department prosecutors over the coals. Suddenly it seemed to many observers that Microsoft might not be in such a bad position. And suddenly, Microsoft was making a big push for its .Net initiative, which made it seem as formidable as ever to both competitors and consumers.

And so we get to the last chapter of "Breaking Windows"-- a hastily written coda that undermines much of the argument set forth in the previous six chapters, and which ends with a breathtaking wet kiss for the very same Bill Gates whom Bank has gone to such great lengths to malign. Gates will "shoot the moon" writes Bank, rise to the new challenges and go out "a winner."

Advertisement:

You have to wonder whether that chapter would have been written the same way had Bank waited to write it until after the actual appellate court decision, which found Microsoft to be guilty of abusing its monopoly power. You also have to wonder how much to trust the argument made earlier in the book, when the about-face at the end is so dramatic.

David Bank is an excellent reporter who was able to fruitfully combine his access to hundreds of thousands of internal Microsoft e-mails that became part of the public record with the extraordinary access to Microsoft executives that accrued from his position as a Journal beat reporter. He also makes a powerful argument that Microsoft's future lies in being more open and less proprietary. As such, his tale is clearly superior to the scads of terrible books that have been written by Microsoft's many critics, as well as some of the slightly better-written accounts authored by Microsoft sycophants. But his cop-out at the end cuts the legs out from under his own argument. It's a change of heart, midstream, and leaves the reader unsure and a bit unsteady.

Bill Gates has never been portrayed in as poor a light as in "Breaking Windows." To pick just a few phrases: "Gates was losing control of Microsoft ... Gates had lost the technical respect of many of Microsoft's key managers ... Gates was slowly being marginalized ... The conventional wisdom was that the more deeply Gates was involved the more likely a project was to fail." It's a courageous act by Bank -- as it becomes increasingly hard to imagine that he will be getting as many one-on-one interviews with Gates after the publication of his book as before.

Advertisement:

Bank bolsters his arguments with quotes from thousands of e-mails and a detailed breakdown of an internal struggle at Microsoft that continued for years and sapped the vigor of the company. On one side, Brad Silverberg and the Internet visionaries argued for a future of interoperability and openness. On the other, under the lead of Jim Allchin, the Windows-first crowd looked for ways to keep doing business as usual, locking customers into proprietary software by leveraging every trick in the business.

Silverberg gets extraordinarily favorable treatment, but another dose of hindsight raises the question of whether his vision was actually appropriate for Microsoft. When Bank started writing his book, the Net was still in its ascendancy -- everywhere one looked, free services via the Net were flourishing. The free software model pioneered by GNU and Linux-based software was receiving favorable coverage, and the old proprietary dinosaurs like Microsoft seemed doomed.

Advertisement:

That line of argument has fewer adherents today, when even such free software stalwarts as VA Linux have announced that they will be selling proprietary software. The Net's threat to established business models doesn't seem quite as potent as it did a few years ago, while Microsoft, despite a depressed stock price, continues to rake in billions of dollars of revenue the old-fashioned way.

Bank does make an interesting argument that, under Gates' leadership and with the encouragement of CFO Greg Maffei, much of Microsoft's financial prowess in recent years has come as a result of numbers games, but there's still no denying that the company sells a lot of software and will continue to do so in the future.

Microsoft isn't going away -- so the very subtitle of Bank's book, "How Bill Gates Fumbled the Future of Microsoft," seems a little misleading. He may have dropped the ball -- but a winning football team often recovers its own fumble and keeps on driving.

Advertisement:

But then again, neither is the Net about to fade away, despite the passing of so many dot-coms and the financial disarray of so many tech companies. How Microsoft and the Net will come to coexist is still entirely uncertain -- as is the ultimate outcome of the antitrust suit, the success or lack thereof of .Net and Bill Gates' own legacy.

Right now, Microsoft appears more determined than ever to impose its own historically profitable vision on the Net. Such actions as excluding Java support from its operating system and new versions of its Web browser, and integrating media-playing technology and instant messaging into Windows XP are extremely familiar to longtime Microsoft watchers. So maybe when Gates stepped down and let Steve Ballmer take over the day-to-day reins of the company, he wasn't actually fumbling, he was setting the stage for even more success. And maybe the future isn't open, but closed: a choice between Microsoft or AOL Time Warner.

Indeed, given the problems facing so many Net companies, the real title of the book could have been "How the Net Fumbled Its Own Future, and Bill Gates and Microsoft Laughed All the Way to the Bank."

Advertisement:

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

MORE FROM Andrew LeonardFOLLOW koxinga21LIKE Andrew Leonard


Related Topics ------------------------------------------

Microsoft

Fearless journalism
in your inbox every day

Sign up for our free newsletter

• • •