VERSION: WINDOWS 3.

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APRIL 25, 2015

BOOK ANALYSIS
HARD DRIVE

PRESENTED BY: FRANCISCO MARTINEZ JR

UNIVERSITY OF COLORADO-DENVER
1201 LARIMER ST, DENVER, CO 80204
 Hard Drive: Bill Gates and the Making of the Microsoft Empire

TABLE OF CONTENTS
Synopsis ....................................................................................................................................................... 2
Conditions of Satisfaction .......................................................................................................................... 3
Visual Representation .............................................................................................................................. 4
Project Overview Statement .................................................................................................................... 5
Project Overview Statement Form ........................................................................................................6-7
Work Breakdown Structure ........................................................................................................................ 8
Outline View............................................................................................................................................. 9
Structural View ....................................................................................................................................... 10
Gantt Chart ............................................................................................................................................. 11
Network Diagram ..............................................................................................................................12-13
Risk Matrix ................................................................................................................................................ 14
Lessons Learned ...................................................................................................................................15-18
Reference Page .......................................................................................................................................... 19

Book analysis 1
 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Synopsis
This book was published the 1993 and serves as an autobiography of Bill Gates up until that
point. It provides a detailed account of Bill Gates early life and career up until the release of
Windows 3. Reading this book, the reader realizes how smart Bill Gates is. The book a great
read. Despite showing its age, it still provides many insights into the mind of Bill Gates and his
personal drive.

The book begins by describing Bill Gates early life. Bill Gates at a young age is characterized as
having “an obsessive personality and a compulsive need to be the best” (Wallace 12). It was
evident at a young age that he was very competitive. His strengths were in the academics and
he was really good at math. It was likely that Bill Gates would have became a mathematician or
college professor. He attended Lakeside, an all-boys private prep school. Here he would first
encounter the personal computer. He was very lucky because few people were presented with
this opportunity. In 9th grade he became obsessed with it.

He and Paul Allen wanted to take advantage of MITS Atari. They decided to write BASIC to work
on it. He eventually left school and they started Microsoft. Their first big break was licensing.
The relationship would turn sour and into a legal dispute. Microsoft won and won the rights to
do whatever they wanted with Basic. “At age 21, he was comfortable sitting in his office
negotiating tough deals with much older executives in three-piece suits as he was programming
long into the night in front of a computer terminal, eating cold pizza and swigging down Coke”
(Wallace 117). Early on, at Microsoft Bill Gates wore many hats. He was involved in sales,
marketing, legal aspects, coding, and running the business.

BASIC became the standard for personal computers. A key thing to understand is that the
industry was still very small at this point. IBM would ask Gates to develop an operating system
for their personal computer. Microsoft would purchase 86-DOS from Seattle Computer for
$25,00 and sublicense it to IBM as MS-DOS. The IBM PC was a success and made MS-DOS a
successful operating system. The motto at Microsoft at the time was “We Set the Standard”.
“Microsoft won control of the market in languages and operating systems by using this
standard-setting strategy” (Wallace 216).

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Conditions of Satisfaction

This Conditions of Satisfaction focuses on the primary business competitor of the time, IBM. It
is the conditions in which the reqestor and provider have agreed on based on negotiations.

Steps for Creating the COS for book analysis

COS Step Description

Request Request is made

Clarification Provider explains what they heard as the request

Response Provider says what they can complete to satisfy the
request
Agreement Requestor restates what the provider will provide.
Continue until the provider is satisfied that the
requestor understands what is being provided

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Visual Representation

This final agreement is the POS. The COS will be a dynamic agreement that that will provide
continual project monitoring

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Project Overview Statement

The questions addressed are as follows:

1. What problem will this activity solve, or what opportunity will it exploit?
2. What is your project goal?
3. What is your project objective?
4. What are your criteria for success?
5. What assumptions do you bring to this project?
6. What are the potential risks and obstacles?

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Project Overview Statement Form

Project Overview Project Name: Project Number: Project Manager:

Statement (POS)
Microsoft
Software running
on all Personal
Computers 1000121 Bill Gates

1. What problem will this activity solve, or what opportunity will it exploit?

The activity is Microsoft software running on al personal computers. A key strategy is to

establish the dominant operating system. At the time, the personal computing space was
in its infancy. It was a niche market in which many software companies were selling high
level programming languages similar to Microsoft BASIC. No company had a dominant
position in the newly created industry. Microsoft had an opportunity to get all its software
running on all personal computers. By developing software for all personal computers they
would be able to be able to get their software running on all Personal Computers.
2. What is your project goal?

The project goal is to make the Microsoft operating system the dominant system used in
personal computers.

3. What is your project objective?

The project objectives are the following:

1. Licensing agreements that favor Microsoft’s profits and market share

2. Exclusivity agreements to maintain market share of Microsoft software
3. Aggressive pricing (based on volume) to ensure that personal computers
OEMs use Microsoft operating system

4. What are your criteria for success?

The criteria for success are licensing with all major personal computer, high profits, and
dominant market share

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

5. What assumptions do you bring to this project?

Compete against mass-market operating systems like CP/M and eliminate them as
competitor
Negotiation operating system exclusivity agreements to eliminate competition
Establish Microsoft software as industry standard
Make money through volume licensing
Support all major OEMs to reach goal of ubiquity

6. What are the potential risks and obstacles?

Software bugs can render the software unusable

Lawsuits from software competitors due to similarity in software features and
anticompetitive practices
Competitors with compelling software solutions (Apple offered its own hardware&
software solution)
Many competitors ( there were more competing operating systems at this time)

Prepared by Expected Completion Date

Bill Gates April 1993

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Work Breakdown Structure

The WBS is a hierarchical description of the work that will be completed to satisfy the
requirements of the project created is the Project Overview Statement. It divides the project
into smaller and more maneagble tasks.

Benefits of WBS for this project

 Helps define and organize scope of the project
 Helps with assigning responsibilities, resoruces, monitoring the project
 Double check deliverables. Make sure nothing is missing
 Shows project scope, ideally for staekholders to review

There are two approaches for a WBS. The apporach taken for this project is Top Down.

Each activity of the WBS fits the following criteria

1. Completition is measurable
2. Events are clearly defined
3 Activity has deliverable
4. Time/cost can be estminated
5. Activity duration is is acceptable
6. Work assignmets are indepdent of each other

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Outline View

1. Microsoft software running on all personal computers

1.1 Initiate Development of BASIC for MITS Altair
1.1.1 Plan business aspects of BASIC software
1.1.2 Write BASIC source code
1.1.3 Continual software enhancements
1.1.4 BASIC ready for sale
1.2 Planning of legal/business aspects
1.2.1 Bill Gates and father write licensing agreement
1.2.2 Establish royalty arrangement
1.2.3 MITS licensing of BASIC
1.3 Deal with OEMs
1.3.1 Develop Licensing Agreement
1.3.2 Find suitable Operating System
1.3.3 Get 86-DOS running on BASIC
1.3.4 Deliver to IBM/OEMs
1.4 Development of Software Applications
1.4.1 Market Analysis
1.4.2 Software Application Development (Office Suite)
1.4.3 Continual Software Application Improvements
1.5 Market Dominance
1.5.1 Current Iteration of Microsoft Operating System has majority of market share
1.5.2 Recurring volume licensing agreements

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Structural View

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Gantt Chart

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Network Diagram
1 of 3

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

2 of 3

3 of 3

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Risk Matrix

Importance of Software component completion

Very
Code completed by deadline

Negligible Minor Moderate Important Important

(81-
100)% Low Risk Moderate Risk High Risk Extreme Risk Extreme Risk

(61-81)% Minimum Risk Low Risk Moderate Risk High Risk Extreme Risk

(41-60)% Minimum Risk Low Risk Moderate Risk High Risk High Risk

(21-40)% Minimum Risk Low Risk Low Risk Moderate Risk High Risk

(1-20)% Minimum Risk Minimum Risk Low Risk Moderate Risk High Risk

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Lesssons Learned

The first lesson learned is being at the right place at the right time. Tom Butler-Bowdon has
the following to say about Bill Gates and Paul Allen’s computer ambitions “[they] shared a
vision that almost everybody would someday have their own personal computer.” This quote
really shows the foresight of Bill Gates and Paul Allen. Bill Gates was fortunate enough to
attend Lakeside, a private school that had one of the first personal computers. This put him a
step ahead of everyone else. This allowed him to see the potential of personal computers
before every else. He got involved in the personal computer business as soon as it was going
to become a mainstream product. He capitalize on this and would eventually make himself the
richest man.

The second lesson learned is hard work. After relocating to Albuquerque Bill and Paul had to
create a version of BASIC that would work on the Altair. They both would code late into the
night to finish it. Bill Gates work ethic can be best described with the following quote “Gates
put everything into the new business, taking only a few days off during its first two years”
(Bowdon 2008). He was dedicated to starting Microsoft. He had a goal and did everything to
make it a possibility. Bill was always pushing the developers at Microsoft to produce their best
work. Bill challenged his employees. His employees were also expected to challenge him. He
had a confrontational style of management that maintained Microsoft’s edge and
competitiveness. His hard work made Microsoft the company it is today.

The third lesson learned is having a goal. Gates told a developer of his two goals: “to design
software that would make a computer easy enough for his mother to use and to build a
company bigger than his dad’s law firm” (Bowdon 2008). Another of his major goals was “‘A
computer on every desk, and Microsoft software in every computer”. The motto at Microsoft
at the time was “We Set the Standard”. “Microsoft won control of the market in languages and
operating systems by using this standard-setting strategy” (Wallace 216). Bill Gates managed
to suceed at every goal listed above.

The fourth lesson is that looks can be deceiving. This in reference to the appearance of Bill
Gates and his maturity. “At 25 he still looked 17 (Bowdon 2008). Clients would soon forget
about his age when they engaged in business with him. “At age 21, he was comfortable sitting
in his office negotiating tough deals with much older executives in three-piece suits as he was
programming long into the night in front of a computer terminal, eating cold pizza and
swigging down Coke” (Wallace 117). “If you talk to Bill about any software company or any
hardware company, there’s a very high probability that he will be able to tell you who the CEO

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

is, what their revenues were last year, what they are currently working on, what the problems
are with their products. He’s very knowledgeable and he prides himself on knowing what’s
going on in the industry” (Wallace 213). His brilliance at a young age became apparent when
Microsoft notified MITS that they were terminating the license agreement they had agreed to
for BASIC. Bill Gates was able to hold his own in meetings regarding the agreement. Gates was
not easily harassed. The legal battle was not as easy as anticipated for MITS due to Gates
ability to control the situation. The book describes how Ed Roberts (previous owner of MITS)
learned that Gates was mature beyond his age.

The fifth lesson is take advantage of opportunities presented. IBM provided Microsoft one of
its big breaks. IBM had a strong interest in entering the personal computer business. IBM
decided to use Microsoft’s software to able to enter the market quickly instead of developing
its own software. “This gave Microsoft a huge opportunity, as the ubiquity of IBM ‘clones’
meant that software, rather than the machines themselves, became the valuable thing”
(Bowdon 2008). IBM using MS-DOS as its default operating system allowed Microsoft to take
an early lead in controlling the market share of the personal computer.

The sixth lesson learned is the “benefits of working in a ‘star’ company” (Bowdon 2008).
Microsoft was a growth company. It doubled in size every year and was evolved in the
personal computer business which was growing every year. Many individuals became either
millionaires or billionaires when Microsoft had its initial public offering. This was a benefit to
Microsoft because it helped attract top talent. Many people where happy to work at this
company that was experiencing high growth.

The seventh lesson learned is establish the standard of software distribution. This lesson is in
regards to piracy. People were using unpurchased copies of BASIC for their Altair computers.”
“Gates eventually became convinced that BASIC wasn’t selling very well because so many
people had obtained copies without paying for them” (Wallace 102). Bill was very displeased
and irritated with the revelation. “[Bill] saw the free distribution of software as stealing,
especially when it involved software that was created to be sold” (Biography.com). He ended
up writing an open letter to the hobbyist community stating that good software could not be
written if it was being pirated. Bills ideas regarding software use would serve as a blueprint for
future software policy.

The eight lesson learned is being heavily involved in the business. Bill Gates served many roles
at Microsoft. “He personally reviewed every line of code the company shipped, often rewriting
code when he saw it necessary” (Biography.com). He had a really good work ethic. “Gates
often would be gone two or three days negotiating deals and selling the company’s software.
He would then return to Albuquerque, work all night, and go to a meeting the next day”
(Wallace 127). Early on he wrote many of the contracts for Microsoft, often knowing more

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

than some lawyers. Few people understood the software industry the way Gates did. He was
savvy in the marketing and business aspects of Microsoft in addition to his coding skills. He
was all around involved in the company.

The ninth lesson learned is licensing. The licensing agreements Microsoft made with IBM is
what eventually made Bill Gates a billionaire. Microsoft had purchased the operating system
86-DOS from Seattle Computer. 86-Dos would eventually become MS-DOS. “For each
sublicense of 86-DOS, Microsoft agreed to pay Seattle Computer $10,000, plus an additional
$5,000 if the source code were part of the sublicense” (Wallace 194). MS-DOS was exactly
what IBM needed to run its personal computer. “IBM wanted to buy the source code, which
would have given them the information to the operating system” (Biography.com). IBM had it
gotten its way would have become owner of the source code. Bill instead wanted IBM to pay a
licensing free for the copies it used in its computers. This turned out to be a smart business
move. This gave Microsoft the ability to license their operating system to any PC manufacturer.
“The IBM PC was an instant hit, and with DOS being the only operating system available on the
machine for the first six months, Microsoft jumped out to the early lead” (Wallace 213).

The tenth lesson is being able to identify a threat. An impending threat is what led to the
development of Windows. Apple had shown Microsoft its new operating system that had a
graphical interface. Steve Jobs had actually tried showings as little as possible in regards to GUI
so Gates would not try to copy it. Gates had other plans. He planned to incorporate this new
technology into a Microsoft operating system. “Gates announced in an advertising campaign
that a new Microsoft operating system was about to be developed that would use a graphic
interface” (Biography.com). He made this announcement before development of Windows
even started. This was a bluff that caused many people who wanted to purchase BASIC to wait
for Windows. This worked out for Microsoft because people were unwilling to switch to
competing operating systems. This slowed the pace of applications like Visi On and VisiCalc.
This strategy gave Microsoft a huge upperhand.

The eleventh lesson is set the standard for the industry. “Every personal computer needed
applications, a high-level language like BASIC, and operating system. Microsoft now had its
fingers in all three layers of the personal computer software cake” (Wallace 155). OS/2 was a
series of computer operating systems that were created in a joint effort by Microsoft and IBM.
After Windows 3.0 became a success, Microsoft began to focus on building its own business
based on just Windows. “As a newcomer in applications, Microsoft faced stiff competition,
going up against entrenched industry veterans like MicroPo and VisiCorp” (Wallace 217). “In
1989, Microsoft introduced Microsoft Office which bundled office productivity applications
such as Microsoft Word and Excel into one system that was compatible with all Microsoft
products” (Biography.com). No surprisingly, these applications were not compatible with OS/2.
OS/2 would not be as popular as Windows. Microsoft software would become the standard for
the industry. Today Microsoft Office is the industry standard for office applications.

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

The twelfth lesson learned is expand aggressively. “Microsoft’s revenues had at least doubled
each year since Gates and Allen had founded the company in 1975. By 1981, revenues had
grown to nearly $16 million” (Wallace 208). Microsoft became the powerhouse it is today
because the company was aggressive and moved quickly. The following text is from the book
after Microsoft had its initial public offering: “Not only did the growth not slow down, it
accelerated. By March of 1986, Microsoft had nearly 1,200 employees” (Wallace 334).

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 Hard Drive: Bill Gates and the Making of the Microsoft Empire

Reference Page

Bill Gates. (2015). The Biography.com website. Retrieved 06:01, Apr 26, 2015,
from http://www.biography.com/people/bill-gates-9307520.

Butler-Bowdon, T. (2008, October 2). Book review: Hard Drive, by James Wallace
and Jim Erickson. Retrieved April 26, 2015, from
http://citywire.co.uk/money/book-review-hard-drive-by-james-wallace-and-jim-
erickson/a318901

Gray, C., & Larson, E. (n.d.). Project management: The managerial process (Sixth
ed.).

Portny, S. (2013). Project management for dummies (4th ed.). Hoboken, N.J.:
Wiley ;.

Wallace, J., & Erickson, J. (1993). Hard drive: Bill Gates and the making of the
Microsoft empire. New York: HarperBusiness.

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