Page last updated at 10:14 GMT, Friday, 27 June 2008 11:14 UK

The hits and misses of Microsoft

By Mark Ward
Technology reporter, BBC News

As Bill Gates finally bows out of Microsoft to pursue his charity interests, we look at some of the hits and misses of the software company he founded.

Bill Gates



Bill Gates calls for spammers to be brought to account

In early 2004, speaking at the World Economic Forum in Davos, Switzerland Mr Gates predicted that within two years the problem of spam - junk e-mail - would be solved.

A triumvirate of technical innovations, financial measures and filters would soon make it uneconomical for anyone to indulge in the practice of sending unsolicited e-mail in bulk.

Four years further on and it is clear that Mr Gates prediction has not been borne out. If anything spam has got worse.

Now junk mail, be it spam or error messages, make up more than 80% of all e-mail traffic.

While technical innovations have reduced the amount that makes it into e-mail inboxes, billions of junk mail messages are sent every day and many spammers make a very healthy living out of it.


The rise of the net and the success of the world wide web took a lot of people by surprise - Bill Gates included.

In 1995 Mr Gates co-wrote a book entitled The Road Ahead which gave little mention to the rising tide of interest in the net and its looming influence.

Later editions of the book were re-written to correct the omission but there is no doubt that Microsoft came late to the dotcom boom.

In late 1995 following the writing of a famous memo entitled "The Internal Tidal Wave" Mr Gates re-worked Microsoft to put the internet at the heart of everything it did.

Despite the dramatic turnaround Microsoft has always been seen as a laggard when it comes to online life.

Google, whose founders met at college in 1995, has set the pace that Microsoft struggles to match.


Bill Gate on the Vista operating system

In January 2002 Bill Gates sent out one of his regular memos that defined the priorities for Microsoft over the coming months and years.

That memo was entitled "Trustworthy Computing" and declared an intent to put the security and integrity of user's data at the heart of everything Microsoft did.

Internally at Microsoft that meant lots of training courses for staff working on software and updates for Windows products to make good on this promise.

Windows Vista was intended to be the ultimate result of this change of strategy and has built in to it several innovations and technologies that try to limit what hi-tech criminals can do to it.

Despite Microsoft's efforts hi-tech crime is booming and Windows PCs are at the heart of it. Some anti-virus companies now report that there are more than one million items of malware in existence and Windows PCs are the target of choice for the bad guys.


It is something of a myth that Microsoft is a hive of innovation that regularly pumps out products that take on the world.

In reality it is a good populariser of ideas but few can be said to have originated on Microsoft's campus or at the research labs it has set up around the world.

The innovations that it has ridden to success on - the graphical user interface, the mouse, spreadsheets, the web, the web browser - all started life elsewhere.

Even now the company regularly pays huge sums to snap up companies, such as Hotmail, that are experts in areas where it is lacking.

In some senses this is not a surprise as few investors are likely to bankroll a start-up that has the declared aim of tackling Microsoft head-on. Even so given its research budget - billions every year - Microsoft rarely wows the world with its new products.


It's clear that there is a profound philosophical difference between Microsoft, for which read Bill Gates' approach to business, and the world of open source that has sprung up on and prospered alongside the net.

This philosophical difference was sealed in 1976 when Mr Gates sent a letter to San Francisco's legendary Homebrew Computer Club in which he decried their rampant sharing of Microsoft's Basic for the Altair.

Many of those who attended the Homebrew Meetings went on to be the leading lights that created the internet and defined its open source ethic of sharing for the greater good. By contrast Microsoft has jealously guarded the inner workings of its products.

That reluctance to open up has served Microsoft well but as the pivot of the hi-tech world is now the web that stance is holding it back.

Worse than that, dedication to older ways of working is stopping it embracing more far-reaching changes, in particular the way it sells and creates software, that could make it a better fit for the web age.



Founders of Microsoft
Gates dropped out of Harvard to found Microsoft

Bill Gates entered Harvard in 1973 aged 18 but never completed his college education.

His early experiences with computers and the appearance of chips that promised to bring about an era of personal computing convinced him to take a leave of absence, in effect drop out, and start a software company.

It's fair to say that this decision worked out pretty well for Mr Gates. Microsoft was founded in 1975 and its success defined the course of much of the hi-tech world for almost as long as he was in charge.

Financially too he has done well out of it and has been consistently named as the world's richest man for a couple of decades.

In 2007 he was awarded an honorary degree from Harvard and on accepting it he said: "I will be changing my job next year. It will be nice to finally have a college degree on my resume.


For much of its early history Microsoft's rise was tied to the success of the IBM's PC.

In 1981 Microsoft signed an exclusive deal with IBM to put its DOS (Disk Operating System) on the new machine.

As makers of clone PCs started popping up Microsoft aggressively sold its operating system to them and, effectively, cornered the market.

Since then most PC makers have bundled in the operating system with the machine and every time a PC gets sold Microsoft makes money.

This system is starting to break down now as the small form factor PCs running cut-down operating systems prove popular but that early deal guaranteed a huge slice of revenue for the Redmond giant.


Bill Gates on the Xbox

Microsoft's Xbox was derided when it was announced and few gave it any chance of securing a significant part of the gaming market.

At the time it was launched Sony's PlayStation was all-conquering and looked impossible to beat.

But one quality Microsoft has in spades is persistence.

Couple that with its enormous reserves of cash and the stage becomes set for a stand-up fight.

The result of this persistence has been the Xbox 360 - the first of the next-generation consoles to launch and one which championed online console play before anyone else.

One of the payoffs for its strategy was the launch of Halo 3 which, Microsoft claimed, set records for an entertainment product.

With the Xbox 360 morphing into a multimedia hub and millions regularly playing online, Microsoft has set trends that others, mainly arch-rival Sony, are responding to.


This phrase has been the mission and mantra of Microsoft almost since the company was founded in the mid-1970s.

While IBM brought together the hardware firms that made all the bits for those first PCs, anyone who used them would probably remember Microsoft more than they would the maker of a hard drive. Its operating systems have become the recognisable face of those machines.

There can be little doubt that Microsoft has helped to evangelise desktop computers and got many people using them. Today about 90% of desktop machines run Windows - a testament to the success of the company.

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