Profile - David and Goliath

It was a decision that almost broke his mother's heart, but David Smith has never regretted joining Bill's most excellent adventure. Simon Meredith hears the story.

When David Smith joined Microsoft his mother cried - not with joy butth has never regretted joining Bill's most excellent adventure. Simon Meredith hears the story. with worry. Her son was giving up a good solid job with a good solid company to join a small American software company she knew nothing about.

Which was about as much as Smith knew.

A little over 12 years later, Smith is leaving Microsoft to do some of the things he's always promised himself he would. Because he can. At 34 years of age, he's been through two rounds of share options and he's financially secure.

Smith had been working as a C programmer for GEC when, in March 1985, he joined Microsoft as a technical support engineer looking after the Xenix product. His starting salary was a modest #7,000. Microsoft had about 1,000 staff worldwide and annual sales of around $8 million. It was a volatile company, hiring and firing all the time. 'On the day I started, there were 26 people there, on day two there were only 19,' Smith told PC Dealer.

'That's what Microsoft was like in those days. It was still trying to establish itself. We didn't have an applications business, we had MS-Dos and development and we were fighting against companies like Digital Research (DR) and Ashton Tate.'

THE BABY BOOMS

Against the big companies of the time - IBM, DEC, Sperry (Unisys), Bull and Hewlett Packard, Microsoft must have seemed like Hicksville USA. Nobody knew what it would become, says Smith. He only had a little more knowledge himself about the company when he joined. He had used MS Basic on a Commodore Pet for a project at university but that was it. He clearly remembers being impressed by the work that Paul Allen and Bill Gates - founders of the company and co-authors of MS Basic - had done.

IN GATES' STYLE

Over the years Smith has met Bill Gates several times, but - apart from being manhandled out of a taxi by Gates' bodyguard one night in Nice - has never got much closer to him than the first time he met the company's chairman.

'He had come over in the winter of 1985 and he made a point of talking to everyone and shaking their hands. He came up to me and asked me what I did, and when I told him that I was the guy who looks after Xenix, he started telling me about how important it was to Microsoft. That's always something he's had, I think - he understood the business so well and he could relate to it and communicate on it at every level. People still say that about him now.'

The hand-shaking and personal interest Gates showed in Smith and his work 12 years ago made a lasting impression on the new starter. 'When you're 22 it is quite impressive and yes, we would see quite a lot of him in those days because we didn't really have a channel then - we were an OEM company.'

For Smith, the 12 years with Microsoft has been a roller-coaster ride of considerable success. But Microsoft has not always been the force that it is now and Smith says that the company's strength lies not only in its products, but also in its approach to business and to the individual.

'It is a hard work, hard play environment. We are very aggressive about setting personal goals and achieving and exceeding those targets - and then enjoying that success when it comes around.'

Smith's timing was excellent. Eight months after he joined, the company launched Windows version 1. It was up against DR's graphical user interface, Gem. Microsoft was selling to OEM customers and it was hard work, says Smith. But one piece of business made a major difference - Amstrad.

SMASHING WINDOWS

Amstrad proved to be one of the catalysts for the success of Windows, although the initial fight was about MS-Dos. The PC 1512 broke all records for price, but Alan Sugar was going to ship the machine with DR-Dos. Smith was one of the people who persuaded Amstrad to dual ship - the product did the rest. Applications developers got on better with the Microsoft Dos and Windows products.

Smith got involved in the multi-tasking side of the business when Microsoft decided to sell off Xenix to SCO in 1986. Even though it was continuing to develop Windows separately, Microsoft was working closely with its long-standing OEM partner, IBM, on the OS/2 project. IBM was basically anti-Unix says Smith, and Microsoft wanted to avoid any conflict.

By spring 1987, OS/2 was on the market and so was MS-Dos 4, as well as Windows. Smith was telling three different stories at the same time. But the writing was on the wall.

'We were never completely convinced about OS/2. IBM wouldn't buy into Windows, they wanted Presentation Manager (PM), which was based on something that they'd brought off the mainframe, and the two (PM and the PC) simply weren't compatible. The compromise - OS/2 - wasn't good enough on backward compatibility but we hadn't got the message, we thought that OS/2 would take over the market.'

When it came, Microsoft's decision to break with IBM and develop its languages and applications for Windows rather than PM and OS/2, was a gamble. 'If PM or something else had worked, we'd have been scuppered.' Smith thinks Gates has to take the credit for the company's ability to place smart bets. But a lot of the success is also down to hard work, he says. 'We have had our lucky breaks, but a lot of it has been down to determination and self-discipline. We have made our lucky breaks count.'

Smith moved into the sales side of the business in 1988, and suddenly, the business started to look different. Amstrad and the revolution that followed it put millions more MS-Dos and Windows machines into the market.

That created a legacy user base and a build-up of applications. IBM meanwhile was pushing OS/2 and PM down corporate gullets but they were spitting it out and biting off the hands of cloners.

By the time Windows 3 came out in May 1990, the battle was really over, says Smith. 'In 1989 we won a number of major OEM deals that had really closed down some contracts for three years or so. That made us feel that they were really buying into it and it was good.'

Smith got a commendation from Gates himself for the work he did at the time, signing up the likes of Amstrad and Apricot as well as new starters like Elonex and Viglen. He caught the Windows bug.

'It was the evangelism of Windows that took me into marketing. I was very enthusiastic about operating systems and that whole area of the business and I used to do a lot of pitches to user groups and that sort of thing. I really got excited about it and when the opportunity to work in Windows product marketing came up, I jumped at it.'

GOODBYE MR CHIPS

There was still a lot of work to do, though. Microsoft was relatively new to the applications business and although it had done well with Excel, it still had a fight on its hands with Lotus' 1-2-3. Apple was also suing the company for infringement of its copyright.

'It was a great time, though,' says Smith. 'There were lots of head-to-heads with IBM, Apple and DR. It was hard work, but in 1990 our business plan said we'd ship 15,000 copies of Windows retail products. It was actually 45,000.'

Microsoft was on a roll and Smith was carried along with it. When PC Dealer interviewed him on his last day at the company, he remained dedicated to the cause. 'It's in your blood and it's very hard to look back and not feel some loyalty when you've been part of building it up to creating something.

'I've done very well and I thank Microsoft for that. I've put a lot of effort in and I've got a lot back and I've got the company to thank for my financial security. That's something many people would want.'

When he's completed his personal objectives, Smith expects to return to the computer industry, but he's uncertain whether it will be at Microsoft.

'One thing I do know is that it'll have to be a challenge. You know, I'm not going to sit at home all day and play golf the rest of the time.'

Smith plans to travel and work on personal projects. His family are still young, so now is the best time for break and to make a change. 'What I've done with Microsoft is going to be tough to beat. I just think it's time for me to step out and do some of the things that I've always wanted to do.'