By E.J. HERESNIAK
From The Conference Board
Judgments of history are often in the eyes of the beholders; winners usually write the accounts. Such judgments are challenged when even indisputable facts put people in difficult spots.
Microsoft provides a compelling case of rewriting history. Bill Gates, ruthless monopolist and now honored philanthropist, fudged some facts a few months back in defending Microsoft's track record of innovation. The company had invited nine influential bloggers to the Microsoft campus in Redmond, Wash., to give fresh-eyed, unbiased feedback on product direction and plans. Gates joined the group at the end of the day for some Q&A that got interesting, particularly from a historical perspective.
A young blogger named Jonathan Snook questioned Microsoft's culture of innovation, saying to Gates: "I've often felt that Microsoft has certainly been reactionary to the market."
"Oh really?" shot back Gates, whose extemporaneous response was a hit in the press as he bitingly defended Microsoft and his personal reputation. "The myth of all these things. We did 8080 word processors, 8080, eight-bit machine word processors. Every stupid thing, we did first." Gates went on to enumerate a number of items that he insisted Microsoft pioneered -- and complained about an anti-Microsoft bias that erases its pioneering contributions.
His protests were heartfelt and not entirely off base -- and more than a little revisionist. One fellow, reacting to the exchange between Snook and Gates, wrote: "I think Microsoft does innovate in some areas but the innovations never seem to become truly successful products even in the business world. Windows is successful because they have a choke hold on the industry." I agree. In his spirited defense to the innovation challenge, Gates said, "So, let history be rewritten at all times. But there's no way to get it straight, I guess."
I guess so, too. Gates also digressed to claim fatherhood of word processing. Yet in college, on IBM's first PC, I was using a word processor called Easywriter, created by a fellow on work release from a jail sentence. It wasn't until three years later that Microsoft released an early version of Word, which itself was a derivative of a long series of inventions from Xerox's Palo Alto Research Center.
Word processing didn't evolve from the computer business at all. It came from the electronic-typewriter business, which itself evolved from mechanical typewriters. IBM scientists and mechanical engineers came up with all sorts of inventions to improve them, including using magnetic cards and tapes to reduce the chore of retyping things or making small changes.
No one would argue that Microsoft hasn't played a key role in popularizing word processing, or in making it the ubiquitous tool it is today, but Gates doth protest too much.
Not that Gates is the first of his breed to rewrite the past. Other storied monopolists have morphed into nice folks, too, after they got rich and started doing good deeds. Cornelius Vanderbilt in particular is reported to have been blunt and unapologetic. To one rival he wrote, "You have undertaken to cheat me. I won't sue you, for the law is too slow. I will ruin you."
It's precisely that power of monopoly that makes it easy for Microsoft to, if not exactly rewrite history, steer its course.
Take instant messaging, in which two or more people can type to each other in real time. It originated as an easy-to-use part of America Online, back when that company was innovating. Today, the premier instant-messaging tool is a Windows feature, tightly integrated with the operating system and rich in function. You can send voice clips, video and even establish a "telephone" conversation. Microsoft, like monopolies before it, can use profits to invest in or subsidize new products or features not otherwise justified by market demand, thereby making things really tough for competitors.
Another piece of computing history influenced by Microsoft involves Netscape, which developed the first effective commercial Web browser program. Though Netscape initially charged users, it became free after Microsoft introduced its own free alternative, piggybacked on its Windows monopoly. At the end of last year, as part of its retrenchment, America Online -- which acquired a weakened Netscape in 1999 -- said it was finally shutting down the browser company. At least Gates isn't claiming he invented browsers, too.
These days, Gates is working hard to be remembered as a do-gooder who saves the world rather than as a calculating tycoon who crushed competition by abuse of Microsoft's monopoly power -- conclusions written in testimony and validated by court decisions in the United States and the European Union.
In January, at the World Economic Forum, an annual meeting of bigwigs intent on saving the world, Gates called for adapting capitalism and market forces to address the needs of poor countries, which he said were being ignored. "We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well," he said. He wants businesses to dedicate their top people to issues of poverty, which he supposes will be more powerful than corporate giving and volunteering.
With billions in the bank and more to spare, Gates is free to tell us how to save the poor and even lead by example. I wonder if that was his plan when he used his market position to kill so many jobs at competing companies.
It seems that a feature of capitalism every century or so is letting monopolists collect all the money and then rehabilitate their image from merciless destroyers of competition to visionary philanthropists by dispersing it as they see fit, many times for the common good and for fitting purposes. Maybe that's OK in the long run, but we ought to just acknowledge that and keep history as history -- and not rewrite it as part of the bargain.
E.J. Heresniak consults for a variety of businesses, drawing on more than 30 years of experience with IBM, McGraw-Hill, Standard & Poor's and academia.
