Hard Drive: Bill Gates and the Making of the Microsoft Empire (44 page)

Gates founded his own company, Interactive Home Systems, to buy up the electronic rights to the world’s greatest works of art. In early 1991, the company bought electronic rights to about 1,000 art works owned by the Seattle Art Museum. The company is still negotiating with the Smithsonian Institute, the National Gallery in London, and the Art Institute of Chicago. Gates is well aware of the commercial potential of this new computer technology, known as multimedia. And he is not the only player in the field. In late 1991, Eastman Kodak Company purchased Image Bank, the nation’s largest supplier of stock photos. Microsoft was also trying to buy the photo company. But Gates does have a jump on the competition. In 1991, Microsoft bought a sizeable interest in Dorling Kindersley Ltd., the London book publisher known for its popular “The Way Things Work” series. Gates has said he believes electronic publishing could be a $1 billion business by the end of the decade. Competitors are already worried that Gates will dominate this field, too.

The home Gates is building will have three childrens bedrooms, as well as one room for a live-in nanny. Gates is always thinking ahead. But for now he remains one of the nation’s most eligible bachelors. Gates is sometimes besieged by women who want to date him. One woman who was a member of Mensa, the society for people with high IQs, wrote to Gates asking him about software for her Macintosh. Gates not only delivered the software, but met her in Atlanta for an evening on the town. Another woman at Microsoft sent Gates an E-mail invitation to lunch. A low-level employee in Microsoft’s information center, she didn’t expect a reply.

Gates did reply, however, informing her he was very busy at the time but would be in touch. Several months later, she heard back from Gates by E-Mail: “What about tomorrow?”

The employee took Gates to lunch at a nearby restaurant on the back of her motorcycle, and over the next few months the two went out dancing several times at some of Seattle’s trendy nightclubs, usually hitting several clubs in an evening.

“I thought he was the most fascinating man I’d ever met,” the employee remembered.

Dan Graves, former export manager for Microsoft who left the company in 1991, recalled an evening with Gates at a chalet in the French Alps at one of Microsoft’s international sales meeting . Gates flew in by helicopter. “We partied all night, everybody,” Graves said. “When I walked out at 5 o’clock in the morning I almost stepped on Gates on top of a woman out, on the lawn.”

“Bill likes to have women in his life,” said a Microsoft executive who has" known Gates for ten years.

For the last few years, Gates has had an on-again, off-again romance with a product manager in Microsoft’s marketing division. Neither will comment about the relationship.

Because he comes from a close-knit family with traditional values, close friends expect Gates eventually to marry and have children. “His family is an important part of him,” said Paul Allen. “I don’t want to put words in his mouth, but I expect him to have a family one day.”

Gates himself has said he expects to be married before 1995. And he expects to have children eventually. But Gates has also made some rather unfatherly remarks over the years. After a personal computer forum in Tucson, Arizona, two years ago, Gates was having a beer with half a dozen industry acquaintances when the conversation turned to the number of people in the computer industry who were starting families. Gates, who had been quiet for some time, suddenly blurted, “Kids are a problem. Later, he elaborated with the curt pronouncement, “Babies are a subset.”

“As much as Bill wants children, he may never be able to take that step, said his friend Vern Raburn, who recalled a conversation he had with Gates in 1990, when Gates came down to Phoenix to help Raburn celebrate his 40th birthday.

“He was flabbergasted that his parents were in their 60s,” said Raburn. “He can’t figure this out, and that’s because Bill consciously tries to protect and maintain this 9 year old in

him That’s the fun part in him. That’s a part you can’t find

in most people. That’s why he doesn’t want to get married, because you can’t be 9 years old and be married. When you are married, you become your parents.”

If Gates carries with him occasionally the attitude and spirit of a child, it is a spirit seen most clearly through his love of games. Each July he throws a huge bash known as the Microgames at the family compound on Hood Canal, a kind of recreation of the games he played as a child at Cheerio. About a hundred industry friends and guests vie for prizes. Gates and his family are the judges. Each year, the games have a different theme. A couple years ago, the theme was African Safari. There were prizes for everything from African Jeopardy to shooting blow darts. Gates once had six tons of sand trucked in to see who could build the best sand castle. The Microgames end with contestants composing and performing a rap song. It is the ultimate kid’s birthday party for adults—with Chairman Bill the ringmaster.

Gates gives another, much larger annual party for his employees. In August of 1991, nearly 10,000 employees turned out for Microsoft’s annual picnic at a sprawling private park in the foothills of the Cascade Mountains east of the Redmond campus. More extravagant yet is the annual Christmas party. In 1990, it was held in the new, 170,000-square-foot Washington State Convention Center. The trade room floors were turned into familiar New York City landmarks, such as Greenwich Village, the Hard Rock Cafe, and Little Italy, each with its own distinctive menu and decor. Yellow taxi cabs were parked inside, on the floor. Actors were paid to come dressed as New York City street people.

While morale at Microsoft is high for the most part, employees do complain about the demanding pace, especially those who work on the development side. The work ethic has not changed much at Microsoft over the years. One well known businessman on the Eastside, where Microsoft is located, said he runs into a lot of “Microsoft wi
n
dows.”

“The joke among them is, ‘We hope Bill will get married. Then we will finally get to see our husbands,’ ” he said. “The sense from these wives is that Bill is a nerdy guy who has no appreciation of people’s real lives. Microsoft does crazy things, like telling an employee they have to be in Hawaii tomorrow. In this day and age of two parents raising kids, that’s hard. People see Microsoft as being hostile to families. It’s a great place for the young, unmarried devoted types. But as Microsoft employees age, there’s more and more tension between the company’s standard practices and people starting to raise families. But they are locked in because of the stock options. They can make so much money.”

Ida Cole, Microsoft’s first female executive, recalled that Gates scheduled the 1990 retreat for company executives on Mother’s Day.

“You know, most of those guys are married, most of them are fathers. There were lots of complaints,” said Cole. “But Bill still had it. What he did, though, was compromise. He let them all go at noon on Sunday so they could have the afternoon at home with their families. ... Bill loves his mother. That’s not the issue. But the company has always taken this incredible priority with him. I’m sure he never thought [holding the retreat on Mother’s Day] would be a consideration for people.”

Gates continues to keep his finger on the pulse of the company, and all critical decisions pass through him. In early 1992, Gates fired Michael Hallman, Microsoft’s president of less than two years, in a major reorganization of the company. Hallman, a former executive with IBM and later with Boeing, wasn’t getting the job done, Gates bluntly told reporters. Hallman had replaced Jon Shirley, who retired in 1990. As part of the shakeup, Gates announced that a triumvirate would now share the presidency. He said Microsoft had become so large that no one person could handle the duties of the number two job. Rather than going outside the company, Gates chose three close friends and Microsoft executives—Steve Ballmer, Mike Maples, and Frank Gaudette—as the ruling troika to replace Hallman.

Although analysts were surprised by the move, it showed that Gates is still very much in control. And that’s what investors like to hear. Microsoft’s stock surged nearly $5 a share the day the shakeup was announced.

It’s impossible to imagine a Microsoft without Gates at the controls. Those who know him best say he is as driven as ever, and as long as he’s in charge Microsoft will not be threatened as the world’s leading software company.

“We have this vision of where we are trying to go, and we’re a long ways away from it,” Gates said during a recent interview in his modest office. A large picture window looks out over part of Microsoft’s huge campus. But Bill Gates is not the kind of CEO who spends valuable time admiring the view.

“You gotta watch out for the anticlimax,” he went on in response to a question about what it felt like to be the chairman of the world’s largest software company. “I mean, we are not on top of the networking heap, or the spreadsheet heap, or the word processing heap. Computers are not very easy to use. We don’t have information at our fingertips. There is one thing that is fun—I look out there and see fun people to work with, who are learning a lot. That’s cool, and that feels good, but we’re not on top. Yes, our revenues are bigger than anybody else’s, but if we don’t run fast and do good things.. ..”

His voice trailed off, leaving the sentence unfinished. Gates got up and walked over to his desk to return to work. “Believe me,” he said as the interview ended, “staring out the window and saying ‘Isn’t this great,’ is not the solution to pushing things forward. . . . You’ve got to keep driving hard.”

Index

Ada, Augusta, 68 Adams, Brock, 9, 17, 46 ADDS (Applied Digital Data Systems), 112— 13

Adobe Systems, 382

Advanced Computing Enviroment (ACE), 404 Adventure, 205 Aiken, Howard, 68-69

Akers, John, 403, 408-9 ,

Aldrin, Buzz, 22

Alex. Brown & Sons, 322, 324

Alger, Horatio, 218

Allen, Paul

at Honeywell, 59-60 at MITS, 83 at TRW, 48-51

and Bill Gates, 33-34, 62, 66-67, 119, 129-30, 131 character of, 159, 162 class-scheduling program of, 44-47 and Computer Center Corporation, 30, 32-33 and DISK BASIC, 98-99 finances of, 409-10 on Gates family, 15 and Harvard University, 82-83 and IBM, 170, 186-87 and Lakeside prep school, 21, 24-26, 336 and Lakeside Programmers Group, 41 lifestyle of, 412

and Microsoft, 2, 88-91, 93-99, 107-10, 132-33, 135, 137-38, 235-38 and Microsoft BASIC, 74-81, 91-94,
^v
99107

as Microsoft stockholder, 330 and MITS, 85-88

and MS DOS, 186, 194-96, 202-4, 34042

ownership of stock by, 325 and Pertec, 115 -

post-Microsoft activities of, 326, 361-62 responsibilities of, 226 ana Seattle Computer Products, 185 social life of, 235 and SoftCard, 157-59 as space enthusiast, 198 and Traf-O-Data, 44-45, 59 Allen, Woody, 272

AUI Really Seed to Know I Learned
In

Kindergarten
(Robert Fulghum), 18-19 Alsop, Stewart, 248, 313, 345-46, 349, 352, 358, 364-65, 375-76, 400 Altair 8080

designing BASIC for, 74-81 introduction of, 67, 72-74, 85-88 marketing of, 91-92 Apple

collaboration of with IBM, 404-9 computers, 111-12, 251 and development of Excel, 281-87 formation of Claris Corporation by, 400 and IBM, 214 Macintosh, 267-70, 398

and Microsoft, 120, 134, 157-59, 220-21, 314-18, 351-56, 402 sale of public stock by, 320 and Windows, 363 Armstrong, Neil, 22 ASCII 123

Ashton-Tate, 320, 326, 388-90, 398, 408

Asimov, Isaac, 6

Astro, 112

Asymetrix, 326, 361

AT&T, 155, 398

Atari, 164

Atkinson, Bill, 317-18

Atlas, Charles, 374-75

Atwood, Colby, 39

Augustine, Brad, 37, 44

Autobiographical Notes
(Albert Einstein), 22

Babbage, Charles, 67-68 Bajarin, Tim, 362, 394 Ballmer, Steve

at Harvard, 62-64 before joining Microsoft, 163-65 and Bill Gates, 237, 273 and Blair Newman, 156-57 character of, 228, 249, 324 and Charles Simonyi, 220 and Digital Research, 212 finances of, 325, 326, 356, 409-10 and Go Corporation, 394 and IBM, 4, 139-41, 169, 170, 186, 188

and Seattle Computer Products, 203 and 3Com Corporation, 383-84 and Windows, 250, 308-13, 348-49 BASIC, 23, 28, 73-74 Bauer, Eddie, 288 Bennett, Jill, 272-74

Bily, Raymond, 225, 234-35, 246, 249, 277, 278

Black Comedy
(Peter Shaffer), 47
Blue Magic
(James Chposky and Ted Leonsis), 167, 186 Bogle & Gates, 341-43 Bonaparte, Napoleon, 35 Borland International, 277-78, 408 Bradley, Dave, 190, 192, 198 Braiterman, Andy, 55, 56, 60, 61, 63, 110 Bricklin, Dan, 145-46, 353, 410-11 Brock, Rod, 143, 183, 185, 194-97, 199, 202-4, 215, 340-44 Brodie, Richard, 242 Brubeck, Dave, 1 Bryan, William Jennings, 8 Buffett, Warren, 406

Bunnell, David, 72, 92, 95, 96, 101, 103-4, 116, 125-26, 131,236, 242 Burroughs, Edgar Rice, 6 Bush, George, 411 Bushnell, Nolan, 57
Business Week,
201-2 Byron, Lord, 68

Cannavino, Jim, 364-65, 367, 370-71 Cannery
Row
(John Steinbeck), 401 Carlson, Paul, 39, 41 Carter, Jimmy, 9 Cary, Frank, 170

Catcher in the Rye
(J. D. Salinger), 35

Caulfield, Holden, 35

C-Cubed

See
Computer Center Corporation CDC

See
Control Data Corporation Chan, Thomas, 396 Chaplin, Charlie, 215 Cheatham, Tom, 66, 82-83 Chposky, James .

Blue Magic
, 167 Chu, Albert, 108, 109 Churchill, Winston, 115 Claris Corporation, 400 COBOL, 73-74 Cole, Ida, 290-94, 418 Colony, George, 409 Commodore, 111, 134 Commoner, Fred, 64 Compaq Computer Corporation, 233-34, 347, 404

Computer Center Corporation, 26-33
Computer Notes,
92, 102, 126
Computer Power and Human Reason
(Joseph Weizenbaum), 34-35 Computer Technology Development, 67-74 Control Data Corporation, 41-42, 112 Cook, Scott, 378-80

Corporate Culture, 125-29, 159-61, 221, 263-66, 275-77, 290-94, 417-19 Corr, Kelly, 341 Courier, 112 Creative Strategies, 394 Cringely, Robert, 365 Crippen, Robert, 198 Crunch, Captain, 205-6 Curry, Eddie, 86, 94, 96, 98-99, 102, 106, 115-17, 130, 202-3, 211-12, 213 Cybernet, 41-42

Davidoff, Monte, 77-78, 94, 97, 102, 126

Davis, Jim, 363

DEC

See
Digital Equipment Corporation Delta Data, 112, 113 Denman, Donn, 317 Diamond, Joe, 275

Digital Communications Associates, 354 Digital Equipment Corporation, 404, 408 and Bill Gates, 20 computers of, 31-32, 70 and Microsoft, 137 and MS-DOS, 212-13 software of, 29, 33 Digital Research, 354, 408 foundation of, 175 and IBM, 179-82 and Microsoft, 174-79, 211-13 operating system of, 183-84, 398
Discrete Mathematics,
66 DISK BASIC, 98-99, 109 Dorling Kindersley Ltd., 415

Dougal, William, 38 Drill, Scott, 61-62 Dvorak, John, 313 Dyson, Esther, 376

Eagleton, Thomaj, 46 Eastman Kodak Company, 414 Edison, Thomas Alva, 270-71 Edmark, Carl, 12, 38, 39-41, 235 Eggebrecht, Lewis, 170 Einstein, Albert, 272

Autobiographical Notes,
22 Eisner, Mark, 266 Ellis, Jenise, 366 E-Mail, 275-77

ENIAC (Electronic Numerical Integrator and Calculator), 69 Esber, Ed, 388-90

Estridge, Don, 168, 172-73, 189, 214, 216, 345-46

Eubanks, Gordon, 177, 223, 376 Evans, Dan, 14, 89

Evans, Kent, 20, 21, 24, 26, 30, 33-34, 38, 39, 42-43, 45, 46 Evans, Marvin, 24, 44 Excel, 278-87

Falcon Technology, 341-42 Federal Trade Commission, 3-4, 372-81, 397-401 Fenstermalcer, Mary, 366, 370 Feynman, Richard, 271
Fire in the Valley,
42, 78, 186 Florence, Philip, 282-83, 293 Flynn, Errol, 100
Forbidden Planet,
72 FORTRAN, 73-74, 109
Fortune,
137, 271, 322-23 Franksfon, Bob, 146 Friedman, Neal, 261-64, 350 Friedrich, Otto, 230 FTC

See
Federal Trade Commission Fulghum, Robert

All 1 Really Need to Know I Learned in Kindergarten,
18-19 Fylstra, Dan, 145-46, 217

Gates, Kristi, 10, 17, 48 Gates, Libby, 12, 93-94 Gates, Mary Maxwell connections of, 136, 189 early life of, 9-10 as Microsoft stockholder, 325 relationship with Bill Gates, 10-17, 34

Gaudette, Frank%21-22, 326, 327, 329,

410, 418 General Electric, 20, 109, 134, 157 Gibbons, Fred, 322 Gilbert, George, 365-70 Gloyd, Karen, 57-58 Go Corporation, 392-94 Goddard, Robert, 116 Gold, Tony, 177

Goldman Sachs, 321-22, 324, 328-29 Graham, Katherine, 406 Graves, Dan, 415 .

Grayson, George, 390-92 Grayson, Ruil, 360, 390-92 Greeley, Horace, 8 Greenberg, Bob, 126, 137 Greenfield, Meg, 406

Gruen, Dick, 33

Hackers
(Steven Levy), 87 Hallman, Michael, 411, 418 Hanson, Rowland, 242-44, 245, 291 Hardy, Andy, 270

Harvard University, 53-67, 81-83, 110-11 Hearst, William Randolph, 413 Heath-kit, 137 Henry, Tames, 375

Hertzfeld, Andy, 268, 283-85, 316-17, 353

Hewlett-Packard, 353-54

Hitachi, 224

Hollerith, Herman, 68

Homebrew Computer Club, 100-101, 103

Honeywell, 59-60

Hopper, Grace, 29

Hucks, Bill, 50-51

Hummer, John, 337

Hussein, Saddam, 392

Iacocca, Lee, 411 IBM

and Apple, 267-68

computers of, 165-68, 204-6, 214-16 and development of initial computer technology, 68-69 and Digital Research, 179-82 and Microsoft, 4, 139-41, 164-65, 16870, 170-74, 186-87, 188-90, 190-93, 194-202, 344-51, 356-59, 363-65, 371-72, 402-9 and MS-DOS, 2-3 and Windows, 253, 257, 308, 314 Ichbiah, Daniel

The Making of Microsoft
, 11 Image Bank, 414 IMSAI Manufacturing, 175 Inamori, Kazuo, 224 Information Sciences, Inc., 42-44
Info World
, 200-201, 257, 365-66 Intel

and Gary Kildall, 175 microprocessors of, 71-72, 142, 345 and Microsoft, 113, 134, 152 Intelligent Systems Corporation, 112 Interactive Home Systems, 414 International Business Machines
See
IBM Intuit, 378-80

Isaacson, Pbrtia, 123, 168, 323, 326 ISI

See
Information Sciences, Inc.

Isyx, 112

Jackson, Henry “Scoop,” 14 Jenkins, Jim, 54 Jobs, Steve

and Apple, 100, 316, 317, 320 and Bill Gates, 251, 267-70, 283 and Excel, 285-86 on Go Corporation, 393 and Macintosh, 219, 220 and Windows, 315, 355 and Xerox Corporation, 253 Johnston, Bruce, 370 Jones, Jim, 265

Jordan, Michael, 11

Julius Caesar
(William Shakespeare), 67

Kahn, Philippe, 277-78, 380, 389 Kaplan, J. Jerrold, 393 Kapor, Mitch, 278-79, 282, 285, 310, 322, 370,375 .

Kassar, Ray, 164-65 Kay, Alan, 231 Kessler, Alan, 383-84, 387 Kidder, Tracy

The Soul of a New Machine
, 193 Kildall, Gary

at Computer Center Corporation, 30-31 background of, 174-75 ' character of, 213 and IBM, 179-82, 206, 240 and Microsoft, 175-79 operating system of, 154, 158, 173, 184, 223

King, Frank, 360-61 Kleiber, Bob, 380 Kluge, John Werner, 410 Klunder, Doug, 278, 282 Knepper, Susan

The Making of Microsofty
11 Konzen, Neil, 306

Kyocera Corporation, 2£4 '

Lakeside Prep School, 18-26, 35-41, 44-47 Lakeside Programmers Group, 26 Lammers, Susan, 218
Programmers at Work
, 23 LAN Manager, 382-88 Laptop Computers, 224-25 Larson, Chris, and Lakeside Programmers,

44, 93-94, 97, 107, 126, 131-32, 144, 333,410 Lawrence Livermore, 112 Leeds, Richard, 199-200, 211 Leithauser, Braid, 61-62 Leitner, Henry, 64, 66 Leonsis, Ted
Blue
Magic, 167 Letwin, Gordon, 137, 297, 299-300, 325, 356, 369 Levy, Steven
Hackers,
87 Lewis, Andrea, 126 Lexar, 112