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Pride Before The Fall
from the -just-because-you're-paranoid- dept.
For his new book Pride Before The Fall: The Trials of Bill Gates and the End of the Microsoft Era, " author John Heilemann got to do what many people reading this must have fantasized about a thousand times:
He flew out to Redmond, sat across from Bill Gates, and asked if he regretted his handling of the Microsoft antitrust trial, during which he alienated state attorneys general, the public and Justice Department trial lawyers, and enraged the federal judge trying the case with a series of provocative and intemperament public statements. Gates and Microsoft CEO Steve Ballmer had told reporters the trial was a "travesty of justice," that "we are absolutely confident we will win on appeal", and that they would "never" allow Microsoft to be broken up -- comments that helped convince Judge Thomas Penfield Jackson that Gates was unrepentant and that no solution short of a breakup could change Microsoft's predatory, monopolistic behavior.
To this day, neither Gates nor any of his aides has admitted an iota of wrongdoing before, during or after the catastrophic trial.
In one of the many dramatic incidents recounted in this astoundingly well reported book, Heilemann said he understood that Gates had "the right"..to make such statements.
"What I'm asking here is a tactical question. It was a moment of great political sensitivity. Wouldn't it have been better to keep your mouths shut?"
The look on Gates' face, recounts Heilemann, fairly radiated contempt. "We are defending principles of greated importance," he harrumphed. "Our right of appeal. Our right to innovate. Our right to have an appeals court sit and judge that." Even to mention tactics and sensibilities, he told Heilemann, was to sully those great principles with the grubbiness of politics.
Gates was unwavering. The company had done nothing wrong, the judge's findings were baseless, he had made no mistakes of any kind. He and Microsoft would be fully vindicated by the appeals process.
Pride Before The Fall is the best account we're likely to see of the downfall of Bill Gates, the wealthiest and most successful businessperson in the world, and until the antitrust trial, one of the most fawned-over. Heilemann sheds some piercing light on how the debacle that engulfed Microsoft could have been allowed to happen -- something analysts, competitors, geeks, CEO's, journalists, coders and Microsoft employees have been wondering for years and have never quite been able to explain. This book and story give credence to the old saw that has it that just because you're paranoid about somebody doesn't mean you're wrong.
Media coverage of Microsoft of is so riddled with hype and hysteria -- an exception has been Joseph Nocera of Fortune Magazine -- that Heilemann's account comes as a brilliant jolt, even to Microsoft-haters. He seems to have penetrated every nook and corner of the trial to tell this story.
The impending break-up of Microsoft was quite avoidable, according to almost every principal close to the case. Gates could have changed some of Microsoft's practices early on, especially those relating to the relationship between IE and Windows and PC makers. He could have settled. He could have accepted relatively generous mediation terms. He could have lobbied for support in Washington, instead of treating bureaucrats with contempt. He could have told DOJ lawyers and the judge the truth in his testimony. He could have avoided gratuituously offending the judge, members of Congress and the public, thereby tarnishing the previously wholesome image of his company, perhaps for good.
Why didn't he?
The patterns of powerful men (my only squawk with this book is that Heilemann didn't go into this history at all, but it is helpful) brought low by hubris -- Richard Nixon, Lyndon Johnson, Bill Clinton, now Gates -- are eerily similiar. They all seem to have believed that the rules that govern other people didn't apply to them. They underestimated their enemies, and lacked friends who could tell them the truth. They surrounded themselves with people who told them what they wanted to hear. They were unable, when things went wrong, to apologize, acknowledge wrongdoing or change their behavior or tactics, or avert looming disaster that everyone else could see coming right at them.
Although his wrongdoings are not comparable, and there are plenty of serious questions about U.S. antitrust laws as they relate to a new kind of economy, Gates hubris fits the pattern. Despite the conclusions of every principal in the trial that Microsoft engaged in predatory, illegal and reprehensible business practices, Gates still can't accept it.
Before the trial, Heilemann points out, Gates was more than a high-tech billionaire. "He was the pristine embodiment of the high-tech myth. At an impossibly young age, he'd come out of nowhere, consumed with ideas and a pure burning passion. He had launched a company that unleashed an industry, and then led that industry as it transformed an economy. For a long time, Gates represented everything that was inspiring about this protean phenomenon taking shape in our midst -- its freshness and its ambition, its sense of possibility and its connection to the future. But like a figure lifted from classical tragedy, Gates sowed the seeds of his own undoing."
If anything, Heilemann understates Gates' unique public position during the late 80's and early 90's. Vice-presidents of the U.S. flew out to Redmond for his parties, editors of Time, The New Yorker and other magazines and publications visited him to write worshipful tributes and gather up his wisdom. Gates wrote a series of vapid and self-aggrandizing books that became instant best-sellers. The historical function of media, to harry and probe the powerful and famous, broke down.
Gates created a company that reflected his image, says Heilemann, and that fostered a worshipful culture of Gatesian omnipotence. He mastered a complex business, but failed to develop any peripheral vision, political sensibility, flexibility, or public relations antennae.
"In his arrogance, he lost whatever perspective he once had, and in his monomania he was unwise to the ways of the world....When his reckoning came, it was shocking and final."
Strong stuff, but Heilemann, a special correspondent for Wired and a former staff writer for The New Yorker , backs it up. He not only interviewed Gates, he had access to nearly every other important figure in the trial, from the judge and his clerk to Justice Department officials and lawyers on both sides. He also is clearly well-connected with the increasingly organized and embittered coalition of anti-Gates executives, lawyers and activists in Silicon Valley, seething for years over the way Microsoft did business.
One of the book's many triumphs is a penetrating look at the Valley's craven and incestuous corporate culture, which increasingly resembles not the new but the old order, the bitter, back-stabbing and opportunism of Washington. In the headquarters of the new economy, the old-fashioned laws of butt-covering and money-grubbing capitalism seemed to dominate. A couple of isolated oddballs did the right thing, but only a couple. Everyone else ducked or ran for cover.
Whatever the ultimate outcome of the appeals under way, it's hard to overstate the significance of the Microsoft trial. The case was a watershed. At times, Gates seemed very nearly broken, and the halo surrounding the company he built has vanished. The case will shape the nature of competition, innovation and law in the high-tech markets pushing aside the practices of the old economy. Economists believe that the outcome will set the rules for years to come. What's amazing is that everybody involved seemed to grasp what was at stake except for the primary target: Gates himself.
Heilemann nails Gates, and more importantly, explains him. Microsoft was brought down by the arrogant, delusional monomania of its founder, traits not perceived by his legions of profilers or challenged by his hordes of subordinates, a man who had clearly come to believe in his own immortality and was unable to grasp the realities of the world beyond his own company. For a man who believes in his own omnipotence, some bitter pills. The phrase "tech-smart but world dumb" is sometimes used to describe even brilliant programmers and computing executives. It captures Gates perfectly. In fact, he embodies it.
One of Heilemann's most telling scenes -- in one of the best books yet written about power and the new economy -- shows Gates, just as Microsoft lawyers readied their case, leaving other MS execs in charge, and heading off on a weeks-long vacation accompanied by his wife and bigwigs like financier Warren Buffet and new media scion William Randolph Hearst III. Gates had chartered a train to ferry his troupe around the American West on a sightseeing tour. Heilemann reports that Gates was surrounded by adoring minions and acolytes who made sure he never got bored or testy, who arranged for a string of experts -- archaeologists, historians -- to suddenly appear out of nowhere and describe a canyon or town.
The image is not of a new kind of leader for the new economy, but of a standard tycoon losing touch with reality, the Citizen Kane of cyberspace, his every whim satisfied, the number of people who can say "you're wrong" dwindling. Small wonder he couldn't bring himself to believe some geek programmers, Silicon Valley whiners and a handful of underpaid Justice Department lawyers could pose much threat.
Many developers, programmers and workers in the tech industry had for years perceived Microsoft as nearly satanic because of its staggering monopoly, its products of questionable quality, its ferociously proprietary ethic. They were right, able to see their world from a vantage point the off-line world still hasn't quite grasped. Many, many stories circulated about the company's arrogance and brutal business style.
Ironic that these sometimes paranoid-seeming notions turned out to be largely valid. The Microsoft culture that Heilemann presents was actually worse than many believed.
The feelings that many Microsoft employees had for their boss went beyond respect or loyalty, writes Heilemann, "and crept right up to the brink of infatuation: in one way or another, everyone in Redmond seemed to have a crush on Bill. Gates inspired this intense following without being, in any conventional sense, a charismatic or especially winning figure."
What he was, the book says, was very smart, and in the universe that he had personally created, "to be deemed smart -- or, better still, super smart -- was to be awarded the greatest accolade in the Microsoft lexicon."
But Gates' behavior before, during and after the antitrust case was anything but smart. At every critical juncture when a friend, colleague, attorney or ally needed to grab him by the threat and force him to come to his senses, nobody did -- either because he was considered above reproach or because, as Heilemann seems to suspect, he simply wouldn't have listened and won't to this day.
Microsoft is still a powerful corporation, and Gates still has many billions in the bank. There are tougher ways to fall. But Heilemann is dead on when he says the Microsoft era is over, done in by the same smart and flawed many who created it.
As for Pride Before the Fall, it's timely, economical and powerful. Skillfully reported, it captures better than any other our transition from one historic period to other. It has enormous moral and human punch, and is convincing and unsparing. It's gripping reading.
P.S. Full disclosure: Heilemann and I worked together as columnists at Hotwired several years ago.
You can purchase this book at ThinkGeek.
For interesting reading... (Score:5)
The 1999 Shareholder Meeting [microsoft.com]
See the previous years as well. Their shareholders consistently advise Microsoft to settle with the government, and they're basically shrugged off.
Did I sleep through the fall of microsoft? (Score:4)
Sorry, Jon, you're way off on this one. MSFT stock may be in the toilet right now, but that doesn't mean they're about to shut down.
Re:WTF? (Score:3)
I'm not saying that MS will do what IBM did in the last 5 years. But big companies with an active large market share do not die easily.
Arrogance is relative, indeed. (Score:3)
Hrrm... let me get this straight. Some random ass-munch on Slashdot, on the strength of sheer force of ego, presumes to post that this guy, who has been a staff writer for the New Yorker, a Washington correspondent for The Economist, and covered political affairs for Wired and HotWired, that he's a hack.
Sorry, who's the troll here?
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"You owe me a case of beer. Sucka'."
Heilemann's article on same for Wired (Score:4)
Heilemann did an article for Wired a couple of months ago called The Truth, The Whole Truth, and Nothing But The Truth [wired.com] on exactly this subject. I'm assuming that the book (which I haven't read) is essentially a more in-depth look at the same thing.
When I started the article, I was hopeful that it would be an even-handed analysis of how Microsoft had come by the drubbing they'd received at the hands of Jackson. (Although - pardon the pun - the jury is still out on whether it will stick.) I couple pages into it, I started to become disappointed: it seemed to me at that point to be shaping up to be a tale of how a dedicated band of young lawyers turned a foundering investigation against an evil empire around, and blah blah blah.
I'm glad I stuck with it. The article was indeed even handed, and still managed to be damning. For example, Heilemann asked Ballmer point-blank if Scott McNealy was right when he said that Microsoft licensed Java in bad faith (with the intent of breaking the contract). The response, edited for space:
It's such a weird picture - Ballmer starts off saying "Of course we entered into the contract in good faith," but seems to immediately do a 180, and finishes up with "Of course we didn't. And the Sun people wore morons to think we did."
I'm gonna buy the book. The article was worth the price of admission just for that.
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"You owe me a case of beer. Sucka'."
Re:On the subject of hubris, Jon... (Score:3)
As far as "delusional" goes. Gates' "delusion" of his pre-eminence as a technological messiah looks to the majority of the world to be a fact.
I think the article, and presumably the book, has a level of arrogance that assumes some kind of failure of Microsoft that has not and may never happen. As much as some of us would like to think otherwise, Microsoft, a half _trillion_ dollar company is not going away any time soon. I personally don't think that's a bad thing even if they are in dire need of a good spanking, but as my bio says, I'm a "shameless Microsoft user".
Financially speaking... (Score:3)
Once again, we fail to see the irresponsibility of our desires. MSFT is still listed on the DJIA. It still heavily swings the NASDAQ index too. Gates, Allen, and Ballmer might be still filthy rich off their own company's stock, but there are a large number of middle class, blue-collar investors that have a significant amount of Microsoft shares... not for lack of portfolio diversity, but because their share value went steadily up for a while and the overall eventual wealth of MSFT holdings well outweighed the wealth of... let's say, AT&T or Exxon stock. And don't forget the large number of mutual funds with a big portion of Microsoft stock... generally the financial world still thinks that it's something to hold onto, maybe even a bargain right now.
I don't condone unethical behavior, but compared with the other giants in the industry, they're in good company. (Intel, Sun, Oracle... hell, even Hemos is whining about RAMBUS today, and you tell me which company you'd rather see die) But more importantly, we'd rather see Microsoft REFORM and avoid unethical behavior... correct? A company of their size and clout could contribute very much to the computer industry... as they have already, although not as much to our line of interests... and I think they would be more beneficial honest than dead.
Of course, the typical 3-year-old child way of thinking is to bring bulldozers to Redmond, put 20,000 people out of work, destroy the personal finances of millions of middle class people, crash the stock market, remove the current lynchpin of the OS business (possibly collapsing the computer industry if people go back to using bank calculators rather than learn *nix), create a nightmare for the retail world, and hand the wheel over to... well, no one is quite ready to take their place just yet.
Hey, you're entitled to your own opinion.
Re:Did I sleep through the fall of microsoft? (Score:4)
Microsoft, dying? Or do you mean Linux? (Score:3)
Microsoft is not evil nor ruthless. They're attributed these qualities because they're on top, but to get to the top, you only need to be the best at what you do. Microsoft took computer code, and envisionned it as a product, to be marketed and sold appropriately. Business-wise, it's a brilliant strategy, and doesn't involve screwing anybody. That vision of the world of software will keep on going, and is the real issue here.
And judging by the market, at least one of these visions is taking a serious credibility hit.
Re:WTF? (Score:3)
Sorry again, but this is a common mistake. Very few organizations use Microsoft to "run their business". They use Microsoft for file servers where they store their mountains of Word, Excel and PowerPoint documents. But, despite what the paper-pushers and PHB's of the world might want you to believe, Word and Excel documents, and most especially PowerPoint presentations do not run the business. And they could just as easily be ported over to Word Perfect, WordPro, StarOffice, 1-2-3, or any of thousands of other business document formats. (We did it before from WordStar to Word Perfect and then from Word Perfect to Microsoft Word.) And for e-mail and other group-ware, Lotus Notes is still more popular with corporate America - although I can't for the life of me figure out why companies think this brain-dead software with its piss-poor user interface is worth $450 per user.
Most serious software for "running the business" runs on high-speed servers from Sun, IBM, HP, DG and others. The critical business software is giant Oracle databases. And even there Oracle is not all that crucial since a database is a database. The data could just as easily be put onto a Sybase, Informix, DB/2 or other database system.
Re:WTF? (Score:5)
Sorry, but until it's not all about money anymore (yeah, right) either General Motors - in terms of revenues - or General Electric - in terms of market capitalization - is the most powerful, influential company in the United States. Microsoft is number 84 on the Fortune 500. In deference to our international friends, Microsoft is only number 216 on Fortune's Global 5000. Hell, Microsoft didn't even know what a lobbyist was until the anti-trust case was filed.
The fact that Microsoft's stock price has dropped from a high of $120 per share in December of 1999 to around $58 per share today is a pretty good indicator of a company on the ropes, if not dying. Regardless of how much you love Bill Gates that does not change the fact that Microsoft is only as powerful as it is because it used anti-competitive practices to ensure that we all had to use their products regardless of how much we thought they sucked. I would challenge you to point out the last time Microsoft was truly innovative and didn't just "adopt and extend" some existing technology.
Wired article: The Truth, The Whole Truth, and... (Score:4)
Was brought down ? (Score:3)
"Microsoft was brought down"
Damn, I must have blinked and missed it !
Stalin died in '53. The Berlin Wall didn't go up for nearly another decade, let along get torn down. It's a bit early to be predicting the Death Of Microsoft, no matter how much wishful thinking is behind it.
How much do you value these methods? (Score:4)
He should have compromised what he really thought.
He should have "played the PR game".
He should have coddled bureaucrats.
He should have paid attention to "political sensibilities".
From the perspective of Fortune or Business Week, that all sounds right and proper.
But from a hacker perspective?
I'm not saying Gates is a hacker (although he is indeed really damn smart), but if you align yourself with those ideals, is it really correct to deride someone for being forthright and stubborn in the defense of their position?
John Carmack
Come on Jon.... (Score:4)
While I *do* think that good and economics will win in the end and Microsoft will at best exist as a shadow of what it is now it is *really* early to talk about their decline and fall in the past tense. It would be better to say that this will be one of the factors that will bring balance to the market and cause everyone to have to compete based on merit instead of marketing buck and monoply power. But don't go using the past tense just yet.
arrogance is relative (Score:4)
Sorry, who was the arrogant one here?
Re:Ancient History (Score:3)
Imminent End of Microsoft!@#$ (Score:3)
Bill Gates (Score:3)
At some point we all learn to compromise because we have to, not because we want to. In the beginning so did wild Bill. Things have changed, it's now his game, he has more money than all of us combined. He DOES (did) run the biggest company in the world, and he, through his own manipulation (be it good or bad), created from scratch his own wealth. He is walking proof that "the system" works for those who know how to use it. He's not some rich boy who took Daddy's money and added a little more to it. He was a middle-class boy who took some of daddy's money, and his own skills (even if not technical) and turned it into an empire.
It is HIS empire to destroy if he so desires it. He's a smart boy, he knows what would be the BEST way of preserving his company, but maybe he doesn't want to. He built that company from nothing and it's being taken from him. If he can't run it his way, he'd probably rather not run it at all. Even if this process "ruins" him (maybe only a few hundred million left), he will always live comfortably. He's merely standing up for what he believes in and for that I admire him, it's a sign of character and backbone.
It irks me (but doesn't surprise me) that Katz of all people will assist in villifying Gates for doing nothing more than standing up for his beliefs. We all do the same for the opposing side, and most of us fall on our own swords, but we do so freely for our cause. It does not make Bill Gates a bad man to fight for his cause. What makes him a bad man is what his cause is. Unfortunately this book is little more than glorified name calling. "He shoulda done this or that" is NOT useful reading. I'm not going to pay any money to hear someone make fun of someone else.
Cursed (Score:3)
This is a book you literally will not be able to put down.
Darn storyteller.. it must be cursed then. Is there a priest with the 'remove curse' spell around?
-Helmet
Microsoft: the world's biggest utility (Score:5)
The problem Microsoft has is, sure, 90% of the world runs their stuff, but that 90% doesn't give a toss. Your average Microsoft user is an office worker who sits down in the morning, turns on their computer, fires up Word and Excel or whatever and gets on with their job. To them, the computer is just a tool; a tool that is handed down from above to them, and, while frequently balky and unreliable, works sufficiently well to get their job done. If there were no computers, their job would be exactly the same, except they would be using typewriters and paper spreadsheets or whatever.
In other words, Microsoft is successful, but it's not the sort of success that Bill Gates or his executives want. Microsoft occupies the same space in the minds of its customers as a traditional energy utility, rather than the bringers of hacktastic innovation to the masses that Bill and the boys would like to be seen as. Electricity? Plug your appliance into a wall socket; it's there. Water? Turn on the tap; it's there. Microsoft software? Switch on your machine; it's there. Ho hum.
No wonder poor Bill and Steve and the rest are so mad! They've very nearly realised their original goal of a computer on every desk running Microsoft software, but practically no-one cares they're running Microsoft software. The only time anyone cares is when it bluescreens for the nth time that day and come 5pm they clock off and go home. No, the only ones that do care are long-haired leftie weirdos who read Slashdot-- and they hate Microsoft and bitch about the technical inelegance of their products! The one segment of the computer-using population that still cares about OSes and APIs and gnarly hacks thinks Bill's software sucks! That's gotta hurt. Bill wants to be a Thomas Edison; not the faceless CEO of some electricity or gas utility. If not, then why all the endless carping about `innovation' during the trial?
Microsoft had better admit this truth pretty quickly-- that their perception of themselves is grossly out of kilter with how they are perceived in the Real World by their customers. C'mon, Bill, there are worse things than being merely adequate; not everyone can be a trailblazer. If they don't wise up, the whole Microsoft edifice will disintegrate, with Bill screaming to the end about `innovation' and the `right to compete', even as the orderlies from Happy Acres Home for the Incorrigibly Bewildered bust down the door of his office, restraints and tasers in hand. Because remember, kids, the paranoid do survive, but only because we lock them up so they can't hurt themselves.
Here endeth the lesson.
On the subject of hubris, Jon... (Score:5)
First they ignore you.
Then they laugh at you.
It Depends How You Define "Fall" :) (Score:3)
I don't think Micro$oft will be broken up. I think our "President" will work to ensure the anti-trust suit is given 0 attention. But Microsoft is hurting. Windows 2000 is NOT taking the world by storm like folks expected. Linux IS making inroads into Microsoft's high profit server market. The desktop scene remains a cash cow for them, but I believe Linux WILL become a strong competitor to Microsoft in the coming years.
We geeks all talk about how 'the average user doesn't have a clue and uses Micro$oft/Intel because - they rule" While true to a point, at some point IF Linux desktop installs become more mainstream and easy to use, the box makers can't ignore it for long. It can wipe off a significant cost for each box (not just hte OS which Micro$oft sometimes gives away practically, but the other things like Office suites, anit virus (on Linux - NOT! :) 0, etc. If htis starts to happen - look out. The only catch here is games - but I see that changing soon too.
Will this result in Microsoft imploding - no way. But the might this giant once held is slipping away and they will soon become just another large software company hawking its wares. Sure they'll use every trick in teh book to stay on top, but instead of the straight up trajectory they are used to, I expect Microsoft will now have to 'work' for good earnings and market share - Just like Intel has since AMD started whipping their butts.
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WTF? (Score:3)
Now I know JonKatz is a troll. Regardless of hom much you people like Linux and hate Microsoft, that does not change the fact that Microsoft is the most powerful, influential company in the United States. This article is pure FUD. I would challenge any one of you to prove that Microsoft is dead or dying, because the way I see it, they're at least as strong as ever.
Ancient History (Score:4)
The new administration will quickly return to a policy of ignoring Microsoft's little shortcomings, and may try to correct the anti-business judgement pushed through by the prior administration.