Microsoft's Rise to PowerMicrosoft's Rise to Power
Take, for example, MS-DOS, Microsoft's first big success. In 1980, IBM was preparing to release its much-hyped personal computer as an attempt to catch up with Apple, the pioneer of the personal computer market. They lacked an operating system, however, and knew that they could not release one in time for their computer's debut, so they sought to find one from another firm. Although several companies were developing one, the only company which possessed an operating system that would run on IBM's new 16-bit computer was the Seattle Computer Company. Its operating system was basically a 16-bit copy of Digital Research's 8-bit CP/M operating system, which was written in 1975 for computer hobbyists. Seattle Computer's CP/M take-off was named QDOS (for Quick and Dirty Operating System, which sums it up just right). Microsoft, having chanced upon QDOS, bought it for $50,000, renamed it MS-DOS, and immediately licensed it to IBM for use in its computers. When IBM's computer made its entrance into the market, everyone was so anxious to fall in line behind IBM, that very few people actually considered purchasing another kind of computer -- until the clones, that is.
And so you'll hear that Microsoft outsmarted IBM by predicting the personal computer revolution. In actuality, neither IBM or Microsoft predicted the emergence of the IBM clones, Microsoft's real money maker. It was a short while later when Compaq Computer Corporation discovered that the IBM PC could be reverse-engineered. This led to an entire IBM clone industry, and since most of the IBM clones shipped with MS-DOS to be compatible, transformed Microsoft into a multi-billion dollar company virtually overnight.
Although MS-DOS was the dominant operating system being used in the clones, it was not the only one, and certainly never the best (remember, it was a copy of a command-line operating system designed in 1975 for computer hobbyists using 8-bit computers, and it was now the mid-80's with its 16-bit computers). But Microsoft made sure that their dominance in the OS market for IBM PCs quickly turned into a near-monopoly. They devised a licensing agreement that required any company which desired to use MS-DOS on some of their computers pay Microsoft for each computer they sold, regardless of whether MS-DOS was on that specific computer. Since MS-DOS was already the dominant operating system, the business model of the majority of the IBM clone manufacturers depended on selling it with some of their computers. They were therefore left with no choice but to agree to Microsoft's licensing plan. But now that they had agreed to it, they were required to pay for two operating systems when they wanted only to put a non-Microsoft operating system on their computer. This, of course, made it rare to find a computer which did not come with MS-DOS, establishing Microsoft's monopoly in the IBM PC operating system market. It wasn't until 1994 when the US Justice Department ordered Microsoft to stop this anti-competitive behavior, but the damage was done.
Then, in 1984, Apple Computer released the Macintosh computer, which used a graphical user interface to represent a desktop metaphor, with folders, files, and a trash can, among other things. It is common belief that Apple stole the idea from Xerox. This is not true. Apple bought the interface from Xerox for a rather hefty amount of Apple stock, and the final result was very different from the one that Xerox invented.
By 1985, Microsoft had become quite a large company. They were the dominant software provider for IBM clones as well as for the Macintosh. Although Microsoft was putting down the Macintosh by claiming that it was for lazy people and that it was less powerful than MS-DOS, they were at the same time well aware of its superiority in both ease of use and functionality, and seeking to mimic it in their own operating system. Microsoft approached Apple, requesting to license some of the key interface elements from the Macintosh for use in what was to be called Windows. Apple, of course, declined. Microsoft again used its dominance in one market -- this time Macintosh software -- to force the industry to bend to its wishes. It threatened to discontinue development of Macintosh applications unless Apple licensed portions of the Mac OS. This would have been a major blow to Apple, since Microsoft was the dominant software provider for the Mac. So Apple was strong-armed into licensing parts of their OS to Microsoft. Windows 1.0 was introduced later that year.
In 1990, Microsoft released Windows 3.0. By then, Microsoft had clearly gone far beyond its licensing agreement with Apple, and had stolen patented intellectual property. Apple took Microsoft to court, and many industry experts thought Apple had a very strong argument and was going to nail Microsoft. Apple lost the case.
Microsoft released Windows 95 on August 24, 1995, supposedly completing their theft of the Macintosh look and feel, but the change was only one of appearance. Deep down, Windows 95 is still QDOS. Despite this fact, Windows 95 was a wild success, and is used today by 85% of all computer users, with another 5% of consumers using its expensive cousin, Windows NT. A few months later, Bill Gates finished writing his "visionary" (book), The Road Ahead.
It wasn't until the latter half of 1995 that Microsoft noticed the Internet, and Bill Gates ordered a complete corporate turnaround -- as well as rewriting The Road Ahead -- to address it. Lots of people will claim that this turnaround is proof of Bill Gates's visionary characteristic, but I see it another way. The fact that it took Bill Gates that long to notice the Internet and that his "visionary" (book) required a complete rewrite one year after its release shows us just how little of a visionary Bill Gates really is. Is this the kind of company we want leading our industry and providing all of our "innovation" (a term that Microsoft uses so casually)?
So, as we've seen, Microsoft's dominant market position was not earned by innovative products and a vision, but was acquired through luck and deception.
Next: Theft of Intellectual Property
Not convinced? - If you're not convinced after reading this, then I invite you to read the comments I've already received and view my responses to them. If you still don't agree, let's talk. And if after talking with me, your opinion hasn't changed, then why not tell the world?
visits since February 6, 1998.