Idea Man

by Paul Allen

  After Kildall made noise about suing for copyright infringement, a move his lawyers apparently discouraged, IBM offered his long-delayed CP/M-86 as an alternative for the PC. But it was obvious that IBM had no wish to support two sets of application software or to revisit the chaos of the 8-bit market. It priced our DOS at $40 and CP/M-86 at $240, a premium that reflected Kildall’s insistence on per-copy royalties. Once it became clear to users that IBM’s own software would run only on DOS, the independent software vendors ignored CP/M-86 and kept flocking to our operating system en masse. Our relationship with IBM made MS-DOS’s supremacy a fait accompli.

  THE IBM PC was imperfect. It was expensive and looked corporate and soulless. But it was also the best personal computer of its time, with the most powerful processor, a superior keyboard, and reliable floppy disk drives. Executives didn’t wait for their IT officers to take the plunge into microcomputing; they went out, bought their PCs, and plugged them in. IBM had projected the sale of 250,000 units within five years, and they were off by a factor of ten.

  The PC marked the official close of the hobbyist era in computing, as the consumer market that we’d seeded with the Altair now came of age. Pretty much anyone who’d used an electric typewriter felt that they could handle this new class of computer. Within a few years of its release, in a development IBM had failed to anticipate, there would be dozens of PC “clones,” fully compatible (and generally cheaper) computers that captured most of the home market after licensing MS-DOS. Soon our operating system was bringing in more revenue than all our languages combined.

  By 1984, the industry had converged around a single standard: MS-DOS twinned to the IBM specification. Legions of applications were developed to run on top of it. Hobbled by inferior hardware and limited software, other platforms could not compete. The TRS-80 was extinct by 1986; the Commodore 64 and Atari ST died a few years later. Only Apple survived, carving out a premium niche in the U.S. market that would hover around 10 percent.

  Down the road, Microsoft would suffer from the distraction of OS/2 until the company jettisoned the jointly created operating system in 1990 and signaled the end of its development partnership with IBM. Nevertheless, our original deal with Big Blue was critical both for Microsoft and for the industry as a whole. The PC phenomenon gave personal computers credibility in the business world. It became the launchpad for Windows and GUI applications like Word. Charles Simonyi, who has flown twice to the International Space Station, likes to use a rocket analogy. IBM gave Microsoft an essential boost before becoming a drag that we needed to shed.

  Or put another way: Before DOS, Microsoft was an important software company. After DOS, it was the essential one.

  For me, the poignant postscript to this story was the fall of Digital Equipment Corporation, the company we idolized in our youth. Early on, its top management had resisted the shift to personal computers. As late as 1977, its president told the World Future Association, “There is no reason anyone would want a computer in their home.” Five years later, DEC swallowed its pride and released a well-designed microcomputer called the Rainbow 100, but shot itself in the foot by using the old 8-bit CP/M system. When DEC finally got around to implementing MS-DOS, the company required a customized version that was incompatible with thousands of PC applications, and it flopped.

  In the mainframe and minicomputer worlds, DEC had achieved small miracles by marching to its own drummer. If, ten years earlier, you had told us that IBM would forge a new path for microcomputers and that the maker of the PDP-10 would straggle in late and be unable to adapt, we would never have believed you.*

  As IBM PC sales exploded, the national media took notice of Microsoft, and particularly of Bill as its president. He became the face of our company and the logical source for any journalist, which was fine with me. (I’ll do my share of publicity but I don’t seek it out, my recently opened Twitter account notwithstanding.)

  One thing didn’t change: Bill was as headstrong as ever. Once I flew with him to San Francisco to visit a few customers. For efficiency’s sake, we conducted separate meetings before rendezvousing back at the airport. I reached the gate several minutes before takeoff, but Bill was late as usual. They issued the final boarding call—no Bill. I was resigned to finding the next flight when he rushed up to the gate, out of breath. It was too late; the plane was already inching away from the jetway. But Bill never stopped running, through the boarding gate and into the jetway itself, with me trailing. Upon reaching the motor control panel, he did a quick scan and began pushing buttons. Then I realized what was happening: Bill was trying to move the jetway back up to the plane so we could board.

  Aghast, I called out, “Don’t do that!” An airline agent rushed over; I was sure that we would both be arrested or, at the very least, escorted from the terminal. But the man said, “Sir, sir, hold on. We’ll get the plane to come back.” To my astonishment, that is exactly what happened. They returned the plane, allowed us to board, and we got home on time.

  In general, I had less to do than ever with the business side of Microsoft. With Steve Ballmer on board, I was free to anchor our technical work. My management style was to wander the halls and peek in on the programmers:

  “What problems are slowing you down?”

  “Have you thought about trying it this way?”

  “What happens if I pull the disk out when you’re doing that?”

  We’d talk for a few minutes as I probed, one of my strong suits. Then I’d let them solve the rest of the problem themselves—unless someone hit a roadblock and got stuck, when I’d drill down to help get things moving again. The programmers liked having one of their own in a decision-making position, and I’m sure it was a relief to report to someone with a technical background. Often I’d get valuable information about some unexpected problem; they’d be loath to tell Bill for fear of getting yelled at, but they felt more relaxed with me. I loved working with my guys, and I think they knew it.

  But though my role may have narrowed, Bill kept running big decisions by me. Our dynamic was more intertwined than the partnership at Apple, where Steve Jobs was the grand thinker and Steve Wozniak the crack hardware designer. Bill and I were both generalists at heart. That was a big strength for Microsoft, but it also meant that no subject escaped debate.

  BACK IN FEBRUARY 1980, after I’d grown convinced that we needed a more powerful operating system, we licensed AT&T’s Unix software, and renamed it Xenix to abide by trademark restrictions. Our goal was to find a niche among midsize companies that wanted a heavier-duty system than MS-DOS without paying for a minicomputer or using a time-sharing service. But while Xenix made some money for Microsoft, it fell short of expectations. Even a scaled-down version of Unix was too demanding for the 8086 chip, and there were financial issues, too. AT&T was unwilling to lower its license fees for high-volume sales, so their royalties cut deeply into our profit margin. Microsoft wound up selling its interest in the software a few years later.

  Xenix was still on my mind in the spring of 1982, when IBM asked us for a next-generation DOS that could manage the upcoming PC-XT and its 10-megabyte hard disk drive, a vast amount of storage at the time. (It’s about enough for three uncompressed digital photos today.) By that point, DOS 1.1 was like a one-story, one-bedroom house—it kept the rain out, but it sorely needed remodeling. I assigned DOS 2.0 to three of my sharpest developers: Mark Zbikowski (the group leader), Aaron Reynolds, and Chris Peters. Our goal was to bring several best-of-breed Unix features into the PC and to widen our edge over Digital Research and Apple, whose operating systems were less sophisticated. If we did the job right, it would bolster MS-DOS as the industry standard.

  After brainstorming for days on possible improvements, we settled on two major ones. The first was Mark’s idea for loadable device drivers, which would allow PC users to add third-party printers or external hard drives without soaking up too much memory. The drivers would be loaded from the PC’s hard drive only when the peripheral was actually a
dded to the system, a first step toward today’s plug-and-play.

  Second, and more important, we were devising a new way to organize files. For stand-alone BASIC, Bill and Marc McDonald had designed a flat, one-level-deep directory called the File Allocation Table, or FAT, which Tim Patterson later reworked for DOS. It functioned well for limited-storage floppy disks but was too limited for a hard disk system, which might contain hundreds of documents. I was impressed by the Unix alternative when I’d first encountered it at Harvard: a hierarchical file system with a root directory and any number of subdirectories underneath it, or folders within folders within folders. It allowed users to organize their data any way they saw fit. What computer maker wouldn’t want to provide this improvement if they could?

  But it soon became clear that IBM was committed to keeping DOS 2.0 as close as possible to the eight thousand bytes used by DOS 1.1, so as not to disrupt their existing user base. If our new DOS was too memory hungry, IBM feared that smaller PC systems would run out of room for some popular applications. And they weren’t accustomed to contractors going beyond their specs, even if it meant they were getting more for their money. IBM’s developers loved our twenty extra features, but management thought we were cramming in arbitrary changes. They weren’t pleased that DOS 2.0 was now triple the size of DOS 1.1 or that interim deadlines had slipped.

  The day Mark got back from delivering a progress report in Florida, Bill stalked into his office, loaded for bear. He slammed his fist on Mark’s desk and started yelling: “I just talked to Boca Raton, and the customer is not happy! You’ve got to do what the customer wants!” When I overheard the ruckus and walked in, Bill wheeled on me and shouted, “The customer says this is unacceptable! We’ve got to give them what they asked for!”

  It was late in the day, and I was tired and having none of it. “What they asked for is stupid—it doesn’t do what we’re going to need!” I yelled back.

  “All we need is to make the customer happy!”

  And I said, “But the customer is an idiot!”

  “It doesn’t matter, they’re the customer!”

  “But the next DOS has to push the industry forward!”

  By that point we were standing six inches apart, chest to chest and nose to nose. Mark was watching like a horrified teenager whose parents sounded like they wanted to kill each other. (There was no physical contact, but Mark told me later that he saw some spittle fly.)

  Bill wasn’t reluctant to do technically difficult things if they gave us a competitive advantage. But he worried that I’d get distracted by the chance to do something cool, to climb some technology mountain just because it was there. By then, our relationship with IBM—and the PC compatibles—was Microsoft’s lifeblood. Bill was determined to keep our biggest client satisfied, and he probably thought I wasn’t giving that enough weight.

  After ten minutes of mutual apoplexy and an epic stare-down, Bill finally said, “OK, but your guy better hit the delivery date.” Then he left, and I said to Mark, “Make sure you finish getting all those features in.”

  And Mark and his team somehow satisfied us both.

  APPLE WAS MORE than a brand; it aimed to become part of your lifestyle. (We’re cool, we’re sleek, we’re reliable and easy to use, we think different.) It wasn’t an accident that Steve Jobs had toured Xerox PARC a year ahead of me. At that point, the high-end Apple Lisa was still in development, and the Macintosh was a low-onthe-totem-pole, one-man project. As Bill would say after Apple unsuccessfully sued Microsoft for copyright infringement over Windows’ GUI: “Hey, Steve, just because you broke into Xerox’s house before I did and took the TV doesn’t mean I can’t go in later and take the stereo.”

  Early in 1982, Jobs invited Bill and me down to see a Macintosh trial run. As we sat down, he turned to a young developer named Andy Hertzfeld and said, “OK, let’s show them what we’ve got.”

  Jobs was already pitching the Macintosh as a computer so simple that even his mother could use it. Unfortunately, the Mac prototype we saw that day was not yet “insanely great,” and the display locked up a minute or so after booting. Jobs was disgusted—you could see the contempt on his face. “What the fuck is going on?” he snarled at Hertzfeld, who’d probably been up all night getting things ready and was now trying to shrink under the table. “These guys came all the way down here to see this thing, and this is the best we can do? This is the best we can do? We get thirty seconds and a frozen screen? What the fuck is wrong with you?” He railed on as Bill and I traded glances and uncomfortably watched the performance. It seemed to me like an exercise in humiliation for its own sake. We couldn’t believe that Jobs would attack a subordinate in front of outsiders.

  I was reminded of that incident by a 1999 television movie called Pirates of Silicon Valley. In reimagining Microsoft in the late seventies and early eighties, the film depicts Bill as an übernerd and Steve Ballmer as a crude cheerleader, while I’m the bearded sidekick who loves gadgets and cracks wise now and then. Jobs, played by Noah Wyle, comes off as a charismatic but ruthless and mean-spirited jerk. The next time I ran into him, I asked him what he thought. And Jobs said, “I thought the guy who played me did a fantastic job.” He just didn’t care about what people thought of his public persona.

  Bill was different; he wanted to be viewed as tough but fair. He could be callous and rude, but he had a warmer, human side, too. And no one doubted that his excesses, for good or ill, were spontaneous. When Bill blew his stack at a meeting, it was never merely for effect. As the late Bob Wallace once said, “The only stuff worth discussing was the stuff you didn’t agree about, so you tended mostly to argue with Bill.” Microsoft veterans knew the drill, but new employees could be traumatized. Bill would miss the cues from those who reacted with stony silence or cold frustration. He didn’t always notice when he pushed too hard.

  When someone threatened to quit, Bill took it personally and did all he could to change the person’s mind. What he never considered, though, was that he might lose me. Whenever we locked horns, I’d have to raise my intensity and my blood pressure to meet Bill’s, and it was taking a toll. Some people can vent their anger, take a breath, and let it go, but I wasn’t one of them. My sinking morale sapped my enthusiasm for my work, which in turn could precipitate Bill’s next attack.

  Top executives like Steve Ballmer and Charles Simonyi had their share of friction with Bill, too, but none shared our long and complex history. I’d known the CEO long before there was a Microsoft, and we’d started the company on an equal footing. Now my role was diminishing. Bill stopped seeking me out on a regular basis, and I went in to see him less and less. Too angry and proud to make an emotional appeal, I never went in and told Bill, point-blank, “Some days working with you is like being in hell.” So my grievances hung in the air, unstated and unresolved. By the time we fought over DOS 2.0, our partnership was living on borrowed time.

  On June 1, 1982, to get my point across without getting distracted by counterarguments and rationales, I decided to write Bill a letter. A few excerpts:

  About two months ago I came to the painful conclusion that the time had come for me to leave Microsoft. Steve convinced me that I should wait to discuss it with you when you were not in the middle of a series of trips. …

  As I’m sure you realize, there is one primary reason that is the basis for my decision. I can no longer tolerate the brow-beating or “tirades” … that characterize almost every attempt I make to discuss any subject that is controversial. …

  The kind of personal verbal attacks that you use have cost many hundreds of hours of lost productivity in my case alone. … Over the years the result of these and other incidents has been the gradual destruction of both our friendship and our ability to work together. … The camaraderie of the early days is long since gone.

  Three weeks later, Bill hired Jim Towne as the company’s first president and chief operating officer. Because they’d need to interact so closely, Bill thought it made sense for T
owne to take my office. I didn’t object, and moved down the hall. Towne inherited the hot seat, with Bill popping in at any moment to grill him about some breaking development. It soon became apparent that the new president lacked the horsepower that Bill demanded. I knew he wouldn’t last when Bill said, “I know what he’s going to say before he opens his mouth.” Towne left the company less than a year later.

  As the summer wore on, my twenty-yard move down the corridor put me even further out of the flow. Though neither of us said it, I think we both knew that it couldn’t go on this way for long.

  CHAPTER 12

  WAKE-UP CALL

  It began that summer with an itch behind my knees at the Oregon Shakespeare Festival, where my parents would take us to see nine plays in seven days when I was in junior high. Not like a rash you got from the wrong soap—this was an agony that had me clawing at myself.

  After the itching stopped, the night sweats began. Then, in August, I became aware of a tiny, hard bump on the right side of my neck, near my collarbone. Over the next several weeks, it grew to the size of a pencil eraser tip. It didn’t hurt, and I didn’t know that any lump near the lymph nodes was a warning sign. I felt as bulletproof as most people under thirty; I took my health for granted.

  On September 12, 1982, I left with Bill on a European press tour. We went from London to Munich, where I felt really odd after drinking a beer. By September 20, when we moved on to Paris, I was exhausted and off-kilter—as if I had the flu, except there was no fever. I made it through one press conference, and then I was done. I flew home to see my doctor, who felt my neck and said, “You’re going in for a biopsy tomorrow morning.”