BOOK REVIEW
By Stephen H. Wildstrom
The Uncivil War Inside Microsoft
Why did Gates & Co. seem so hamstrung during the antitrust trial? A new
book, Breaking Windows, blames an internal feud between the Windows and
Internet camps
In the fall of 1996, Microsoft Senior Vice-President
Brad Silverberg, who headed the company's Internet
Platform & Tools division at the time, confided a
stunning bit of news to me. The next version of
Microsoft's Visual Basic development package, he
said, would be able to create programs for Web sites using both Microsoft's
proprietary ActiveX technology and Sun Microsystems' Java. At the time, Java
was the hottest buzz in high-tech -- and was widely viewed within Microsoft as
a threat to the continued dominance of Windows.
Visual Basic never did learn to speak Java. Like anyone else who followed
Microsoft in the mid-'90s, I knew the company was rent by a nasty high-level
struggle between Silverberg, who had led development of Windows 95 and the
Internet Explorer browser, and fellow Senior Vice-President Jim Allchin, who
had expanded his domain from the business-oriented Windows NT to all
Windows development. The two executives had sharply conflicting visions for
Microsoft: Should the company bet its future on the emerging Internet? Or on
its proven, Windows-centric business model?
The Silverberg-Allchin struggle, which dragged on after Silverberg severed his
relationship with Microsoft in 1999 and resonates even today, forms the heart
of Breaking Windows: How Bill Gates Fumbled the Future of Microsoft
(The Free Press, $25) by Wall Street Journal reporter David Bank. This
solidly reported and smart book explains how Microsoft went, in a few short
years, from a behemoth bent on world domination -- and one likely to have
achieved it -- to a troubled, albeit very profitable, company uncertain about its
role and future. Along the way, Bank captures the human drama of the
struggle.
TACTICAL FEINT. Bank details the disillusionment and ultimate departure from
the company of many of Microsoft's best minds, Bill Gates's increasing struggle
to understand and control what had become a vast enterprise, and finally, his
reluctant passing of the reins of active management to new CEO Steve
Ballmer.
The Web and its open standards were the future, Microsoft's Internet faction
contended. Perhaps, replied the software experts inside the company, but
Windows was the wellspring of the company's success and would remain the
key to its financial future. The Internet forces had been in the ascendancy since
December, 1995, when Gates publicly embraced the Net as the future of the
company. But the move turned out to be more of a tactical feint designed to
thwart upstart Netscape Communications than a strategic reorientation.
By the time of my visit to the Microsoft campus in Redmond, Wash., in the fall
or 1996, Allchin's Windows team was back on top. Within months, the
Internet Platform & Tools group had been broken up and, not long after,
Silverberg left on an extended sabbatical from which he never really returned.
"ODD COMPLICITY." The battle for the soul of Microsoft received very little
media coverage, probably because it coincided with Microsoft's very public
fight with government antitrust lawyers. There's little evidence that the antitrust
suit had any significant effect on the Windows vs. Internet struggle, other than
distracting top managers. But the internal fight had a dramatic, if largely hidden,
impact on the trial.
Bank makes a compelling case that the notorious internal e-mails detailing
Microsoft's plans to smash Netscape and dominate the Web -- evidence that
did immeasurable damage to the company's position in court -- seem far more
benign when seen in the context of the internal war in which they were written.
And executives' unwillingness to air the company's dirty linen during the trial
helps explain Microsoft's otherwise baffling failure to mount an effective
defense.
Allchin "was unable to explain in public his strategic and legal position without
exposing the power struggles within Microsoft and the depths of its internal
confusion," writes Bank. "At the same time, government prosecutors were
loath to explore the meaning of the split between the Windows and the Internet
teams. They feared they might undermine the value as evidence of Allchin's
impassioned e-mails. This odd and self-serving complicity between defendant
and plaintiff prevented one of the most important threads of the Microsoft story
from being aired at the trial."
"HERCULEAN EFFORT." Bank's prose is workmanlike, but the story he tells
more than makes up for any deficiencies of literary style. Like nearly all books
published these days, it seems, Breaking Windows is marred by sloppy
editing. Characters are introduced twice, sometimes three times, as though they
had never appeared before. Legal guru Lawrence Lessig is identified once as a
Harvard law professor, and once as from Stanford's law program -- without
the explanation that he moved west in 2000. But these are quibbles that barely
mar an otherwise excellent effort.
Bank completed the book between February, when the Court of Appeals
heard arguments in the case, and its June 28 ruling, which upheld key findings
against Microsoft while tossing out Judge Thomas Penfield Jackson's order that
the company be broken up. Whatever Microsoft's legal future, it is moving on.
The Herculean effort required to ship Windows 2000, which, like the antitrust
case, is a subtext of the book, has been accomplished successfully. The
October shipment of Windows XP will accomplish Microsoft's long-cherished
goal of unifying its "professional" operating systems, based on Windows NT,
and its consumer versions, whose legacy stretches back to MS-DOS.
Microsoft is now putting the bulk of its energies into its .Net initiative, an
ambitious plan to provide a broad variety of seamlessly integrated consumer
and business services over the Web. Faced with America Online's dominance
of consumer markets and the big head start other companies, most notably
IBM, have in providing Web services for business, Microsoft is back in the
position where it has always enjoyed its greatest success, as a scrappy
underdog.
OLD DIVISIONS, BATTERED PARTNERS. Times have changed, however, since
Microsoft came from behind to smash Lotus, WordPerfect, Netscape, and
others. The .Net business model depends heavily on companies that want to
do business on the Web hooking up with Microsoft, but the company's long
history of leaving a trail of battered partners makes this a difficult proposition.
Within Microsoft, the old doubts seem to persist: Is .Net really a breakthrough,
taking the company into a new world of open standards and partnerships? Or
is it the newest "embrace-and-extend" ploy designed to breathe new life into a
flagging Windows franchise, especially on the servers that run Web sites? You
can read the evidence either way. On the one hand, the new Microsoft has
made peace overtures by offering to let some .Net services run on platforms
others than Windows. On the other, the old Microsoft has stirred a great deal
of political and legal controversy by tightly binding features in Windows XP to
.Net services, possibly to the detriment of competitors.
Bank agrees that .Net is by no means a guaranteed win for Microsoft, but in
the end concludes that Chief Software Architect Gates will probably pull it off:
"Gates has offered no public unburdening about his private torment as he bore
both the weight of expectations and the pain of unrelenting attacks. There has
been no catharsis, no sense of what he may have learned....He has
acknowledged no mistakes save for his regret that he didn't more effectively tell
Microsoft's story.
"So metaphor will have to do. I [Bank] say he shoots the moon."
NEW ERA. As for me, I'm less sure. The lightning that transformed a tiny
software startup into the world's most important technology company in 15
years isn't likely to strike twice. And Gates himself seems more comfortable
today as a philanthropist than as a technology mogul. The Bill & Melinda Gates
Foundation, a huge donor to minority education and Third World health
concerns, seems more likely to dominate the second act of Gates' life than
Microsoft.
Microsoft will certainly survive and, more likely than not, prosper. But the odds
are that it will never again reach the level of either dominance or profitability it
enjoyed during the mid-1990s. And for the world at large, that's probably a
good thing.
businessweek.com |
