Bill Gates - Microsoft

Founded by Bill Gates and Paul Allen in the 1970s and lead by Gates through the 1980s, Microsoft succeeded by relentlessly chasing its rivals. The company also had a lot of luck–you simply don't become the richest man in the world without it. That luck produced three additional billionaires: Paul Allen, Steve Palmer, and Charles Simonyi. None of them would have achieved that level of financial success if they hadn't been at the right place at the right time.

Microsoft is the company people love to hate. Only twenty years after its founding, critics complained it was a monopoly engaging in anticompetitive practices. They compared Microsoft to the old Standard Oil not just because its practices were similar but because Gates was as ruthless a competitor as Standard Oil's villainous John D. Rockefeller.

Most people who make these charges know little about monopolies and less about Microsoft's history. Free market capitalism expressly permits some monopolies. Burger King, for example, has a monopoly on the Whopper® but not on hamburgers. Microsoft has a monopoly on Windows but not on all computer operating systems. Computer users today could go their entire lives without using any Microsoft products, and many do. If some of the alternatives are substandard, that doesn't make Microsoft a monopoly; it just means they produce a more desirable product. They set out to be the industry standard and succeeded–at least for a time.

It's hard to accuse a company of being a monopoly or anticompetitive when they compete against products that are free…except when they give their own products away. Remember that once a software product is developed, reproduction costs are nearly zero. If a company decides it can't compete, it can still punish competitors by not charging for their products. Even Microsoft initiated a free product war when it gave away its Internet Explorer browser as a way to compete with Netscape (see Jim Clark's profile for details).

It isn't hard to find a computer user with something negative to say about Microsoft but that's not surprising. Their products are so ubiquitous that almost everyone has had contact with them. And the human-computer interaction naturally generates some experiences that are memorable and negative.

For more than a dozen years, my company developed software that ran on Microsoft Windows. Windows developers have a love/hate relationship with Microsoft. We hate the company for some of the product decisions they make. Then there are times when we love Microsoft–usually when we're forced to use someone else's software.

That's the key to Microsoft's success. Certainly they played tough but when an important product failed, they worked relentlessly to improve it and to take advantage of their competitors' mistakes. The cash machines of DOS and Windows allowed them to focus on development. Unfortunately, recent product decisions and a plethora of free software continually threaten Microsoft's dominance.