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Default So Long, Bill Gates, and Thanks for the Monopoly

He's a merciless competitor, a shameless "fan" of other people's ideas and an unapologetic monopolist. And because of all that, Bill Gates has done more to create the thriving computer industry than anybody else.
As Gates prepares to retire from full-time work at Microsoft July 1, after 33 years of doing everything from writing code to defending his company's business practices in court, many people are saying 'good riddance' to the man most techies loved to hate. What the critics won't acknowledge is that it was Gates' most obnoxious qualities that made it possible for the tech industry to grow as large as it has.
"In his prime, Gates combined the monomania of the compulsive software programmer with the competitiveness of Attila the Hun," said Nicholas Carr, author of Does IT Matter? and The Big Switch.
And that was a good thing. "A lot of people see Microsoft as the enemy of openness and innovation, but it's worth remembering that it was the open architecture of the Microsoft-based PC that spurred massive creativity in both hardware and software and sped the adoption of computers both at home and at work," Carr said.
In fact, the monopoly that Microsoft once had on computer operating systems was essential to the development of the computer industry, enforcing a de facto standard that permitted thousands of software and hardware companies to blossom.


The Microsoft monopoly was one part luck, one part business acumen. The lucky part: When IBM asked Microsoft to provide an operating system for its new personal computer in 1980, Gates got the contract, even though he didn't have an OS to sell.
No problem. Gates immediately bought the rights to another operating system, QDOS, which he then recast as MS-DOS and sold to IBM.
The savvy part: Gates' fledgling company was able to retain rights to the new operating system, securing Microsoft's place at the hub of the PC industry. Later, Gates leveraged that monopoly into such complete dominance of the PC industry that Microsoft was able to collect payments from PC manufacturers for every PC they sold -- even if those PCs didn't carry a Microsoft operating system.
That monopoly was bad for competitors who had arguably superior operating systems -- including, later, IBM's OS/2. And it was built in large part on appropriating the best ideas of other companies, from Gary Kildall's CP/M to Apple's Macintosh.
But the upside was enormous because the monopoly created a stable environment where entrepreneurs could develop new companies and new products around a common platform.
Without that standard, the computer industry in the 1990s would have resembled the web today: diverse, vibrant and flowering with abundant innovation, but also frequently broken because of the inability of disparate products to make the most basic connections with one another.
"Unlike oil, pharmaceutical or steel, monopolies are a necessary ingredient in the technology business," Forrester Research founder George Colony wrote in a recent blog post. "It's only when de facto standards like Windows or de jure standards like HTML become dominant that usefulness soars."
Contrast that to the state of the internet today. While the web abounds in standards, a frequent problem is that companies don't hew to them (and since 1996, Microsoft has been guilty of this behavior too). Having trouble syncing your Google calendar with your Yahoo calendar? Wondering why your camcorder won't upload to your new Macbook, your iPod can't share files with your friends' MP3 players and your mobile phone can't display webpages properly? All of these problems are traceable to a lack of widely supported standards.
Just imagine if the same chaos had reigned throughout the 1980s and early 1990s. Hardware manufacturers like Dell, Hewlett Packard, Compaq and IBM would still be battling it out with incompatible systems. And software like Lotus 1-2-3, WordPerfect and yes, even Microsoft Office never would have achieved widespread success.
"[Bill Gates] made an unbelievable contribution," said Netscape, Opsware and Ning founder Marc Andreessen, while speaking at a keynote with John Battelle at the Web 2.0 Expo in San Francisco earlier this year. "It's hard to conceive what this industry would look like today if Microsoft hadn't standardized the OS ... I think the industry would be much smaller if that hadn't happened."
Of course, success breeds resentment, and Gates' aggressive business practices -- and less-than-polished personal style -- made him many enemies.
"The problem is when you're the biggest sequoia in the woods, everyone wants to cut you down," said Paul Santinelli, a general partner with North Bridge Venture Partners, a venture capital firm.
Gates didn't help matters by overreaching once his company's monopoly was firmly established.
"Gates became kind of a Godfather figure in the industry, demanding tributes from his partners and whacking those who threatened his power," Carr said. "So Microsoft deserves both praise for stimulating innovation and criticism for stifling it."
And then there was the problem that many of Microsoft's products simply didn't work that well. Indeed, as the chorus of complaints about Windows Vista grows louder day by day, it could be said that Gates is leaving Microsoft at exactly the right time, before the company's long decline sullies his reputation.
"If all that stuff worked right out of the box, we'd all be out of a job," said David Strom, an independent technology consultant and speaker in St. Louis, Missouri. Strom has a speech praising Gates for, among other things, effectively guaranteeing full employment for IT people called in to make Microsoft products work properly.
But while technologists may curse Gates' aggressiveness and the bugginess of Microsoft software, they should also raise a glass to toast him as he departs the computer business.
"He didn't have the zest of a Philippe Kahn, or the elegance of a Steve Jobs, or the stage presence of a Larry Ellison. But the guy revolutionized the PC industry, and that's what people need to remember," said Santinelli.


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