Bill Gates's Secret to Success: Cheating

http://www.gototheboard.com/articles/Bill_Gates_Secret_to_Success:_Cheating

by jcarlson23 • 18 years ago

25 35 18 years ago

This will be controversial but there's a good point that Gates benefited tremendously from no one enforcing anti-trust laws. No company should ever get to a 90% market share - that's not good for the public.

Tichy• 18 years ago

Opinions differ on the anti-trust thing... Personally, I don't understand it. I don't think anybody was forced to sign the contract.

gaius2• 18 years ago

Well, quite. It's worth noting that the anti-monopoly laws are retrospective, which means you can be found guilty of things that were not illegal at the time you did them.

If the democratic will of the People is that the government regulates business that's one thing, but retrospective laws are just insidious. A level playing field up front is the only fair way.

corentin5• 18 years ago

Just because "The People" democratically wants something doesn't mean it's right.

gojomo• 18 years ago

Yes, and in the context of the article: the 'pay for every computer' pricing contracts Microsoft pursued to its advantage were not by themselves illegal. They became illegal when used by a firm with monopoly power to stifle competition.

Unfortunately there's no bright-line rule that lets you know that today, you're a monopoly. You might write such a sales contract legally on Monday, and on Wednesday cross the invisible antitrust line which (after years of later largely subjective legal argument) obligated you to stop doing the same things that led to your success. So signing the exact same contract Friday would be illegal.

goodkarma3• 18 years ago

I'm sure no one was "forced" to sign the contract, but by not signing it and agreeing to Microsoft's terms, you could not distribute Windows and other Microsoft products with your computer..

corentin5• 18 years ago

Just like by not paying for a car you can't go home from the store driving it.

rbanffy2• 18 years ago

To put it simply:

"Hey... Your competitor just signed this deal that allows them to include our OS for pennies. I see you will have a tough time competing with them unless you sign it too".

goodkarma3• 18 years ago

Antitrust or not, most Gates biographies I've read touch on aspects of cheating or questionable ethics. Microsoft has a history of using predatory pricing through OEM distribution and/or giving products away to establish its monopolies.

corentin5• 18 years ago

Three businessmen are sitting in the hallway of a court, waiting for their trial. After some time, one of them starts lamenting: "because my prices are way higher than my competitors, those bastards want to convict me for profiting from a monopoly!"

"Well, that's interesting" replies the second one, "because I'm also here for an antitrust case: I charge way less than my competitors and they say that I'm doing predatory pricing to kill the competition."

The third one starts laughing hysterically: "Believe it or not, guys, I'm here for the same reason as well! But my prices are exactly the same as my competitors, so they want to convict me of price collusion and profiting from a cartel!"

Goladus2• 18 years ago

Funny, but the purpose of an investigation is to determine the truth. It probably sucks to get dragged into an investigation when you've done nothing wrong, unfortunately history is not on their side.

If they're looking for someone to blame, blame the monopolies, cartels, and predators that abused public trust so badly that laws had to get made.

dreish• 18 years ago

And what about Bill, down the hall from those three, who only offers his best price when he charges his customers for every computer they sell whether it comes with Bill's product or his competitor's? (I.e., RTFA.)

You do understand how this abuses a monopoly position, don't you? I have a feeling this subject hits a libertarian-crank nerve, though.

augustus• 18 years ago

Reminds me of John D. Rockefeller's agreement with shippers.Gates must have studied history.

Regardless, ultimately Microsoft lost the US antitrust lawsuit and is no longer dominant in the era of the Internet.

Much of the money he earned would end up funding good causes so I feel there is some justice in all of this.

henning• 18 years ago

They still have two strong monopolies: Windows and Office. Neither are going anywhere anytime soon.

yariv• 18 years ago

Windows and Office are dominant but they are not monopolies. People have alternatives. I haven't used a Windows machine (at least at home) for years.

patrickg-zill• 18 years ago

They are still illegally "tying" by their use of the WHQL certification process.

steveplace• 18 years ago

This is one of those where I try and put myself in his shoes.

If your business had the opportunity to take the contracts he mentioned, would you? Of course there are those silly things called laws that might get in the way of this business deal, but they may not have been clear at the time (I don't know).

All I know is that Gates leveraged his product against an unknown market and then created barriers of entry for other competitors. Machiavellian, perhaps, but brilliant.

brentr2• 18 years ago

I read things everyday about what's better: Windows or something else. The truth is each OS has its own plusses and minuses. Linux/Unix allows a sophisticated user much more power than Windows. Windows has a whole network of developers that create the mainstream games and other entertainment software I enjoy. I use both a Unix and a Windows system, but I use both in a very different manner.

Regardless of one's opinion on what OS is better, you cannot deny that Gates is one of the most brilliant people of our time. His business practices are what brought him wealth. He may or may not have done a few questionable things, but what business hasn't? This is why we have a justice system. Laws are not always written to be black and white. The justice systme is there to help us define all the gray in between.

If I had the ability to create a monopoly because the laws don't explicitly define a certain prohibition, you can bet your ass that I would. I'd deal with antitrust issues as they came up and leverage what I have already done to move into a new area of exploitation. Whether or not you want to believe it, that is how capitalism is practiced.

brentr2• 18 years ago

Would the person who downmodded me for my comment post a response. I would like to know your opinions of what I wrote. I was only trying to stimulate discussion.

If you downmodded me because you don't like Windows, Gates, or my statement on the practices of capitalism, that's fine. I just want to know what you think. There must be some disagreement that you have. I would like to respond to that.

jamesbritt• 18 years ago

I didn't mod you either way, but a statement such as this

"He may or may not have done a few questionable things, but what business hasn't? "

is stunningly vapid in equating all things "questionable".

Some things really are better or worse than other things, and some companies really do behave better or worse than others.

rbanffy2• 18 years ago

I don't agree Billg as one of the most brilliant people of our time. He is certainly a clever strategist, but not much more than that. He got incredibly lucky a couple times: The non-exclusivity IBM deal, the PC clone market (that could have not existed if the BIOS were harder to reverse engineer - say, like a Mac). MS has also at least one failed attempts to create a PC-like environment: MSX. They saw that a commodity computer running an OS they controlled was a way to get big money.

I would also like to know if they somehow covertly helped the BIOS reverse engineering process.

Everything they did up to Windows 3 derived from that - do whatever it takes to secure a market for their OS. They did not leave OS/2 to IBM because the codebase was bad. They needed control of the OS in order to keep it a commodity and having a competitor developing the OS that runs on commodity PCs was out of the question. Up to the launch of Windows 3, the public discourse was that OS/2 was the future. It changed dramatically at that minute.

They played dirty tricks all the time. Threatening Apple not to renew the Applesoft BASIC license was a way to secure Apple would endorse Microsoft BASIC on the Mac and ditch a competing product. I don't know what else they got from Apple while their cash cow had a piece of MS software within. It certainly made Apple's contracts better the next time.

They got lucky a couple times and IBM got fooled twice. Their dominance is the consequence of luck and borderline criminal tactics. I see no huge genius here beyond one that was willing to bend the law (and morality) as much as he could.

It's also unclear how much of this came from Ballmer.

As far as I know, the big genius among the Microsoft founders is Paul Allen.

furiouslol• 18 years ago

I think you need to give credit where credit is due. Bill Gates is one of the geniuses of our time.

You don't create a powerful company like Microsoft just by being lucky. This is the guy who brought personal computing to the masses. This is the guy who managed to grow his company into the behemoth that it is today. This is the guy who responded to the Internet threat brilliantly (well initially that is.).

Dirty tricks are PARTS AND PARCEL of the world, especially in businesses. The techies are insulated from such behavior, which is why they are usually shocked at such behavior. People on the business side are used to such behavior. They deal with it. They counter back. Wall St revel in it. Govts use them all the time. This is society at its normal equilibrium. Google, being a techie wonderland, is trying to avoid this for as long as possible but trust me, WallSt will push their hands sooner or later.

Paul Allen wouldn't have build Microsoft into the success that it is today. He just isn't as sly as Bill is.

mattmaroon• 18 years ago

This is simply redefining cheating such that Microsoft is guilty of it because he doesn't like them. That sort of contract seems like a brilliant maneuver to me. The fact that they were merely forced to stop it, rather than pay for having done it shows the DoJ probably didn't feel it was illegal.

And if it ain't illegal, it ain't cheating in business.

Bill Gates's Secret to Success: Cheating

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