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Gates' 4 golden rules

Bill Gates may walk out the door on July 1, but he leaves a lasting impression. These are four of his core beliefs that are likely to carry on at the company he founded.

By David Kirkpatrick, senior editor
Last Updated: June 20, 2008: 5:33 PM EDT

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Bill Gates gave Fortune magazine exclusive access to some rare photos from the Microsoft archives - and shared his memories about them.

(Fortune Magazine) -- Think of software as a utopian tool. "Thirty-three years ago the company was founded on the proposition that software would be important," says Gates. "Looking at the next decade, the value that will be created by software and popular software platforms will be greater than ever."

Gates takes what colleagues call a utopian view of software. He believes it can do anything. That means the revolution is just beginning. Says longtime Microsoft (MSFT, Fortune 500) executive Craig Mundie: "Today Microsoft actually thinks about itself as just a software company - not a specific type of software company, not a PC software company, not a word-processor software company. And that has been many years in coming."

Let the engineers rule. Microsoft employs about 30,000 programmers among its 90,000 people. In operating groups engineers are involved in every major decision. Not only that, engineers typically get paid more than businesspeople.

The geeks also get lots of toys: Microsoft's $8 billion computer science R&D lab is the world's largest. At a recent executive retreat, Gates said he thought every great businessperson at Microsoft should cultivate at least five close relationships with engineers.

Institutionalize paranoia. "It's very Microsoft to prepare for the worst," says Gates. His heirs agree, and they want to keep it that way. The collective worry a few years ago was that Linux and open-source software could wipe out Microsoft. Today there are products across the company that take for granted that customers will use opensource products alongside Microsoft's own.

Meanwhile, Windows Server is finally gaining market share against Linux. Fear is what enabled the company to make that necessary transition. "Bill and Steve created what I guess I'd characterize as a culture of crisis," says chief software architect Ray Ozzie. "There's always someone who's going to take the company down. It's mythical, but at any given point in time there might be two or three big competitive things that the company is juggling. It's something people here are used to, and it's accretive in terms of making things more resilient over time."

Invest for the long term. One of Microsoft's most successful products at the moment is SharePoint, a set of tools to enable companies to build both internal and external websites - everything from collaboration and blogs to a flagship dot-com. This year it will generate about $1 billion in revenue. But that product has been evolving for a decade.

"Whatever the cycle is, we will keep investing through the cycle," says Entertainment division president Robbie Bach, "because we know on the other side of whatever cycle happens, there is opportunity. That's just the way the company thinks about itself." To top of page

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