Unexpected Pleasures in Gates/Ballmer interview at D Conference
In the joint interview with Bill Gates and Steve Ballmer at D last week, I loved some of the stories about the early Microsoft, especially Ballmer talking about how Gates wouldn't let him hire anyone unless he could prove that they would pay for themselves. Gates was incredibly conservative, and always wanted to have enough cash on hand to keep people employed for a year even if sales fell off a cliff. Everyone thinks about Microsoft as the gorilla of the industry, but it was great to see that view of them as an early, scrappy startup. And that kind of financial conservatism is great advice for startups.
I also liked the description of how they worked together. It's great to have a partner in running a business, and they did a great job of complementing each other's strengths. A CEO/COO partnership can be really great. (We have that now at O'Reilly, and it's been fabulous.)
It was also great to see how relaxed Gates was. He was happy to let Steve take point, had a slightly bemused smile on his face a lot of the time. It was definitely the face and body language of a man who had let go and was ready to move on. It's nice to see, in an era of aging, driven corporate titans, someone who can step aside. As Lao Tzu said, "To retire when the task is accomplished is the way of heaven." Microsoft may still need to reinvent itself, but Bill is done.
I wanted to add a comment by Linda Stone that I overheard in the hallways, namely, that it seemed like a real missed opportunity on the part of Walt and Kara that there wasn't some kind of effort to honor Bill Gates for his enormous contributions to the industry. They acted like this was just a panel like any other. Despite my many criticisms of Microsoft, I truly respect the company and what they have achieved. They played a huge role in the commodification of computing, and made so much possible (even the rise of open source and the internet), and a huge part of that was the vision and talent of Bill Gates. I'm glad he's now focused on a new "big hairy audacious goal" beyond Microsoft (eliminating diseases like Malaria.) Even if I think that Microsoft has had trouble finding a new BHAG, it's clear that Bill himself still thinks big.
P.S. Despite what I said about "aging, driven corporate titans" above, I have to admit to being very impressed with both Rupert Murdoch and Barry Diller. Both are brilliant, forceful, and surprisingly candid. You could have knocked me over with a feather when Murdoch came out and all-but endorsed Barack Obama. I love it when people don't fit your preconceptions. (I was twittering this live, but twitter managed to have an outage so all my notes were lost. Glad there's video -- even better, though you don't get to see my amazement and delight.)
It was also fabulous to hear Barry Diller talk about Carl Icahn and Yahoo! and the responsibility of management to maximize shareholder value. I loved the way Barry said that he feels a deep responsibility to do well for his long-term shareholders, but that he feels absolutely no obligation to make money for short-term speculators (and presumably that Jerry shouldn't feel any responsibility to folks like Carl Icahn either.) All shareholders are not created equal.
These guys are blunt and insightful, afraid of no one, and still having fun. Great role models for any entrepreneur.
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I wonder how their long relationship will hold up when Bill finally realizes he has to fire Ballmer for failing to show any strategic skills whatsoever. Failed OS, losing market share, crappy search, no decent web apps, even Office is losing market share, Yahoo fiasco.
Yeah, he's a genius. Look at the shareholder return the last few years...
Martin --
There may yet be blood on the tracks because of some of Ballmer's failings, but it sounds like they got past that long ago. See this Wall Street Journal article, just out today: Gates-Ballmer Clash Shaped Coming Handover.
I've always thought that Microsoft's demise was inevitable (see The Open Source Paradigm Shift and What is Web 2.0? (plus anything by Clayton Christensen) for the reasons. I don't think Bill had the energy to completely rethink the company, and suspect that at least unconsciously he was happy to see the decline on someone else's watch. But I think it won't be Ballmer who fixes the company. It will need to be someone who really understands that the world is different, as Lou Gerstner did for IBM.
But that doesn't take away from anything I've said here. In fact, it adds, perhaps to the story. And it is impressive that Gates does still have big hairy audacious goals. They just don't coincide with Microsoft's business. And that's fortunate, because the problems he's biting off now are both more pressing and more interesting.
Improbus --
As you know, I'm well aware of the difficulties that Microsoft is having in adapting to the new world, and have written about it and talked about it a lot for years. And I've criticized a lot of their past monopolistic behavior. But that doesn't take away from Microsoft's past achievement. Microsoft really did help computing become mainstream, and a lot of the things we all enjoy have been built on top of that, even if we're using alternate OSes.
Changing your stripes in response to a new paradigm is hard.
They dont seem to do anything right recently, in my opinion they do nothing right.
There's a great book written by a man here in Austin, Bijoy Goswami, which among other things discusses the absolute necessity of power-of-two relationships in business. It's called "The Human Fabric," and despite the Zen-ish title, it discusses how the Gates/Ballmers or Jobs/Wozniaks of the world feed off of each other to exponentially increase the amount of "energy" (e.g., brainpower) they would otherwise have alone. Also: good discussion on knowing yourself and mapping the entrepreneurial journey to Joseph Campbell's seminal "The Hero With a Thousand Faces." Self-published.
Tim: "Microsoft really did help computing become mainstream, and a lot of the things we all enjoy have been built on top of that, even if we're using alternate OSes."
Isn't that because Microsoft Windows became the defacto standard OS? And in turn, wasn't that due to their business practices to try to create a monopoly? If so, are you suggesting that their monopolistic behavior was a good thing?
Don't get me wrong, standards can be a very good thing. Witness the mess with nob-standard cellphones. But community standards willingly entered into are a very different thing from imposed ones. One might well muse what might have happened had Microsoft not been a player, or remained a minor one.
Alex -
Yes, that's what I'm saying. FWIW, the rules against the kind of business practices Microsoft employed are illegal only once you have a monopoly. Microsoft achieved that monopoly partly by some very tough business deals, but they also achieved it by having a bigger vision than anyone else had, and driving relentlessly for a big goal.
It seems to me that a nuanced understanding of the world allows for the fact that someone can be great in one dimension, while seriously flawed in another.
@Tim,
>> But I think it won't be Ballmer who fixes the company. It will need to be someone who really understands that the world is different, as Lou Gerstner did for IBM.
Isn't that person Ray Ozzie? Or better said, isn't Ray Ozzie the one officially dubbed as Bill Gates successor?
Ballmer has never been seen as any type of visionary for Microsoft. That was always Bill. You could argue that Ballmer taking over as CEO marked the downfall of Microsoft. But I would argue that Bill taking on the role of Chief Architect is what changed MSFT from the pioneering "Ship It!"-driven company it was in the 80's and 90's, to the Architectural Astronaut-driven company of the first half of the 00's.
That's not to suggest BillG didn't/doesn't know how to architect great software, just that running the day-to-day operations of the company for as long as he did caused him to lose site of what it was that made MSFT so successful in the first place: Shipping new and (at the time) innovative software on a regular and consistent basis.
Many are laughing at Ray Ozzie's "slap a 'Live' label on it and push it out the Window(s)" rapid-fire approach to releasing new products, passing it off as Yet Another Reason Microsoft Is Dead/Dieing. But from my own perspective, the best way to get MSFT back on track is to follow the same formula of success that brought them to the top of the stack in the first place: Ship It!
Like you said, Ballmer isn't going to fix the company. But his job isn't to fix the company. As CEO, his job is to get the right people in place who can in turn fix the company for him, and then get out of their way and let them do their thing. Which, if not mistaken, is exactly what he's done.
Of course, turning around a company as large as MSFT is no easy task, no matter who you are, or how much vision and leadership you have. But my guess is that few will argue that if anyone is capable of doing it, Ray Ozzie is that guy.
What do you think?
@Tim,
One additional thought: How much of an impact do you believe the loss of Nathan Myhrvold in '99 had on MSFT as a whole? I do sometimes wonder if his leave of absence in July of that year had more to do with Microsoft's loss of focus for the first five years of the '00s than anyone has really given credit. In this regard, in addition to replacing Bill with Ray, maybe what Microsoft really needs is a replacement for Nathan? Or does Ray's proven ability to get his hands dirty with production quality, battle tested code offset things more than it would otherwise?
Tim,
Thanks for pointing out that Gates has had a huge impact on the industry. Totally agree, more attention shoould have been paid to this. If Jobs were leaving under similar circumstances, there would have been no end of retrospectives.
I appreciate you providing a balanced view.
Jay --
I agree. Of course, Gates hasn't left yet (another couple of weeks, I think) so all those retrospectives might yet appear.
This guy is the titan of the personal computer age. For all that people have complained about Microsoft's business practices (myself among them), it's important to remember the incredible achievements of the company as well.
@David Peterson -
Gates played two roles -- technical visionary, and CEO. Ozzie is replacing Gates as chief software architect, but not as CEO. So you're comparing apples and oranges. I was referring to a new CEO who gets the cloud rather than the PC. Ray gets it, but he doesn't run the business. He's got Ballmer and a whole set of business unit heads to persuade.
Regarding Ray and Nathan - also comparing apples and oranges. Nathan is a guy who fires off a new idea every minute. Ray is profoundly thoughtful, following deep ideas for a long time. Both are brilliant, but very different. I didn't know Nathan in his Microsoft years, though, so I'm not really qualified to opine about his influence on the company.
Alex Tolley said...
If so, are you suggesting that their monopolistic behavior was a good thing?
Here is my answer Alex. If they got there by physical force, then that vendor, be it Microsoft, Google or someone else fully deserve to be a monopoly.
You seem to equate being a monopoly to what the mobs do in the underground world of business. Microsoft and other monopolies are not like the mobs are doing. Mobs use threat of force to get what they want. On the other hand, Microsoft and the likes got there by peaceful purposes (not threat of using force).
Now, can you see the difference? Microsoft's properties (software applications) belong solely to Microsoft and not the consumers nor the state legislators. This means if the consumer don't like Microsoft's products, they're free not to buy them, since Microsoft doesn't put a gun to the heads of consumers. This is what I call property rights.
Ok, here is an article for you to read and I hope that commonsense & reason will enlighten you after reading the article:
Typo...
If they got there by physical force, then that vendor, be it Microsoft, Google or someone else fully deserve to be a monopoly.
should read...
If they got there by use of physical force, then that vendor, be it Microsoft, Google or someone else, doesn't fully deserve to be a monopoly.
@Tim,
>> Ray gets it, but he doesn't run the business. He's got Ballmer and a whole set of business unit heads to persuade.
But do you really think he's going to get in Ray's way. It seems to me that Ray's got a fairly wide open path to go down. Then again, you're obviously in a much better position to see things with greater perspective. Will be interesting to see how this all plays out.
@ M David Peterson --
Influence is always harder to wield than authority. Bill Gates had both influence and authority (more in his CEO years, but even just as chief software architect, because of his status as founder and largest shareholder.) Ray has influence.
I'll bet even Ballmer, the CEO, has trouble always getting the business unit heads to do his bidding. Remember that these are guys each running businesses that are larger than 99.99% of all other software businesses out there. They have their own team, their own vision, their own goals.
I know how hard it is to get a company the size of O'Reilly to do what I want sometimes (and often that's a good thing, when people do things better than I want :-), and I can only imagine what it's like at a really big company.
@Tim,
>> Influence is always harder to wield than authority. Bill Gates had both influence and authority (more in his CEO years, but even just as chief software architect, because of his status as founder and largest shareholder.) Ray has influence.
Ahhh... I definitely see your point. Of course Ray also has what I assume is a disadvantage in the fact that he's still somewhat of an outsider as far as tenure is concerned. Of course, in some ways this could be to his advantage, as he can look at things from the standpoint of how he feels they should be, not how they have always been.
>> I'll bet even Ballmer, the CEO, has trouble always getting the business unit heads to do his bidding. Remember that these are guys each running businesses that are larger than 99.99% of all other software businesses out there. They have their own team, their own vision, their own goals.
Oh, that's without a doubt! Having worked at MSFT from '96 to 2000 I can certainly attest to the fact that MSFT isn't the single behemoth of monster most people assume it to be. It's lots and lots of little companies that just so happen to share a common parent.
>> I know how hard it is to get a company the size of O'Reilly to do what I want sometimes (and often that's a good thing, when people do things better than I want :-), and I can only imagine what it's like at a really big company.
It's funny: The upside to the MSFT culture is you get a lot of creative people independently doing a lot of creative things, the end result being a lot of innovation from all over the map. The downside, as MSFT has so painfully proven, is that building something as massive as what Vista strived to become proves impossible: Coordinating that many groups across that many divisions is chaos beyond that which can be effectively organized into a single cohesive product.
I think they've learned their lesson, but I now recognize your point regarding the cloud: When I first started at MSFT it was quite common to have conversations with long time engineers who were adamant in their belief that the Internet was nothing more than a passing fad. In fact, now that I think about it, that's got to be one of the primary reasons CDF failed. MSFT never saw CDF in terms of the open Internet: They saw it in terms of proprietary content partners (visions of the Win95/IE4 Channel Bar still gives me nightmares to this day! ;-)) pushing content to MSFT powered PC's and handhelds. As per one of your recent posts, the cloud isn't a single proprietary entity like Windows, and instead a collective group of interoperable applications like BSD|GNU/Linux.
Again, as you point out, Ray obviously understands this. But having experienced that single (closed) minded mentality first hand -- and having heard some of the "What's he talking about?" follow-up comments from MSFT employees to Ray's original "What is Windows Live" speech at the 2006 FAM -- its obvious that this isn't something that many at MSFT even understand, much less stand behind.
Interesting times ahead!
Tim, That's an excellent point about honoring Gates and what he built at Microsoft. They're an easy target now and I as much as anyone have spewed venom at their approach in recent years...but I remember way back (yes, I'm that old) when Microsoft WAS the vision of a startup and Gates the visionary leader that all aspired to be. I attended conferences where he was the 'rock star' kick off speaker and crowds filled the auditoriums and listened intently to every word he spoke.
Interesting that Steve Jobs had fallen out of favor at the time....and here we are eagerly awaiting his keynote presentation tomorrow. How times change.
"Both are brilliant, forceful, and surprisingly candid. You could have knocked me over with a feather when Murdoch came out and all-but endorsed Barack Obama. I love it when people don't fit your preconceptions."
I am not sure why you expected anything more from him. Murdoch all-but endorsed Hillary Clinton in 2006 when the smart money had her pegged as the favorite:
http://www.nytimes.com/2006/05/10/nyregion/10hillary.html
In the 90's he famously started two partisan media outlets, the Weekly Standard and Fox News, outlets run by Republican operatives which anticipated (and worked to create) Republican electoral success. He rides the waves we all see coming.
"Both are brilliant, forceful, and surprisingly candid."
A couple years ago you were gracious enough to publically engage me on the relationship between marketing and truth:
http://radar.oreilly.com/archives/2006/05/how-to-tell-a-great-story.html
I'm here to resume the conversation. Is "candid" really the word that came to your mind when Mossberg said "fair and balanced?" and Murdoch replied "Absolutely!"? Then try these on for size:
- Saddam Hussein was behind the 9-11 attacks
- Global warming is a hoax
- Cutting tax rates on the rich raises revenue
- No specific figure can be attached to the Iraq War in the federal budget
These falsehoods have been pushed for years by Murdoch's outlets. They are not random falsehoods; they are linchpins in the marketing of a particular political platform. Without them in 2004, Murdoch would now be weighing whether to support President Kerry's reelection. Murdoch's lies have done great harm; the lie about global warming may well help ruin us all.
Listen to him if you must, but please don't call him "candid" because you like his replies to his employees' questions on the stage he owns. The exchange with Mossberg about "fair and balanced" was his way of setting the rules: he was forcing Mossberg to choose between decorum and truth. His dominance established, he was happy to flatter the audience's collective sense of themselves as people who respect acumen wherever they find it. To admire a particular performance of his, to accept some of his stories on his terms, is to loan him just a little bit of your good name. He doesn't deserve it, and he will use it for ill.
"I was referring to a new CEO who gets the cloud rather than the PC."
Tim, I have an vague feeling that in under a decade we'll be talking about Amazon's hostile takeover bid for Microsoft.
Sam Penrose --
I didn't say that Murdoch's outlets were candid, just that he himself is. Like you, I find much of what some of his businesses do quite reprehensible. But I find him surprisingly thoughtful -- and yes, candid -- in person. And I don't buy the idea that by admitting that, we give him power. The fact is, what gives him power is black and white thinking. That's playing the game on his terms.
Lao Tzu says:
I find good people good,
And I find bad people good
If I am good enough,
Enough of a father, enough of a son.
I doubt Sam and I share many foreign policy views but he's right about Murdoch's essential opportunism when it comes to embracing political candidates. You forget that Fox like the NY Post is first and foremost a mass-market franchise devoted to entertainment for downmarket adults and teeniboppers. As Alfred Bloomingdale reportedly said to Rupert, "Your readers are our shoplifters." Weekly Standard and Fox News are just for kicks-- "epater le [east coast media] bourgeois', Rupert-style.
Also, Rupert's affectations in the political realm are a lagging indicator of east coast media infatuations. He cozied up to Hillary when the esat coast media believed she had the Democratic nomination locked down, and he's cozying up to Obama now that it's clear that he represents everything young, hip, knowing, cool in media eyes. If McCain were hip, Murdoch would embrace McCain.
Thanks for the reply. I think I understand what you're getting at regarding power and the Lao Tzu epigram. Where we differ is I suspect our priorities. Murdoch's power seems to me largely of his own making, and my problem with it is not that he is "reprehensible" or "bad", but that he is *harmful* on a global scale. My concern about your public reaction to him is that as best I can tell you are giving him what he wanted, just a smidgen more credibility.
In other words, I worry that you are playing the game on his terms -- though perhaps simultaneously on your own very different terms -- and I believe his terms matter a lot more. This is a live fight, and I see no evidence that loving my enemy will change him, nor that he is fighting for his own vision of a better world which might be reconciled with mine or yours. He deserves our scrutiny and our opposition.
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Improbus [06.06.08 09:02 AM]
You may respect the company and what they have "achieved" but I am rejoicing that the sun finally seems to be setting on Microsoft. Have you noticed that they can seem to do anything right recently? They seem to be standing still while Apple, Google and Open Source go whizzing by.