American History 1988
Chapter 348 - 337 Skunkworks

Chapter 348: Chapter 337 Skunkworks

"Bit Company is about to launch free instant messaging software. Why are they doing this?"

Although Gates was asking Microsoft’s executives, he himself was quite puzzled.

Free software? What could it bring to the company? Gates was really baffled.

"Maybe there’s some kind of value-added service," Executive Director Ballmer speculated.

"But the software itself is free, meaning that the instant messaging service is free.

Besides that, what other value-added services could there be? Group chat? Voice calls?"

Steve from the marketing department, brainstorming, was equally surprised by Bit’s decision.

"That’s unlikely," Gates shook his head. "If that were the case, it would conflict with their Teams product."

According to the press release from Bit, its core feature seems to be just instant messaging.

Avoiding features similar to Teams—like file transfer and voice calls—is a good decision, or else these two services would contradict each other.

But again, what benefits could this bring to Bit Company?

Is this just a publicity stunt, or are there value-added services we haven’t thought of?

The senior executives at Microsoft discussed for a while longer, but were still clueless.

Their thinking remained trapped in the model of making money from every ordinary individual.

Windows systems, Office software ... every sales model they had was just like this.

Thus, facing the advent of the internet traffic era, Microsoft struggled to easily shift its business philosophy.

"Should we follow suit?" Steve from marketing asked tentatively.

Gates shook his head, "Let’s keep an eye on Bit’s moves for now. Microsoft’s strategic focus is on Windows 95, NT servers, and MSN."

Microsoft couldn’t discern Bit’s intentions from this free instant messaging software.

Thus, Gates decided to wait and see. Without seeing sufficient value, Microsoft was not going to easily enter the fray.

"By the way, can we ensure Windows 95 will be on the market by next summer?" Gates asked at every meeting.

He couldn’t help it; it was Microsoft’s core business and pivotal to the plan to monopolize desktop operating systems.

Not just Gates, all the executives held immense ambition for this new operating system.

"We are doing the final adaptations and plan to provide software development kits to various major software companies in January or February,"

Ballmer was personally overseeing this matter, well aware of the significance of Windows 95.

Assured by his word, Gates nodded in satisfaction.

The new system, developed over three years, was finally about to launch.

"By the way, Bill, the Windows 95 software development kit we submitted to Bit Company, we need to..." Steve gestured for a delay.

Gates thought about it for a moment and then shook his head, "Windows 95 needs software companies for promotion, and Bit is the world’s third-largest software company, which is important for us."

Steve shrugged to indicate he was just suggesting, and others tacitly refrained from commenting further.

This approach was disgraceful; if it became public knowledge, it would lead to another controversy.

Before the launch of every new system, Microsoft provides the system development kit to third-party software companies much earlier.

The purpose is to allow them to develop ecosystem software for the new system early on.

Otherwise, when the new operating system is released, users would face a situation of having no compatible software available, which would be a disastrous outcome for Microsoft.

Therefore, well-known software companies always see the new generation operating system even before the general public.

And this lead time was at least three to six months, because developing software for the new system takes time.

What Steve just meant was to intentionally delay the provision of the software development kit to Bit Company.

Plainly put, it was to trip them up and slow down their software development progress.

But weigh it over again, Gates still refused.

It wasn’t because he was exceedingly benevolent, but because the disadvantages of this action outweighed the benefits.

Although confident internally about Windows 95, it didn’t mean it was already successful.

As the world’s third-largest software company, Bit’s office software was widely used by companies globally.

If Microsoft dared tamper with the development kits, the repercussions would be very severe.

Not to mention potential lawsuits, other software companies would also become distrustful of Microsoft.

Even those enterprises reliant on Bit’s office software might refuse to upgrade to Windows 95.

The consequences of such actions would be too great, and after all, the overlap between Microsoft and Bit’s business wasn’t significant.

Just looking at Bit’s development in the office software field showed their products were even categorized into specific business types.

For example, HCM software tailored for human resources companies and SCM software built for supply chains.

Their specialization had reached a level found nowhere else in the world, but Microsoft hadn’t entered these specific market segments.

The only product that could be considered office software from Microsoft was perhaps only the Office suite.

Clearly, there was no potential competition with Bit Company’s business, so Gates rejected Steve’s suggestion.

If it were merely because of some past disagreements with Dean, to purposely make things difficult in this aspect would be an underestimation of Gates.

Once this suggestion was vetoed, everyone else tactfully dropped the topic.

Seeing the atmosphere was somewhat gloomy, Brad Silverberg suddenly spoke up.

"Should we pay more attention to another business?"

"What?" Gates lifted his gaze.

"The Internet," Silverberg shrugged, "I have a feeling it might be the hot topic of the future, like the very popular browsers recently."

"We’ve already discussed this, Brad," Gates’s expression showed some helplessness.

"A browser is just an application software, no different from Word and others.

After all, its existence just expands people’s demand for computers.

Looking at the current browser market, they will not become an independent profitable business."

Internally, Microsoft had debated about browsers more than once.

However, Gates was not optimistic about them because such software was too easily imitated, and the competition was fierce, with low barriers to entry.

The early market competition between Mosaic and Explorer was quite clear to everyone here in Seattle.

For Gates, it wasn’t worth wasting resources on such "ordinary merchandise," especially since browsers were free for a long period.

Although it was said they had started to be commercialized, the fierce competition would inevitably lead to a fall in software prices.

Meaning, from a business standpoint, it could not obtain substantial profits from the market.

Recent sales data about this business further confirmed Gates’s deductions.

A couple of million US dollars in sales every two months could hardly impress the massive entity that is Microsoft.

Gates not only refused to invest in research and development of web-based applications, but he also rejected all developments of such applications.

He was very confident in his judgment, and Microsoft’s past success proved this.

However, Brad disagreed, "Bill, a browser isn’t just an ordinary application software.

Nowadays, nearly every Internet user can’t do without it, which might create an entirely new market."

"No, Brad, the Internet is just a utilitarian thing," Gates stubbornly shook his head.

"Going online is an extended function of server software, and our servers are the most important.

If it’s just to compete with the Unix servers of Sun Microsystems and develop this kind of software independently, it isn’t necessary."

Though browsers had been developing for over a year, Gates still hadn’t changed his opinion.

His impression of browsers remained stuck with the initial versions of Mosaic and Explorer.

Indeed, Gates hadn’t yet experienced the new Explorer 2.0, and he also wasn’t interested in it.

He possessed supreme personal authority, and his viewpoints usually prevailed in debates.

In short, all employees and other managers naturally assumed that Gates’s ideas and methods were always correct.

But Brad was an exception; he was one of the few in Microsoft who dared to hold an opposing opinion to Gates.

"Bill, my team will try to develop Internet business, and I’m sticking to my view."

"OK," Gates shrugged nonchalantly, "You have the right to do that."

The two had discussed this disagreement several times, but neither had convinced the other.

But seeing Netscape leading in the Internet realm, Brad Silverberg decided not to wait any longer.

As Microsoft’s internal "Skunkworks," the strategic team he led had considerable autonomy.

The term "Skunkworks" originally originated from the aviation industry, initially referring to Lockheed’s secret laboratory.

The projects developed here often pertained to an organization’s long-term interests but were not directly related to current businesses.

It might end up fruitless, but it usually still received support from management.

Because the people in "Skunkworks" are the "troublemakers" of a company.

Their thoughts and ideas are unconventional, and they do not easily succumb to the authority of management.

Many times, some excellent innovations were born right here.

Therefore, to avoid stifling such employees’ innovative talents, large companies typically gather them together and set up a separate department internally.

This is the Skunkworks, or the maverick team.

They possess skilled techniques and unconventional thoughts but are not tamed.

The team led by Brad Silverberg was Microsoft’s Skunkworks, able to secretly carry out business operations without authorization.

However, due to Gates’s opposition, he might not get full support from Microsoft here.

But Brad Silverberg was not planning to give up easily, and he already had some ideas.

Gates was right, the browser market competition was actually very intense.

If Silverberg were to start from scratch at this time, it would require a significant amount of development time.

So he planned to make a trip to Illinois, where Mosaic had reportedly licensed to a commercial company.

Their subsequent development obviously was not up to par, otherwise, they wouldn’t now be losing ground to Netscape’s Explorer.

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PS: Gates’s views on browsers and the Internet are based on physical book data.

These are not fabrications or deliberate dumbing down by the author.

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