We Will Not Gloat

Microsoft Rebooted
by Robert Slater

(Page 4 of 5)

By 10:00 a.m. the two Microsoft leaders had left. Brad Smith stayed behind to talk with the public relations executives. He placed phone calls to the attorneys general of states involved in the case. "Whatever happens," he told one of them, Tom Miller, the Iowa attorney general, "we are committed to trying to develop an ability to work together. If it's good news, we won't gloat. If it's bad news, we won't complain about you to the press." (Miller had been coordinating the legal strategy against Microsoft for the states since the start of the case.) Most in the room believed that the news would be bad. The gloom was contagious. The company had been forced to take one body blow after another during the trial. Faces grew longer and longer.

Suddenly, it was only fifteen minutes before the announcement was due, 12:45 p.m. The Microsoft legal and public relations team began gathering in the company board room in Building 34. Down the hall Bill Gates and Steve Ballmer and another half dozen executives were meeting in a conference room near the CEO's office. Brad Smith walked quietly into that conference room to inform Gates and Ballmer that once he had learned details of the judgment from Microsoft's lawyers in Washington, D.C., he would quickly walk back down the hall and notify them.

A Good Day

Brad Smith returned to the company board room and sat down with other attorneys for the final vigil. Then precisely at 1:00 p.m., the phone rang in the board room. He picked it up. On the other end of the line, calling on a cell phone, was one of Microsoft's attorneys in Washington, D.C. Adding to the tension, Microsoft's chief counsel had trouble hearing the voice in Washington. Between the crackles on the line, Brad Smith strained to hear the fateful news. Finally, the reception improved once the attorney was outside. Now Smith could understand every word. To anyone else who had not followed the trial, the language would have seemed arcane. But Brad Smith could recite the trial record in his sleep. He listened for certain key phrases that indicated the judge had agreed to the settlement. When he heard them, he allowed himself a brief sigh of relief. Microsoft had by no means won the case; but it had not lost, either.

For all intents and purposes the case was over. It had not been the resounding victory Bill Gates had hoped for. There would be scar tissue. But the ratified settlement undoubtedly had constituted the best that a company as assaulted and bloodied as Microsoft could have expected. The Government had been able to impose important restraints on the company. But the good news was that Microsoft would not be split in two. The judicial edict calling for the breakup of the company had been overruled some time earlier; but who could be certain, if the case had continued, that another judge might not reverse again and order a dismantling of the company? Knowing all this, no one around Brad Smith's conference table screamed for joy. They all sat quietly, hanging on every word coming in through the phone. Eventually, the news sunk in. Microsoft could continue more or less as it had been. Here and there someone broke out in a quiet smile, perhaps sensing that it was too early to look too happy.

Now it was time for Brad Smith to deliver the news to Gates and Ballmer. He was thrilled to carry this kind of announcement, having dwelled far too long on what it would be like to transmit a negative outcome to the gathering. As he reached the conference room door, Smith could feel everyone's eyes on him. He knew that if he broke into legalese off the bat, he would confuse too many listeners. But he did not want to say simply, "We won," which he was all too aware would be oversimplifying things. Conscious of how important it was to get to the point at once, he searched for just the right phrase, something that would resonate with the crowd.

Suddenly, he thought back to the trial and an image stuck in his mind of Microsoft spokesperson Mark Murray on the courthouse steps. Briefing reporters, as he did every day, Murray was saying, "This is another good day for Microsoft." Within Microsoft, Murray's phrase had been greeted with a kind of gallows humor and whenever bad news broke in the trial someone was sure to utter, "Oh, another good day for Microsoft."

With that phrase ringing in his mind, Brad Smith looked around the room and blurted out, "This is a good day for Microsoft."

At first, there was silence. Some had questioning looks on their faces. A few broke into smiles at once but were not sure the smiles were in place. Then everyone saw the smile on Brad Smith's face and everyone understood. The place erupted in cheers. Steve Ballmer turned to Bill Gates, patting the cofounder on his back. For the first time in years, the people who were running Microsoft had something to shout about.

All of the above drama serves as the backdrop for Microsoft Rebooted: How Bill Gates and Steve Ballmer Reinvented Their Company.

But this is not a book about the trial, though the trial is a key part of the drama of this book; it is the catalyst for what will come, the major turning point that forces the company to deal with issues smoldering under the surface even before the trial. Though few at Microsoft like to hear it said, the trial is the occasion for much of what was to happen at Microsoft in 2002 and 2003.

The book has as its focus those two years, centering on what occurred at Microsoft and how Bill Gates and Steve Ballmer were attempting to change the face of their company during that period. It is therefore not a history of the company, even though some of that history emerges here and there in order to help the reader understand the way the company is currently changing. Nor is the book meant to be, by any means, a cobiography of Bill Gates and Steve Ballmer, though their personal lives are very much a part of this story and the change in their personalities over the years bears crucially on the book's main themes.

Finally, although Microsoft is known far more for its technology than for its business processes, the book does not offer detailed explanations of the company's various software products; those products appear in the narrative only as they relate to Microsoft's business side.

What the book is about is the attempt, still in progress, of both Gates and Ballmer to transform Microsoft into a completely different company from the one it had been prior to and during the trial. In the book we look at the main players, Gates and Ballmer; we examine how each in his own way contributed to the changes that would occur; and we make some assessment toward the end of how the revamping is progressing. But before moving too far along, we have to examine why Microsoft chose to act in the immediate wake of the trial, and not long before.

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.