How Microsoft bytes its way in tough PC market



James Wallace

and Jim Erickson.

John Wiley & Sons.

426 pages. $22.95. Want to make a splash in the business world? You should be brilliant, driven, ultra-competitive and a workaholic. You'll need to forge technological breakthroughs and be an astute businessman and negotiator, able to protect your interests and know what's around the next two corners. It also helps to be at the right place at the right time.

That, anyway, is the rough formula used by Bill Gates, co-founder of Microsoft Corp. and one of the mainstays of the personal computer revolution, according to this thorough and readable biography/corporate history. Seems like a lot to ask? You bet. That's why there will never be an oversupply of billionaires. Somebody's got to be out there coaching Little League baseball.

Of course, Bill Gates' path to early fame and fortune (in 1987, at age 31, he became a billionaire, the youngest person to reach that lofty plateau) is not the only one that can be taken. As portrayed here by two reporters for the Seattle Post-Intelligencer (Microsoft is based in Washington state), Mr. Gates is not exactly a sympathetic individual. He's seen as a man obsessed with work and bent on destroying -- not just besting -- competitors. He's said to be given to explosive tirades and to overworking employees to meet unrealistic deadlines. Nobody's perfect.

One of the most intriguing aspects of this book is how easy it makes our brand of market capitalism seem when everything falls into place. Take brilliant, energetic people (Bill Gates did not build Microsoft alone) who are able to ride the creation of a new industry (such as personal computer software), and you have everything politicians are always jawing about -- growing companies creating jobs and making world-class products.

Microsoft has been a big success even in Japan, the nation that so many other U.S. companies have found impenetrable. All this was accomplished by virtual children: Mr. Gates was 19 when Microsoft's first big product, BASIC, was licensed to an early manufacturer of personal computers in 1975.

Mr. Gates and Microsoft co-founder Paul Allen did come from privileged backgrounds and attended an elite preparatory school. But their mammoth success came without the help of a government industrial policy or even a bank line of credit. That's not to say that Microsoft-type successes can spring up in any field at any time, or that government assistance is always inappropriate -- only that it's refreshing in this time of national economic self-doubt to read about a large and powerful company that came from nowhere and is now dominant in its field.

Interestingly, as the book notes at length, the now-powerful Microsoft has been accused of trying to stifle the very innovation in computer software that helped it thrive. Authors James Wallace and Jim Erickson write that some in the software industry maintain "Microsoft repeately approaches small companies developing promising new products, ostensibly to talk about a partnership. After Microsoft is given a glimpse of how the software works, it suddenly loses interest in the deal

-- only to announce later that it has been working on surprisingly similar, but competing software."

Still, they add: "It's difficult to determine the difference between aggressive business practices and anticompetitive behavior. Has Microsoft abused its position or just out-hustled and outfoxed others in the industry?"

The book's significant achievement is that it retains the interest of the non-hacker, even the computer illiterate, while providing enough technical details to allow one to appreciate Microsoft's achievements in the world of computer software. Microsoft's early milestones -- its ability to set an industry standard with MS-DOS and its alliance with International Business Machines Corp. among them -- are well documented. Also made vivid is the heated, all-out work environment established at Microsoft by Mr. Gates and some of the other Microsoft "kids."

The book would have benefited from more stringent editing. There are too many details of various business developments and stratagems. Some themes are overworked: There are only so many ways and times to say Mr. Gates looked even younger than his relatively few years and describe the culture shock when he and other scruffy Microsoft personages met the older "suits" from IBM and other established computer companies. And since Microsoft is still so young (it went public in 1986), the book could have used some informed speculation about the company's future and that of the U.S. software industry.

Overall, this is a well-executed account of two American phenomenons, Bill Gates and Microsoft Corp. As the authors make clear, though, the two are hardly separable.

Mr. Lipschutz is a writer living in New York.

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