Friday, June 6, 2008

Ballmer is the nice one?

On June 27, Chairman Bill Gates of Microsoft shifts from five days a week to one. It will be the end of a long era in the PC industry, and one of the longest continuous periods of leadership for an tech industry entrepreneur. Ken Olsen of DEC comes to mind, but like Scott McNealy of Sun, it didn‘t end well; I suppose Larry Ellison will hang on for a few more years, just for the bragging rights over his ├╝ber-nemesis.

Thursday morning, the WSJ had a long article on the close (but occasionally testy) relationship between Gates and his Harvard poker buddy, Steve Ballmer. (Official copy here, unofficial copy here).

There were some interesting revelations (like an abandoned attempt to buy SAP in 2003) and some familiar stories (like the role of Ray Ozzie in taking over Gates’ technical leadership of Microsoft, or Microsoft killing NetDocs long before Google documents came along). But the big point was the difficulty of Gates letting go:
Eventually, in January 2000, he gave his chief executive title to Mr. Ballmer. Mr. Gates became Microsoft's "chief software architect," a new position that, in theory, was below that of Mr. Ballmer.

Soon, the two men clashed as Mr. Ballmer tried to assert himself in his new job. As the firm's iconic leader, Mr. Gates still held sway that wasn't tied to a title: In meetings Mr. Gates would interject with sarcasm, undermining Mr. Ballmer in front of other executives, Mr. Gates and other Microsoft executives say.
Mr. Gates concluded that it was he who needed to change most. "Steve is all about being on the team, and being committed to the mutual goals," Mr. Gates said. "So I had to figure out, what are my behaviors that don't reinforce that? What is it about sarcasm in a meeting?" he said. "Or just going, 'This is completely screwed up'?"

Mr. Ballmer says that, as the top executive, he had to learn when to override decisions and when to just "let things go," he said. "We got it figured out," he said.

Soon, Mr. Gates started to hold back negative comments in meetings. During one deliberation among the executives who reported directly to Mr. Ballmer, Mr. Gates deferred to Mr. Ballmer on an important decision, prompting Microsoft executives to silently glance at each other with surprise, recalls Microsoft Vice President Mich Matthews.
Normally industry foes think of Ballmer as the prince of darkness — as with his famous “Linux is a cancer” comment. However, the article specifically said Ballmer “worked to settle Microsoft’s many lawsuits, taking a more conciliatory line than Mr. Gates typically had.” That implies that Gates saw the lawsuits as a personal affront to his baby, while Ballmer saw resolving them as just another business problem.

While there were interesting revelations, most of it was about the former CEO, who (supposedly) will be letting go in three weeks. It wasn’t as though there were great intimate insights into what makes Ballmer or Ozzie tick.

The other interesting post is from my friend, Prof. Shane Greenstein of the Kellogg School. Shane has a regular column in IEEE Micro, has penned a two-part retrospective on the three decades of Gates’ tenure. The basic question is: was Gates smart or just lucky? Shane leans towards the latter, but comes down firmly on the side of those who see Microsoft as abusing its market power over the past decade.

Here is Shane’s conclusion:
There is one enormous irony in the long arc of Gates’ managerial career. His temperament, savvy, and intellectual breadth are qualities that would have made him an extraordinary serial entrepreneur, founding one organization after another. Yet, the road he traveled was quite different: continual employment at a single firm for over 30 years.

That ultimately led to new types of challenges in a corporate setting and the singular tragedy of Gates’ career. He tried to retain the unqualified self-serving approach that had worked so well for him as an entrepreneur, even when the actions of a dominant firm required a different touch.
This also came up during the panel discussion Monday — Microsoft’s impression of its dominance lagging the reality until it was forced by various courts to back down.

Microsoft still has persistence, so if it can convince industry (and government) that it’s tamed its ruthless streak, perhaps it still has a few good years in front of it.

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