Sunday, July 13, 2008

Bill Gates: PC Genius, Internet Fool

Bill Gates, who for years was the richest man in the world, is also one of the smartest. But even he couldn't figure out how to beat the Internet — how to transition his grand old monopoly software company, Microsoft, into a business that thrives on the Net. And so he begins his retirement from Microsoft as the PC era's biggest winner, and the Web era's most spectacular casualty, says JOSH QUITTNER in this interesting article in TIME.

It gave me the feeling that even a genuis has limitations. Some highlights from the article -
  • Internet, for all its world-flattening glory, is a destroyer of businesses without parallel. The Net has brutalized old-line business across most industries — retail, telecom, financial services — and the technology industry itself, is, ironically, no exception.
  • Few companies not born on the Web have figured out how to thrive there. Apple, with its post-PC iPhone, could be the shining exception.
  • But big, complicated operating systems such as Microsoft's latest, Vista, aren't necessary in the Web Age, where applications are delivered for free and on demand — often without users' even being aware of it. The Net is where the money is, and it's the one place that Gates — like so many others — hasn't left his mark.
  • He saw the Internet missile coming, of course. But by the time he sounded the alarm, it may have been too late. (Read his famous "Internet Tidal Wave" memo, sent to the troops May 26, 1995, over a year after the browser company known as Netscape launched.)
  • Gates built or bought all manner of things to conquer the Net, but few managed to be anything more than also-rans in the innovation game. In 1995, he launched a gated online service, MSN; a Web-based email client, Hotmail was purchased in 1997; a search engine, MSN Search, launched in 1998 using a third-party product as its core; a chat client, Messenger, was released in 1999; and last year it bought an online advertising platform, aQuantive and became a significant, though minority investor, in social network Facebook.
  • While Microsoft is exponentially larger than Google — number 44 on the Fortune 500 list versus Google at 150 — Google's Web business (advertising mostly) is growing so fast, it's poised to rival Redmond's operating system revenues by 2010. And that's the problem. As more and more of what Windows does moves up into the cloud — into Google's always-on, give-'em-whatever-they-want-for-free servers — what becomes of the company that Gates built?
  • The smartest move Gates could make right now is to get out of the way. There are many smart and talented people inside Microsoft who know what to do. Blow up Vista and abandon its next iteration, Windows 7, and start from scratch, is but one excellent idea. That will probably work.
And if not? Maybe we'll see Gates return, a Nobel in his pocket, ready to wrestle with the Web once again!