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Bill Gates Flabbergasted by Gmail

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During his commencement address at the University of Southern California last week, Microsoft (Nasdaq: MSFT  ) CEO Steve Ballmer recounted the time he told his parents about his decision to join the infant software company.

"My father comes up out of his chair. 'What's software?' Pretty inconceivable today. My mother asked an even more interesting question for the year 1980: 'Why would a person ever need a computer?'"

Just goes to show that in the world of technology, what seems like common sense today was wacky and innovative yesterday.

Fast-forward a quarter-century. Steven Levy's excellent book In The Plex: How Google Thinks, Works, and Shapes Our Lives gives a refreshingly ironic example of Microsoft's other top dog, Bill Gates, showing the same bewilderment toward Google's (Nasdaq: GOOG  ) Gmail as Ballmer's parents showed toward software:

"Have you played with Gmail?' I asked [Gates in 2004].

"Oh sure, I play with everything," he replied. "I play with A-Mail, B-Mail, C-Mail, I play with all of them."

My editor and I explained that the IT department at Newsweek gave us barely enough storage to hold a few days' mail, and we both forwarded everything to Gmail so we wouldn't have to spend our time deciding what to delete. Only a few months after starting this, both of us had consumed more than half of Gmail's 2-gigabyte free storage space.

Gates looked stunned, as if I offended him. "How could you need more than a gig?" he asked. "What've you got in there? Movies? PowerPoint presentations?"

No, just lots of mail.

He began firing questions. "How many messages are there?" he demanded. "Seriously, I'm trying to understand whether it's the number of messages or the size of messages." After doing the math in his head, he came to the conclusion that Google was doing something wrong ...

Gates' implicit criticism of Gmail was that it was wasteful in its means of storing each email. ... Despite his currency with cutting-edge technologies, his mentality was anchored in the old paradigm of storage being a commodity that must be conserved.

Pretty inconceivable today, you might say.

Seven years and about 200 million happy Gmailers later, it's safe to say Google wasn't doing anything wrong by offering users a then-unheard-of 2 gigs of storage. It was doing just what Microsoft did a generation before: anticipating what consumers want and delivering it on a massive scale.

Fool contributor Morgan Housel owns shares of Microsoft. And a Gmail account. You can follow him on Twitter @TMFHousel. The Motley Fool owns shares of Microsoft and Google. Motley Fool newsletter services have recommended buying shares of Microsoft and Google, as well as creating a diagonal call position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (14) | Recommend This Article (22)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 31, 2011, at 11:37 AM, David369 wrote:

    Good article!

  • Report this Comment On May 31, 2011, at 11:58 AM, G44ca wrote:

    Somewhat interesting... in light of the fact that you think storage should not be conserved. Even for Google, storage is not free. We've only seen the ice cube of information that is sitting on the tip of the iceberg to come.

    The clouds containing the information will have to be very, very large and will become extremely heavy likely giving way to a catastrophic rain in which we all drown someday.

  • Report this Comment On May 31, 2011, at 12:10 PM, cmfhousel wrote:

    ^ Just to be clear, the comments about storage conservation came from Levy, not me.

  • Report this Comment On May 31, 2011, at 12:15 PM, embpf wrote:

    Morgan - you're missing the point. you talk as if storage is an infinite resource. if say you send a 5Mb attachment to 10 people, why would an email system send 10 different emails totalling 50Mb of storage. that's just wasteful if that is in fact what gmail does. an efficient email system should store the 5Mb attachment once and each of the 10 emails can just have an attachment that actualy points to that single file transparently. beyond storage, consider the extra processing required to service 10 different files. gmail ain't green at all. sounds very inefficient.

  • Report this Comment On May 31, 2011, at 12:28 PM, G44ca wrote:

    TMFHousel, Yes Levy made the comments. But in regard to Gates thinking you wrote: "Pretty inconceivable today, you might say."

    Gates comments were appropriate, if not prescient.

  • Report this Comment On May 31, 2011, at 12:35 PM, TMFSymington wrote:

    @embpf, you negated your criticism before you even wrote it in saying "that's just wasteful if that is in fact what gmail does."

    In fact, that's not what Gmail does. Simply put, behind the scenes they do just what you suggest they should be doing. As a software engineer, I always try to stay as aware as possible of how everybody writes their software (as much as any black-box processes can provide understanding, anyway). Interestingly, Google has consistently proven to me that they are almost always more efficient than their competition in everything they do (from page/software load times to storage efficiency to comprehensive user-friendliness).

    My 2-cents, anyway.

  • Report this Comment On June 01, 2011, at 1:21 PM, pinchekittybiker wrote:

    When I first played with a computer, , supercalc, and a word processor all fit on a 5 1/2 " single sided floppy disk running on a Tandy 1000 RL 4 Mhz 8088 processor with 4 color graphics.

    After writing considerable amounts of short stories, I ended up with several floppy disks,. I used email from WWIV or fidonet, and the internet was not in my vocabulary.

    Today, my email box consists of hundreds of " hot sexy ladies on webcam " & " buy viagra online " spam, as well as hundreds of other junkmail emails that do nothing but take up space. The legitimate emails take up space in one of up to six email addresses that I use regularly.

    Honestly, Bill Gates was probably right back then, but even crazier is the idea that today the short stories I wrote require several megs to store, and the word processor and spreadsheet software I use take up hundreds of megs to install and maintain. My question is - what have we all gained from getting more? If anything, a feeling of entitlement and senseless waste for resources that are so far beyond our comprehension that when I think about how much electricity my share of 6 emails ( consider the power used up by the server, SAN, network hardware, and all of the transmission equipment ) utilized to hold that information in place - it IS wasteful. If I want to be even more in your face about it - then I might even measure the cost of the communications equipment and the Indian labor outsourced to manage it all - all factored into the course of 1 year - it's not free nor is it " Green "

  • Report this Comment On June 02, 2011, at 3:22 PM, lefthem wrote:

    The story doesn't support the conclusion. Gates was trying to figure out how you used 1GB of mail storage in 2 months - that's pretty tough to do with simple text mail, if you're not receiving/sending around movies or big pictures. So he asks you about your mail, you give your best answers, and he sees that it doesn't match up. The Mac OS uses a minimum of 4K for any file, even if it has one letter in it - admittedly this is inefficient. Gates figured something similar must be going on with Gmail.

    It doesn't show that he didn't understand Gmail (which he may not have - but your story doesn't prove it) - just didn't understand how you could use that much storage that quickly.

  • Report this Comment On June 06, 2011, at 2:35 PM, RichBruklis wrote:

    Those mailbox capacities are all thin-provisioned. You think you have 2GB but you don't. Google's software builds the mailbox larger as needed.

  • Report this Comment On June 08, 2011, at 1:51 PM, libbyx wrote:

    Gates believes storage must be conserved. That's very funny, because Microsoft Windows is the most bloated operating system out there, and the software contains easter eggs which adds to the already bloated software.

  • Report this Comment On June 12, 2011, at 7:09 PM, MyYoda007 wrote:

    Gates pretended to not understand this? You're kidding, right? As the biggest purveyor of bloat-ware on the planet, he was obviously being disingenuous.

  • Report this Comment On June 13, 2011, at 3:01 PM, isaacfields wrote:

    I with gates on this one I think it would take much longer than just a few months to accumulate 1GB of normal text based email these messages would have to have more content than an average email user would have.

  • Report this Comment On June 14, 2011, at 3:21 PM, PrincetonBrooke wrote:

    Bill Gates was not saying to not prepare for client's needs; but instead, he was merely pointing out that Google might want to reevaluate how it stores and presents data to it's users.

    A typical person might think the solution is to just add more space but is that the best option for dealing with people who have that need to hold on and retain every email that comes into their inbox?

    I believe Gates was simply saying Google was not taking time to find a long term solution when he said "they are doing something wrong" in that they only went with the first thought which is give users more space.

  • Report this Comment On July 07, 2011, at 1:53 AM, dezigns333 wrote:

    Google offers 2 GB of space but they don't allow you to use it as you wish. They finally added the ability to upload files with GDrive, but the technology has been available since 2004. And it's still not as good as Dropbox.

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