Resolve and Fortitude : Microsoft's ''SECRET POWER BROKER'' breaks his silence (51 page)

When Intel soon thereafter developed and released a Reduced Instruction
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et Computer (RISC) CPU, named i860, as a response to a similar Sun Microcomputer offering, the industry was immediately rife with rumors. How secure was the future of Intel’s current architecture built on Complex Instruction Set Computer (CISC) technology? Would RISC technology prove disruptive enough and hinder Intel to produce a successor to her flagship 80386 CPU? As a consequence, most software, and in particular OSs, would need rewriting from scratch. Fortunately the rumors were short-lived, and as insiders we quickly understood Intel had already started working on an upward compatible successor called the 80486 eventually to be released in ’89. Lucky us!

In 1986 we released version 3.2 of MS-DOS. Our intense sales and marketing efforts had by now restricted DRI, our main competitor for the IBM clone business, to primarily serve the low end of the PC market. Her prices were now half of ours and counting. Her management had learned from earlier mistakes. Like AMD with CPU sales, DRI had gained ground in developing countries and with a few larger European manufacturers. Most dominating brand name OEMs were for now firmly in our camp. An OEM buying primarily AMD’s CPUs was always a danger sign for me, as they were drawn to DRI like flies to the honey pot.

History had reversed itself—CP/M-86 was now considered an MS-DOS clone. It did sound strange knowing that MS-DOS had been derived from an early CP/M-86 clone. To DRI’s dismay, MS was for now unarguably in the lead. She found herself in the role of a scrambling and tenacious runner-up who never—in great competitive spirit—gave up correcting the imbalance. Her unrelenting attitude kept MS’s OS development on its toes and guaranteed product improvements from both companies.

In ’88 DRI changed the name of CP/M-86 to DR-DOS. Signaling compatibility, she continued to use MS-DOS identical version numbers. Not leaping ahead of us further fostered her clone image. With both OSs comparable in performance and features, DRI—for the world at large—appeared inept at charting her own destiny—the MS-DOS benchmark therefore remained the undeniably yard stick. A few journalists and advanced users disagreed with this entrenched perception, though imparting little effect on MS’s image as the standard bearer.

As a result, people wondered how compatible DR-DOS and MS-DOS truly were. Their code had never been identical. Users therefore experienced well documented and small functional differences despite DRI’s strident denials. MS’s support organization, which I managed for several years, diligently kept track of them. Any public mention of apparent incompatibilities made DRI management outright furious! Allegations were always instantly rebutted. OEM customers who were licensing from both companies concurred. Our answer to them: Switch to the “original” and your customers won’t suffer. DRI’s public relations teams tried hard but never mastered the daunting job of changing public misconceptions.

With the appearance of 80286/386 CPU-powered PCs, UNIX had become a viable OS alternative for PCs. It was derived from AT&T’s original code, developed in the 70s and written in a non-system specific programming language called C, developed between ’69 and ’73 by Dennis Ritchie at the then AT&T owned Bell Telephone Laboratories. A novelty at a time when OSs were normally written in assembler language uniquely tied to the computer systems they were designed for. The brilliance of writing UNIX in C eased its portability to other systems. As long as a C-compiler existed for the targeted computing platform, a port could be accomplished in a relatively short time frame. AT&T spread UNIX’s popularity further when licensing it with few restrictions to a variety of manufacturers. Porting it to several minicomputer systems was the first serious attack aimed at the proprietary OS empires the IT world was built upon long before Bill succeeded with the MS-DOS standard in PC land. UNIX running on minicomputers had the potential of bringing down switching cost for customers. Not wanting to believe in or promote that type of progress, Digital Equipment Corporation’s CEO Ken Olson called UNIX a form of “snake oil.” As such, UNIX was a disruptive technology and contributed heavily to the downfall of the leading minicomputer companies of that time before PC servers became feasible and finished that job. Why didn’t UNIX conquer the PC world as convincingly?

Simply put, all companies who developed UNIX for the IBM PC were thinking and planning within the cloistered, proprietary walls of sovereign systems unwilling to answer the call for unification. IBM called hers AIX, Sun distributed SOLARIS, Hewlett-Packard called her version HP-UX, and many others left the name UNIX unchanged. MS and SCO (Santa Cruz Operation) used the name Xenix. Introducing vendor specific incompatibilities robed UNIX of a golden all-encompassing standard setting opportunity. The other most important ingredient for a successful run truly existed. Available for nearly 20 years, the UNIX environment was rich in application programs. On the other hand, to port them to the variety of incompatible UNIX systems was costly and time-consuming. The larger memory footprint and the higher-end CPUs UNIX needed to function well added to its disadvantage. Last but not least and as important, UNIX was hard to operate by computer novices. Lacking their crucial acceptance, it nevertheless successfully veered off into the high-end PC workstation realm used by computer experts for graphical designs and engineering tasks. The availability of superior graphic libraries and design tools were the main reasons for its popularity in that user segment—again software availability drove hardware use. All in all, the fragmentation of the UNIX standard and its consumer unfriendly operating interface served to MS’s advantage and made—for now—for a less dangerous and only niche occupying competitor.

In the early ’80s, controlling OSs with command line user interfaces—like MS-DOS, DR-DOS and UNIX—finally came of age. The trend toward using a Graphical User Interface (GUI) instead can be traced as far back as 1945. Several experiments then and thereafter led to a handful of scientific papers substantiating the advantages of operating a computer with a mouse-driven cursor and graphical window technologies. The competition for developing modern GUI shells—as we use them today—eventually heated up. Earlier systems like the Xerox Alto and the Three Rivers PERQ failed to gain market acceptance. Apple was slightly more successful with the experimental Lisa
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system she released in ’83, and gained tremendous customer acceptance and industry accolades with her Macintosh (MAC) PCs one year later.

Steve Jobs had developed the latter to regain Apple’s lead and eventually wipe out PCs powered by MS-DOS, potentially hurting us and the IBM PC–clone industry alike. The full blown GUI operated MAC was years ahead of competition. Its commercial success nevertheless lagged Job’s revolutionary vision. Being priced too high dampened customer acceptance and led to Steve Jobs ouster in ’85. A huge blunder for Apple’s shareholders and fans! His role as product guru was taken over by Jean-Louis Gassée, my ex-colleague, who eventually met the same fate. The PC industry including MS continued to prosper while Apple went into a tail spin.

The PC industry knew that Apple was on the right track. So the GUI race continued. In ’84 Tandy ambitiously ported her semi-graphical user shell from the archaic TRS-80 to her MS-DOS based PCs. DESQview
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appeared as yet another none-command line interface for IBM PCs. Commodore fitted her high volume 8-bit Commodore 64 model with a proprietary GEOS
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shell, later porting it to the Apple II and MS-DOS. Written for 8-bit computer systems, it was instantly obsolete once 16-bit computing took hold. At about the same time, UNIX was enhanced by the graphical X WINDOW system, while Sun’s SOLARIS got a PostScript-based
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GUI. Where was MS?

In ’82, VisON showed a prototype GUI for MS-DOS at Fall COMDEX
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in Las Vegas. (The COMDEX fair is the Mecca of PC Tech where careers, products, and entire start-ups rise and fall each year.) Launched a year later, its commercial success was hampered by requiring too much memory to perform satisfactorily. (Computer memory prices were 100 times more expensive than today) That same year, IBM jumped in with both feet by announcing TopView, her secretly self-developed text-based shell for MS-DOS, shipping it a year later with the AT model, her first Intel 80286 powered PC. For the startled MS, her breakaway drive for independence classified as augury.

The embedded revelation: We had fallen behind the curve by not replacing our command-line-oriented MS-DOS interface with a sexy GUI. True to form, we decided to compete, prematurely. Hastily announcing our own development—eventually named Windows—with a flourish of trumpets and drumrolls, an avalanche of promises and fanfare, innovative info-speak, and a sprinkling of smoke and mirrors. Attending the announcement in NYC and flying for the first time on Air France’s Concord to get there in time, I watched our mock-up being demonstrated by Bill Gates personally. Partly written in BASIC, the new GUI prototype ran on a variety of PCs. Slow and failing a couple of times, without dampening the simmering excitement in the glorious Helmsley Palace Hotel ballroom. Limping, we had at last arrived in GUI Land!

In true competitive spirit, DRI made her own effort to literally upset the Apple Macintosh cart and MS altogether. The second MS announced her intent, DRI disclosed her workings on a GUI named Graphical Environment Manager (GEM). The early and already well-functioning prototype DRI demonstrated at fall COMDEX ’84 created extra urgency. Fueled by leapfrogging competitive entries, the growing GUI acceptance was threatening MS’s fragile house of cards, rapidly unveiling the end game. Bill had no choice but to reveal our still nascent cobbled-together code earlier than he was comfortable. The NYC event, supported by a lavishly well-orchestrated public relations campaign, served as a stake in the ground, upped the ante and put us at least back on the map. Bill regained his top industry guru status. We were again the darling of a press, casting the spotlight most vividly on the ever-more fascinating dark-horse.

Our faithful OEM customers understood the competitive dangers generated by Apple’s MAC and Commodore’s Workbench
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driven Amiga platform. Therefore they supported our Windows’ efforts enthusiastically. Without endorsing GUI wholeheartedly, the IBM PC–clone industry would have lost its edge. The responsibility was not necessarily MS’s alone but, with Apple owning a predominance of patents in this field and us having licensed them, who else could have securely and successfully pursued that user-friendly path? Our situation seemed to worsen after DRI delivered her version unexpectedly in February of ’85, well ahead of our Windows release. Luckily we got an unanticipated boost when Apple marched DRI into court for patent infringement—defending her Apple cart for now and helping ours. DRI relented and later redesigned the product to avoid further patent disputes, resulting in a much-crippled and long-delayed version. Re-released in ’86, it never gained popularity.

No one foresaw how long it would take for MS-Windows to show up or how underwhelming it would perform. The OEMs who had signed on early were growing justifiably upset with the interminable delays. Bill echoed my customer’s sentiments. I heard of several loud and emotional meetings where his temper boiled, calling people out by name and hammering on them to work harder and to hasten its release. Meanwhile I had to mollify and coddle unhappy licensees. My response to their restless discontent was the repeated mantra: “The wait will be worth your while”—oh my, oh my! Bill, deeply concerned about Windows’ performance, painfully lost that argument against actually shipping a barely acceptable version in late ’85. Fully functional and in many ways innovative, but slower than a duck on ice with hardly any none-MS applications taking advantage of its innovative features. Failure on the horizon?

The product, like others of its kind was hosted on top of MS-DOS, remained consumptively resource-hungry and was less elegant than Apple’s solution with its overlapping window frames. Using up a ton of memory, it needed lightning-quick storage devices and top-end CPUs to work reasonably well. Memory was now a bit cheaper than six years earlier, when the original IBM PC had been introduced with just 64 KB,
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yet still significantly costlier compared to today. Most OEMs, while hailing Windows a step in the right direction, were reluctant to burden their PCs with sufficient hardware to make it shine. Licensing Windows in addition to MS-DOS and adding all the hardware bells and whistles sharply increased costs. In the eyes of most users Windows lacked applications and was therefore simply not enough of a must have. Our bottom-line and price point-wary PC manufacturers consequently casted Windows as a dim afterthought. All through ’86/’87 MS struggled mightily to keep that business alive and growing.

ISVs were still learning how to design smooth and well performing Windows applications and were not releasing them as fast as expected, stalling its acceptance. Those who had released Apple MAC versions successfully jumped out ahead. The others discovered GUI applications consumed extra development time compared to text or character-based ones. Windows’ breakthrough was by no means guaranteed.

With manufacturers not biting, maybe pushing a relatively inexpensive $99 MS-Windows package through the retail channel could revive its image and drum up business. Just before Christmas ’86, MS ran a monstrous print and public relations blitz, a real doozey in retrospect—SVP Steve Ballmer, Bill’s right hand man, the main force behind it. The twelve minute video with him heralding Windows can still be found on the Internet, a provocative enactment in the harsh light of over two decades’ hindsight. Not too many PCs in use could actually run Windows reasonably well without upgrading raw hardware performance. Our marketing ploy nevertheless worked, enhancing overall product visibility and keeping the Windows application sales dream alive with struggling ISVs. Windows developer conferences where we induced them to write better ones filled up. Steve, personally functioning as the chief agitator, convincingly indoctrinated excitement and belief in Windows future. Developers working on non-Windows apps began sensing powerful headwinds.