How Bill Gates and Steve Ballmer Reinvented Their Company

Microsoft Rebooted
by Robert Slater

In recent years, Microsoft has become more than just Bill Gates's company. Steve Ballmer is now the CEO, overseeing a Goliath that has been plagued by a federal antitrust trial, an employee exodus prompted by the dot-com revolution, and an ongoing economic downturn. But Microsoft has not only survived; it has thrived, prospering to the point that it is the second most recognizable brand in the world (behind Coca-Cola).

Bestselling author Robert Slater explains exactly how the company has adapted in the last few years, taking readers into Microsoft's inner circle to tell an amazing story of persistence in the face of adversity. Slater describes the many changes that have led to a new corporate culture, a new strategic direction, new product lines, and new ways of doing business worldwide.

There have been many books about Microsoft over the years, but this one brings the story right up to the present, with fresh insights and information. Slater was granted unprecedented access to the company's notoriously press-shy top brass, including extensive interviews with Bill Gates and Steve Ballmer.

I have been thinking about writing a book on Bill Gates and Microsoft for a very long time. As part of the research I conducted for Portraits in Silicon (MIT Press, 1987), a book about computer pioneers and developers, I interviewed a young man who twelve years earlier had founded a company that had become the most outstanding software enterprise in the world. His name is Bill Gates and the company, Microsoft. It occurred to me soon after the book was published that Gates and his company would make a superb topic for a future book. He had, after all, almost singularly brought about the personal computer revolution. And, at the time, no one had told his story in book form. I wanted to be the first to do it. I took the idea to publishers, but they suggested that Gates was not well known enough to warrant such book-length treatment. I remember replying to one of them, "Well, he will be." I was right. Gates, of course, became widely known, especially after 1992, when he was named for the first time as the richest man in the world. Books on him followed, many of them negative. Meanwhile, I wrote a series of books on other business leaders, always wondering if there was a way to return to my idea of doing a book on Gates and Microsoft. I still believed that he was an intriguing figure, indeed one of the most intriguing of our era. Few others have had such an impact on society and few have become as controversial.

Then, in the early 2000s, my editor at Portfolio (The Penguin Group), Adrian Zackheim, and I began talking about my doing just such a book; it was around the time that Microsoft was trying to extricate itself from the greatest crisis it had faced: the lengthy antitrust trial that the Department of Justice had brought against it. Once the trial ended in November 2002 and Microsoft and the DOJ reached a settlement, Adrian and I returned to the subject of a Gates/Microsoft book; only, by then, Steve Ballmer had become the CEO and was as important to the Microsoft story as was Gates. We agreed early in 2003 that I would write a book about Microsoft as it was emerging from the agonizing previous four years of the trial, but the book would be about both Gates and Ballmer, not just Gates. That is how Microsoft Rebooted: How Bill Gates and Steve Ballmer Reinvented Their Company came into being.

I hoped to interview Microsoft officials, including Gates and Ballmer, and to talk with outsiders as well, people who had some connection to the Microsoft story. As I began my interviews in Redmond, Washington, Microsoft's headquarters, Microsoft's public relations people let me know that the company sharply limited the access of authors to its officials; but it had responded positively in my case because Steve Ballmer had enjoyed reading my 1998 book, Jack Welch and the GE Way, on the former GE chairman and CEO Jack Welch.

Having access to both Gates and Ballmer of course added immeasurably to the project. During my interview with Gates, I asked him mostly about the business side of Microsoft, much less about the technology. In most of his interviews he was asked exclusively about Microsoft's technology. But I was writing a business book and I wanted to hear his views on the way he had run Microsoft from 1975 to 2000, and what he thought about the way Ballmer had reshaped the business side of the company. As is evident in the book, Gates was much more eager to talk about his conduct of Microsoft than about the latest reforms. In my interview with Ballmer, we talked mostly about those reforms. It was no surprise that Ballmer was quite comfortable talking about his role in recasting Microsoft.

I thank Bill Gates and Steve Ballmer for the opportunity to talk not only with them but also with many other Microsoft employees, including a large number of its senior executives.

I also want to thank the people at Waggener Edstrom Strategic Communications, which handles Microsoft's public relations, for guiding me through the company on my many visits to Redmond. Pam Edstrom, the head of Waggener Edstrom, spoke to me a number of times, giving me the benefit of her long experience in dealing with Microsoft's public relations efforts. Corey duBrowa, senior vice president at Waggener Edstrom, organized my interviews with Gates and Ballmer and the other senior executives and offered some valuable insights into the company as well. Laurie Rieger was my main contact in both the interview and fact-checking phases. I am especially grateful for her friendly and extremely efficient efforts on behalf of the project. Jim Bak helped me to get started with interviews at Microsoft.

I also want to thank the people at the Bill and Melinda Gates Foundation in Seattle, especially Bill Gates Sr. and Joe Cerrell.

I would like to thank those who granted me interviews, some of whom agreed to see me more than once: Jim Allchin, Robert Bach, Brendan Barnicle, Christopher A. Bartlett, Eric Benhamou, Dan Bricklin, James I. Cash Jr., Scott Charney, Jonathan Cluts, John G. Connors, Dwight B. Davis, Kenneth DiPietro, John Eng, Bob Frankston, Michael Gartenberg, Mark B. Gruenberg, Anoop Gupta, Amir Hartman, Peter Haynes, John Heilemann, Robert J. Herbold, Elijah Hurwitz, Kevin Johnson, George Kelly, Alan D. Levy, Daniel T. Ling, Kai-Fu Lee, Kornel Marton, Mich Matthews, Craig Mundie, Mike Murray, Nathan Myhrvold, Scott Oki, John O'Rourke, Pamela S. Passman, Lew Platt, Jeff Raikes, Rick Rashid, Peter Rinearson, Robert S. Rosenschein, Rick Sherlund, Jon Shirley, Charles Simonyi, Bradford L. Smith, David Smith, Mary Snapp, Steven Sinofsky, Gary Starkweather, Deborah Willingham, Andy Wilson, David B. Yoffie, Mark J. Zbikowski, and a number of others who asked not to be identified.

I wish to thank Michael Gartenberg and Richard Sherlund for looking through the manuscript and helping me to clarify a number of key points in the text.

It has been a pleasure for me to continue to write books for Adrian Zackheim and his Portfolio imprint at the Penguin Group. I have learned a great deal from him. I appreciate his guidance in making this the best book possible. I'm also grateful to be working with the others at the Portfolio team: Will Weisser, Mark Ippoliti, Allison Sweet, and Jennifer Pare.

Finally, I thank the people who really made this book possible: my family, especially my wife, Elinor. As she always does, she created the best possible atmosphere for an author, enabling me to sit for hours in front of a computer and to travel to Seattle and elsewhere frequently in the knowledge that we were in many ways doing this book together. A professional editor of long standing, she read and edited the manuscript, making numerous improvements.

Copyright © 2004 Robert Slater. All rights reserved. This excerpt, or any parts thereof, may not be reproduced without permission.

About the Author

Robert Slater is the author of more than twenty books, among them the recently released The Wal-Mart Decade and the national bestsellers Jack Welch and the GE Way and Get Better or Get Beaten. He was a reporter with Time magazine for two decades.