Bill Gates wheels out Windows 98

By Richard Morochove

First published July 2, 1998

SAN FRANCISCO - What's good for Microsoft is good for the country. That was the message from Microsoft CEO Bill Gates as his company launched Windows 98 in historic Fort Mason on the shore of San Francisco Bay last week.

While others touted the capabilities of the new operating system, Gates used the opportunity to tackle a bigger issue and drew parallels between the automotive and computer industries. In particular, he referred to opinions expressed by the long-time former head of General Motors, Alfred P. Sloan.

In his autobiography, "My Years With General Motors," Sloan wrote that the integration of component manufacturing within GM was the key to making better cars and building it into the world's largest automaker. Gates clearly believes that integration of software into Windows, such as the controversial move to fold in Internet Explorer, makes for better software.

It looks like Gates will get his way. Earlier, a U.S. appellate court overturned a ruling that required Microsoft to offer computer makers a version of Windows 95 that didn't have Internet Explorer. That will have little immediate effect, since Windows 98 has replaced the older system. However, it augers well for Microsoft's ongoing battles regarding Windows 98 with the U.S. Justice Department and 20 U.S. states.

Yet there are fewer parallels between automobiles and computers than Gates would have us believe. For example, the competitive landscape is markedly different. In addition to the American-based Big Three automakers, there are large car manufacturers in Japan and Europe. Yet when it comes to PC operating systems, the only game in town is Microsoft, which commands about 90 per cent of the market.

While there are intriguing parallels between the early years of the automobile and computer businesses, Microsoft wasn't built like General Motors, an amalgam of several carmaking pioneers. It grew by dominating and extending its control over a particular piece of the computer business, computer software.

In this way it's much like John Rockefeller's Standard Oil Trust, which grew to prominence by supplying the fuel for automobiles and other energy needs. Yet this parallel wouldn't serve Gates' needs, since Standard Oil was broken up by the U.S. government over concerns that it dominated the oil and gasoline business.

Gates' automotive analogy carried over to the theme of the software launch, Route 98. About 1,000 members of the press, consultants, business partners and Microsoft employees surrounded the set at Fort Mason's Festival Pavilion, which was modeled after a two-lane highway.

The launch ceremonies were also broadcast live over satellite TV and the Internet. Microsoft estimated that more than 100,000 viewed the broadcast of the event at 91 theatre locations and over 3,000 computer retailers.

Brad Chase, Microsoft's vice president for Windows marketing and developer relations, quarterbacked the demonstrations of Windows 98. Unlike a demonstration a couple of months earlier, there was no embarrassing system crash when he plugged in a scanner and Windows 98 reconfigured itself on the fly. A couple of long days work by several Microsoft engineers eradicated that bug.

After the broadcast, the area behind the set was opened. Dressed like a drive-in movie theatre, complete with classic autos from the 50s and 60s, it featured exhibits from dozens of hardware and software makers, showing off products that take advantage of the new features of Windows 98.

The launch loosened the logjam of products that connect to the Universal Serial Bus (USB) which is now supported by Windows 98. USB devices such as digital speakers along with digital photo and video cameras dominated the exhibits.

Gates toured the partners' pavilion, as casually as you could when surrounded by a mob of thirty or so photographers. He stopped strategically to view the exhibits of important partners such as Hewlett-Packard and Compaq Computer and lend his support.

The launch of Windows 98 wasn't nearly as glitzy as the send-off of its predecessor, Windows 95. It's estimated that Microsoft spent only one-tenth as much on the festivities this time round. This new operating system isn't as big an enhancement as the move from Windows 3.1 to Windows 95 and Microsoft doesn't want to oversell it.

Yet Windows 95 was launched from the relative safety of Microsoft's backyard, near its headquarters in Redmond, Washington. This time, the festivities were held in the capital of Silicon Valley, within striking distance of Microsoft enemies like Netscape Communications, Sun Microsystems and Oracle.

This, too, sends a message. Microsoft won't be cowed by legal threats masterminded by its competitors. The Windows 98 monster truck is on the roll. CW

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