Paul Allen the artist versus Bill Gates the entrepreneur

There are artists and entrepreneurs. Their stories aren’t pretty. But tough calls must be taken. Their stories can be found across the world, India included where the IT Services business is staring at a tough time

Charles Assisi

[Microsoft co-founder Paul Allen. By Miles Harris (CC BY-SA 3.0), from Wikimedia Commons. Photograph cropped from original.]

It was inevitable the journalist in me who has covered technology for over two decades feel a lump in the throat while scanning the news. Paul Allen, the co-founder of Microsoft died earlier this week on October 15. He was only 65. Much has been written since then about his technological prowess, love for American football and accomplishments as a philanthropist.

Now that the eulogies are done with, a question continues to linger: Why did his death make it to the news in the first instance? Until now, most people, me included, have come to associate Bill Gates with Microsoft.

If I were to be brutally honest, I suspect the answer lies in that when Allen died, his estimated net worth was $20 billion. For the record, Gates’ current net worth is in the region of $90 billion.

On his part Gates went on to write, “What I loved about Paul Allen” on his personal website. It reads like a heart-felt tribute.

But every story has shades of gray. When he was alive, Allen and Gates parted ways bitterly. And in his memoir, Allen wrote to Gates, “somedays working with you is like being in hell” and described Gates, his childhood friend, as an “abusive personality”.

That is why I think this explosive interview broadcast by CBS News in 2011 is an absolute must watch. The video contains rare footage of the early years after Allen and Gates got together and how Microsoft was founded. It explains the difference between Gates the entrepreneur and Allen the purist.

One of the most honest perspectives on the relationship between Allen and Gates that has emerged over the last few days was offered by technology analyst Ben Thompson on Stratechery (behind paywall). Thompson recalls the time Allen exited Microsoft, eight years after the duo founded it.

Microsoft, incidentally, is a name Allen thought up.

Both were brilliant coders and childhood buddies who had worked hard to create MS-BASIC, the most popular microprocessor software in the world. At some point, tech giant IBM figured it needed this software to further its interests.

Multiple rounds of conversations through people in the tech circuit who knew Allen followed and the Allen-Gates duo created Q-DOS (an acronym for Quick and Dirty Operating System) to meet IBM’s requirements. This was later re-named MS DOS.

In a brilliant business decision that would make itself obvious only in hindsight, Allen "licensed" it to IBM. What it meant was that if any IBM clones emerge in the future, Microsoft could license MS DOS to those entities as well. Entities that mimicked IBM emerged. And Microsoft sold MS DOS to them. Allen put the organisation on a path to grow into the juggernaut that it is now.

Why did the friends become bitter then?

What remains untold is that ideological angst was playing out between the co-founders. All of this was articulated in a tell-all by Paul Allen in his book Idea Man. A passage Thompson pointed out stared at me. Nobody else who wrote eulogies to Allen cared to speak about this.

Sometimes it seemed that Bill so utterly identified with Microsoft that he’d get confused about where the company left off and he began. I didn’t feel quite the same way. The business was hugely important, but it did not define me. I wasn’t sure what the future held, or even how much of it I’d have to enjoy, but I looked forward to a new phase. I had never forgotten my father’s advice: “Whatever you do, you should love it.” My dad was happy for me when I’d returned to Seattle four years earlier, full of ideas and enthusiasm. It seemed to him that I’d found my calling, and I thought I had, too. But now it was time to go.

This angst, Thompson points out, was compounded by the fact that Gates muscled his way to acquire control of Microsoft and practically pushed Allen out of the firm until the stock split between them was 64:36.

In the interview to CBS and as documented in Idea Man, Allen speaks with outrage about how after he was diagnosed with cancer, one of the first things Gates did was touch base with Steve Ballmer on how to wrangle Allen’s stake in Microsoft out of him. Ballmer was later appointed as the CEO at Microsoft. That Gates eventually backed out of the plan is another story altogether.

This raises a few questions:

  1. Would Microsoft have gotten this far if Allen and Gates had not gotten together?
  2. Without Allen’s technical prowess and early call on licensing the software to IBM, would Microsoft have gotten to dominate the world?
  3. If Allen were in charge instead of Gates, what may Microsoft have turned out to be like?

In his tribute to Allen, Gates writes, “…Microsoft would never have happened without Paul.” But all evidence suggests that when he was alive, Gates saw Allen as an impediment to Microsoft. Why? And where may the truth lie?

Now that I think about it, and basis multiple conversations with entrepreneurs over two decades, I suspect the answer lies somewhere in between. To put all that into perspective, let’s start with a question: Does the name of a company called Borland ring a bell?

If I were to hazard a guess, the name would be unfamiliar to most people outside the technology business.

I first encountered the entity in my early days as a reporter in the early 1990s. One of the company’s founders Niels Jensen was on a visit to India and I was deputed to interview him. I was young, impressionable, and in awe of Borland. It had started life in Denmark and was locked in a fierce battle with Microsoft. From my “remote” perch in Mumbai as opposed to Silicon Valley where all the action was, I had read multiple accounts of how this battle was playing out. I was rooting for Borland. Everybody likes David versus Goliath.

I was naïve and unwilling to accept how brutal Microsoft can get. Without getting into much detail, suffice to say, Gates was at its helm. As early as age 13, he was clear he wanted to build an entity that would be in the Fortune 500 list. And if that meant getting brutal with opponents, so be it.

Microsoft undercut Borland until it started to bleed. The CEO Phillipe Kahn didn’t know how to respond. From being an entity celebrated by analysts that was valued at $7 billion in 1985, its value eroded to just $91 million in 2008 after a disastrous acquisition.

Let’s pause a moment and revisit that question: Would Microsoft have gotten as large as it is now if Allen were at the helm? Unlikely.

By his own admission to CBS News, he was the son of librarians, placed a premium on coding, and thought of himself as an artist.

Business, politics and government are complicated domains to navigate and insist on detachment of a certain kind

While there is no taking away from that Gates is a formidable coder, he lives at an intersection as well where he can deal with the machinations of business, politics and government. All of these are complicated domains to navigate and insist on detachment of a certain kind.

If Microsoft’s future was left to Allen, the purist may have walked out of the battle with Borland. He was uncomfortable with the brutal battles entrepreneurs must fight every day. He liked the purity of coding. He was a creator, or an artist if you will—not an executor.

This perspective was drilled home while conversing with an old friend Achyut Nayak, a formidable programmer. “How familiar are you with Dennis Ritchie and Ken Thompson?” he asked. “They were among the Gods I worshipped.”

I had to admit I wasn’t familiar with either name. But Ritchie and Thompson, Achyut told me, were the intellectual giants who created the highways that Allen and Gates could travel on. Why just them? All contemporary computing minds including Steve Jobs of Apple, Linus Torvalds who created Linux, and Larry Page and Sergey Brin, the co-founders at Google, forged their futures on the roads of the kind Ritchie and Thompson put in place.

Some digging around later, it was painfully obvious to me that despite two decades of reporting on technology, the stories of many heroes continue to remain under the covers for me.

Ritchie died in October 2011, aged 70. It went largely unreported by the mainstream media. Some technologists and a few journalists wrote obituaries. But had it not been for him, the C programing language may not have emerged. Everything that we now take for granted from the search engine that is Google to the smartphone everybody carries around was made possible because of C language.

Much the same can be said of Thompson. Without his contribution to computing and his pioneering efforts to create UNIX, the world we now live in and its many creature comforts would not exist. They were friends and worked at the Bell Labs. Thompson is still around, works out of the Google campus, and continues to develop the Go Programming Language. This too, is unknown to most people outside the rarefied circuits of programming.

Why, then, did the likes of me who have reported first-hand on technology not mourn the death of Ritchie? How did it not occur to track the accomplishments of Thompson?

Personal experience offers two pointers:

1. I recall the time I was invited to interact with Richard Stallman during one of his visits to India. I was wide-eyed even before meeting him. His reputation preceded him—father of the Free Software Foundation and the GNU/Linux operating system.

Meeting done with, I wasn’t sure what to make of him. On the one hand, he was funny. Then on the other, he yelled at me a few times during the course of our interaction for slights only he could imagine.

It took much for me to keep calm. I finally acknowledged to myself that he may be a great programmer—and by that token, a great artist as well. But he will always be a lousy entrepreneur. That is why he will never be spoken of in the same breath as Linus Torvalds.

So, what makes for a good entrepreneur?

2. My mind travelled back a few years to the South Bombay (as Mumbai was then called) apartment of FC Kohli. An engineer by training and the founding CEO and chairman of TCS (then called Tata Consultancy Services), now India’s largest IT company, he had stepped down from his formal role at the company to make way for S. Ramadorai.

Kohli, everybody agreed, was a formidable technologist with an equally formidable temper, and was an incredible manager as well. Over time, it became evident to me why.

For some reason, he had taken a liking to me and would often invite me to his home for tea with him and his wife. The three of us would sip tea, look at the sea, and he’d talk of what it was like to build a technology company out of India beginning in the 1970s. Nobody thought it possible.

The few who thought it possible, wanted to emulate their icons in Silicon Valley who built great software products. But Kohli was a pragmatic man.

He knew there would be no takers for software products in the Western world from a Third World country. And if he built anything, India couldn’t afford to buy it.

To disrupt the West and get a toehold there, he thought up IT services as a strategy. He could deploy engineers from India to do the job and use exchange rate arbitrage as a hedge to undercut the Americans. He went about it clinically, brutally and executed to precision. It wasn’t very different from what Gates and Microsoft were doing to Borland.

This wasn’t just a tech artist at work—but somebody who understood technology and entrepreneurship at once. Above all else, he had figured it takes much will to sometimes just survive the next day. He was born in Peshawar, graduated from Punjab University in Lahore and was pursuing a degree in engineering when he was uprooted from his ancestral home when India and Pakistan were partitioned in 1947.

It isn’t without reason that Kohli is called the father of the Indian IT industry. He paved the way for Infosys, Wipro and every other entity that followed. The government of India conferred the Padma Bhushan, India’s third highest civilian honour, on him.

There were many purists though, whom I have had multiple conversations with, who have repeatedly suggested Kohli did India a disservice and created an IT services nation and a class of “coding coolies”. He ought to have moulded India into a software product country, they maintained.

In hindsight, they couldn’t see the big picture. Kohli did the best given the circumstances. No Indian software product company comes to mind that emerged from the ecosystem he had to wade through. What comes to mind are clones of TCS.

FC Kohli was the pioneer. After he set the ball rolling, others like NR Narayana Murthy at Infosys and Azim Premji at Wipro got the import of his attempt and created a genre of companies that would last a generation. It is only now that the voices of those who differ from them are being heard.

One of the earliest and among my favourites is that of Anand Deshpande, founder and chairman of Persistent Systems. It has been a while since I met him. But I do remember the times when he used to speak of why it is important Indian IT companies invest into building software products if they must survive the long run.

I have heard first-hand people dis him. Why does he invest disproportionately into the products business when there is money to be skimmed off IT services, they ask?

I was reminded of many such conversations when earlier this week I was told that he called for a town hall meeting at the company’s headquarters a few weeks ago. He was distressed and made it known in no uncertain terms. The company had recorded $420 million in revenues. That fell short of the $500 million he wanted to accomplish last year. Going forward though, he made it clear to everybody there, this deficit is unacceptable—and that there is much churn everybody will have to go through.

However, this falling short by $80 million isn’t a failure. When looked at dispassionately, true to form, Deshpande is ahead of the curve. One-third of the revenue comes from what the industry calls SMAC—an acronym for Social, Mobile, Analytics and Cloud.

As opposed to this, other frontline tech majors in India are still attempting to play catch up here and their earnings from this business have just about begun to kick in. Deshpande had bet on this very early on and has a head-start.

Incidentally, Steve Jobs was once written off as a crank minus a plan.

Back to Persistent, what explains the $80 million deficit and what is Deshpande paranoid about?

To create software products and sell them as a branded products in major markets takes time. What got Persistent this far is that it built products for other technology majors. I’ve never asked him this—and I don’t know if he may ever admit to it. But I suspect it may hurt a technologist deep down to create intellectual property (IP) and hand it over to another technology major. The artist must be suppressed and is perhaps a terribly lonely place to be in.

Pragmatism insists this is what it takes to gain experience. History shows this is a long haul and is a strategy most entities adopted to learn and create technology majors out of Israel.

It is only now that Indian IT services companies see merit in Deshpande’s line of thinking, have begun to embrace SMAC, and are fighting for a slice of it. To do that, people are needed. There aren’t enough of them though. Older people must be reskilled and fresh talent at cheaper salaries must be got in to keep margins healthy. Those who cannot fight this battle out are in conversations to cash out. There are few takers though.

It takes time to earn a reputation and grit to stay in there

Then there were those who dived headlong to build software products when the ecosystem wasn’t ready. Most died early deaths—literally. One among them was my closest friend who built military grade encryption software out of India for markets in the West. There were no takers. He was ahead of the curve and died heart-broken, two years ago.

It takes time to earn a reputation and grit to stay in there.

Everybody thought of Deshpande as a dreamer. Indeed. Just that somewhere down the line, he morphed into an executor as well. I hope to meet him sometime and ask him how he sees all of this playing out.

Those who do not intuitively know they are artists and not entrepreneurs, are in for a very hard time

Those who may not have the mental muscle to intuitively know they are artists—like Dennis Ritchie and Ken Thompson—and ought not to attempt to become entrepreneurs, are in for a very hard time. Like my friend who died tortured in his head. If only, if only he had learnt to walk the thin line like Kohli and Deshpande.

Now that there is a formal venture capital ecosystem in the country, some who have learnt the ropes of the trade on highways that Kohli, followed by Murthy and Premji created, are beginning to learn how to say, “hello world!”

That, incidentally, is the first line of code a programmer is taught to write when they learn the C programming language that Ritchie thought up.

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About the author

Charles Assisi
Charles Assisi

Co-founder and Director

Founding Fuel

Charles Assisi is an award-winning journalist with two decades of experience to back him. He is co-founder and director at Founding Fuel, and co-author of the book The Aadhaar Effect. He is a columnist for Hindustan Times, one of India's most influential English newspaper. He is vocal in his views on journalism and what shape it ought to take in India. He speaks on the theme at various forums and is often invited by various organizations to teach their teams how to write.

In his last assignment, he wore two hats: That of Managing Editor at Forbes India and Editor at ForbesLife India. As part of the leadership team, his mandate was to create a distinctive business title in a market many thought was saturated. When Forbes India was finally launched after much brainstorming and thinking through, it broke through the ranks and got to be recognized as the most influential business magazine in the country. He did much the same thing with ForbesLife India where he broke from convention and launched the title to critical acclaim.

Before that, he was National Technology Editor and National Business Editor at the Times of India, during the great newspaper wars of 2005. He was part of the team that ensured Times of India maintained top dog status in Mumbai on the face of assaults by DNA and Hindustan Times.

His first big gig came in his late twenties when German media house Vogel Burda marked its India debut with CHIP a wildly popular technology magazine. He was appointed Editor and given a free run to create what he wanted. During this stint, he worked and interacted with all of Vogel Burda's various newsrooms across Europe and Asia.

Charles holds a Masters in Economics from Mumbai Universtity and an MBA in Finance. Along the way he earned the Madhu Valluri Award for Excellence in Journalism and the Polestar Award for Excellence in Business Journalism.

In his spare time, he reads voraciously across the board, but is biased towards psychology and the social sciences. He dabbles in various things that catch his fancy at various points. But as fancies go, many evaporate as often as they fall on him.

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