Fiona Bruce (commentary)

Gates prides himself on being brainy and by all accounts he’s extremely well read.

Fiona

Because I was reading in one of your volumes about how you would take books on holiday, on a particular subject to just learn about that particular subject while you were away. Is that right?

Bill Gates

Yeah I, you know, I love to read, it’s the most relaxing thing for me and so I take a pile of books and read, you know, hopefully a couple of books a day if I’m just on vacation.

Fiona

A couple of books a day!

Fiona

His image, if you don’t mind me saying, is a bit of a kind of super nerd, in some ways. Is that what he’s like?

Chris Capossela

Well, he’s certainly super smart.

Bill

When an Aries nebular, there were many supernovas in that area or one?

Microsoft worker 1

Well this is just a really, really large cloud, an uber cloud of gas and dust.

Fiona (commentary)

Gates’s braininess is seen as a key asset at Microsoft.

Bill

No, I mean, can I define exactly that to be the syntax that my macroling, which processes, I don’t understand, I mean, it’s a turning machine that, this is the syntax right?

Microsoft worker 2

That’s right.

Bill

Ok, well that was a great update. Thank you.

Fiona (commentary)

For all Gates’s nerdiness it was the shrewdness of his business strategy that really paid dividends, putting Microsoft at the heart of the industry.

Heidi Roizen

Because they were the operating system everyone else in the industry had to deal with them. They were the conduit that connected the applications developers with the hardware manufacturers. So, the position was probably more important even than the actual revenues of the company.

Fiona (commentary)

Microsoft’s pivotal role soon had software rivals crying foul. Mitch Kapor’s Lotus company was once bigger than Microsoft thanks to the success of its spreadsheet 1-2-3.

Mitch Kapor

If the operating system changed we would have to change in response to it. And they never changed the operating system in ways that intentionally made it easier just for us but I have no doubt that they wound up making decisions which they understood, even if it weren’t their primary purpose, would make things more difficult for us. They took advantage of, of their position.

Fiona

Some of your critics have said that you’ve taken advantage in controlling the operating system.

Bill

Well, the irony there is that the reason that our operating system is so successful is that we invented this idea of evangelisation, of going out telling people about it and so the very model we brought of reaching out and saying to people, please write software for our platform, that’s been key to its success. You don’t need any permission to write software, you didn’t for MS DOS, you didn’t for Windows and that was very new.

Fiona (commentary)

We all know Windows. Microsoft’s operating system is now all conquering. But it wasn’t always like that. By the early 1980s the success of the earlier DOS system had boosted company sales to $50 million a year. Now Gates wanted a more advanced graphical system. But developing Windows was a struggle.

James Wallace

It became something like a death march, I mean it consumed the company, there were delays, after delays, after delays and Gates would come into meetings and something would be wrong and he’d scream at the top of his voice. It really was an ordeal.

Bill

We totally bet the company on this being popular and at first it did not catch on. Windows did not sell very well but we knew it was right, we needed the chips to get better, we needed the software companies to figure out how to write this software.

Fiona

But it must have been dispiriting given this was such a big idea. That, that, that...

Bill

I wouldn’t say it was dispiriting.

Fiona

...it took a while to take off.

Bill

It was another one of those things where we said; we know this is going to be popular and we just need to get the word out.

Fiona (commentary)

Gates had hired someone who was good at getting the word out; an old Harvard buddy, Steve Ballmer, whom he lured away from a more conventional business career with a big promise.

Steve Ballmer

Bill said; Steve, you don’t get it, we’re going to put a computer on every desk and in every home. Come on; you got to stick with me! And, it worked.

Robert Cringely

He completed Bill in a sense. Bill wouldn’t have known good marketing if he’d seen it and, and Steve had worked at Proctor and Gamble and he knew how to sell soap.

Fiona (commentary)

With Ballmer on sales and with Windows on its third version it finally took off. By 1990, Microsoft’s income topped a billion dollars. Bill Gates found himself an unlikely celebrity.

Bill

I’m, I’m Bill Gates, the...Bill Gates.

Man in hat

Oh Bill, ok, I’ve heard of Bill Gates, the great Bill Gates.

Bill

I don’t know.

Man in hat

Pleased to meet you Bill.

Fiona (commentary)

His image as a businessman was far from conventional. How many other chief executives are prepared to show off their party tricks on television?

CBS interviewer

Is it true that you can leap over a chair from a standing position?

Bill Gates

It depends on the size of the chair. I’ll cheat a little bit.

CBS interviewer

Yes!

Fiona (commentary)

But media coverage wasn’t all as jolly.

James Wallace

Microsoft became so powerful that Gates was landing on the cover of all the magazines and all those stories began to paint him as a bully.

A myth developed around Gates that it wasn’t Conan the Barbarian with all the muscles but this little computer nerd who exerted tremendous influence on the industry and a lot of people thought it was bad.

Fiona (commentary)

Rivals had a more personal grievance too as Microsoft shares kept rising Gates’s wealth was going off the scale. In 1995, he was named the richest man in the world, a title he kept for thirteen years. But apparently he doesn’t really care.

Heidi Roizen

I can’t remember him ever saying; well, I’m worth more than so-and-so. I mean it didn’t matter, that wasn’t the goal and if anything I would say the only time I remember him ever saying something was he made a comment to me once about being the ‘richest person in the world’ as a burden.

Fiona

Most people think, that must be great, must be great never to worry about money. Is that what it’s like or is that just too simplistic?

Bill

You know, I’m lucky that I never have to worry about money, you know, so my kids get a great education, whatever books they want to buy, things like that, it allows me to focus on the things I love doing and so, you know, it is, it’s a privilege and umm...

Fiona

Is it overwhelming, I mean the ball park puts you at $58 billion, is that about right?

Bill

Yeah, but that number, you know, doesn’t really matter. Having a job where you work as hard as I do, it’s fun, it’s hectic and I wouldn’t trade places with anyone so, umm, and it’s not because of the number it’s because of the day to day activity that I love.

Fiona (commentary)

The scale of Bill Gates’s wealth is almost unimaginable. But all that money hasn’t changed his eating habits.

Fiona

Mmm! Bill Gates likes his hamburgers. This cost me $7.49. Now if he was feeling really generous he could buy every single person in the world, that’s all 6.7 billion of us a cheeseburger combo and he’d still have $8 billion left. Which is not a bad tip.

Fiona (commentary)

The staff here have been serving cheeseburgers to Bill Gates for 26 years.

Stacie Mendoza

He comes in with his family, he comes in by himself. He’s come in in a cab before.

Fiona

Generous tipper?

Stacie Mendoza

Umm, yeah, above average, definitely. Yes.

Fiona

He’s not leaving you $100 bills or anything.

Stacie Mendoza

No. No, no.

Fiona (commentary)

Well, he could if he wanted. If he’s made $58 billion in his 33 years at Microsoft Burgermaster’s most famous customer has been earning $5 million a day since 1975.

Announcer

Ladies and gentlemen; welcome to the launch of Windows 95.

Fiona (commentary)

Windows 95 took Microsoft into the mainstream and it gave a massive boost to Microsoft applications like Excel and Word.

Robert Cringely

It was Microsoft generally entering the big time saying; Windows ninety-five and the associated Microsoft Office product, you know, these are the two profit centres, the one-two punch that we’re going to use to dominate computing for many years to come. And they did.

Fiona (commentary)

It’s software, not hardware, that makes the big profits in computers today.

Sir Alan Sugar

He was right and I was wrong. If you go to a supermarket these days and you go and pick one up for a £150 and you would be amazed to know how that £150, how much of that is going to good old Bill. Quite a lot.

Fiona (commentary)

And Sugar admits he’s had to eat his words after thinking he didn’t have to pay Bill Gates for something as intangible as software.

Sir Alan Sugar

He has taken over the world. End of story. Live with it. You know, accept it. It’s done.

Fiona (commentary)

At Gates’s old school, and in much of the world, his audacious ambition – a computer on every desk and in every home – has been achieved.

Boy 1 at school

If I didn’t have my computer I’d probably lose most of my connections with my family because I have family in different parts of the world and it’s so easy to get in touch with them.

Boy 2 at school

Like communication with friends.

Girl at school

Or music.

Boy 2 at school

Or music.

Girl at school

I use it for music all the time.

Fiona (commentary)

Today Microsoft makes profits of almost a billion dollars a week and every kid is a computer expert.

Girl at school

Our teachers are usually blown away of how we know so much more about than they do because it’s our generation, we are the computer generation.

Fiona (commentary)

But Gates’s success has produced many disappointed rivals. Small software companies were afraid of attracting competition from Microsoft.

Robert Cringely

Bill Gates just didn’t understand what the problem was. Of course he was just competing and crushing and killing these companies. Seemed perfectly normal to him.

Doug Klunder

The rules are, after you win you have to play nicer. And I think Bill and Steve and really the whole company didn’t realise we had won.

Fiona

One of the things that critics say is that Microsoft is as aggressive about winning now as a tiny start-up that’s fighting for its life.

Bill

Well, that sounds like a compliment...

Fiona

Well, I suppose what they’re getting at...

Bill Gates

It’s a very competitive business and so, you know, we have, always have tons of competitors and that’s one of the things that’s fun about it, you know.

Fiona

But I suppose what they were getting at is here you are, you are this massive company, do you need, still need to be winning 10-nil.

Bill

This is not a game where we’re on a field, you know, tackling each other, this is a game where you write good software and you take it to a customer and they have a choice. They can go to any web site, they can buy software, there’s free software, there’s software from many, many other companies and so they choose.

Fiona (commentary)

By the mid-90s, Bill Gates had it all. He’d built Microsoft into one of America’s most successful businesses and in the process virtually invented an industry. The rewards were riches beyond imagination.

Fiona (commentary)

But storm clouds were gathering over Bill Gates’s empire. His claim to be the champion of consumer choice was soon to be challenged; not by his rivals but by his own government.

Janet Reno

Microsoft is unlawfully taking advantage of its Windows monopoly to protect and extend that monopoly and to undermine consumer choice.

Fiona (commentary)

At the same time, Microsoft would be threatened by a new technological phenomenon and a new generation of competitors.

John Battelle

Much as IBM was a defining company in the seventies and, you know, Microsoft in the nineties I think that this is Google’s decade.

Fiona (commentary)

To top it all the richest man in the world decided to take on his ultimate challenge on a global stage.

Robert Cringely

Bill needs a goal. Bill Gates’ goal is to win a Nobel Peace Prize.

Fiona (commentary)

By 1995, it looked as though things couldn’t get any better for Bill Gates. Microsoft shares were going through the roof with the launch of Windows 95 and he’d just been named the richest man in the world. But privately Bill was worried.

Fiona (commentary)

Microsoft’s position may have seemed impregnable but a new hi-tech force was emerging on campuses across America. They called it the world wide web.

Rosanne Siino

The college students definitely picked up on this notion of, there’s this thing called the web that Tim Burnsley had created. Students loved the idea that they could post information, right, so that you could create content and put it out on this web.

Fiona (commentary)

One of Bill Gates’s engineers spotted web fever on a visit to his old college.

Steven Sinofsky

.....What we saw was students using the Internet as a, as an integral part of their, their course work and their college experience, not just in the computer science classes like we did but in history or in English or in, in any liberal arts.

Fiona (commentary)

He was so impressed he sent his boss an e-mail.

Bill

So it was phenomenal to see that in this university environment they really had connected the machines up and that started to lead to new ways of using it. The class scheduling, ordering pizzas, using e-mail in a very mainstream way.

Fiona (commentary)

A small company called Netscape released a new piece of software called a browser making it easier to surf the web. Almost overnight the cult of the web turned into a mass movement.

John Battelle

There was so much excitement about the knowledge that this was going to happen, that there was going to be a vast network of computers serving information on demand to the world. It was like you were continually exploring a new frontier.

Fiona (commentary)

As Netscape’s web browser took off Bill Gates saw through the Internet hype but spotted the potential impact on Microsoft.

Bill

People were just getting so excited about it and many of the things were over the top, you know, that all the banks would be shut down and the stores would be shut down, I mean some wild predictions that were far too radical in terms of people’s behaviour but it was a very important thing and we needed to rethink our strategy.

Roseanne Siino

Every business magazine, every newspaper was talking about the phenomenon of the world wide web and all of the things that were happening because of it. So, of course Microsoft wanted a part of that business but it was pretty clear that they were late coming to the party, a little late and a little late in Internet time meant a lot late.

Fiona (commentary)

Microsoft staff were already working night and day on their booming operating system business. Now their boss wanted to prioritise the Internet. With engineer Steve Sinofsky by his side Bill Gates rallied the troops.

Bill

He helped me write a very key memo, which was called the Internet Tidal Wave memo that said to the whole company, this is as big, literally it’s as big as the original PC because so many new things will be enabled by it and we need to move quickly to be the leader in this.

Fiona (commentary)

Gates’s memo announced he was reinventing his company. He wrote;

"Now I assign the Internet the highest level of importance. In this memo I want to make clear that our focus on the Internet is critical to every part of our business."

Fiona (commentary)

The e-mail was a clarion call to Microsoft and a warning to the competition. The battle for the Internet had begun.

Later that year Microsoft released their own web browser, Internet Explorer. Instead of producing it as a separate product they included it free with their ubiquitous Windows software.

Nicholas Carr

What Microsoft did was to quickly cobble together its own browser, Internet Explorer, to fight off the threat it saw from Netscape and because it was able to bundle that, that, that browser in with its traditional Windows operating system it could essentially give it away for free and it undercut Netscape’s entire business model.

Fiona (commentary)

The two companies went to war with new improved versions of their browsers. But Microsoft had a tactical advantage when it came to the hardware boxes since it was already selling to the PC makers.

Robert Cringely

And so Microsoft wanted those boxes to have Windows and Internet Explorer in them and not Netscape. So they tried to cut deals where they pressured them to not put Netscape in.

Rosanne Siino

Sales people at Netscape were reporting back to us that these deals that Microsoft was cutting were saying, you know, you’re not going to be able to conclude Netscape on this piece of, piece of hardware because we’re not going to license the operating system to you if you do so.

Fiona (commentary)

Microsoft was gaining on their Internet rival, however many in the industry believed the race to win control of the on-line market brought out the company’s ruthless side. Not for the first time they claimed the Microsoft juggernaut was trying to crush the opposition.

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Content last updated: 26/06/2008

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