As Bill Gates begins his early retirement from Microsoft to focus on the work of the Gates Foundation, this is a good time to review his leadership impact within information technology (IT).
The story begins almost forty years ago in Seattle, a struggling manufacturing town 
where unemployment is high. The Boeing Company has ended a supersonic transport government contract, lost a jumbo transport military contract and is modernizing its commercial product line. The company’s newest commercial aircraft, the 727, is experiencing too many crashes on landing and a new large aircraft, the 747, requires significant capital to build the country’s largest manufacturing plant. Employees are overworked but afraid to take vacations because they have seen those who did come back to an empty office. The bright spot is Boeing Computer Systems where excess mainframe computer capacity and information technology expertise is being sold on a time-sharing basis to other companies.
In the late 1960s, while Bill Gates is in junior high school and Redmond, WA is a sleepy little town, I lived in Bellevue, WA where two of my children were born. As an IT marketing specialist for Eastman Kodak company, I helped Western U.S. customers maximize information retrieval from their IT resources. At the time, IBM was dominate in the computer world (with the mainframe IBM 360)....having a workforce that totaled about half the population of the State of Washington.
Gates attends Harvard University, dropping out in 1975 at the age of nineteen, with the belief that personal computers will change the way people work. He starts a software company, called Microsoft, where jeans-and-tennis-shoe programmers write code in Basic, Fortran and Cobol languages.
Fast-forward to a fall day in 1980 in an IBM office in Boca Raton, FL when Gates, Steve Ballmer and Bob O'Rear (after having spent a sleepless night on a Delta red-eye flight from Seattle to Miami memorizing business and technical information) meet with eight sharply focused IBM executives and two attorneys. Gates, the small start-up company's young leader has been up several nights in a row crafting his sales presentation, an example of the intense style of preparation that would become his personal trademark. In the meeting, they propose that Microsoft develop the new IBM personal computer's disk operating system, DOS. Microsoft wins the contract to develop DOS for IBM.
After a few years of selling their new personal computers (PCs), IBM decides that it is time to upgrade to a new PC operating system and, once again, they ask Microsoft to design and program their next operating system, to be named OS/2. Gates says, "From the very beginning--and much to our surprise--Microsoft was pretty successful. In large part, that was because we lived and breathed software, stopping only to eat and catch a few hours of sleep here and there. We were totally hard-core about succeeding right out of the gate."
While developing OS/2 under contract to IBM in the late 1980s, Microsoft leadership recognize there is a large installed base of DOS personal computers that could be upgraded to new graphical user interface (GUI) technology. Gates and Co. conclude that such an operating system upgrade would allow this significant PC customer base to continue using their DOS machines.
The Microsoft corporate strategy is to enter two product horses in the race to satisfy the consumer's PC needs: the new IBM OS/2 and a DOS upgrade called "Windows" that would be developed and funded internally within Microsoft. To make Windows successful, Microsoft management proactively establishes strategic alliances with as many independent software vendors (ISVs) as possible. The ISVs develop new Windows-based application upgrades to the large DOS machine customer base as Microsoft distributes beta test Windows software to the ISVs (allowing the ISVs to gain a working knowledge of the new Windows operating system architecture)....long before the Microsoft Windows operating system upgrade is introduced to the marketplace. This Microsoft-ISV collaboration leads to more application software being available for Windows than any other operating system on the market.
This market leadership allows Microsoft to move from a provider of operating system software to an application software provider: delivering office process automation for word processing, spreadsheets, presentation graphics, etc. Soon, these individual applications are bundled into software suites, like Microsoft Office, and sold profitably with comprehensive site licenses throughout end user organizations.
By 1992, Microsoft's operating systems would be installed on seventy-five percent of the world's personal computers. Today, IBM is out of the personal computer business and Microsoft is one of the wealthiest companies with eighty-six percent market share and thirty-six billion dollars in sales.
Source: "A Leader Becomes a Leader: Inspirational Stories of Leadership for a New Generation" by J. Kevin Sheehan.