Coppertop, Green Lane, Lasswade, EH18 1HE    07973 214024   www.coppertop.co.uk

  • Facebook - Grey Circle
  • LinkedIn - Grey Circle
  • Google+ - Grey Circle
Please reload

Recent Posts

Learning from the champion of the World

November 16, 2000

Microsoft's strength comes not from being first to market but through aggressive competition

 

TWELVE THOUSAND PEOPLE gathered at the MGM Grand Hotel in Las Vegas on Sunday night to see the performance of the year. No, it wasn’t a heavyweight boxing match, or a rock concert; it was the annual kick-off to the COMDEX computer trade show.

 

The featured artist was Bill Gates, the richest man in the world and the undisputed heavyweight champion of the world’s computer industry.

 

Mr Gates has done this opening keynote for as long as anyone can remember – he uses it as a kind of ‘State of the Nation’ address to brief us all on his views on the position of the information industries.

 

Mr Gates is not a natural entertainer, so his annual presentation is lifted by the inclusion of several video sequences with high production values showing magic new technologies and a few joke sequences.

 

This year Mr Gates, who has handed over the position of CEO of Microsoft to Steve Balmer during the last year, was seen ‘goofing off’ in a park. The pair are shown on a motorcycle, with Mr Gates in the sidecar, just like the two fat ladies, and then Mr Balmer pushes Mr Gates on a swing in the park. All this is designed to indicate that Mr Gates has a sense of humour, despite all other indications to the contrary.

 

A long time ago, when the PC world was young, I visited Mr Gates at his headquarters in Seattle. In those days, Microsoft operated from a modest three storey building on the east side of Lake Washington. I showed him my product, a spin-off of artificial intelligence research work from Professor Donald Michie’s laboratory at Edinburgh University. Mr Gates looked intently at my demonstration and asked incisive questions. He then rocked back and forward while he thought about the implications, and finally he gave his verdict: “Yep”, he said, “You could probably sell 1,500 of those”.

 

Looking back on this meeting a few years later I had to admit that Mr Gates had been proven right – the product had subsequently sold almost exactly 1,500 copies before disappearing into obscurity. It was a lesson in why I was the early adopter, and Mr Gates was the market leader.

 

He was, however, not always correct; during the eighties Mr Gates had given a similar message to Mitch Kapor about spreadsheets and Paul Brainard about desktop publishing and they went on to create Lotus 1-2-3 and PageMaker respectively. Microsoft had an uphill struggle to later regain control of these two markets, spreadsheets with Excel, and document layout, with Publisher and Word. The lesson was learned however and subsequently Microsoft was much more effective in tackling potential competition from innovative new companies.

 

In 1987 an entrepreneur named Jerry Kaplan started a company, called GO Corporation, which developed a new computer system, which didn’t require a keyboard. Their operating system, called PenPoint, allowed users to control the computer by the use of a stylus directly on the screen. They were funded by Kleiner Perkins Caufield & Byers, one of Silicon Valley’s top Venture Capital companies, and John Doerr, the doyen of venture capitalists, joined their board. This project was serious.

 

Mr Gates thought so too, but Microsoft wasn’t going to let anybody take the operating systems (OS) market away from them. Microsoft quickly rushed out a ‘spoiler’ – a prototype OS called ‘Pen Windows’ which was offered to manufacturers as a no-cost option to Windows. Under this competitive pressure, the GO Corporation failed, losing about $75 million of Venture Capital funding. After the disappearance of GO, Microsoft quietly dropped ‘Pen Windows’ and it was never seen again… until this week that is.

 

Last Sunday in Las Vegas, Mr Gates showed a prototype product called the ‘Tablet PC’ that looks like a bulky notepad and appears to be very similar to the GO machine. It has no keyboard – users write directly on the screen. Microsoft predicts that it will be available some time in 2002. It will be connected to the Internet via a wireless link and runs ‘Whistler’; the code name for the next version of Windows 2000.

 

The real message of Mr Gates’ performance this week is that Microsoft’s strength doesn’t come from being first to market, or by innovation, it comes from aggressively deploying its competitive strengths. In his speech, Mr Gates made no reference to the US Government investigation into his company this year which concluded that Microsoft used its monopoly position to illegally manipulate markets and destroy competitors.

 

However, by showing the ‘Tablet PC’ in Las Vegas on Sunday, he demonstrated that they had come to the right conclusions.

 

Share on Facebook
Share on Twitter
Please reload