Consumers Make Or Break Tycoons
What a summer this has been for Washington state’s most famous entrepreneur. Fifteen years ago, Bill Gates was an obscure computer geek. A few weeks ago, Forbes magazine crowned him the world’s richest man. And now, with fanfare fit for the Second Coming, Microsoft is about to ship Windows 95.
Out of the limelight, like a horse plodding to the glue factory, the last American typewriter maker, Smith Corona, has filed for bankruptcy. And corporate America continues to downsize its labor force, aided by the accelerating computerization of industry.
Gates made his fortune from these upheavals.
The saga makes us think of Henry Ford, who also rode the crest of technological transition. Ford led the way in making the horse and buggy obsolete. He was loved, hated and envied - for his success and for his role in a huge lifestyle change. But later, his company produced the Edsel. It nearly succumbed to the Japanese. Now, it’s strong again, but no one could call it a monopoly.
Microsoft does wield an unsettling amount of power, both in the computer industry and in the emerging information-based economy. But that power is hardly unchallenged. So volatile is the computing industry that a lapse in foresight or quality can bring any titan down. Look at IBM.
Gates won his riches by providing goods of considerable value. Back in the 1980s, computer buyers struggled with awful compatibility problems. Computers needed a common, functional standard to reach their potential. Gradually, Microsoft provided it. Along the way it faced, and still faces, competition from rivals such as Apple, Novell and IBM. Meanwhile, flaws in Microsoft’s DOS and Windows 3.1 created a vast market for competing for supplemental software that fixes bugs and inconveniences.
This week competitors blasted Microsoft for bundling, in Windows 95, some software to access Microsoft’s new on-line service. Yet other on-line services bundle their access software with the new computer hardware people buy - plus, they shower their software, free, on anyone who appears on a computer-related mailing list. Microsoft’s on-line network will succeed only if it’s a good product compared with those of its competitors - all of whom are rushing to improve their wares and cut their costs, a situation consumers can applaud.
The uproar in advance of Windows 95 is mere posturing. What counts is what, and whether, consumers will buy. Microsoft’s future and fortunes, like Ford’s - or Packard’s - are only as good as its products. Why? Because the market, in fact, remains intensely competitive.
, DataTimes The following fields overflowed: CREDIT = John Webster/For the editorial board