Gates is determined not to miss the next wave

Americans always have been fascinated by the great captains of
industry, be they robber barons, philanthropists or both. Today there is no larger
capitalist colossus than Bill Gates, the 40-ish, $13 billion man.

Part of our fascination is sheer admiration for the Harvard dropout who had the courage
and vision to sell software in a way that it became a de facto world standard.

Another part of why Gates is an irresistible public figure is that if you were smart
enough to buy $2,000 worth of Microsoft Corp. stock in 1986, when it went public, your
investment now is worth about $160,000. It makes you pay attention to the man and hope his
vision for the future will rub off, even marginally, so you can find the next Microsoft to
buy.

But as Gates reaches middle age, fatherhood and the role of IT establishment statesman,
he has set himself a new public challenge: to be the first leader of the IT revolution to
carry his company successfully into successive waves of change.

Many Americans and entrepreneurs in other nations are buying and reading Gates' book, The
Road Ahead. The book provides a bland but useful view of the technology future. In
chapters with labels such as "Friction-Free Capitalism," Gates acknowledges
problems that plague the Internet explosion.

For example, he raises the question of whether an on-line service is more like a
publisher who is responsible for content, or a telephone network used by a crank caller.
But Gates expends little effort at elucidating such problems, and it would be helpful to
know more about what he really thinks.

In the third chapter, one of the most interesting, Gates lists visionaries who
eventually faltered, including Digital Equipment Corp.'s Kenneth Olsen and the founder of
Wang Laboratories. Gates is determined not to succumb to the "negative spiral"
that trapped these once-successful gentlemen.

In his book, Gates modestly says: "'I never anticipated Microsoft's growing so
large, and now, at the beginning of this new era, I unexpectedly find myself a part of the
establishment." But part of the change he will have to grapple with is that Microsoft
is a target for certain parts of the establishment, and Gates' days of essentially
ignoring Washington are over.

Having survived an initial brawl engineered by his competitors but fought out by the
Justice Department, the Federal Trade Commission and ultimately U.S. District Court Judge
Stanley Sporkin, Gates must know that competitors remain ready to savage his company
legally and politically, as well as try to beat him in the marketplace. Microsoft already
has suffered a series of stinging Washington defeats, including having to abandon the
Microsoft-Intuit merger.

At the National Press Club in Washington on Nov. 28, 1995, Gates stated he intended to
stay on top. It was an intriguing performance that demonstrated why he is simply a great
marketeer. He used a video presentation to poke fun at the world's most famous hardware
company (the one that used to be his partner) as well as a certain long-distance company's
ads about future technology.

Perhaps the funniest portion of this video was the section where Gates mocked the rush
to e-mail and home pages. He used as a prop a video charlatan who suggested that people
send mail with a $12,000 computer rather than a 32-cent stamp.

The film and Gates' energetic but occasionally impatient answers to questions had a
hyperspace subtext--creating more than just a little fear uncertainty and doubt
("fud") about his competitors' plans. He let us know that all the Internet
companies whose stocks are so hot may not be such a good investment as Microsoft. In fact,
Gates indicated that biotech and high-tech medicine stocks were his pick over Netscape et
al.

To complete his masterful performance, Gates has donated all his book royalties to an
educational charity. House Speaker Newt Gingrich probably would have saved himself a lot
of heartache if he'd done the same thing.

Other dynamos like Larry Ellison of Oracle Corp., who also have made millions and
created fast-growth technology companies, have expressed a fundamentally different
technology vision. Ellison believes desktop PCs may become dumber and, more importantly,
cheaper as the network takes over functionality.

"A PC is a ridiculous device; the idea is so complicated and expensive,"
Ellison says. "What the world really wants is to plug in to a wall to get electronic
power and plug in to get data."

The Road Aheadmakes it clear that Gates clearly shares Ellison's views on the
centrality and importance of the network, but they also just as obviously diverge somewhat
on the products and services that will succeed. So which multibillionaire has the best
vision of the future?

Gates' competitors ask, "Has Microsoft essentially missed the Internet explosion
without the right products to maintain its lead?" But betting against Bill Gates is
never easy.

I too have entered the e-mail age. My Internet address SMR@blrlaw.com.
  Your comments on these articles are always appreciated.

Stephen M. Ryan is a partner in the Washington law firm of Brand, Lowell &
Ryan. He has long experience in federal information technology issues.