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Challenges and Strategy

Part of A Memo by Bill Gates

Subjects > Computers > Microsoft > Challenges and Strategy By Bill Gates

IBM: IBM is proposing to take over the definition of PC desktop operating systems. This would be a new role for them -- their previous attempts: Topview and the 3270 control program, did not succeed. The barriers to thier success are not only technical but structural. Why are they willing to lose so much money on systems software? The answer is that they have a plan to design the operating system so that their hardware (MCA) and applications are tied in. Our disagreements with IBM over OS/2 were that we wanted to push 2.0 and they wanted to push 1.3. Now they have switched to the strategy that we proposed -- even using our marketing slogan "better windows than Windows". We will not attack IBM as a company and even our public "attacks" on OS/2 will be very professional. Our strategy is make sure that we evolve the Windows API and get developers to take advantage of the new features rapidly, while IBM has a poor product with poor Windows functionality. Amazingly they are not cooperating with us on our compatibility approach called WLO, but are trying the approach we did not choose of using Windows code itself. Their lack of cooperation limits WLO effectiveness and the Windows approach has contractual and technical problems for them. We will do almost no work specific to OS/2 2.0 -- we will rely on their 1.3 compatibility to run our applications and most of our networking software. Our focus is on OS/2 3.0. If a cusotmer buys OS/2 2.0, the problem for us is that they expect to get Extended Edition and perhpas some PM16 applications that may not be on 3.0 so we may have "lost" that customer. Other than usability, making sure Windows is the winning OS is our highest priority. Eventually we need to have at least a neutral relationship with IBM. For the next 24 months it may be fairly cold. If we do succeed, then we will be done forever with the poor code, poor design, poor process, and other overhead that doing our best to do what IBM has led us to (for the past five years). We can emerge as a better and stronger company where people won't just say we are the standard because IBM chose us. In the large accounts IBM will retain a some of its influence -- this is where our risk is highest.

Other sections of this memo:


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