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The Gates memo.

Last week, the San Jose Mercury News published a confidential memo that Microsoft chairman Bill Gates sent to about 20 of his top managers. What's Softeletter's reaction to the memo's contents? Gates starts by talking about how he spent a think week" devoted to reading PhD theses, using competitive products, reading books, newsletters and anything I can get my hands on." The purpose of this retreat from daily business, he says, was to "make our technical strategy clear." Yet Gates doesn't seem to have come back with any fresh ideas about technology strategy or even products. Instead, much of his memo deals with business and legal confrontations--the Apple lawsuit and the FTC investigation, defensive patents, the simmering feud with IBM, "dislike of Microsoft," price competition, and hostile relationships with Adobe and Hewlett-Packard over printer software. Microsoft should embrace distributed computing environments, says Chairman Bill, "as a weapon against Novell." Go, NEXT, and Patriot Partners represent potential threats to Microsoft's position as a standard-setter: We have to get there early before significant development momentum builds up behind the incompatible approach." What the Gates memo reveals, in short, is a pervasive siege mentality, and not much technology vision, insight, or innovation. So who's minding the R&D store at Microsoft? Good question. According to Gates, Microsoft is now so diversified that he's hard-pressed to provide real leadership. "The complexity of the industry and its technology means that a lot of my time is spent just trying to keep up rather than coming up with new product ideas," he says. It is no longer possible for any person, even our 'architects,' to understand everything that is going on." Moreover, he complains, fresh ideas aren't welling up from the product groups. Gates notes that Microsoft has become rigid" and unwilling to fund "any internal or external research." He therefore proposes to boost R&D spending to $10 million a year and promises to "reduce our technical risk by strengthening our relationship with the research community." That sounds pretty haphazard. How does microsoft plan to convert raw research into successful commercial products? By building the company's product strategy entirely around Windows. Our strategy in its simplest form," Gates says, is lone evolving [Windows) architecture, a couple of implementations and an immense number of great applications." New technologies--"pen, audio, multimedia, networking, macro language, 32-bit, advanced graphics, setup, a better file system, and a lot of usability"--will "be accommodated as extensions to the existing PC standard." In effect, Gates implies, every important technology and product at Microsoft eventually will be tied into Windows. That strategy almost certainly will turn into a strait-jacket, but at least it provides more short-term focus than Microsoft has shown in recent years. Any other strategic changes? Gates is passionate about Microsoft's "really embarrassing" performance in tech support and product ergonomics. "The number of customers that get a bad impression because of [poor support) must number in the millions worldwide. As CEO I take full responsibility for these mistakes," he says. We will spend what it takes to have the best support." Here, the important question is whether Microsoft really will bite the bullet on support and product design. Some of the process is already well under way: Microsoft has started to clean up its often-bewildering interfaces and to provide better telephone support. If Gates continues to hammer away at this issue in public (and turns Microsoft into a genuinely customer-friendly company), he'll probably force his rivals to respond in kind. The result could be an industry-wide escalation of competition in service and support--which might be a healthy trend for everyone.
COPYRIGHT 1991 Soft-letter
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:confidential memo from Microsoft Chmn Bill Gates leaked
Publication:Soft-Letter
Date:Jul 7, 1991
Words:600
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