Microsoft co-founder Bill Gates has been reflecting on his time at the company when crucial decisions were made over its mobile operating system. During a recent interview at Village Global, a venture capital firm, Gates revealed his “greatest mistake ever” was Microsoft missing the Android opportunity:
“In the software world, particularly for platforms, these are winner-take-all markets. So the greatest mistake ever is whatever mismanagement I engaged in that caused Microsoft not to be what Android is. That is, Android is the standard non-Apple phone platform. That was a natural thing for Microsoft to win. It really is winner take all. If you’re there with half as many apps or 90 percent as many apps, you’re on your way to complete doom. There’s room for exactly one non-Apple operating system and what’s that worth? $400 billion that would be transferred from company G to company M.”
Google acquired Android back in 2005 for $50 million, and former CEO Eric Schmidt admitted that Google’s initial focus was beating Microsoft’s early Windows Mobile efforts. “At the time we were very concerned that Microsoft’s mobile strategy would be successful,” said Schmidt during a 2012 legal fight with Oracle about Java. Android ultimately killed Windows Mobile and Windows Phone off, and became the Windows equivalent in the mobile world.
Gates’ admission is somewhat surprising, though. Many had assumed that Microsoft’s missed mobile opportunity was a Steve Ballmer era mistake. Ballmer famously laughed at the iPhone, calling it the “most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard.” While Ballmer accepted the iPhone could go on to sell well, he crucially missed the touch-friendly era it was ushering in, and laughed off its lack of a keyboard.
This was a key part of Microsoft’s early mobile mistakes, and it came from the very top. Microsoft spent months arguing internally over whether the company should scrap its Windows Mobile efforts, which at the time weren’t touch-friendly and were born out of an era of stylus-powered devices. Microsoft decided, in a December 2008 emergency meeting, to scrap Windows Mobile and completely reboot its mobile efforts with Windows Phone.
While former Windows chief Terry Myerson and Microsoft’s Joe Belfiore were involved in that emergency meeting, it’s likely that the company would have sought Bill Gates’ advice in some capacity. Gates stepped down as CEO in 2000, taking the chief software architect role during the crucial years leading up to Windows Phone and Microsoft’s Windows Vista missteps. Gates eventually stepped down as chief software architect in July 2008, and carried on as the company’s chairman until Satya Nadella took over as CEO in 2014.
Gates promised to “substantially increase time” at Microsoft back in 2014, and Microsoft’s Edge team sought his thoughts about the company moving to Chromium last year. Gates has been assisting on a mysterious “personal agent” project at Microsoft in recent years, and now uses an Android phone.
Gates might not have been directly involved in the management of some of Microsoft’s mobile decisions, but his departure came right in the middle of Microsoft missing out to Android. Comparatively, former Microsoft CEO Steve Ballmer said that Windows Vista was his biggest regret at Microsoft before his tearful farewell.
Microsoft seems to have weathered its mobile mistakes, and the company’s cloud business is thriving. “It’s amazing to me that having made one of the greatest mistakes of all time, and there was this antitrust lawsuit and various things, that our other assets like Windows and Office are still very strong, so we are a leading company,” says Gates. “If we had gotten that one right, we would be the leading company, but oh well.”