Bill Gates

Pretty wild.

Pretty wild.

I could see if you were an Azure doubter and you were sitting there at the top of Microsoft enjoying the Windows monopoly, the tremendous business that is Windows and Office, and thinking, why would I do anything to jeopardize this? I mean, Windows has self-reinforcing network effects everywhere.

I could see if you were an Azure doubter and you were sitting there at the top of Microsoft enjoying the Windows monopoly, the tremendous business that is Windows and Office, and thinking, why would I do anything to jeopardize this? I mean, Windows has self-reinforcing network effects everywhere.

Huge switching costs for the enterprise, super profitable, high margin, one of the greatest businesses of all time. And now there's this idea that you want me to spend the money to run servers. People can run their own software on my servers, even if it's open source, so it's not feeding into my Windows-centric ecosystem. Yeah. There's a chance they're not paying for Windows licenses. Right.

Huge switching costs for the enterprise, super profitable, high margin, one of the greatest businesses of all time. And now there's this idea that you want me to spend the money to run servers. People can run their own software on my servers, even if it's open source, so it's not feeding into my Windows-centric ecosystem. Yeah. There's a chance they're not paying for Windows licenses. Right.

It's not even as good a business. It's not zero marginal costs. Running servers, running these big data centers has huge costs. And even if you say, oh, those are fixed costs to rack them and you amortize them over a course of years. But like energy has a real cost.

It's not even as good a business. It's not zero marginal costs. Running servers, running these big data centers has huge costs. And even if you say, oh, those are fixed costs to rack them and you amortize them over a course of years. But like energy has a real cost.

It's kind of shocking that they eventually did embrace this very unproven new business that could potentially be way worse than their current business.

It's kind of shocking that they eventually did embrace this very unproven new business that could potentially be way worse than their current business.

Yep. Now, I will say, the company stayed the Windows-centric company for too long.

Yep. Now, I will say, the company stayed the Windows-centric company for too long.

I mean, Azure was being built, so it was successful enough that it sort of erases everything else. But a lot of listeners know this, but I worked at Microsoft from 2011 to 2014. My internship in 2011 was on the Word web app in the Office 365 suite, but before it was called 365. And then my real job was I worked on, when I came back, Office for iPad. which was super secret at the time.

I mean, Azure was being built, so it was successful enough that it sort of erases everything else. But a lot of listeners know this, but I worked at Microsoft from 2011 to 2014. My internship in 2011 was on the Word web app in the Office 365 suite, but before it was called 365. And then my real job was I worked on, when I came back, Office for iPad. which was super secret at the time.

It was really counter-strategy because we were the Windows company. But at the same time, what users wanted in this world in 2012 was, I want to access my documents on any device that I'm on. We have moved to a world where I have multiple devices. I just want to be able to use your application on my device, please.

It was really counter-strategy because we were the Windows company. But at the same time, what users wanted in this world in 2012 was, I want to access my documents on any device that I'm on. We have moved to a world where I have multiple devices. I just want to be able to use your application on my device, please.

And absolutely 100% something that happened is all 200 of us worked for multiple years to get these things ready. We had a ship date. Well, we had what we thought was a ship date. Actually, what happened was we were told that actually we're going to shelve it. And instead of a ship party, we had a shelf party because the product got canceled.

And absolutely 100% something that happened is all 200 of us worked for multiple years to get these things ready. We had a ship date. Well, we had what we thought was a ship date. Actually, what happened was we were told that actually we're going to shelve it. And instead of a ship party, we had a shelf party because the product got canceled.

And basically it was, hey, we just released Windows 8. We just released the Surface. And we want the marketing message for those things to be that Office is first and best on Windows. And the only tablet in the world... that can run real Office is the Surface. And I, of course, am too biased and too personal to really think through this, but I was like, oh, this company has its head in the sand.

And basically it was, hey, we just released Windows 8. We just released the Surface. And we want the marketing message for those things to be that Office is first and best on Windows. And the only tablet in the world... that can run real Office is the Surface. And I, of course, am too biased and too personal to really think through this, but I was like, oh, this company has its head in the sand.