Bill Gates, Microsoft and Corporations
June 16, 2006 – 3:16 am by coachwei | Category Tips, software business model |Wah, Bill Gates is leaving Microsoft to focus on giving away his money…Though the transition will take two years to happen, this signals the ending of an era.
What would microsoft be without Gates? MSFT is officially becoming a different kind of company. Over the last 30 years, Microsoft's capability to turn the ship around has been absolutely amazing to me: from DOS to Windows, from Windows to Internet, then to .NET and web services. There has never been any other significant company in the history that can make this kind of switch at this kind of speed.
In general, corporations by the very nature of its structure prevent such kind of radical changes (which is probably why yesterday's big corporations would fail and die).
Corporations are set up to follow a certain course with a certain discipline. In early days of a company, it can be very entrepreneurial and react to market changes quickly. A “visionary” would set the course and others would follow. Once the company grows to a certain size, product management is added, marketing folks are added, data analysis and ROI justification are requirements….Such structure and processes are definitely necessary in the normal course of business, but also prevent corporations from reacting to rapid and significant market shifts.
visionaries can see upcoming market shifts. Unfortunately, such foresight is usually obtained through intuition and deep understanding of the market and industry, instead of data points that corporations rely on in order to make decisions. Such data points are things like market research, competitive info, sales/field info, analyst insight, customer study, etc. However, early market shifts do not produce such data points. When such data points can be collected, it is only too late. When faced with radical market shifts, following the usual way of thinking (such as listening to customers) probably lead to bad things. For example, the famous speech from Ken Olsen that nobody would want a PC is a perfect example: in the early days of PC, PCs at the time were toys in comparison with the mini-computers Ken Olsen's company was building and selling. “Computer” was a concept for sophisticated business operations that only corproations can afford. Very few consumers would even think of owning a computer. - if you listened to customers like DEC, you would come to the same conclusion as Ken Olsen.
As a result, yesterday's great companies like DEC and WANG failed. You don't see a lot of companies that can be on top of the industry cross different market shifts. IBM faced huge problems transitioning from mainframe to PC era. It took IBM 10 years to transition out of that problem.
The only exception has been Microsoft. The company that started out by helping establishing PC era and owned its operating system market. When the world moved from client/server to web, this same company went ahead and won the “web/browser” war. When the world moved into SOA and Java, this company rebuilt itself that became a key player in the web services area. I credit all thes to Gates. They got Gates - a visionary who knows techology and the market , and has the power to make changes happen. “Vision” and “power” typically don't go together. Gates is the exception. If you look at the way venture business operates today, the first thing you will hear from any investor is about “establishing an experienced management team”, which typically starts with engaging an executive search firm to hire a “grey hair” CEO. The way Microsoft was built and the way Bill Gates managed to maintain his position as CEO has been absolutely crucial to their success today.
Solute to Bill Gates! Microsoft without him and the industry without him are certainly going to be less interesting. Microsoft will probably change into a company like GE - if they can not do so, Microsoft will not be a significant player twenty years later. The industry will certainly miss all the fun and challenges associated with Gates over the last 30 years…
For those who are on their courses of building companies or starting companies, learn from Gates…The best way to start and build a sustainable company.
2 Responses to “Bill Gates, Microsoft and Corporations”
Excuse me, when you talk about Gates and his vision you miss that their software has been and still is sub-par with every other vendor, and I'm not talking about Open Source; I'm talking about the industry heavyweights that make reliable software: IBM, Sun, HP. You also forget their heavy-handed tactics of suing anyone who threatens them into oblivion just because they are incredibly rich. You also forget they have never played fair, like the good companies that will remain after MS is gone. They fight in court just as one more way to do business. And that is filthy and has not brought us any innovations worth mentioning one year from now. They have impact? Definitely; they have steered the market? Yes; But with dishonorable methods. MS is there because it appeals to millions of mediocre IT managers who know they are safe if they recommend Microsoft. Microsoft has catered to the many incompetent out there who cannot figure complicated things by themselves. And there are many many more mediocre people than brilliant ones.
By Anonymous on Oct 1, 2006
It also hurts to think about all the great web based applications we could have had out there, if it were not for the non standards compliant Internet Explorer.
If they had played ball, it is hard not to believe that Internet would probably have been a better and more exciting place.
By Anonymous on Oct 2, 2006