( Microsoft and the Internet

· . . . fi • dustry was facing the

Iri 1996, the Microsoft Corporation, a giant 1n the so tware in ' . . n PC
1
same dilemma that IBM faced in the late 1970s. Microsoft has been doman~nt f .
software. It developed the highly successful and useful Window~ 95,. a versi?n ° its
Windows-based software that contributed to a significant increase 1n Microsoft s profits
and helped the company expand its domination of the PC market. Yet there is an emerg-
ing technology looming on the horizon-the Internet. The growth of net technol,ogy has
been exploited by Netscape. Yahoo, and Sun Microsystems. Netscape developed a
browser that is very popular among Internet users. Yahoo's software allows users to
search for topics on the World Wide Web (WWW); its initial public offering of stock
was made at $12 per share and went up to more than $40 per share the same day the
stock was traded on NASDAQ. Sun Microsystems introduced Java software, which
quickly becan1e one of the standard languages of the web in 1996.
The question is, Could Bill Gates, founder and CEO of Microsoft and champion of
. its PC-related business success, have the vision to change the direction of his firm and
embrace the emerging Internet technology? Could he forget all the profits he made in
the PC:-related business and make potentially risky investments in the new technology?
Apparently he made the difficult choice. It was reported that "Gates agreed that the In-
te~et was going to drive demand for PCs and software. He opted to play by the Inter-
ne~ s rules, not the PC rules Microsoft had written with Windows. Gates ordered that
M1crosof~ ?ecome web-centric, dumping that which didn't fit and reshaping everything
else.~ Sdtc~n Valley parlance, Gates showed he was willing to 'eat his young' to stay
on top (Business Week, July 15, 1996, p. ·98).
. Proper management of technology requires makin~ tough decisions and bein will-
mg to accept change, move where new technologies are heaclecGind invest in fue f utufe
/ These are t e mar s of success ul managers. ______ ·