Tuesday, 25 June 2019

Bill Gates has rare honest moment

From CNBC:

Gates admitted his “greatest mistake ever” was allowing Google to develop Android — one of Apple’s biggest smartphone competitors — before Microsoft could develop a competing mobile operating system, he told Eventbrite co-founder and CEO Julia Hartz Thursday at a Village Global event.

“That was a natural thing for Microsoft to win,” he said. Gates said he blames his own poor “mismanagement,” since he didn’t guide his team to jump on the opportunity. He also partially blames Microsoft’s antitrust problems in the early 2000′s for allowing Google to get ahead.

Google moved on mobile shortly after Apple did, when it acquired Android in 2005. Google later released it first Android device in September 2008, a little more than a year after Apple released its first iPhone on June 29, 2007.

“These are winner-takes-all markets. So the greatest mistake ever is whatever mismanagement I engaged in that caused Microsoft not to be what Android is,” he said. Gates added that there is now only room for one “non-Apple” operating system, and that market is worth $400 billion.

He added that if Microsoft would have “got that one right,” Microsoft would be the top technology company in the game right now. “We would be the company. But oh well, ” he said.

Yup. These things are natural monopolies, it's easiest if everybody uses the same platform-system-language, whether it's perfect or not (and nothing is).

He got this one right with Windows, and IBM has been kicking itself ever since for buying in Microsoft software for its PCs, rather than just developing its own; hiring Bill Gates; or snapping up Microsoft for cheap forty years ago, in the same way that Google snapped up Android in 2005. Once IBM used it, other PC manufacturers used it etc.

What goes around, comes around, but key to this is the tacit admission that Microsoft also holds a natural monopoly, and most of its income is simply unearned rent. However rubbish its updates are, it knows it can sell a billion new licences every year with a marginal cost of 0.001c.


formertory said...

I'm one of the few who regrets the passing of Windows Mobile, which I always found to be a simple-to-master, and in a sense rather elegant, phone operating system. When Windows 10 was released for phones, it was brilliant, but far too late. Gates blames Ballmer, Ballmer blames Gates.

Mark Wadsworth said...

FT, how good something is is not key to getting the monopoly. There's a fair amount of luck involved.

Lola said...

The two questions then are, is there a need to do anything about this duopoly and if so what?

Mark Wadsworth said...

L, usual rules, depending on level of price gouging/economic inefficiency caused, choose from...

1. Do nothing, it's not that big of a deal.

2. Remove patent protections, make the software free to use.

3. Price caps.

4. Higher taxes on the patented items.