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obsessive hackers.
With the development of OS/2 the strains
really began to show.
In IBM there's a religion in software that says you
have to count K-LOCs,
and a K-LOC is a thousand line of code.
How big a project is it? Oh, it's sort of a 10K-LOC
project.
This is a 20K-LOCer. And this is 5OK-LOCs.
And IBM wanted to sort of make it the religion
about how we got paid.
How much money we made off OS 2, how much
they did. How many K-LOCs did you do?
and we kept trying to convince them: hey, if we
have - a developer's got a good idea
and he can get something done in 4K-LOCs
instead of 20K-LOCs,
should we make less money?
Because he's made something smaller and
faster, less KLOC.
K-LOCs, K-LOCs, that's the methodology.
Ugh anyway, that always makes my back just
crinkle up at the thought of the whole thing.
When I took over in '89 there was an enormous
amount of resources working on OS 2,
both in Microsoft and the IBM company.
Bill Gates and I met on that several times. And
we pretty quickly came to the conclusion together
that that was not going to be a success,
the way it was being managed.
It was also pretty clear that the negotiating and
the contracts
had given most of that control to Microsoft.
It was no longer just a question of styles. There
was now a clear conflict of business interest.
OS/2 was planned to undermine the
clone market,
where DOS was still Microsoft's major
money-maker.
Microsoft was DOS. But Microsoft was helping
develop the opposition?
Bad idea. To keep DOS competitive,
Gates had been pouring resources into
a new programme called Windows.
It was designed to provide a nice user-friendly
facade to boring old DOS.
Selling it was another job for shy, retiring
Steve Ballmer.
- How much do you think this advanced operating
environment is worth?
- wait just one minute before you answer
- watch as Windows integrates Lotus 1, 2, 3 with
Miami Vice. Now we can take this...
Just as Bill Gates saw OS/2 as a threat,
IBM regarded Windows
as another attempt by Microsoft to hold on to
the operating system business.
We created Windows in parallel. We kept saying to
IBM, hey, Windows is the way to go,
graphics is the way to go, and we got virtually
everyone else,
enthused about Windows. So that was a
divergence that we kept thinking
we could get IBM to - to come around on.
It was clear that IBM had a different vision of its
relationship with Microsoft
than Microsoft had of its vision with IBM.
Was that Microsoft's fault?
You know, maybe some ,but IBM's not
blameless there either.
So I don't view any of that as anything but
just poor business on IBM's part.
Bill Gates is a very disciplined guy.
He puts aside everything he wants to read,
and twice a year goes away for secluded
reading weeks.
The decisive moment in the Microsoft/IBM
relationship came during just such a retreat.
In front of a log fire Bill concluded that it was
no longer
in Microsoft's long term interests to
blindly follow IBM.
If Bill had to choose between OS2, IBM's
new operating system and Windows,
he'd choose Windows.
We said ooh, IBM's probably not going to like this.
This is going to threaten OS 2.
Now we told them about it, right away we told
them about it, but we still did it.
They didn't like it, we told em about it,
we told em about it,
we offered to licence it to em.
We always thought the best thing to do is to try
and combine
IBM promoting the software with us doing
the engineering.
And so it was only when they broke off
communication and decided to go their own way
that we thought, okay, we're on our own,
and that was definitely very, very scary.
We were in a major negotiation in early 1990,
right before the Windows launch.
We wanted to have IBM on stage with us
to launch Windows 3.0,
but they wouldn't do the kind of deal that would
allow us to profit it would allow them
essentially to take over Windows from us, and we
walked away from the deal.

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