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Ballmer's big regret at 10: Losing the interwebs

Wrong patience, lost talent

Internet Security Threat Report 2014

Key Exits

The late 1990s and early 2000s saw the exit of Adam Bosworth, the man who'd managed Microsoft's XML program and who was looking at offline browser caching, as well as Tod Nielsen, vice president of Microsoft's platform group.

It was a telling indication of what could have been for Microsoft that they joined forces at a start up called Crossgain, to build online development tools. It was telling, too, that Microsoft threatened Crossgain with legal action claiming both were subject to non-compete agreements.

Then there was the Internet Explorer and internet team implosion. IE came from nowhere, introducing many ordinary PC users to the early internet using their PCs. How it got on so many PCs is not the question here. What's relevant is that its sheer presence on the PC and its relative ease of use introduced so many to the web. The IE programming environment gave application and web developers a platform too.

What did Microsoft do to retain and reward such talent? Very little.

The man who created the IE team and saw it through three successful iterations, Ben Slivka, was allowed to leave for the then up-and-coming online book retailer Amazon in 1999. Also leaving in the late 1990s was IE's senior vice president and product manager Brad Silverberg. He didn't just help take IE from nothing to market leader, though. He also oversaw the acquisition of Hotmail, which became one of Microsoft's prized online assets and is today at the center of Live Services, thanks to its critical mass of users.

Again, it was a telling indication of where Silverberg's interests lay and where he could have taken Microsoft as he went on to jointly create an investment company specializing in network and wireless companies.

Also out in 1999 was the energetic general manager of the MSN dial-up business, Eric Engstrom. MSN as a whole, meanwhile, was left under the somnolent leadership of Rick Belluzzo, a former chief executive of workstation outfit company SGI.

At the time, the official reason for the departures was either "personal reasons" or to "pursue other interests." For some, Microsoft had simply become too big and too bureaucratic for their entrepreneurial spirit.

The case of Silverberg, though, is telling. He left having clashed with eventual co-president of Microsoft's platform and services division Jim Allchin, who felt that the web would threaten Microsoft's desktop dominance. Silverberg, like some of the others, disagreed with the direction the company was going in.

Several years later, and minus Silverberg, Microsoft declared the browser had gone as far was humanly possible, so there'd be no more development on IE. Allchin took over leadership of the fantastically intricate and ambitious Windows Vista, billed as Microsoft's biggest version of Windows since Windows 95. History will record that Microsoft U-turned on IE development, resuming it in the face of security treats and vigorous competition from open source, while Windows Vista proved a turkey.

Ballmer is wrong to say he, or Microsoft, have lacked patience. Let's call this for what it was: In the late 1990s, Microsoft took a strategic gamble.

That bet was that the internet threatened Windows on the desktop and that Microsoft - through its sheer might and force of will - could bend history around to its way, with people remaining loyal to the desktop and the internet remaining a colorful adjunct.

That bet proved wrong. It cost Microsoft market share online, and saw a brain drain that's hurting Microsoft to this day. ®

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