Techworld

Why Bill Gates can't save Microsoft

CEO Ballmer and his predecessor shared a vision of how Microsoft could stay on top by focusing on Windows

Now that CEO Steve Ballmer has announced that he will be leaving Microsoft sometime in the next year, some people hope that Bill Gates will come out of retirement and ride in like the U.S. cavalry to save the beleaguered company. That won't happen.

Gates can't rescue Microsoft. He's at least partly responsible for the company's current woes, because Ballmer in his years at Microsoft mainly followed Gates' playbook, which holds that Windows is Microsoft's centerpiece. And by sticking to that mind-set, Microsoft fell far behind in big growth areas, notably mobile and Internet search.

Since Gates' retirement from day-to-day Microsoft responsibilities to focus on the Bill and Melinda Gates Foundation, he has taken on a can-do-nothing-wrong aura. If only he still headed Microsoft, a strain of thinking goes, the company would be able to see its way out of the wilderness. After all, Gates was the visionary who in 1995 wrote a memo titled "The Internet Tidal Wave," in which he declared that "our focus on the Internet is crucial to every part of our business. The Internet is the most important single development to come along since the IBM PC was introduced in 1981."

Such thinking ignores that the seeds of Microsoft's current woes were sown under Gates. It's one thing to have a vision and another to put it into effect. And that's where Gates failed. Three years after he wrote that memo, Microsoft remained focused primarily on Windows and didn't have a solid Internet strategy. A startup named Google was born that year. The rest is history.

Microsoft blew its chances at mobile computing under Gates as well. In 2001, when Gates had turned over his position as CEO to Ballmer, but was the company's chief software architect, Microsoft announced its Tablet PC, essentially a full-blown computer in tablet form, costing thousands of dollars and running Windows. No one wanted one. It wasn't until Apple released the iPad, nine years later, that tablet computing took off.

Under Gates, Microsoft also developed a smartphone years before the iPhone. Called Windows Mobile, it was released in 2000, and was built on earlier versions of various Windows mobile operating systems. Once again, Windows was the centerpiece. And once again, few people wanted one.

Gates and Ballmer for years have shared a common vision about Microsoft: Use Windows as a bludgeon to frighten partners, beat competitors into submission, and gain share in related markets, such as browsers and offices suites. That strategy, developed under Gates, led to the U.S. government's successful antitrust prosecution against Microsoft.

The strategy continues today with Window 8. Microsoft apparently thought that the best way to push into the tablet market would be to develop a single, touch-based operating system for traditional PCs and tablets. Because Windows dominates the traditional PC market, the thinking went, people would get used to the interface on their computers and then rush out and buy Windows 8 tablets. It was a technique taken straight out of Gates' playbook. It has so far failed.

So criticize Ballmer all you want for Microsoft's woes. But Ballmer only did what Gates had done before him, and so Gates isn't the person who can guide Microsoft into a better future. Gates likely recognizes that. There's evidence that he was at least partially behind Ballmer's surprise resignation announcement. If he was, that means he recognizes that a new vision for the company is needed, not one as wedded to the past as Ballmer's was -- and as Gates' has been as well.

Preston Gralla is a contributing editor for Computerworld.com and the author of more than 45 books, including Windows 8 Hacks (O'Reilly, 2012). See more by Preston Gralla on Computerworld.com.

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