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- <text id=91TT1081>
- <title>
- May 20, 1991: The Next 800-Lb. Gorilla
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1991
- May 20, 1991 Five Who Could Be Vice President
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- BUSINESS, Page 44
- The Next 800-Lb. Gorilla
- </hdr><body>
- <p> Who is the most powerful person in the computer industry?
- Arguably it is the frail, bespectacled, boyish figure shown
- below, the essential computer nerd, William Gates, 35. His
- Microsoft Corp., which he co-founded two years after dropping
- out of Harvard, is to computer software what IBM is to hardware--and now the two companies, formerly partners, are contenders
- in one of the industry's most important battles.
- </p>
- <p> Like IBM, Microsoft dwarfs its competitors. With $1.5
- billion in sales and a market value of $12 billion, it is eight
- times larger than its nearest rival, Lotus Development. Gates
- is the world's youngest self-made billionaire, with 42 million
- shares of Microsoft stock worth about $4.3 billion. The company
- didn't get so big so fast all alone: its close tie to Big Blue
- propelled it to the top. A decade ago, the two companies teamed
- up to develop the IBM PC, with Microsoft contributing the disk
- operating system, or DOS. After the PC started to lose steam,
- the two joined to introduce a new system based on IBM's Personal
- System 2 machines and Microsoft's Operating System 2 software.
- </p>
- <p> But PS/2 and OS/2 have failed to catch on, mainly because
- of glitches and constant delays. As a result, the duo that
- created the industry's hottest product of the 1980s is parting
- ways. IBM is developing its upgrade of OS/2, while Microsoft is
- making a separate version, setting up a competition for
- dominance in desktop computers, the most important segment of
- an important industry. "It's an interesting sideshow," says
- Gates. "But it will be the marketplace that decides the winner."
- </p>
- <p> The industry has a considerable stake in this sideshow.
- OS/2 was supposed to be a new standard, but its weak showing so
- far has left the field open. AT&T, for instance, is pushing its
- Unix operating system, and Apple Computer is promoting a
- program of its own. This week Apple will introduce an advanced
- version of the Macintosh operating system.
- </p>
- <p> IBM may win the race--it expects to introduce its new
- OS/2 by year-end--but that doesn't mean it will prevail.
- Microsoft is attracting a dedicated following to its successful
- Windows software, which lets users juggle a variety of programs
- at once. While Windows is not as muscular as OS/2, Gates sees
- it as a bridge leading customers from DOS to OS/2 in a smooth
- transition. He thinks that is important: "Switching overnight
- to OS/2 is too great a leap," he says.
- </p>
- <p> Microsoft's battle with IBM is far from Gates's only
- concern. Prompted by his competitors, the Federal Trade
- Commission is looking into possible Microsoft violations of
- antitrust laws. At issue is whether the company's role as
- supplier of both operating systems (the basic programs that make
- a computer work) and applications software (the programs that
- do word processing, calculating and other jobs) gives it an
- unfair advantage. More than 80% of all personal computers use
- the company's DOS, while an additional 3% use OS/2. One rival,
- Go Corp., charges that Microsoft swiped its idea for a software
- system that operates computers through a stylus capable of
- writing on the screen rather than through a keyboard. Microsoft
- (along with Hewlett-Packard) is also the target of a suit filed
- by Apple charging the company with illegally copying the "look
- and feel" of its Macintosh graphics software.
- </p>
- <p> Industry observers are not surprised by the shots fired at
- Microsoft; they expect more. Says Jonathan Yarmis, an analyst
- at the Gartner Group: "There's a Micro soft backlash out there."
- Such are the hazards of being awesomely big and powerful. Just
- ask IBM. The feds sued it years ago in an antitrust case that
- dragged on for 13 years before it was finally dropped. That's
- one rite of passage Microsoft would just as soon avoid.
- </p>
- <p> By Thomas McCarroll
- </p>
-
- </body></article>
- </text>
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