Bill versus Steve: The Early Years

Bill Gates started developing his computer skills with childhood friend Paul Allen at Lakeside School in Seattle. At the age of 14, the two had formed their first computer company. After high school, Allen and Gates left Seattle for Boston. Gates went off to Harvard and Allen began working for Honeywell. After only two years at Harvard, Gates and Allen left Boston for Albuquerque to develop a computer language for new Altair 8080 PC. This computer language would become BASIC and the foundation for Microsoft, which was created as a partnership in 1975.

After five years in New Mexico, Microsoft relocated to Bellevue, Washington, in 1980 with BASIC and two other computer languages (COBOL and FORTRAN) in its arsenal. Later that year, IBM began developing its first PC and was in need of an operating system. Microsoft developed the Microsoft disk operating system (MS-DOS) for IBM while two other companies created competing systems. Gates determination and persuasion of other software firms to develop programs for MS-DOS made it default IBM platform.

As Microsoft became more successful, Gates realized that he needed help managing the company. His enthusiasm, vision, and hard work were the driving force behind the companys growth, but he recognized the need for professional management. Gates brought in one of his friends from Harvard, Steve Ballmer. Ballmer had worked for Procter & Gamble after graduating from Harvard and was pursuing his MBA at Stanford. Gates pursued Ballmer to leave school and join Microsoft. Over the years, Ballmer has become an indispensable asset to both Gates and Microsoft. In 1983, Gates continued to show his brilliance by hiring Jon Shirley, who brought order to Microsoft and streamlined the organization structure, while Ballmer served as an advisor and sounding board for Gates. Microsoft continued to grow and prosper in the 1990s, dominating both the operating system market with its Windows and the office suite software market with Microsoft Office.

Gates recognized that his role was to be the visionary of the company and that he needed professional managers to run Microsoft. He combined his unyielding determination and passion with a well-structured management team to make Microsoft the giant it is today.

The other visionary, Steve Jobs, and his friend Steve Wozniak started Apple Computer in Jobs garage in Los Altos, California, in 1976. In contrast to Bill Gates, Jobs and Wozniak were hardware experts and started with the vision for a PC that was affordable and easy to use. When Microsoft offered BASIC to Apple, Jobs immediately dismissed the idea on the basis that he and Wozniak could create their own version of BASIC in a weekend. This was typical jobs: decisive and almost maniacal at times. Jobs eventually agreed to license Microsofts BASIC while pursuing his own vision of developing a more usable and friendly interface for the PC.

Many see Jobs as the anti-Gates. He is a trailblazer and a creator as opposed to Gates, who is more of a consolidator of industry standards. Jobs goal was to change the world with his computers. He was also very demanding of his employees. Jobs were different from Gates, Allen, and Wozniak. He was not a hard core computer programmer. He was the person selling the idea of the PC to the public. Jobs made the decision to change the direction of Apple by developing the Macintosh (Mac) using a new graphical user interface that introduced the world to the mouse and on screen icons. Jobs forced people to choose between the Microsoft-IBM operating system and his Mac operating system. In the beginning, Jobs was the visionary who changed the computer world, and Apple dwarfed Microsoft. With all this success, a major problem was brewing at Apple: Steve Jobs was overconfident and did not see Gates and Microsoft as a serious threat to Apple.

Soon After the release of the Macintosh computer, Jobs asked Microsoft to develop software for the Mac operating system. Gates obliged and proceeded to launch a project copying and improving Apples user interface. The result of that venture was Microsoft Windows.

This cocky attitude and lack of management skills made Jobs a threat to Apples success. He never bothered to develop budgets, and his relationship with his employees was criticized. Wozniak left Apple after the release of the Mac because of differences with jobs. In 1985, John Scully, CEO of PepsiCo, replaced Steve Jobs as president and CEO of Apple Computer.

The 1990s saw Microsoft and Apple go in two very different directions. Microsoft became one of the most profitable companies in the world, making Bill Gates the worlds richest man. Microsoft Windows became the industrys standard operating system. Apple fell from grace and became a niche market place. Jobs went on to found NEXT, a small computer manufacturing company, and Pixar, the animation house that produced the movies Toy Story and A Bugs Life.

Microsoft and Apple at the Turn of the Century: An Industry Giant and a Revitalized Leader

With the success of Windows, the Office application suite, and Internet Explorer, Microsoft has become a household name and Bill Gates has been hailed as a business genius. The fact that Microsofts competitors, the press, and the U.S. Justice Department have called Microsoft a monopoly reinforces Gates determination to succeed. Many people question whether Microsoft could survive the Justice Departments decision. Bill Gates, however, has shown that he is the master of adapting to changing market conditions and technologies.

Apple has gone in the opposite direction in the 1990s. The outdated operating system and falling market share eventually led to a decrease in software development for the Mac. Something needed to be done. In 1998, Steve Jobs returned to Apple as the interim CEO. His vision, once again, resulted in the innovative iMac. The design is classic jobs. In the 1980s, he created the simple-to-operate Mac attract people who were using IBM PCs and their clones. Now he has matured and looks to his professional staff for advice and ideas. Although he is the interim CEO, Jobs has sold all but one share of his Apple shock. Larry Ellison, Oracles CEO and Apple board member attributes Jobs ability to lead Apple to this fact: He owns only one share of Apple stock, yet he clearly owns the product and the idea behind the company. The Mac is an expression of his creativity, and Apple as a whole is an expression of Steve. Thats why, despite the interim in his title, hell stay at Apple for a long time. Many people believe that this will lead to continued success for Apple and a renewed battle between Gates and Jobs.

Questions:

1. Compare and contrast the managerial practices of Gates and Jobs. Write your answer in a tabular form