Microsoft on the brink of battle

Two new books try to answer the question: What makes a software company tick?

By Bill Rosenblatt

July  1998
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With the U.S. government's anti-trust case against Microsoft officially under way, this is a very good time to be publishing a book about Microsoft. This month Bill reviews two of the first books riding the coattails of Microsoft's newfound notoriety. Edstrom and Eller's Barbarians Led by Bill Gates and Quittner and Slatalla's Speeding the Net offer insider accounts of life within the Redmond giant and its arch-rival, Netscape. (2,600 words)

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Microsoft is big news these days. The U.S. government's lawsuit against it has been receiving more front-page coverage than any legal proceeding since O.J. And we are now witnessing the next wave of media products from publishers hoping to cash in on the company's notoriety: tell-all books. Two such books are Jennifer Edstrom and Marlin Eller's Barbarians Led by Bill Gates: Microsoft from the Inside and Joshua Quittner and Michelle Slatalla's Speeding the Net: The Inside Story of Netscape and How It Challenged Microsoft. Both books are examples of the growing subgenre of semi-sensationalist book-length stories about technology companies. Both hit bookstores around the time of the lawsuit. Both are pleasant, fast reads.

The title, Barbarians Led by Bill Gates, is, of course, a lugubrious pun on Bryan Burroughs's Barbarians at the Gate -- the story of Kohlberg Kravis Roberts's hostile takeover of RJR Nabisco -- which many consider to be the paradigmatic saga of 1980s business culture. The implication is that the story of Microsoft is equally emblematic of the '90s. The tell-all tone of the Microsoft book is similar to its predecessor in that it reveals a particular side of business culture, with all of its warts and idiosyncrasies. But what it reveals may not be exactly what its authors had in mind.

New barbarians
Barbarians started out as a first-person account of life within Microsoft -- the person being Marlin Eller. Eller was one of Microsoft's elite developers for many years, dating back to the earliest days of the company. Like many such people, he left the company when his stock options vested and he became a millionaire. He had also grown disillusioned with the culture of Microsoft as a multi-billion-dollar company with tens of thousands of employees -- a sharp contrast to its early days as a closely-knit band of hackers.

Somewhere along the line, what began as first-person account became a third-person narrative about life at Microsoft during the past six years or so. Eller's co-author is the daughter of Pam Edstrom, Microsoft's chief publicist and one of the most admired PR reps in the industry. Rumor has it that mother and daughter are currently not speaking to each other, because this book airs a considerable amount of the kind of dirty laundry that is anathema to publicists.

It is utterly impossible
to get an objective picture
of a company like Microsoft.
In the large, high-tech
environment, things just happen.

Despite the authors' attempts to shift the tone from first-person account to third-person reportage, this book is still very much a representation of Eller's point of view. It is an entertaining narrative of Microsoft's forays into online services, the Internet, video, and other markets, as well as the Justice Department's mounting proceedings against it. But underneath that, the book exposes two important inner truths about technology companies.

The first inner truth is that it is utterly impossible to get an objective picture of a company like Microsoft, no matter how disinterested the writer is or how complete their access to people and documents. Piecing together a coherent, readable, detailed account of several years in the life of a large high-tech company requires that the writer establish a logical chain of events, along with reasoning that links the events and the people responsible for them. Anyone who works for a company like Microsoft, Sun, or any other such place will tell you that this is simply impossible.

Law of the jungle
In the large, high-tech environment, things just happen. Plenty of facts whiz by, but no one has the time to absorb, let alone verify them. Information spreads by e-mail, intranet, and phone, but equally by rumor and guesswork. Executives tend to be poorly informed about what is really going on. They make momentous decisions in closed-door meetings, and their rationale is never truly revealed to the outside world. Such decisions are important, but by no means are they the only factors affecting the directions a company takes. Because of this atmosphere of lightning-speed ambiguity, it is impossible to draw detailed conclusions about how or why big companies do big things. (I'm reminded of financial reporters who make statements like, "Blue-chip stock prices suffered yesterday due to jitters over corporate earnings," or meteorologists who attribute human qualities to the weather.)

For example, both of these books try to pinpoint the pivotal moment when Bill Gates decided that Microsoft should wholeheartedly embrace the Internet. The public moment was his now-famous Pearl Harbor Day speech -- but when was the actual decision made? In Barbarians, Eller and Edstrom represent it as a sudden decision that Gates made while developers argued in the background about the future of interactive digital media. Chief Strategist Nathan Myhrvold believed it would be delivered over broadband services; Russ Siegelman, the original director of Microsoft Network, believed it would be delivered over proprietary low-bandwidth online services. Eller, who had developed some Web-like technology called RIP (Remote Information Protocol), claims to have argued that it would be the Internet -- a form of which Gates eventually backed.

On the other hand, Quittner and Slatalla's Speeding the Net claims that the pivotal person in the Internet decision was Steve Sinofsky, the designer of the Microsoft Foundation Classes for C++ who got promoted to executive staff as a technology adviser to Gates. Apparently, he concluded that the Internet was the next big thing after taking a college recruiting trip. A Sinofsky presentation on the Internet at a Microsoft management retreat then precipitated the change.

How do we know that Sinofsky's presentation was the key event, especially since nobody else seems to have mentioned it? Can we read Bill Gates's mind? Do we even really know how much Gates is influenced by each of his top advisors? Or was Gates simply representing what his key developers had independently decided? We don't know. And the authors don't, either. They just need to tell a good story, and pointing to events such as Sinofsky's talk makes things coherent.


Caste system
The second hidden truth brought out by Barbarians centers around the politics of large technology companies. Such companies -- I am admittedly generalizing and extrapolating from my in-depth knowledge of two of them -- have employees that are divided into four castes:

  1. The Big Guy, or perhaps two or three Big Guys, or the Top Guy and a couple of trusted advisors.

  2. The VPs, who form a closed circle around the Big Guys, wielding political power and jockeying for more through business acumen, deviousness, sycophancy, and other such skills.

  3. The key technical people, who do the real work -- hack code, design products, and such. Without them, the company wouldn't have a business.

  4. Everybody else.

The pattern of life at such companies is roughly this: Key technical people simply do their stuff. They choose projects mainly on the basis of their own skills and interests, tempered somewhat by strategic pronouncements from the Big Guy. They report to vice presidents, who don't so much control them as back them. Vice presidents choose (and fight over) which techies to back based on what they think will get them the most airplay with the Big Guy. The Big Guy encourages this competitive situation, because there is usually some overlap between the VPs' political goals and the business goals of the company.

In truly exceptional situations, the Big Guy will understand the technical issues deeply enough to go around the VPs directly to the techies, thus excising some of the more shameless politics from the process. Perhaps this is the source of Microsoft's success. Bill Gates does come off, in both of these books, as someone who really tries to grasp the issues himself rather than breathe his inner circle's swamp gas.

Talking to [Nathan] Myhrvold
was a little like smoking dope.
It could give you insights,
but in the light of day those insights
often didn't make any sense.
-- Marlin Eller, Barbarians Led by Bill Gates

Barbarians paints just such a picture of life at Microsoft. Eller, of course, fit into category three: a highly skilled, difficult-to-manage developer who went around choosing hot projects to work on. (He got passed over for promotion precisely because of his unwillingness to play the political game.) He has few kind words for the top people at Microsoft, especially Nathan Myhrvold: "Talking to Myhrvold was a little like smoking dope," he writes. "It could give you insights, but in the light of day those insights often didn't make any sense."

Speeding the Net intersects with Barbarians in its coverage of Microsoft's discovery of the Internet, and Netscape's subsequent adventures competing against Gates. Both books demonstrate that Microsoft's normal course of business is stealing other companies' technology, because Gates has developers who can take and clone other people's ideas. When a smaller company appears with an offer of technology for licensing or sale, Microsoft determines the technology's value by calculating how much it would cost to develop the technology itself. The threat is implicit but clear: Take our price, or we'll copy you and put you out of business. This behavior isn't illegal, nor is it the subject of the government's complaint, but it is a good illustration of how Microsoft has gotten where it is today.

Netscape's odyssey
Most of Speeding the Net, however, is the story of Netscape, which is not a large technology company by Microsoft standards. In fact, if the book is to be believed, Netscape is maintaining the hacker culture it started with. The first half or so of the book reads like the modern equivalent of an old-fashioned heroic melodrama: an epic tale of valiant young warriors (nerdy college kids from Illinois) performing their feats of derring-do (code development) against mythical evil creatures (bugs, deadlines, bureaucrats, Microsoft) and achieving manhood (IPO riches) -- starring Marc Andreessen as Telemachus. There are lots of episodes involving pizza, Mountain Dew, all-nighters, sleeping under desks, questionable bathing habits, and so on.

In other words, this is the stuff of which cliches are now made. In fact, there's not much to differentiate it from the story of just about any other software startup, except for one very important thing: This is about the startup of the Internet, not just any old software product. When Netscape released its Navigator 1.0 browser, it was releasing the Internet to the general public. When the company went public and investors bid the stock up into the stratosphere, they were investing in the Internet. When Microsoft decided to move in on Netscape, it was moving in on the Internet.

The interesting story in Speeding the Net is how Marc, Clark, and Bark (Andreessen, visionary Chairman Jim Clark, and pragmatic CEO Jim Barksdale) fashioned a highly profitable business from a set of open standards. Sun did something similar fifteen years ago with Unix (and may do it again with Java), but Netscape's achievement is perhaps more impressive -- because it touches more people than Sun, and because these guys had to do it by the seats of their pants.

While the book gives most prominent treatment to Andreessen and his merry band of hackers, it implies that Barksdale became the real hero once the initial product came out. Barksdale, old enough to be the developers' father, brought in many years of executive experience with IBM, AT&T, McCaw Cellular, and Federal Express. In addition to his reputation as a first-class operations manager, his experience at Federal Express and in telecommunications made him understand -- as this book puts it -- "the power of the network made flesh." The book draws a picture of Barksdale as the cool, detached decision maker, with a firm hand on the tiller in an ocean of chaos.

The free world
Speeding the Net finishes off at the point where Netscape decided, in the face of Microsoft's onslaught, to make its source code freely available. In doing this, it defied software industry convention, but it also followed in the footsteps of hacker cult heros: Richard Stallman, inventor of the GNU Emacs editor and founder of the Free Software Foundation; Eric Raymond, editor of the Hackers' Dictionary; and Linus Torvalds, developer of the Linux operating system.

The freeware philosophy -- which is distinct from that of public-domain software or shareware -- is based in part on the idea that the best software results from the most people contributing to it. Therefore, restrictive source licensing is anathema to software quality. (It is also based on Stallman's notion that intellectual property should be a public good, not a source of private gain.) From Netscape's point of view, making the browser source code into freeware makes the browser war more like the Java war: It's not just Netscape or Sun against Microsoft, it's the whole world against Microsoft. This is a noble stance, and one that is certainly ingratiating the company with the community of software developers -- but of course it remains to be seen whether it will be profitable.

Both of these books are fun and fast-moving. You could get through either of them in an evening's sitting, accompanied by an appropriate beverage: Jolt or Mountain Dew for Speeding the Net; a double hazelnut latte for Barbarians Led by Bill Gates. Barbarians suffers from a surfeit of awkward, cutesy wordplay, as exemplified by the title and a few chapter headings ("The Road Behind," "Pen Ultimate Warfare," the latter referring to Microsoft's unsuccessful foray into pen computing). Speeding the Net is written in a more journalistic style, but it suffers from a lack of index and some technical misunderstandings (for example, its explanation of RISC versus CISC microprocessor architectures is just plain wrong). Yet one pleasant surprise in the middle of this book is a highly lucid summary of intellectual property law, worthy of publication in a magazine as a service to anyone following the Microsoft antitrust case. (The Economist comes to mind; or perhaps it already has been published on Time Inc.'s Pathfinder Web site, where Quittner holds a day job.)

These books offer the story so far of Microsoft, Netscape, and the Web. They are of the moment and should be treated as such. Once the Justice Department activity comes to a close, you can be sure that there will be many more interpretive writings on the subject.

[ Books]
Title: Barbarians Led by Bill Gates: Microsoft from the Inside
Authors: Jennifer Edstrom and Marlin Eller
Publisher: Henry Holt and Company
ISBN: 0805057544
List price: $25.00

Title: Speeding the Net : The Inside Story of Netscape, How It Challenged Microsoft and Changed the World
Authors: Joshua Quittner and Michelle Slatalla
Publisher: The Atlantic Monthly Press
ISBN: 0871137097
List price: $25.00


About the author
[Bill Rosenblatt's photo] Bill Rosenblatt is market development manager for media and publishing industries at Sun Microsystems Inc. Reach Bill at

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