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Bill Gates Flabbergasted by Gmail

By Morgan Housel - Updated Apr 6, 2017 at 9:33PM

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Doubting the birth of technology.

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.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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