Hard Drive: Bill Gates and the Making of the Microsoft Empire (27 page)

Unlike a lot of corporate executives, Gates was able to put his ego aside, look at himself honestly, and to learn from his mistakes. He knew he had made a mistake in hiring Towne. In hiring Shirley, he would not make that mistake a second time.

“As you watch how Microsoft has developed, what you see is Gates realizing well in advance what he’s not good at and going out and finding exactly the right person to do the job,” said Stewart Alsop, a respected industry observer and longtime Gates admirer who writes a national computer newsletter. “This is so rare. I’ve been following startup companies for years. I can’t tell you how rare this is. Look at what happened with James Towne. Gates was told that as the founder of the company what he needed was a management guy, someone to organize the company. So he found Towne. But Gates realized quickly that Towne was not taking into account the history and culture of Microsoft. He was organizing Microsoft in a classical way rather than as it should have been run. He realized Towne was not bad, but that he, Gates, had made a mistake and Towne was the wrong guy for the job. So Gates went out and hired Jon Shirley. And he was absolutely the right guy. . . . The process of identifying the mistake, figuring out the problem and fixing it is what makes Bill Gates different. I’ve watched him do it over and over again.”

Shirley arrived at Microsoft in August of 1983, after 25 years with the Tandy Corporation, where he had earned a reputation as a tremendous organizer known for his toughness and efficiency. He had most recently been a vice-president of computer merchandising at Tandy. He had also worked in sales, international operations, and manufacturing. At 45, Shirley was five years older than Towne, but he and Gates had known each other for years and had negotiated many times across the table. The two had worked closely during the previous year on the Model 100 portable computer. They liked each other, despite the fact that Shirley, in an interview a couple months before he joined Microsoft, had said of Gates: “He can be difficult to work with.” Gates knew and respected Shirley enough that he trusted him to run parts of Microsoft without Gates’ direct supervision. This freed Gates to concentrate more on the development side of Microsoft and less on day-to-day administrative matters.

The two men had very different personalities. Gates was intense and energetic, like a shark always on the move. The dour, pipe-smoking Shirley, on the other hand, was quiet and contained, preferring cold logic to hot emotion. He had a nononsense approach to business.
₍
“If you presented something to Jon, the emotion would stay out of it,” said one of the first managers Shirley hired. “A lot of people found that very cold and were put off by it. I liked it.”

Shirley brought a calmer, more mature management style to Microsoft. He was the perfect complement to the combative Gates when diplomatic skills were needed. He had a “tempering” role with others in the industry when relationships with Gates became too tense.

“Shirley was a very easy guy to work with, easy guy to talk to,” said Raymond Bily. “He helped round out the team. He wasn’t like Bill or Steve Ballmer. He had kid gloves. He was more able to make you feel good about a bad decision and redirect your efforts.”

When he joined Microsoft, Shirley went to work immediately on the company’s numerous organizational and managerial weaknesses. He restructured the retail sales force, tapping Ballmer as a vice-president of marketing. Shirley wanted to better utilize Ballmer’s brand-management experience from his days at Procter & Gamble.

Shirley found new suppliers and cut Microsoft’s manufacturing costs by 20 percent. As Towne had discovered during his tenure, the marketing people had little idea how much product they could sell. Shirley ordered production based on 90-day projections instead of annual projections. This soon eliminated a huge backlog of unfilled orders. And Shirley finally did something about the stone-age computer system used by accounting.

Secure with his new president in place, Gates could now turn his attention to what would prove to be Microsoft’s most ambitious and difficult undertaking—the development of Windows, a software program that Gates hoped would make computers easier to use than ever before. Easy enough, in fact, for his mother to use.

What Gates couldn’t foresee in 1983 was that his vision would consume the labors of as many as 30 of his best programmers for the next two years while they worked around the clock on making Gates’ vision a reality. Before the first version of Windows was finished, those programmers would spend some 80 work-years designing, writing, and testing Windows, in contrast to the 6 work-year investment originally approved by Ballmer. Gates’ ability to manage complicated development programs would be severely tested, as would his relationships with his closest advisers. Several of his hand-picked managers would quit, unable to tolerate the screaming fits he and Ballmer threw as the project slipped embarrassingly behind schedule. Microsoft would be reorganized a year into the project to improve efficiency, but it would nonetheless suffer its first significant loss of credibility with the press and the public. A few computer writers would even venture that Gates had badly blundered when he chose to champion graphical user interfaces. In time, Gates would prove them wrong. But a new decade would have dawned before Windows finally lived up to its promise.

With Windows, Gates intended to draw on technology developed in the early 1970s at the Palo Alto Research Center, that fountainhead of creativity that gave birth to the Alto and Star computers.

In the summer of 1981, Steve Jobs had given Gates a peek at the prototype of a new computer Apple was developing—the Macintosh—which used GUI concepts developed at the Xerox research center. Later that year Microsoft formally began a GUI project of its own called Interface Manager. Gates had his own vision of what the program should do. Popular software application programs each had a unique way of working on a computer. Users could not easily switch from WordStar to VisiCalc, for example, because the
commands to print a file or move text were different. Gates wanted Interface Manager to be sandwiched between MS-DOS and applications. By acting as an interpreter for users, Interface Manager would make different application programs look the same, and users could operate them in nearly the same way. The display screen would be divided up into individual “windows” so several different applications could be viewed simultaneously.

Development of Interface Manager proceeded in secret at Microsoft along those lines throughout 1982. By the middle of the year, however, it was becoming clear that other software companies were developing GUI programs of their own for the IBM personal computer. At the fall Comdex trade show in 1982, VisiCorp announced it was working on something called VisiOn. This represented a double whammy for Microsoft. Charles Simonyi had already seen the swift new Lotus 1-2-3 spreadsheet at the show. When he got a look at VisiOn, it appeared very similar to Microsoft’s own efforts to develop Interface Manager. Not long afterwards, in the early days of 1983, Apple introduced Lisa, the first personal computer with a graphical interface and mouse. It had been under development since 1979. Jobs had hired away one of PARC’s top scientists to work on the Lisa. The machine generated quite a buzz in the trade publications, notwithstanding its $10,000 price tag.

Unwilling to let VisiCorp steal a march on Microsoft, Gates hinted to the press in January 1983 that Microsoft would ship a product before VisiCorp could bring VisiOn to market. The

promise was made weeks before a prototype of Interface Manager had even run on an IBM PC. It was the first of several pronouncements that would later embarrass Microsoft.

A graphical user interface was the linchpin in Gates’ strat- , egy to overtake Lotus in the applications business. The plan was twofold. By writing programs for the Macintosh, which was still under secret development, Microsoft would get the jump on other software developers in creating applications for the graphical environment. And if Gates could make Microsoft’s Interface Manager the industry standard for the IBM PC, he could shift millions of DOS users over to his applications, rather than those developed by Lotus. To establish an interface standard, Gates had to get other software publishers to agree to write application programs that would support Microsoft in the graphical environment. He also needed to convince the big personal computer manufacturers to sell Microsoft’s Interface Manager with their machines.

With characteristic zeal, Gates spent months selling computer manufacturers and software developers on his vision of GUI. One software company executive recalled that in early 1983, Gates paid to fly him and a colleague to Microsoft. Gates wanted to convince them to write program development tools for Interface Manager rather than to work with Lotus on developing tools for 1-2-3. “He walked us all around Seattle and told us about this grand scheme,” the executive said. “He was doing Multiplan, Multifile, and right in the middle of it was this graphical user interface. He said it was going to be done in a year.”

It was Rowland Hanson who came up with the name Windows in place of Interface Manager. At the time, trade articles about graphical user interfaces described the concept as a “windowing” system. Even VisiOn was described in that manner. “It appeared there were going to be multiple systems like this on the market,” Hanson said. “Well, we wanted to have our name basically define the generic.”

But a catchy name by itself wouldn’t make Windows a winner. Microsoft was being outflanked on several fronts by competitors that were further along in the development of their own GUI system. Worse, Gates was having a tough time selling IBM on the product. More than 20 other computer makers, including Compaq and Radio Shack, had indicated their willingness to endorse Windows. But there was one name conspicuously absent from the Windows alliance—IBM. Gates wanted Big Blue to endorse Windows, but it refused to do so. IBM executives, never particularly happy about sharing revenues with another company, wanted to bring software development in-house. IBM decided to design its own graphical user interface, called TopView.

Clearly, Microsoft needed more firepower to counter the growing threat. As Steve Jobs had done before him, Gates looked to Xerox PARC for software developers experienced in GUI who could put the spurs to Windows development. Charles Simonyi had been the first from PARC to join Microsoft. Now, in the summer of 1983, Gates went after Scott MacGregor.

“Microsoft was looking for somebody who had done this thing before,” recalled MacGregor. “They didn t want to reinvent the wheel. That’s why they went shopping at Xerox.”

The belly dancer who undulated her way around Bill Gates wasn’t doing much to distract him from his quest.

Earlier this August day he had flown from Seattle to San Francisco to personally handle the recruitment of MacGregor for the Windows team. Now he was sitting in a Moroccan restaurant in Palo Alto, listening to the surreal background drone and twang of Middle Eastern music, sizing up the man sitting across the table from him.

MacGregor, 26, was a friend of Charles Simonyi. Weeks before, Simonyi had suggested to Gates that MacGregor might be induced to leave Xerox PARC for more amiable surroundings. MacGregor, prematurely bald with a scholarly air about him, headed a small software engineering team that helped create the windowing system for the Xerox Star. When Simonyi called, MacGregor agreed to an interview after talking by phone with Gates. Although he was only vaguely aware of Microsoft, his curiosity was piqued when Gates hinted he wanted to talk to him about a graphical user interface for personal computers.

Their dinner conversation that night came easily, despite the distraction of the belly dancer. Recalled MacGregor: “There are a relatively small number of people in the industry who understand ideas very quickly, and one of the things I like is if somebody is really smart and understands what you’re saying, you can complete each other’s sentences. You start speaking in

an abbreviated way Bill and I hit it off right away. I think

he concluded I knew something about Windows, and I think I concluded he knew something about the PC industry and had some visions and goals he wanted to get done.”

Both found they shared an enthusiasm for the possibilities of a windowing system that could make personal computers far more accessible to the average office worker and home user. The Star had incorporated all the features necessary for an electronic replica of a typical office setting: icons, menus, multiple windows symbolizing the desktop, file cabinet, telephone, in- and-out boxes, and wastepaper basket. Data could be coaxed in and out of the computer with a mouse. Software combined text and graphics into one document, and the system was designed so that what the user saw on the screen was what came out in hard copy when the “print” command was given. It all sounded very much like what Gates envisioned for Windows.

We talked about Windows and how we were going to change the world while watching a belly dancer do her thing,” said MacGregor. “I think Bill in a sense realized GUI was something that was important that he really didn’t know enough about. He figured he better get something in place fast because all his competitors were doing it. Apple was driving forward on the Macintosh, as were some of the other competitors like VisiCorp and Digital Research. I think he didn’t quite understand it, but he didn’t want to be blindsided by this one.

MacGregor visited Microsoft a couple of times before he agreed to sign on to head the new Windows engineering team. On MacGregor’s first day at work, he and Gates talked about a name for the development team. They finally settled on the Interactive Systems Group.

Around the same time Gates was wooing MacGregor, he hired two more people from Xerox: a talented programmer named Dan Lipkie, and Leo Nikora, a management veteran of the Star project with 17 years of software programming experience.