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  • The Smartest Move Bill Gates Ever Made!

    September 17th, 2007

    I could, I suppose, call myself a prophet for being co-author of a science fiction novel that, in passing, mentioned Bill Gates as devoting the final portion of his life to philanthropy. The initial draft, for example, was actually written before Gates and his wife started that foundation with which to hand out most of their vast horde of cash, with the help of Warren Buffett and U2 lead singer, Bono.

    With far less fanfare than you might expect, Gates last year announced he was stepping away from his day job at Microsoft, and he is now off to deal with other, more charitable concerns. He’ll still maintain a presence at Microsoft, but how long that’ll last is anyone’s guess.

    Forgetting the myriad reasons why he took this move — and you might as well disbelieve whatever he said publicly about it — it couldn’t come at a better time. Microsoft these days is as susceptible to the beleaguered label as Apple was only a few years ago.

    All right, there’s no immediate threat that Microsoft is going to go out of business in a rush, crashing to the ground in the fashion of Enron several years ago. In fact, there have been few, if any, hints that Microsoft is pulling fast ones on the S.E.C. with their financial statements.

    Instead, Microsoft is spending billions paying off lawsuits and funding failing products. In the former case, their inability to overturn that European Union antitrust decision must have come as a huge blow, although I would think their legal counsel was smart enough to realize that the appeal wouldn’t pass muster.

    The action by the EU stands in stark contrast to the U.S. Department of Justice and the American court system that genuflected meekly and removed most of the teeth from their original antitrust decision. In case you forgot, that decision recommended splitting up Microsoft. I’ll withhold comment on how that played with the administration that took over, since that would push us too far into the political arena.

    However, it’s not just the legal obstacles and the costs of selling the Xbox and Zune at a loss. That’s chump change for a company the size of Microsoft.

    Instead, it’s the fact that this 800-pound gorilla has become old and flabby and doesn’t have near the clout it used to. Let’s forget for the moment all the insidious marketing games it played to attain dominance of the PC industry. In this universe, that’s probably regarded by many MBA candidates as just smart business, and no doubt millions of businesspeople would just love to be able to imitate even a small part of Microsoft’s success.

    Where Microsoft has trouble is that it is not taken as seriously as it used to be, and that can have dire consequences. In the old days, if they announced a new product initiative, it would be shouted from the rooftops in the tech media. These days, there will be headlines, and maybe some Microsoft synchophants will continue to tout the company’s superior innovation. But that usually all goes away when the product never appears, or appears in in a form that doesn’t quite match the original promise.

    At one time, Microsoft’s OEM hardware partners were almost scared to death to upset the company, lest they lose their special pricing deals and other financial incentives. However, these days, some PC makers are offering Windows XP for those who, for one reason or another, don’t want Vista. Dell is even offering some models equipped with Linux.

    It’s not that these things didn’t happen in the past, but these actions are far more overt these days, with nary a whisper from Microsoft. Of course, Microsoft makes a profit regardless of which operating system you buy, so long as it’s Windows.

    But the biggest problem facing the company is their inability to spin on a dime. It took more than five years to move from Windows XP to Vista, with significant missteps along the way. At the end of the day, the response has been relatively tepid. Unlike the days of Windows 95, when customers were lining up around the block to get a copy, the introduction of Vista was surprisingly low-key. You’d think, after spending so many years and billions of dollars on its development, Microsoft would be proud of its new operating system.

    Instead, you get lame corporate spin over the alleged stellar reception of Vista. At the same time, tech pundits who used to praise Microsoft to the skies call Vista a slug.

    This doesn’t mean that Microsoft can’t overcome its problems, such as severely bloated and buggy software, and endless development cycles. Perhaps the company’s new leadership will be able to steer their overwhelming corporate bureaucracy into a new direction where innovation really occurs.

    Yes, Microsoft has a plate filled to overflowing. Maybe it was a good time for Gates to get out of the rat race and have a life.



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    9 Responses to “The Smartest Move Bill Gates Ever Made!”

    1. richard smith says:

      5 years from now Vista service pack( 5?) will be on 90 % of the worlds computers.
      Innovation is not required.OSX or Linux will not change that reality.

    2. tundraboy says:

      Microsoft has only two viable products. Windows and Office. Try as they might, they just can’t develop new products that capture the public’s imagination. That’s because they’re not really a software design company. They are a monopoly acquisition, expansion and extension company.

      The Microsoft Prime Directive is “Protect the Windows and Office Monopoly”. Everything they do is driven by this. From a Vista that is old-tech, bloated, and resource-hogging to their efforts to have ISO standardize OOXML. That the Microsoft Prime Directive kills innovation and creativity is something they are perfectly willing to live with or are totally unaware of. They certainly didn’t try to do anything (other than file lawsuits) when their best software engineers left for companies like Google to work on cutting edge stuff.

      If they had just gone along with Penfield Jackson’s remedy of splitting up Microsoft into the OS and apps divisions they probably would be in much much better shape today.

    3. Larry Prall says:

      The US government is largely responsible for Microsoft’s position. By specifying Microsoft for use internally, they effectively forced companies doing business with the government to adopt Microsoft as well. Sure made life easier for all of those involved — except the users, of course. I always thought that rather than attempting to split up the company, or fining them, or otherwise penalizing them, the proper remedy would have been to simply ban any US government agency from purchasing any Microsoft goods or services for a period of five years or so. Of course, that would have severely crippled the company — far more so than any penalty against them. And it would have been appropriate to the situation.

    4. Tom B says:

      “In case you forgot, that (DoJ) decision recommended splitting up Microsoft.”

      Ironically, a split up would have been healthy for the Office division, and probably “neutral” for the OS divison. Shareholders would have benefited, because they may have chosen to shed their money-losing game division.

    5. Moctod says:

      Larry Prall’s comments were spot on.

      Also. Isn’t it ironic that Apple was never considered by the IT people because of supposed hardware lock-in? Yet, nearly ever govt agency gladly choose no-bid software lock-in with MS Office?

    6. “In case you forgot, that (DoJ) decision recommended splitting up Microsoft.”

      Ironically, a split up would have been healthy for the Office division, and probably “neutral” for the OS divison. Shareholders would have benefited, because they may have chosen to shed their money-losing game division.

      You assume the people at Microsoft can see this, but of course they can’t. Otherwise, they’d have shed the game division long ago and ditched the Zune. They think they own the world.

      Peace,
      Gene

    7. Tom B says:

      “Also. Isn’t it ironic that Apple was never considered by the IT people because of supposed hardware lock-in? Yet, nearly ever govt agency gladly choose no-bid software lock-in with MS Office?”

      They say whatever they want to get THEIR desired result.

      Also ironic: PDF IS an open standard (or a MORE open standard than any “.doc”). OS X support for PDF is FAR superior to what you get in WinXP (I can’t speak to Vista).

    8. Andrew says:

      Microsoft has only two viable products. Windows and Office. Try as they might, they just can’t develop new products that capture the public’s imagination. That’s because they’re not really a software design company. They are a monopoly acquisition, expansion and extension company.

      The Microsoft Prime Directive is “Protect the Windows and Office Monopoly”. Everything they do is driven by this. From a Vista that is old-tech, bloated, and resource-hogging to their efforts to have ISO standardize OOXML. That the Microsoft Prime Directive kills innovation and creativity is something they are perfectly willing to live with or are totally unaware of. They certainly didn’t try to do anything (other than file lawsuits) when their best software engineers left for companies like Google to work on cutting edge stuff.

      If they had just gone along with Penfield Jackson’s remedy of splitting up Microsoft into the OS and apps divisions they probably would be in much much better shape today.

      Actually Microsoft has a very strong business in keyboards and mice, and occasionally releases a blockbuster game (love the Age of Empires franchise).

    9. Andrew says:

      “Also. Isn’t it ironic that Apple was never considered by the IT people because of supposed hardware lock-in? Yet, nearly ever govt agency gladly choose no-bid software lock-in with MS Office?”

      They say whatever they want to get THEIR desired result.

      Also ironic: PDF IS an open standard (or a MORE open standard than any “.doc”). OS X support for PDF is FAR superior to what you get in WinXP (I can’t speak to Vista).

      OS X PDF support is still limited to read-only on existing documents and the ability to create, which is easy to add for free to Windows.

      Where PDF excels is in the Acrobat Pro version, which I use on both my PCs and Macs. With that (expensive) solution in place, true interoperability is a reality, but then, we have to pay Adobe for the privilege of their proprietary format.

      XML or even the old-standbye RTF are fine for many uses, but sometimes the proprietary option, be it .doc, pdf or whatever is the only reasonable choice.

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