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Call Your Bluff

Week of Halloween 2002
Luck is his companion, gambling is his game.

Bill Gates is a very good poker player. When he wasn't reading Popular Electronics or Playboy or getting drunk and racing bulldozers in his year and a half at Harvard, he was playing poker, and he always won.

There's a scene in the movie The Pirates of Silicon Valley where Bill Gates and Steve Ballmer are standing offstage while Steve Jobs entertains several thousand Apple faithful with the news of the first Macintosh. A few nights earlier Bill was summoned by Steve Jobs. He dropped everything and flew down and got the browbeating of his life for betraying Jobs and using his contract to steal the Macintosh design. And now it's a few days afterwards, and Bill and Steve Ballmer are standing offstage as Steve Jobs receives the applause, and they look every bit the cretins in their Macintosh sweatshirts.

When Steve tells the masses that the coming success of the Macintosh would not be possible without the help of their good friends at Microsoft, a spotlight falls on the Microsoft duo, who look weak in the knees to say the least. When the spotlight fades, Ballmer shows his panic to Gates. 'Bill, let's get out of here - I don't like this at all,' says Ballmer, shaking like a leaf. But Gates is calm. He knows better. He knows he has won the game.

There are a number of qualities which together make a successful poker player.

First, there is no such thing as luck. Poker is not gambling. Play your cards right - play your fellow players right - and the money will come to you sooner or later.

Second, never be ostentatious. If possible, never be the big winner. Big winners only call attention to themselves and incur the wrath of the losers. Instead, be the second or third biggest winner. See that you win all the time, but steer the game so that someone else is always the big winner. Make someone new the big winner every time you play.

Third, be able to assess the situation with faultless precision. Know your fellow players, and know when you don't have to bluff anymore - know when you can be absolutely certain you will win.

Steve Ballmer was in a panic at the Apple meeting because he did not understand the situation as Bill Gates did. For years Bill Gates had deliberately groveled for Steve Jobs. He'd been at Jobs's beck and call. He had bowed to the master. He had lured Jobs with the prospect of getting spreadsheet software for the new Mac. He might not have known that Jobs had already decided to give him the assignment, but Jobs underestimated his opponent, or more likely did not even see an opponent in Gates. But Gates knew his Macintosh prototypes would make sure his hand was a winner.

Steve Ballmer trembles as Jobs approaches the Microsoft duo. But this time, when Jobs barks at Gates, Gates does not shrink away. He rises up, reaches over his head, starts pulling off his Macintosh sweatshirt, and begins a tirade back at Jobs. As he outlines why Jobs is no better than he is, he demonstratively removes his sweatshirt and places it on a nearby table. He doesn't need Apple anymore. They need him, and he knows it, and he's letting Jobs know it too, and ever so gently he inflicts a little pain, just so Jobs will know who the boss is.

It's been several years - several Halloweens - since we first heard about the Halloween Documents. For those of you who haven't been around long enough to remember, an employee of Microsoft Corporation leaked a number of choice internal Microsoft documents to Eric Raymond. These documents, promptly dubbed the Halloween Documents, outlined Microsoft's strategy for combating Linux and the open source movement. The New York Times later confronted Microsoft with the documents and received confirmation that the documents were real. And the blood flowing from these documents was not to be treated lightly: Microsoft would smear the reputation of Linus himself if that was what was needed to prevent Linux and open source from gaining a foothold.

But Linux never did gain a foothold. Today open source makes up a mere 2% of the desktop market. Subtract Apple's 5% and that still leaves Bill Gates with 93%, or almost 14 times as much share as the competition combined. Bill Gates knows he has won.

A lot of people have wondered why Bill Gates would be so mean to his customers in the face of the open source threat. Story after story surfaced of how Microsoft inflicted painful license audits on US state authorities and schools; Microsoft introduced their product activation scheme; they continually imply they will use 'self-help' to enforce their licenses (self-help is the destruction of software and hardware by remote control, virus, hacking, worm, or other device and is supported by UCITA).

But through it all Bill Gates has not swerved. Microsoft's treatment of their customers gets consistently worse. Customers pay more and more for the same old buggy products, find their support programmes suddenly canceled, and now have to pay extra for security.

Bill Gates knows he has won. He saw that open source was not going to be a real threat long before anyone else. For a time, Microsoft executives continued to attack Linux in the media, but that was only smokescreen - that was only the poker player making sure no one knows what he is thinking. The die had already been cast. With a 14-1 market share, the game was all but over and the pot was going to Redmond Washington.

And have personal computer users proved Bill Gates wrong? Has anyone called his bluff? One day an overlooked millionaire, he surprised everyone by becoming the richest person in the world, and with a monopoly no one can threaten. Even with the US federal government and 20 US states against him, he doesn't shake. He's taken off his Macintosh sweatshirt. He's speaking in a calm clear voice.

He's already won the game, he knows it, and he's letting us know he knows it too. And ever so gently he inflicts a little pain, just so we know who the boss is.

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