Resolve and Fortitude : Microsoft's ''SECRET POWER BROKER'' breaks his silence

by Joachim Kempin

  History had reversed itself—CP/M-86 was now considered an MS-DOS clone. It did sound strange knowing that MS-DOS had been derived from an early CP/M-86 clone. To DRI’s dismay, MS was for now unarguably in the lead. She found herself in the role of a scrambling and tenacious runner-up who never—in great competitive spirit—gave up correcting the imbalance. Her unrelenting attitude kept MS’s OS development on its toes and guaranteed product improvements from both companies.

  In ’88 DRI changed the name of CP/M-86 to DR-DOS. Signaling compatibility, she continued to use MS-DOS identical version numbers. Not leaping ahead of us further fostered her clone image. With both OSs comparable in performance and features, DRI—for the world at large—appeared inept at charting her own destiny—the MS-DOS benchmark therefore remained the undeniably yard stick. A few journalists and advanced users disagreed with this entrenched perception, though imparting little effect on MS’s image as the standard bearer.

  As a result, people wondered how compatible DR-DOS and MS-DOS truly were. Their code had never been identical. Users therefore experienced well documented and small functional differences despite DRI’s strident denials. MS’s support organization, which I managed for several years, diligently kept track of them. Any public mention of apparent incompatibilities made DRI management outright furious! Allegations were always instantly rebutted. OEM customers who were licensing from both companies concurred. Our answer to them: Switch to the “original” and your customers won’t suffer. DRI’s public relations teams tried hard but never mastered the daunting job of changing public misconceptions.

  With the appearance of 80286/386 CPU-powered PCs, UNIX had become a viable OS alternative for PCs. It was derived from AT&T’s original code, developed in the 70s and written in a non-system specific programming language called C, developed between ’69 and ’73 by Dennis Ritchie at the then AT&T owned Bell Telephone Laboratories. A novelty at a time when OSs were normally written in assembler language uniquely tied to the computer systems they were designed for. The brilliance of writing UNIX in C eased its portability to other systems. As long as a C-compiler existed for the targeted computing platform, a port could be accomplished in a relatively short time frame. AT&T spread UNIX’s popularity further when licensing it with few restrictions to a variety of manufacturers. Porting it to several minicomputer systems was the first serious attack aimed at the proprietary OS empires the IT world was built upon long before Bill succeeded with the MS-DOS standard in PC land. UNIX running on minicomputers had the potential of bringing down switching cost for customers. Not wanting to believe in or promote that type of progress, Digital Equipment Corporation’s CEO Ken Olson called UNIX a form of “snake oil.” As such, UNIX was a disruptive technology and contributed heavily to the downfall of the leading minicomputer companies of that time before PC servers became feasible and finished that job. Why didn’t UNIX conquer the PC world as convincingly?

  Simply put, all companies who developed UNIX for the IBM PC were thinking and planning within the cloistered, proprietary walls of sovereign systems unwilling to answer the call for unification. IBM called hers AIX, Sun distributed SOLARIS, Hewlett-Packard called her version HP-UX, and many others left the name UNIX unchanged. MS and SCO (Santa Cruz Operation) used the name Xenix. Introducing vendor specific incompatibilities robed UNIX of a golden all-encompassing standard setting opportunity. The other most important ingredient for a successful run truly existed. Available for nearly 20 years, the UNIX environment was rich in application programs. On the other hand, to port them to the variety of incompatible UNIX systems was costly and time-consuming. The larger memory footprint and the higher-end CPUs UNIX needed to function well added to its disadvantage. Last but not least and as important, UNIX was hard to operate by computer novices. Lacking their crucial acceptance, it nevertheless successfully veered off into the high-end PC workstation realm used by computer experts for graphical designs and engineering tasks. The availability of superior graphic libraries and design tools were the main reasons for its popularity in that user segment—again software availability drove hardware use. All in all, the fragmentation of the UNIX standard and its consumer unfriendly operating interface served to MS’s advantage and made—for now—for a less dangerous and only niche occupying competitor.

  In the early ’80s, controlling OSs with command line user interfaces—like MS-DOS, DR-DOS and UNIX—finally came of age. The trend toward using a Graphical User Interface (GUI) instead can be traced as far back as 1945. Several experiments then and thereafter led to a handful of scientific papers substantiating the advantages of operating a computer with a mouse-driven cursor and graphical window technologies. The competition for developing modern GUI shells—as we use them today—eventually heated up. Earlier systems like the Xerox Alto and the Three Rivers PERQ failed to gain market acceptance. Apple was slightly more successful with the experimental Lisa95 system she released in ’83, and gained tremendous customer acceptance and industry accolades with her Macintosh (MAC) PCs one year later.

  Steve Jobs had developed the latter to regain Apple’s lead and eventually wipe out PCs powered by MS-DOS, potentially hurting us and the IBM PC–clone industry alike. The full blown GUI operated MAC was years ahead of competition. Its commercial success nevertheless lagged Job’s revolutionary vision. Being priced too high dampened customer acceptance and led to Steve Jobs ouster in ’85. A huge blunder for Apple’s shareholders and fans! His role as product guru was taken over by Jean-Louis Gassée, my ex-colleague, who eventually met the same fate. The PC industry including MS continued to prosper while Apple went into a tail spin.

  The PC industry knew that Apple was on the right track. So the GUI race continued. In ’84 Tandy ambitiously ported her semi-graphical user shell from the archaic TRS-80 to her MS-DOS based PCs. DESQview96 appeared as yet another none-command line interface for IBM PCs. Commodore fitted her high volume 8-bit Commodore 64 model with a proprietary GEOS97 shell, later porting it to the Apple II and MS-DOS. Written for 8-bit computer systems, it was instantly obsolete once 16-bit computing took hold. At about the same time, UNIX was enhanced by the graphical X WINDOW system, while Sun’s SOLARIS got a PostScript-based98 GUI. Where was MS?

  In ’82, VisON showed a prototype GUI for MS-DOS at Fall COMDEX99 in Las Vegas. (The COMDEX fair is the Mecca of PC Tech where careers, products, and entire start-ups rise and fall each year.) Launched a year later, its commercial success was hampered by requiring too much memory to perform satisfactorily. (Computer memory prices were 100 times more expensive than today) That same year, IBM jumped in with both feet by announcing TopView, her secretly self-developed text-based shell for MS-DOS, shipping it a year later with the AT model, her first Intel 80286 powered PC. For the startled MS, her breakaway drive for independence classified as augury.

  The embedded revelation: We had fallen behind the curve by not replacing our command-line-oriented MS-DOS interface with a sexy GUI. True to form, we decided to compete, prematurely. Hastily announcing our own development—eventually named Windows—with a flourish of trumpets and drumrolls, an avalanche of promises and fanfare, innovative info-speak, and a sprinkling of smoke and mirrors. Attending the announcement in NYC and flying for the first time on Air France’s Concord to get there in time, I watched our mock-up being demonstrated by Bill Gates personally. Partly written in BASIC, the new GUI prototype ran on a variety of PCs. Slow and failing a couple of times, without dampening the simmering excitement in the glorious Helmsley Palace Hotel ballroom. Limping, we had at last arrived in GUI Land!

  In true competitive spirit, DRI made her own effort to literally upset the Apple Macintosh cart and MS altogether. The second MS announced her intent, DRI disclosed her workings on a GUI named Graphical Environment Manager (GEM). The early and already well-functioning prototype DRI demonstrated at fall COMDEX ’84 created extra urgency. Fueled by leapfrogging competitive entries, the growing GUI acceptance was threatening MS’s fragile house of cards, rapidly unveiling t
he end game. Bill had no choice but to reveal our still nascent cobbled-together code earlier than he was comfortable. The NYC event, supported by a lavishly well-orchestrated public relations campaign, served as a stake in the ground, upped the ante and put us at least back on the map. Bill regained his top industry guru status. We were again the darling of a press, casting the spotlight most vividly on the ever-more fascinating dark-horse.

  Our faithful OEM customers understood the competitive dangers generated by Apple’s MAC and Commodore’s Workbench100 driven Amiga platform. Therefore they supported our Windows’ efforts enthusiastically. Without endorsing GUI wholeheartedly, the IBM PC–clone industry would have lost its edge. The responsibility was not necessarily MS’s alone but, with Apple owning a predominance of patents in this field and us having licensed them, who else could have securely and successfully pursued that user-friendly path? Our situation seemed to worsen after DRI delivered her version unexpectedly in February of ’85, well ahead of our Windows release. Luckily we got an unanticipated boost when Apple marched DRI into court for patent infringement—defending her Apple cart for now and helping ours. DRI relented and later redesigned the product to avoid further patent disputes, resulting in a much-crippled and long-delayed version. Re-released in ’86, it never gained popularity.

  No one foresaw how long it would take for MS-Windows to show up or how underwhelming it would perform. The OEMs who had signed on early were growing justifiably upset with the interminable delays. Bill echoed my customer’s sentiments. I heard of several loud and emotional meetings where his temper boiled, calling people out by name and hammering on them to work harder and to hasten its release. Meanwhile I had to mollify and coddle unhappy licensees. My response to their restless discontent was the repeated mantra: “The wait will be worth your while”—oh my, oh my! Bill, deeply concerned about Windows’ performance, painfully lost that argument against actually shipping a barely acceptable version in late ’85. Fully functional and in many ways innovative, but slower than a duck on ice with hardly any none-MS applications taking advantage of its innovative features. Failure on the horizon?

  The product, like others of its kind was hosted on top of MS-DOS, remained consumptively resource-hungry and was less elegant than Apple’s solution with its overlapping window frames. Using up a ton of memory, it needed lightning-quick storage devices and top-end CPUs to work reasonably well. Memory was now a bit cheaper than six years earlier, when the original IBM PC had been introduced with just 64 KB,101 yet still significantly costlier compared to today. Most OEMs, while hailing Windows a step in the right direction, were reluctant to burden their PCs with sufficient hardware to make it shine. Licensing Windows in addition to MS-DOS and adding all the hardware bells and whistles sharply increased costs. In the eyes of most users Windows lacked applications and was therefore simply not enough of a must have. Our bottom-line and price point-wary PC manufacturers consequently casted Windows as a dim afterthought. All through ’86/’87 MS struggled mightily to keep that business alive and growing.

  ISVs were still learning how to design smooth and well performing Windows applications and were not releasing them as fast as expected, stalling its acceptance. Those who had released Apple MAC versions successfully jumped out ahead. The others discovered GUI applications consumed extra development time compared to text or character-based ones. Windows’ breakthrough was by no means guaranteed.

  With manufacturers not biting, maybe pushing a relatively inexpensive $99 MS-Windows package through the retail channel could revive its image and drum up business. Just before Christmas ’86, MS ran a monstrous print and public relations blitz, a real doozey in retrospect—SVP Steve Ballmer, Bill’s right hand man, the main force behind it. The twelve minute video with him heralding Windows can still be found on the Internet, a provocative enactment in the harsh light of over two decades’ hindsight. Not too many PCs in use could actually run Windows reasonably well without upgrading raw hardware performance. Our marketing ploy nevertheless worked, enhancing overall product visibility and keeping the Windows application sales dream alive with struggling ISVs. Windows developer conferences where we induced them to write better ones filled up. Steve, personally functioning as the chief agitator, convincingly indoctrinated excitement and belief in Windows future. Developers working on non-Windows apps began sensing powerful headwinds.

  This renewed push to mobilize ever-greater legions of ISVs supporting Windows along with an eye dazzling public spotlight on the product tremendously pleased the few OEMs who had licensed it. Steve’s propaganda machine kept them in our camp. For OEMs shipping just MS-DOS PCs, like Compaq and IBM, there was good news as well. Customers buying Windows at retail often needed additional hardware to beef up their systems. The ripple effect, OEMs began including MS-Windows testing in their quality control efforts, yet another bit of beneficial synergy much appreciated by us. The smoldering volcano was becoming visible.

  MS made her ongoing Windows push effective by doubling personnel devoted to helping other software companies write Windows apps. We had realized early on that cooperation, innovation, and success were interchangeable and mutually re-enforcing concepts. People working in the Windows support group were called evangelists. Over time—as they succeeded—they had a huge impact on the richness of its application environment. They were the unsung, true, and only heroes who eventually made the platform relevant and most popular with end-users and OEMs alike.

  Igniting Windows with marketing money and adding the evangelists felt like the magic of exponential muscles visibly at work. Steve truly nailed this one, neatly clicking the final cogs in place, engineering a critical and decisive move to lay a strong and unshakeable foundation for providing quality Windows applications to consumers and businesses alike.

  Not resting on their laurels, MS and IBM had already started working jointly on a successor to MS-DOS and Windows called OS/2. Its design called for adding security and networking improvements to its combined feature set while making sure that existing MS-DOS and Windows applications ran unaltered on the new platform. A key for easing the transition for end-users and guaranteeing financial health for hard at work ISV partners. With its release date set for late ’86, the world was anxiously waiting to put OS/2 through its paces.

  The huge hardware performance achievements and incremental improvements in OS technologies had helped producing high performance PC software applications. Some of them had gained popularity beyond belief. Lotus had bypassed VisiCalc as the leading spreadsheet company with her Lotus 1-2-3 product in the US, trailed by MS-Multiplan for MS-DOS and later MS-Excel for Windows and the MAC. The success of her spreadsheet was based on graphics capabilities she had integrated into her flagship product. In Europe MS attacked her successfully with localized versions of Multiplan and Excel and denied her the lead. Ashton Tate was the unchallenged database powerhouse with her then superior dBase product, followed by Symantec’s Sybase. In word processing, WordStar was still alive in ’86 although it was losing its luster. WordPerfect was on its way to becoming the new text processing star, rivaled by MS-Word for MS-DOS, Windows and the MAC. Buying dedicated word processors or god-forbid typewriters were now a thing of the past, and spreadsheets had taken over as most popular analyst’s and accounting tools. Brimming with energies, the software industry was well and alive and her innovation span guaranteed PC technology to strive and become an indispensable tool for society.

  AND HOW I EARNED MINE

  Born in Hannover, Germany, I finished high school before joining the German army for two years instead of the mandatory eighteen months, as determined by the draft system. This move allowed me to obtain the rank of lieutenant while laying money aside. Young men despising the draft employed all possible means to avoid it. Hardy and hale and with retreating to Canada not an option, hesitantly at first I served. Joining early, I avoided interrupting my later studies. The army complemented much of what I had learned so far in life and prepared me well for a far larger
role. Long a history buff, I was deeply impressed by her leadership principles which originated from the early 19th century. Contrary to public opinion, the German army was not looking for blind submission of complicit sheep unquestioningly following its leaders. Even in peacetime, overshadowed by the cold war, she wanted confident young men willing to marshal their intelligence and capabilities to accomplish distinct and complex tasks. I soon discovered that within well-specified parameters, you had considerable freedom to achieve defined objectives. In stark contrast to the blind obedience drilled into me—often with the aid of a bamboo stick—during the strictest of upbringings. Resourcefulness was not only desired but rewarded! I found myself accorded ever-higher levels of autonomy and trust by the chain of command. Allowing me, for instance, to organize and lead an officer class of 56 trainees during the last three months of my stay. For the first time in my life, I gained a solid sense of what it meant to manage and be boss. I relished it, gave leading the cadre my best effort, and never looked back.

  The savings from my army stint came in handy as I worked my way through university and obtained a diploma102 in mathematics. Yet, my primary source of income soon became developing software programs for agricultural and pharmaceutical companies, applying my ever-growing statistical knowledge. I learned to write them in two different native assembler languages specific for International Business Machines Corporation (IBM) mainframe103 computers and in several higher level programming languages. When writing software programs was not enough to support me, I started teaching mathematics and physics classes at a local high school. Germany had a teacher deficit and welcomed non-degreed workers like myself after I had passed a half time math exam. I had a terrific time learning how to teach the ten to eighteen years old high school students. Young as I was, I strived to make learning fun for them. The teaching experience together with my programming background helped me to later land my first employment in the computer industry. As I made my way through university without being supported by my parents, I learned to appreciate my independence and how to be responsible for my own well-being. The invaluable lessons provided by working hard to gain and sustain my individual freedom and financial health influenced my work ethics for the rest of my life.