
Microsoft Has It All—Almost (1985) - coloneltcb
http://www.nytimes.com/1985/09/04/business/microsoft-has-it-all-almost.html
======
jasode
_> But selling software to consumers is different from selling highly
technical operating systems directly to computer companies. To compete against
sophisticated marketers like Lotus,_

The really young techies won't remember this since it was over 30 years ago
but what Microsoft did during the 1980s in the software space was astounding.

The 1970s Microsoft was originally a "programming languages" company. They
sold MS BASIC and MS COBOL.

In the 1980s, they added _productivity apps_ like word processors and
spreadsheets (Word and Excel). What's amazing is that they didn't acquire
those from a competitor (like the later acquisitions of Spyglass for IE or
Vermeer for MS Frontpage). Word & Excel were homegrown at Microsoft and Bill
Gates hired Charles Simonyi to lead their development.

They added _operating systems_ like MS-DOS and later MS Windows & Window NT.
MS-DOS was an acquisition but Windows NT was homegrown by hiring Dave Cutler.

Nobody else replicated Microsoft's successful diversity in software. That
included Lotus, Ashton-Tate, Computer Associates, Adobe, etc.

That's 3 very different areas of software : programming + MS Office +
operating systems. All 3 were huge profit machines.

In the 1990s, they continued success with server-side software like SQL Server
and MS Exchange.

To give a modern analogy, imagine Jetbrains just selling programming IDEs like
IntelliJ and PHPStorm. And then Samsung comes along and says, _" we need an
operating system for the millions of smartphones we're going to sell"_ so
Jetbrains hires Andy Ruben[1] to write the Android os for Samsung. And then
Jetbrains decides that Android also needs a picture sharing app and hires
Kevin Systrom[2] to develop Instagram. That absurd combination from _one_
company is what Microsoft did in the 1980s and in that alternate universe, the
Jetbrains owners would be multi-billionaires.

Compare that to Google where it's almost 20 years old and its major revenue is
still AdWords. Diversifying revenue is not easy.

A comparable (and possibly more astounding diversification) in modern times
would be Amazon's origins from selling books & CDs to selling AWS computation
resources.

[1]
[https://en.wikipedia.org/wiki/Android_(operating_system)#His...](https://en.wikipedia.org/wiki/Android_\(operating_system\)#History)

[2]
[https://en.wikipedia.org/wiki/Instagram#History](https://en.wikipedia.org/wiki/Instagram#History)

~~~
RandomOpinion
Visual Capitalist has a set of pie charts that show the breakdown of revenue
streams for 5 of the top tech giants, including MS, Google, Amazon, etc. that
illustrate exactly what you're talking about:
[http://www.visualcapitalist.com/chart-5-tech-giants-make-
bil...](http://www.visualcapitalist.com/chart-5-tech-giants-make-billions/)

Google is poorly diversified and even Amazon is not as well diversified as one
might think.

~~~
enitihas
The link is an eye opener. Xbox contributes to 11% of MS revenue, and Window
9%. The world of personal computing has truly changed and Microsoft has really
diverse revenue streams.

~~~
uiri
Keep in mind that that is consumer Windows. Active Directory and Exchange run
on Windows Server and I'm sure every large business has a fleet of those (or
has decided to ditch them in favour of Azure).

I wonder what falls in the "other" bucket. Visual Studio / MSDN come to mind.
Perhaps Enterprise Services is split out from Azure & Windows Server. It looks
like Dynamics might be reported separately from Office although I'd normally
expect it to be grouped with it instead.

------
nolok
> But what is spoiling the party is that the company was eclipsed last year as
> the largest personal computer software concern by the Lotus Development
> Corporation, creator of the highly successful 1-2-3 spreadsheet program.
> Lotus's revenues totaled $200 million for the 12 months ended June 30.
> Microsoft's revenues came to $140 million in that period.

Between the fact that it was in '85 (long before the days of windows 95/98 and
microsoft really "taking over the world"), the revenue total that wouldn't
even register as a margin error for today's dominating tech companies, the
fact that a deal with IBM meant they had "won it", or that their main
competitor is a company so that they utterly destroyed a decade later ... What
a blast from the past.

~~~
sillysaurus3
That's the thing: good ideas seem unlikely, otherwise everyone would be doing
them. IBM certainly didn't expect the DOS deal to be world-changing.

Someone should write a book, "100 Decisive Tech Battles: From Ancient Times to
the Present," a tongue in cheek reference to
[https://www.amazon.com/100-Decisive-Battles-Ancient-
Present/...](https://www.amazon.com/100-Decisive-Battles-Ancient-
Present/dp/0195143663)

The book is excellent, and analyzes battles with a clinical detachment not
really found in most history texts.

But each battle is _decisive_ : it shaped the world. There are many skirmishes
that would be interesting to analyze but out of scope for the book. That's
what makes it a fascinating collection.

If we had to think of 100 technology "battles" that reshaped the world, I
wonder what they would be? There is so much freedom in the criteria that it's
hard to know where to constrain it: Electricity, plumbing, grocery stores, etc
have all shaped the world. Many had a "decisive" effect in that it was
technology vs technology, and one tech came out the winner.

I think computing alone could fill a book of 100 tech battles, and it would be
interesting to try. Which stories were decisive? It would take months to
decide, but it would be enjoyable work.

~~~
ethbro
I'd put the literal Battle of Crécy up there. An army of commoners being able
to murder armored nobles with the aid of the longbow certainly changed the
world.

[https://en.m.wikipedia.org/wiki/Battle_of_Cr%C3%A9cy](https://en.m.wikipedia.org/wiki/Battle_of_Cr%C3%A9cy)

~~~
Alakagom
English eventually lost Hundred's year war so this battle wasn't world
changing. But not seeing Battle of Tours 732 or Vienna 1683 was certainly a
surprise.

------
mschaef
It's interesting to see this in the context of their later success, but one
bit of trivia stood out:

> Microsoft is now unleashing a barrage of programs, including ... Access, a
> communications package for the I.B.M. computer.

This is the 'other' MS Access - the one that predates the database.

~~~
Nition
Has Microsoft been naming things confusingly forever, then? One recalls the
Microsoft Surface from 2008 - A big touchsceen table.

------
non_sequitur
"Microsoft and its 29-year-old chairman, William H. Gates, clearly want to be
No. 1 again."

Really amazing what he had done by 29. As someone older than that, I'm really
starting to feel like I'm hitting the "older tier" of tech ages.

~~~
adventured
The majority of tech companies that have acquired significant size, were
founded by people in the 30s (or older). Gates is an extreme outlier.

I made a large compilation list of famous founders a while back. You might be
surprised at how not particularly young most of them are. I won't repost it
here, but here's a link to that thread:

[https://news.ycombinator.com/item?id=15477686](https://news.ycombinator.com/item?id=15477686)

~~~
em500
But four out of the current big five were founded by people in their
early/mid-20s (only exception is Bezos who just turned 30 when he founded
Amazon).

------
diminish
> Microsoft was also hurt by its reputation for bringing products to market
> behind schedule and full of ''bugs'' or errors. In a letter in the latest
> issue of Macworld magazine, for instance, a reader gripes about finding ''15
> bugs and 7 shortcomings'' in the initial Macintosh version of Microsoft
> Word. ''Word is typical untested Microsoft software,'' he said.

Very interesting

------
adventured
For reference. Microsoft's growth history:

1980 | $8m sales (40 employees)

1981 | $17m sales

1982 | $24.4m sales (220 employees)

1983 | $55m sales

1984 | $97.4m sales

1985 | $140m sales

1986 | $197m sales

1987 | $345m sales

1988 | $590m sales

1989 | $804m sales

1990 | $1.18b sales | 5,635 employees

1991 | $1.84b sales

1992 | $2.76b sales

1993 | $3.78b sales | $953m profit

1994 | $4.7b sales | $1.1b profit

1995 | $6.1b sales | $1.45b profit

1996 | $8.67b sales | $2.19b profit | 20,561 employees

1997 | $11.4b sales | $3.45b profit

1998 | $14.5b sales | $4.5b profit

1999 | $19.7b sales | $7.78b profit

2000 | $22.9b sales | $9.4b profit

~~~
scholia
It looks better as a graph ;-)

------
webreac
I remember the agressiv commercial technics, the troll-like litigations and
how easy it was to copy their software (no copy protection) compared to the
concurrents.

Before microsoft, software was expensive. Many people were programming their
own games or software with the language of their computer (a mix of
proprietary basic and assembly).

After, everybody had pirated copies of Win3.1 and Office and were coding excel
macros :-(

For me, there was an explosion of creativity between 1983 and 1992 where
people were empowered to program. After, programming was for "specialists". I
have hated a lot Microsoft at that time.

~~~
mikestew
_how easy it was to copy their software (no copy protection) compared to the
concurrents._

That's an important point that I forgot about until you mentioned it: I bought
Microsoft software _because_ it was easy to copy, or more accurately, lacked
copy protection. This was in the days of having to shove the original disk in
the drive even if you had it copied to the hard drive. It'd be one thing if
floppies were more reliable, but $DEITY help you if that master disk went bad,
because Lotus would be...less than helpful. So I rewarded the "good guy" by
buying their unprotected software. Hey, if they trust me enough to not copy-
protect it, the least I can do is pay for a copy.

And when Windows NT went out, I remember big debate about whether Microsoft
could do enterprise software, given that all they'd really done to that point
was put out applications and dev tools, and a cute little graphical shell that
went on top of their cute little toy operating system.

------
shmerl
About having it all: [https://www.theonion.com/microsoft-patents-ones-
zeroes-18195...](https://www.theonion.com/microsoft-patents-ones-
zeroes-1819564663)

------
omarforgotpwd
Bookmarked this to read when I / others doubt me. Very interesting and funny
to look back with what we know today.

~~~
justherefortart
Amazing book that goes up to 1994 or so is Hard Drive: Bill Gates and the
Making of the microsoft Empire.

It's writing and editing certainly leave a lot to be desired but from a
historical standpoint about Microsoft, it's a fantastic read.

~~~
scholia
Gates by Stephen Manes and Paul Andrews is a much better book. Bigger, better
researched, better written, and a lot more accurate.

(Paul Andrews worked for the Seattle Times and Microsoft was his beat. I guess
he just had more and better contacts.)

Hard Drive did well because it came out first and filled a big hole in the
market. However, Gates was sufficiently better to become a best seller.

------
grawprog
"Microsoft was also hurt by its reputation for bringing products to market
behind schedule and full of ''bugs'' or errors."

I guess some things never change.

~~~
scholia
The number of bugs found reflects the number of users and the range of
equipment they are using.

There are probably more bugs in most non-Microsoft applications, it's just
that they don't have enough users to find them....

------
zekevermillion
Windows ain't done 'til Lotus won't run! Just a little "friendly competition"
in the words of 1985 NYT.

~~~
mschaef
Lotus did a good job shooting itself in the foot. It's easy to second guess in
hindsight, but it always amazed me that they didn't have any Windows story at
all for their one major product, Lotus 1-2-3, until 1991 or 92. (And even then
it was amazingly buggy.)

(And they did have multiple text-mode PC versions, VMS, Unix, Improv for
NeXTStep...)

~~~
pinewurst
It shouldn't be forgotten though that the original Lotus 1-2-3 was a
masterpiece. Fast, easy to use, with a polished UI, a useful help system and
tutorial. Almost all PC apps were amateur hour by comparison and that includes
pre-Word MS.

~~~
justherefortart
Word was a joke in the 80s/90s. Everyone used WordPerfect. By the end of the
90s though the MS Office addon had overtaken most places productivity software
of choice. Primarily due to companies like Dell, Gateway 2000, AST, HP,
Compaq, etc. including Office as an option when you purchased.

I loved WP and 123. Begrudgingly switched to MS Office in 97.

~~~
mikestew
_Primarily due to companies like Dell, Gateway 2000, AST, HP, Compaq, etc.
including Office as an option when you purchased._

I would posit that it was due to WP screwing the pooch at every turn. They
held out until they couldn't on releasing a Windows version, and it was as
buggy and unreliable as you would expect from a rushed product designed to
check a marketing checkbox. WP also bet on OS/2, and they did it by porting
what was already a poor product, so the OS/2 version ended up being a poor,
buggy product that had the added bonus (due to an interpretation layer) of
being dog slow.

So maybe Microsoft's success can be attributed somewhat to bundling, but much
of it can also be laid at the feet of competitors like WP and Lotus.

~~~
AgentIcarus
Was there something special about OS/2 that suggested it would be the winner
of this war or did WP and Lotus just make the same bad bet at the same time?

~~~
mikestew
Remember the state of Microsoft's operating systems in 1992, when OS/2 2.0 was
released: DOS, a purchased operating system that was barely worthy of the
name, and a graphical shell on top of it. In other words, a house of cards and
just as reliable. Cooperative, not pre-emptive, multitasking. 16-bits when
32-bit CPUs were standard. Contrast to OS/2 that had a 32-bit API, pre-emptive
multitasking, and a more robust file system, all with the backing of IBM. That
might not be a sure bet, but it was a good one. Turns out it wasn't, but it
might have looked like it at the time given that it was inarguably technically
superior to Windows 3.x and DOS.

As it turned out, IBM refused to effectively market OS/2 and Microsoft was
busy cutting bundling deals with manufacturers while releasing their
"munchkins" (look it up, it's well documented) on Compuserve and Usenet. And
then Windows NT came out, giving Microsoft a much less laughable operating
system in their quiver, and that was pretty much it for OS/2.

~~~
scholia
Unfortunately, OS/2 could barely load on the PCs of the day (it started
swapping while loading), it had very little software, and cost a ridiculous
price (from memory, something around $500).

You had to vape your PC to run it.

By contrast, you could pick up a copy of Windows for $40 and run it on top of
DOS without losing your DOS software. If you didn't like it, it hadn't cost
you much time or money.

And there was a boom in Windows software with lots of cheap programs to try.

Seriously, how would anyone expect OS/2 to win that battle?

~~~
Fnoord
Eh, sorry, which Windows version are you on about?

I remember our Pentium 1 75 MHz being shipped with OS/2 Warp. It was dogshit
slow (and on top of that, I was an impatient kid). I was used to DOS (which
could be fired up from OS/2 but then it didn't work well, and DOS 6.x was
known to work better than that version). I was sitting more in DOS 6.x (booted
from a floppy) than OS/2 Warp.

Eventually, we bought a Windows 95 pirated copy for about 50 Dutch guilders
(not sure how that translates to current currency due to Euro and inflation).
It was a low risk deal indeed for the reason you suggested (cheap) however the
real deal was expensive and we already paid for an OS, and we had a contact
who would press thousands of these (in hindsight, probably related to Twilight
CDs etc as both sourced from the infamous TUe network). So we went with that.

We ended up not using it much either because we were used to DOS and didn't
find Windows 95 stable. Not that DOS was super stable, it (6.x) was just more
stable.

The first Windows version I've ever used which was reasonably stable, was
Windows 2000 (yes, I used NT 3.5x and NT 4.x and Windows 2.0 and Windows 3.1).
Arguably, it was even more stable than XP which is probably the first version
the general consumer used which was reasonably stable.

Now, how much did a copy of Windows 95 cost back in the days? Well, I'd love
to read some other sources but the fact we bought a pirated one for 50 Dutch
guilders plus the source I found which says Microsoft suggested a retail price
of 210 USD suggest a different price than 40 USD for Windows 95 [1]. Which
leads me asking which Windows version you're referring to. No offense, btw.

[1]
[http://community.seattletimes.nwsource.com/archive/?date=199...](http://community.seattletimes.nwsource.com/archive/?date=19950607&slug=2125167)

~~~
scholia
Sorry, my mistake. I was inadvertently thinking of what Microsoft charged PC
manufacturers for pre-installation. The retail copies included extra charges
to cover boxes, discs, distribution, the retailer's margin, support, returns
etc.

Unfortunately I can't find a list of Windows retail prices, but originally
Windows was sold much like an application. That is, it assumed you already had
DOS installed.

From what I recall, the official retail was something like $99 and you could
pick up a copy for around $80 or so. (Some programs came bundled with a run-
time copy of Windows, though you couldn't used that copy with a different
application.)

Windows 95 upped the price because Microsoft was charging for both DOS and
Windows at the same time. On that basis, something like $200 doesn't sound
wrong, and that's around the price Windows has sold at ever since. (Unless, of
course, you buy a pre-launch offer.)

Software and hardware prices were generally much higher in the old days, of
course.

On stability, I found both NT4 and Windows 2000 to be very stable. With other
versions, they were stable if they were correctly set up on decent hardware,
you only used Microsoft drivers, you were pretty careful, and you restarted
every day.

I could usably run Win98-XP for about week. I would never find out how long I
could run NT4 because I was dual-booting it ;-)

Eggs are fragile, but they generally don't break if you handle them carefully.
It was much the same with Windows...

~~~
Fnoord
Thanks for your comment. I don't agree with a lot you wrote, so I'll have to
mostly agree to disagree.

You get 2 OS with Windows 9x? Really? Or is it that Windows 9x is just a GUI
on top of DOS? At the very least its product tying.

One thing which stood out was how you excused the terrible stability of
Windows 9x. For me the fragility of Windows 9x is unacceptable. What's worse
is that a lot of people thought this was normal, acceptable behavior for
computers. Millions of work hours have been wasted thanks to this instability.
Back then Linux desktop had its fair share of issues which were also
unacceptable, but instability wasn't one of them.

~~~
mschaef
> You get 2 OS with Windows 9x? Really? Or is it that Windows 9x is just a GUI
> on top of DOS? At the very least its product tying.

This is an interesting question...

Windows started out (early-mid 1980's) as a graphical layer on top of DOS
(Sold separately). To DOS, Windows added memory management, device independent
graphics, windowing, multiple processes, and a cooperative multitasking scheme
that let the multiple processes run at the same time.

The next 10 years of history (through to Windows 95, 98, and Me) are then
largely about Windows taking over more and more functionality from DOS.... but
never quite supplanting it. If a Windows 3.1 system launched Windows at the
end of DOS's autoexec.bat, Windows 95 did essentially the same thing, but
internally and not in a script. (In fact, Andrew Schulman got Windows 95
running as DOS 7.0.)

So the way to view it is that this lineage of Windows is really a hybrid
design, with elements of both DOS and Windows.

The Windows NT kernel and OS/2 >=2.0 are both totally different... to the
extent they run DOS, they run it as a child process under a native 32-bit OS.
(Not 64-bit because x86-64 doesn't support the V86 mode necessary to make
virtual DOS machines run.)

