Bill Gates on Technology and Strategy

Over the past few days, I had the great pleasure to savor a 1989 speech by Bill Gates to the Computer Science Club of the University of Waterloo. My previous exposure to Bill Gates’ thought had been rather disappointing — Business @ The Speed of Thought has to be one of the emptiest collections of cliches ever written — so I tuned in mainly for the nostalgia.

Little did I know that I was in for 93 minutes of brilliance.

Bill Gates speech in 1989 reveals two things: he is an expert at technology and an expert at strategy, both theoretical and applied. Except for the parts of his speech which deals with the specific environment of the late 1980s, most of Gates’ technological statements are timeless. Listening him to talk about his vision for programming I kept having to tell myself that .Net wouldn’t be released for another 14 years. Likewise, listening him to how he structures teams at Microsoft, and how he forms goals and sets release schedules, I kept being reminded of Chet Richards’ Certain to Win: The Strategy of John Boyd, Applied to Business.

The grand view of Gates’ ability is emphasized through his repitition of a near-disasterous decision. At the time, Microsoft and IBM were collaborating on a new operating system called (with typical IBM finesse) OS/2 (short of Operating System / 2). The relationship would collapse the very next year. IBM and Microsoft have very different operating philosophies, and Microsoft assisting in building and promoting IBM’s “successor” to Windows was in retrospect unimaginably dangerous. It was as if Queen Elizabeth I had supplied timber and workers to build the Spanish Armada.

Of course, like in that war, it didn’t matter.

IBM’s islamic, top-down, one-true-way philosophy was outclassed by Microsoft’s theory of embrace and extend. Just as the British defeated the Armada, not because of luck but because of the Spanish inability to change in respond to changing events, Microsoft defeated IBM because of International Business Machine’s inability to change in respond to changing event. On paper IBM had the advantages

  • Man power
  • Hordes of cash
  • Business Contacts
  • Experience (IBM had previously been outmaneuvred by Microsoft in the release of DOS)

But Microsoft had a unity of purpose, iterative design, and flexibility. IBM had none of these.

Within half a decade, the war was essentially over. IBM released the last commercial version of OS/2 in 1996. The overwhelming power & success of Microsoft Windows, by contrast, needs no elaboration.