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Goliath At Bay

Microsoft Internet Play
By George Gilder and Rex Hughes

If Gates is right, browsers will be trivial.

Stuck in a snowstorm in Ithaca, New York, in midwinter 1993, Steve Sinofsky shipped a shocking memo back to Bill Gates, his boss in Redmond, Wash. Ordinary students and faculty on the Cornell University campus, according to Sinofsky, commanded powers of communications, collaboration and information-sharing well beyond the tools of the world’s leading computer jocks on the Microsoft campus. To make matters worse, the Cornell collaborators shunned Windows machines. They were using Unix workstations and TCP/IP networks.

Bill Gates today describes this report as his wakeup call for his May 1995 memo, “Internet Tidal Wave.” What Gates’s memo does not explain is that the tidal wave is in large part a Microsoft application, made possible by the early conversion of Windows machines into Internet platforms. But the Microsoft Internet scheme, based on the notion of the Net as an extension of the operating systems, saw browsers as “trivial.” This vision now clashes with the Sun-Netscape plan in which it is Microsoft’s increasingly vast and versatile operating systems that are becoming peripheral.

Although Microsoft did not declare itself an Internet company until December 1995, the firm had begun laying the necessary foundations as early as 1991. When Marc Andreessen of Netscape described the Internet opportunity as a “giant hole opening in the middle of the world,” the computers opening in his mind were mostly Windows machines increasingly equipped with the standardized Windows Socket APIs (application program interfaces), now notorious as Winsock.

Without Winsock, developers of Internet applications for the world’s PCs, such as Andreessen, either would have to design their own TCP/IP stack or would have to compile a separate API for each of the existing stacks on the market. By writing an open standard for interfacing to all Windows-based TCP/IP stacks, Microsoft gave the Windows Internet market a tremendous jump start. Any application could work with any protocol stack.

The key step in 1991 came when Nathan Myhrvold hired James Allard out of Boston University’s computer science program and gave him a free hand “to make Windows PCs the world’s best Internet appliances.” Supporting Allard was top Microsoft executive Steve Ballmer, who had just returned from a sales trip where he found that key Fortune 500 customers were more keyed into the Internet’s potential than Microsoft was. Ballmer did not know what the thing was exactly, but he knew its initials were TCP/IP and he wanted Microsoft to have it in spades.

Allard’s first task was to develop the TCP/IP stack for the Windows platform. His second task was to assist Microsoft’s information technology group by replacing the Novell-Xerox networking standard with TCP/IP across Microsoft’s own 30,000-PC corporate network. Thus began the Windows Socket technology through which most Windows applications, including some 80% of Netscape’s, normally reach the Internet.

Winsock has acquired an unsavory reputation in recent months, summed up by the joke: “Windows 95 sure is a great program. It blows the Winsocks off all the competition.” But the joke captures the reality that all the competition depends on the Winsock standard to reach the bulk of the world’s PCs. What had happened after the release of Windows 95 was that multiple Winsock.DLL (dynamic link library) files were installed in many machines and they conflicted. while the Justice Department saw the companies whose .DLL files were displaced as victims of Winsock, in fact these firms, from Netscape to Attachmate, were huge beneficiaries of the Winsock standard, which was necessary to make Windows work in a Unix world.

Although the Internet tidal wave—and the companies that fed on it—were largely a Microsoft-enabled application, Microsoft sees the browser mania of 1995 as a passing phase. As Craig Mundie says, “1995 was the year people focused on the stand-alone browser. You get people launched in one mind-set and they go roaring down that path for quite a long period of time, until they wake up one day saying, “Oooh?! Gee, these two things were not as separate as I thought.” Soon every Microsoft application will contain browsing functions.”

Here once again engaged is the crucial conflict of paradigms—the Wintel machine full of what is ungraciously described as Microsoft “fatware” versus the lean and mean Internet appliance using the resources of the net.

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