Gates switches gears

Industry analysts had praised Gates for guiding his company on a path of growth that saw its revenue stream increasing by more than 50 percent per year in a extremely competitive, even cutthroat, market. They credited much of this success to Gatess ability to capitalize early and effectively on industry trends and his willingness to take risks on such fledgling technologies as Microsofts CD ROM based software packages, which became industry standards. Furthermore, Gates had organized the companys structure so that it worked concurrently on all phases of a software products business cycle from development to distribution. Larry Michels, an early software developer, told Mary Jo Foley of Electronic Business, Other software vendors have modeled themselves after the hardware business. Microsoft created its own model of how to do business (August 15, 1988). Although Gates had established himself as a visionary, he did not always hit the mark. For years he had paid little attention to the business potential of the Internet, which led him to say later that he regretted not having focused more closely on Microsofts capabilities for e mail and networking. In 1995, however, he did an about face and began to redirect the companys efforts in this area. His success was measured by the fact that Microsofts Internet Explorer Web browser had become the industry leader by 2000.

Gatess success in developing a competitive Internet browser, as well as coming out on top of the desktop database and office suite wars of the 1990s, proved that he had formed a company nimble enough to jump into a market that others were developing and take the lead away from the competition.In 1998 Gates announced a new phase in Microsofts expansion that would allow him to concentrate his energies on strategy and product development. At the same time the company funneled larger amounts of money into improving customer support and feedback. Gates planned to direct the companys work in such areas as intelligent telephones and television, as well as the integration of such new computer input techniques as speech, vision, and handwriting. Although Windows had already gone through several upgrades, Gates wanted to continue improving its ease of use and reliability. To free himself up for this work, he stepped down as president, a position he had held since 1992, but remained Microsofts chairman and CEO.