[Script] The Sins of Silicon Valley - Act 2, Scene 2

 Fade In: Microsoft - The First Horseman

[Images of Bill Gates, and Microsoft]

Fade Out

VO: Microsoft was started in a garage in 1972.  They are literally the first horsemen; the first start up and the model that set the pattern for the rest; Five Horseman, Microsoft, Facebook, Google, Apple and Amazon have come to totally dominate our world and economy today.  Microsoft grew from two people to thousands and now has an annual income well north of a hundred billion dollars.   They started small; little advances here and there like BASIC and ASCII, but their real break came with the creation of DOS, Disk Operating System.  Now, allegedly, Microsoft copied this code from CP/M (allegedly) and then IBM gave Microsoft a sweet deal.  In 1990, back when the federal government actually did things, it investigated microsoft for collusion with IBM, but by then the genie was out of the bottle and the company was worth billions upon billions of dollars.

[Images of Computers]

VO: There was a war, early on between Apple and Microsoft, but Microsoft opened its system to allow others to make hardware and software, whereas apple took the ‘walled garden’ path that is reflected in its war with Google today.  But Microsoft started a lot of sketchy behavior right off the bat.  Since Microsoft was in the majority of computers, if they decided that they wanted into a market; that was the end of things.  The two most notorious examples of this were in word processing where Microsoft signed the death warrant of the highly popular Word Perfect, and the first (and highly valuable) browser Netscape with the kludgy and easy to hack Internet Explorer.  Microsoft not only made it the default browser on every windows PC, they did all kinds of quiet things in the background to ensure that it didn't work as well as Internet Explorer.

[Images of Clinton and investigations]

VO: But Microsoft did this again and again; small start ups would come up with a product and microsoft would crush them by building something in the operating system, a competing process or doing something called Vaporwear, where they would release a hypothetical program that never actually got release, but the mere hint that they might do it caused competitors to run away screaming and investors to think twice.  Eventually enough people got sick of this that Microsoft was taken to court by the FTC.  There was a lot of back and forth, but Microsoft had very clever lawyers and kept dodging around laws and regulations (which set the pattern followed by all the tech companies) until their violations finally got so egregious that the Department of Justice and 18 states took them to court and got a consent decree forcing them to stop the nonsense of jamming their product down everyone’s throat.

[Images of bars and chains]

VO And it hit the tech world like a sledge hammer.  For a while, a short while, tech companies started trying to obey the law.  Google notoriously chose their first motto “Dont Be Evil” so that they would be everything Microsoft wasn’t (we’ll see how long that lasted later) but while every company wanted to be Microsoft in economic size, none of them wanted to be perceived as the bad guy so a number of very slick, very sophisticated advertising campaigns took place to clean up the valley’s image.

[Image of other companies passing microsoft by with phones and platforms]

VO Microsoft did what it always did; tried to move into new platforms, but when Bill Gates retired and with the consent decree, Microsoft became more conservative.  They were the aging lion in the tech jungle, and they lost out in social media, they lost out in online sales, they lost out mobile devices (the windows phone was an unmitigated disaster) and the lesson that Microsoft learned from this was that they needed to be more aggressive, but also bide their time and see if the government isnt looking.  From time to time, Microsoft has still rolled out features that are mandatory, like that ad and status screen you see pop up, or do little things in the Windows store like make decisions about whether open source is available.  Recently, they formed an alliance with facebook to agree on standards for a new virtual universe (and we’ll get to that later) but the clear take away is that Microsoft is still this big, stable blue chip company like IBM and like IBM, they have allowed their past controversies to slide away mostly forgotten.