Bill Gates Is Getting Disrupted

Moneybox
A blog about business and economics.
May 6 2013 10:17 AM

Bill Gates Probably Needs to Say Disruption More

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Microsoft founder Bill Gates addresses the first Global Vaccine Summit in Abu Dhabi on April 25, 2013.

Photo by STR/AFP/Getty Images

In a recent column I bemoaned the word disruption as an all-purpose tech sector buzzword. One argument for trying to restrain our disruptivity is that when you don't use it constantly, you can use it to illustrate some real issues. On CNBC this morning, for example, Bill Gates expressed confidence in the future of the Surface, Microsoft's tablet, explaining that iPads just aren't good enough. "A lot of those users are frustrated," Gates said. "They can't type, they can't create documents, they don't have Office there."

And it's true: If you want the best the computing world can offer, the iPad is not for you.

But Gates should be aware of the classic disruption story of the personal computer versus the mainframe computer. When PCs first hit the market, some dismissed them as less powerful than mainframes. From back when "a computer" meant "a mainframe," people developed certain ideas about who needed "a computer" and why, and claimed a PC couldn't serve the full needs of many of those organizations. But it turned out that lower cost and greater flexibility meant it could serve the needs of lots of other people, and ultimately the market for PCs was far larger than the market for giant supercomputers. Which isn't to say that the supercomputer industry died. It's still very much around, and it's still true that there's a lot of stuff a supercomputer can do that a PC can't—like mine for Bitcoin! But Bill Gates became the richest man in the world because it turned out that building the most powerful computing devices on the planet wasn't the way to sell the most computers.

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The reference to Office is a giveaway here. There are roughly two kinds of people: First, there are those who need a computer for work; those people's work will give them a cheap, powerful PC that sits on their desk. They don't need to buy a PC because they already have one, but they might want to buy a tablet. Then there are the people who don't need a computer for work—the waitresses and cashiers and yoga instructors who are the backbone of the 21st-century service-sector working class—who don't need to buy a PC because they don't need one for work, but might want to buy a tablet. So where does that leave the consumer PC? People like me, who do need a computer for work but also need their worklife to be able to follow them around everywhere. But how large is that market, really? Obviously if you live your life surrounded by tech workers and the journalists who cover them, it can start to seem like a lot of people. But it's not really clear that it is. Lots of folks right now are in the habit of owning a personal computer in parallel to whatever equipment they do or don't have for the office job they may or may not have, but in a world where tablets keep getting better at the stuff they do—web browsing, reading, social networks, casual gaming, entertainment—are those folks going to keep upgrading?

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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