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Microsoft Volume II

July 21, 2024

AI Summary

5 min read

Microsoft Volume II: The Middle Chapter

The Internet Tide

In January 1994, a young Windows networking engineer named Jay Allard wrote a memo to Bill Gates and senior leadership titled "Windows: The Next Killer Application for the Internet." He pointed to a piece of software spreading like wildfire from the University of Illinois, written by a kid named Marc Andreessen in his free time. It was called Mosaic. Allard argued that the internet was becoming an exponential phenomenon and that Microsoft should "embrace, extend, and innovate" — a phrase that would later be shortened by critics to "embrace, extend, extinguish."

The next month, Bill's technical assistant Steven Sinofsky got snowed in at Cornell University on a recruiting trip. He noticed that students weren't using the internet for academic research. They were using it for flirting, registering for classes, and messaging each other. He wrote another memo to Bill and leadership titled "Cornell is Wired!" Bill Gates later said: "When I heard Steven talk about what was happening at Cornell, I began to take the internet quite seriously."

On April 5, 1994, Bill organized an internet offsite. The very next day, Netscape was incorporated. At that offsite, Bill declared a core Microsoft value: exponential phenomena cannot be ignored.

The Browser War

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What you'll learn

  • 1 (00:00) **Episode Introduction & Framing** - Ben and David set up the "middle chapter" of Microsoft (1995-2014), challenging the simple "rise, fall, then Satya saves it" narrative.
  • 2 (04:42) **The Internet Arrives: Microsoft's Early Miss** - Microsoft initially focuses on the "information superhighway" (interactive TV) and a proprietary online service (MSN), ignoring the open web.
  • 3 (13:44) **The Netscape Threat & Microsoft's Response** - Netscape is founded, goes public, and threatens to make Windows irrelevant by becoming the new application platform.
  • 4 (40:36) **The Browser War & The Mac Deal** - Microsoft bundles IE for free with Windows, crushing Netscape's distribution. The deal to save Apple includes making IE the default Mac browser.
  • 5 (50:47) **The Antitrust Trial (1998-2001)** - The DOJ sues Microsoft for abusing its monopoly power to suppress competition, specifically by bundling IE with Windows.
  • 6 (78:40) **The True Cost of Antitrust & The Ballmer Era Begins** - The antitrust ordeal is a "mental breakdown" for the company, destroying culture and distracting leadership. Steve Ballmer becomes CEO in 2000.
  • 7 (90:59) **The Enterprise Juggernaut** - Microsoft pivots from a consumer tech company to an enterprise powerhouse, building a flywheel of server products (SQL, Exchange, Active Directory) that work best with Windows and Office.

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Guests on this episode

Steven Sinofsky

Show Notes

In 1999, Microsoft became the most valuable company in the world. And in 2019, Microsoft became the most valuable company in the world, again. But… what happened in the twenty years in between? The answer, as we discovered in our research, is probably not what you think.

In this episode we explore and analyze the browser wars and the DOJ case, Windows XP through 8, Surface, Xbox, search, Yahoo!, Bing, the iPhone, Nokia, mobile, social, Facebook… and oh yeah, a little thing called Azure and the enterprise — which ended up becoming so big that no failures mattered. Tune in for Microsoft, Volume II.

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